Tough Times? Time To Grow!

How This Iconic Brand Achieved 30% Growth and Became the Market Leader During the Great Depression

During the economic boom of the Roaring Twenties, Kellogg’s and Post (former Postum Cereal Company) were the main competitors in the American breakfast cereal market, both headquartered in Battle Creek, Michigan. The competition between these two giants was fierce, driven by innovative marketing strategies that included free samples, coupons, and children’s art contests. By the late 1920s, cereal had become the breakfast staple across the United States.

However, the landscape drastically changed with the Wall Street Crash of 1929, marking the onset of the Great Depression. This period saw unprecedented bank failures and soaring unemployment, significantly reducing average American household income. Many businesses struggled, but the cereal industry was faced with a critical decision: continue marketing aggressively or cut back to save costs?

Post chose the latter, reducing their advertising spend in an attempt to weather the storm. Conventional wisdom might have suggested tightening the belt and preparing for a decrease in consumer spending. In contrast, William Kellogg opted for a bold, counterintuitive strategy. He doubled down on his marketing investments, pouring funds into the promotion of a new product, Rice Krispies, which featured the now-iconic slogan "Snap! Crackle! Pop!" By doubling their marketing budget, they aggressively promoted their brand and products at a time when their competitors were retreating. This decision not only kept the company afloat but also propelled it to new heights.

Kellogg’s Advertising 1930s

Founded in 1906, Kellogg's entered the Australian market in 1924, establishing its first production facility in Chippendale, Sydney. This marked the beginning of their commitment to the Australian consumer.

The result? A staggering 30% growth in their market presence, turning Kellogg’s into a household name and a market leader amidst one of the toughest economic climates in history. This growth was not by chance but by choice—a choice to invest in marketing to connect with consumers, understand their needs, and remain top of mind.

This case study serves as a compelling argument for maintaining or increasing marketing investments during economic downturns. The lesson here is clear: tough times are not just challenges; they are opportunities to grow and reshape the market landscape! As we navigate through our own uncertain times in 2024, Kellogg’s story is a reminder that strategic investments in marketing can lead to remarkable outcomes.

In the midst of economic downturns, the instinct for many businesses is to cut costs, often starting with marketing budgets. However, history provides us with powerful lessons on the benefits of countering this instinct. A prime example is the iconic Kellogg’s, which not only survived but thrived during the Great Depression by doubling down on its marketing investments.

Key Marketing Strategies:

1. Aggressive Advertising: Despite the economic downturn, Kellogg’s increased its advertising budget. This not only maintained its brand visibility but also capitalised on the reduced advertising noise due to competitors pulling back.

2. Innovative Product Launch: The introduction of Rice Krispies during such precarious times was a risk that paid off. The new product offered something unique and memorable, which helped differentiate Kellogg’s from its competitors.

3. Customer Engagement: Kellogg’s continued its consumer engagement strategies, such as collectable premiums and box-top coupons, which enhanced customer loyalty and kept sales buoyant.

4. Promotional Merchandise: To boost brand recognition, in the late 1920s and 1930s, Kellogg's introduced collectible items such as toys and booklets with their products. This strategy was part of their broader marketing efforts to build brand loyalty and increase sales. The use of promotional merchandise has been a longstanding component of Kellogg's marketing strategy, helping them to maintain a strong brand presence over the decades.

Merch Archive Fond Memories

Kellogg’s 90s Merch

So, to business owners, marketing teams, and decision-makers, the message is to stay the course and possibly even double down. History doesn’t just repeat itself; sometimes, it offers a blueprint for success. Investing in marketing during downturns isn’t just about surviving; it’s about preparing to thrive when the cycle turns upward again!

As we navigate the complexities of 2024, let’s take inspiration from Kellogg's strategy. By committing to robust and innovative marketing efforts, companies can not only weather economic storms but also capitalise on opportunities to grow and secure a competitive edge. Just as Kellogg's has shown remarkable resilience and growth by adapting and evolving, your company can achieve similar success. 

Now is the perfect moment to invest in high-quality promotional merchandise that resonates with your brand’s resilience. Investing in custom merchandise not only enhances brand visibility but also strengthens customer loyalty. Our high-quality promotional products serve as constant reminders of your brand's value, ensuring you're always top of mind. Empower your marketing teams with our bespoke merchandise solutions. Keep investing in your brand and watch not only how it survives but how it can spectacularly grow even in the toughest times.

Let’s grow together by embracing the timeless principles of resilience and strategic investment in marketing.

Contact us today to learn how our customised merchandise solutions can drive your business forward!

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