During the past two decades, Post Division experienced substantial fluctuations in its Grape-Nuts brand. New advertising campaigns in the 1980s had slowed the decline but had not reversed the trend. By the end of the decade, Grape-Nuts had fallen to an all-time low of 2.1% share of the ready-to-eat (RTE) cereal market. Some progress had been made in the early 1990s to reverse the share decline, but this reversal was short lived. By 1996, the brand had fallen out of the top 10 selling RTE brands with a market share that was just under 2%. Carin Gee, the group product manager on the Grape-Nuts business wondered whether the brand would have to be satisfied with this more modest share position, or whether it was feasible to return the Grape-Nuts business to its former status as a leading brand. She examined the brand’s history to help her make this judgment.

Charles Post developed Grape-Nuts in 1898. It was marketed as a natural cereal that was good for health and well being. Grape-Nuts was reputed to be a brain food that was good for red blood cells. So Post started a franchise that developed into one of the leading brands in the RTE cereal category. The modern history of the brand is summarized in Table 1.

TABLE 1

campaign halted the decline in Grape-Nuts share for one year, after which the brand’s decline resumed.

Gee’s goal is to grow the Grape-Nut franchise so that it is over the 2% level. "I don’t think we can do it with a new form, because we have tried developing a Grape-Nut flake and it did not sell well." She also questioned returning to the "try it for a week" approach, noting that "try it for a week worked the first time it was used in 1990, but it really has not grown the business over the long haul." Gee turned to consumer data to see if he had overlooked any insight that the findings might afford.

Grape-Nuts is a highly distinctive brand in the RTE category. It has a crunchy texture that appeals to a small percentage of the adult population. Table 2 shows that percentage of the population that annually eats the leading cereal (i.e. penetration), Frosted Flakes, the 8th most popular brand, Special K, and the 17th most popular brand, Wheaties. In relation to these brands, Grape-Nuts penetration is small and the amount consumed by each user is substantial.

TABLE 2

1995 Penetration (% of RTE Cereal Users Who Use the Brand)

Although the Grape-Nuts franchise was composed of a relatively small group of consumers, those who purchased the brand did so with great regularity. Loyal users of Grape-Nuts purchased the brand every 30 days on average and all Grape-Nuts users purchased it every 46 days on average.

To develop the marketing plan Carin Gee consulted a variety of data sources. A user profile study provided a demographic description of the Grape-Nuts user (Exhibit 1). Psychographic research provided some induction of the attitudes, interests and lifestyles of Grape-Nuts users (Exhibit 2). Research conducted for Grape-Nuts by Grey Advertising in which consumers were asked to personify Grape-Nuts offered further information about the brand’s essence (Exhibit 3).

In the summer of 1996, with this information in mind, Carin began to develop the 1997 marketing plan. Who should be targeted, she wondered--the current franchise or nonusers of the brand? What should the brand position be--a regular, nutritional or some other sort of cereal? What benefits should be stressed and what should the tone of the advertising be? And if the campaign were successful, what strategy might be used to sustain brand development over time.

 Demographics

VALS

A review of the Grape-Nuts VALS groups suggests that our users can best be defined by focusing on two VALS groups. These include the VALS Actualizers and Experiencers segments.

PRIZM

PRIZM data, which is more demographically oriented than VALS, indicates that the Grape-Nuts user base is clustered around two general typologies:

• Educated, affluent and upper middle class families in established suburbs and new suburbs/ ex-urban towns respectively.

• Lower middle class to downscale, factory and farm workers in factory towns and mid-American agricultural communities respectively.

A Grape-Nuts Brand Character Study utilized focus groups and quantitative personal interviews against both users and non-user prospects. A well-defined Brand Personality was identified that was manifested in a definite set of images associated with the brand.

Those images proved to be consistent in the minds of both users and prospects and are summarized in the sample results below:

• How is Grape-Nuts (if it were a person) described? (Base: Total sample)

How do users and prospects describe the type of person they want to be like or be with? (Base: Total in each group)

How is the Grape-Nuts person visualized? (Base: Total sample)