RKETING AND THE DISCLOSURE OF INFORMAT 313 CH 4. KRAFT FOODS INC.: THE COST OF A

Question

RKETING AND THE DISCLOSURE OF INFORMAT 313 CH 4. KRAFT FOODS INC.: THE COST OF ADVERTISING ON CHILDREN'S WAISTLINES room fell silent as Dr. Ellen Wartella, The College of Communications at the Univeristy quality of products and services Dean of of perception of various factors, including a company's ices, social responsibil the Austin, gave Kraft executives her opin ueapresentation they had just made regarding ity, and vision and leadership. Depending on w Kraft chooses to do about i food marketing issue ts and advertising to children. Wartella charac the company may rise higher in crized Kraft's online marketing as "indefensible" tion Quotient studies, or it may fall further down. the and concluded that Kraft's claim that it was not Kraft Foods is a company that values quality to children under the age of six was "at and safety in its products One of Kraft's key strat st disingenuious and at worst a downright lic. The egies is to "baild superior consumer brand value esecutives in the room were visibly shaken by her through 'great-tasting products, innovative packag ing, consistent high quality, wide availability, helpful igh In late soos, Kraft formed the Worldwide Health services and strong brand image." With products in & Wellness Advisory Council, comprising io nutri more than 99 percent of U.S. bouseholds, Kraft cer tionists and media experts, including Wartella, to tainly has earned the trust of its consumers With investigate allegations that Kraft had been know. the recent feedback from the Health and Wellness ngly advertising unhealthy foods and dress the rise in obesity, among other health issues ood obesity due to aggressive food marketing The pressure for Kraft to review its advertising poli, however, I "ft must ake action before it loses con- cies came amidst increasing criticism from congres sumers loyalty and trust in its products sional panels, parent groups and other concerned citizens, that food corporations, such as Kraft Foods Kraft Foods Inc. and McDonald's Corporation, have been know- Kraft Foods Inc., the largest food and beverage ingly targeting young children (up to age 12) in their company in North America, has grown consider- advertising campaigns. The concern surrounding ably from its humble beginnings in 1903. With only childhood obesity stems from statistics showing a s6, a rented wagon, and a horse named Paddy. oo percent increase in childhood obesity since the L. Kraft started the company by parchasing cheese 198os. Between the 196os and the 198os, the percent from a wholesale market and reselling it to lo- age of overweight children hovered around 6 per cal merchants These cheeses were packaged with cent, but in the last two decades, this rate has leapt Krafts name. A decade later, Kraft improved the to 16 percent Despite this, Kraft decided to keep cheese by processing the product, which prolonged marketing to children under 12. One Kraft executive its shelf life. The processed cheese became such a admitted, "We didn't want to give up the power of success that a patent for the "Process of Sterilizing marketing to kids." in help ad: Advisory Council and public concerns about child- e af- l in- ools n? sure u rec Cheese and an Improved Product Produced by Such This "power" is villainizing the company, how- Process' was issued to Kraft in 1916. Over the years, ever. Currently, Kraft is a trusted brand, but that the company went on to create other new cheese reputation is already slipping. According to the products that are familiar to homes today including Reputation Quotient study conducted in 2oos by Velveeta and Cheez Whiz, as well as expanding be- research firm Harris Interactive, Kraft is ranked in yond cheese to introduce salad dressings, packaged the soth slot. While this is a small drop from the dinners, barbecue sauce, and other products 48th spot Kraft held the previous year, it is a far dis Tobacco giant Philip Morris acquired Gen ance from the Sth position occupied by competitor eral Foods Corporation in 1985 and then Kraft General Mills. This survey is based on consumer three years later for s12.9 billion. Through the do any Kraft Foods Inc: The Cost of Advertising on Children's Waistlines Copyright soo6: Eugene D. Fanning Center for Business Commanication Mendoss College of Business, University of Notre Dame. Used by permission

Explanation / Answer

Ans 1) Critical Issue of Krafts food inc was the inceasing obesity amongts children due to junk food or unhealthy food and attracting these children with the alluring advertisement,wherein the companies are spending huge amount of money. The stakeholders are company employees,customers,shareholders.

Ans 2) Kraft should mainitain a balance with the customers with regards to providing them the quality food.Also, as a solution Krafts altrady decided to reduce the advertisments for the same and most importantly, the advertisement will be made keeping in mind the age of the children and they decided not to show certain ads for the kids below the age of 12. Since,Kraft is a well know company and due the issue of increasing obesity amongst the children Kraft should be more focussing on the quality of the food and keeping in mind the demand and supply chain for their customers to build the trust again.

Ans 3) Krafts is a well know food brand and has been striving to keep their customers happy. though they had to face a lot of criticism for the obesity issue and the attractive advertisments to advertise their products. however, after the study, Krafts actually found out a way to build the trust amongst their customers. Krafts came up with the model name "Service Excellence" as per the model they reduced the prices, not compromising on the quiality of the products and balance the supply chain mode of the company. Another measure,they took is to reduce the advertisement to a great extent and speacially make the advertisement appropriate for the audience below the age of 12,which mean the kids below the age will not be forcibly attracted to the ads wherein the food is showing like a fairy tale or stories.

Ans 4 - Kraft's Options concerning it's marketing tatics are :-

1) reduce the advertising targeting childrens and thus not encouraging them for something that can turn out to be hazardoud for their health.

2) they decided that they will not advertise certain products hwoever these products withh still be found in local stores and would be available for the public.

3) Krafts also started with the online shows promoting use of healthy products in making food for kids that actualy helped parents to be involved with their children in another way and thus making the bond strong between them. though this was an emotional move, but Krafts used it wisely and impacted a large audience iwtuh this idea,

4) Krafts also came up with an " Excellenc Program Model" which states that the customers will recieve excellent services by the company with regards to the reduced cost and good quality products.this way they will get quality food in reasonable prices.

I think "Execellence program model is the one that most of the customers will like as it helps them to consume quality food and it does not affect their pocket much.

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.