Recession And The Tale Of Two Brands
Insightful story in New Yorker Magazine about how the rivalry between Kellogs and Post (another cereal brand) was settled during the great depression. When recession hit, no one knew what would happen to consumer demand. Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty per cent and it had become what it remains today: the industry’s dominant player. What Kellogs did during the depression is not a new idea toady. There are legions of reports that tell us that the brands that invest in marketing and research during a recession are the ones that come out stronger when things turn better. In fact, one way to read these studies is simply that recessions make the strong stronger and the weak weaker, as the strong can afford to keep investing while the weak have to devote all their energies to staying afloat. More in New Yorker.