“Marketing” is one of those terms that gets tossed around a lot, a buzzword for some and a real business driver for others. However it is defined or prioritized within a company, marketing plays an undeniable role in building product or brand awareness, boosting sales and, ultimately, improving profitability.

In today’s competitive retail and foodservice climate, marketing dairy products becomes even more important — and complex. More often than not, marketing campaigns are integrated programs, encompassing new product development, product packaging, market research and advertising through a variety of media, public relations and grassroots promotions.

Whether driven by their own desire to capture market share or inspired by successful general marketing efforts from industry-funded organizations, processors increasingly invest in marketing to stay competitive, both within and beyond the dairy category. “We have to be very aggressive,” reports Jill Schroeder, brand manager for St. Paul, Minn.-based Hyper Cow Inc., which produces a new line of Hyper Cow™ flavored milks with caffeine. “We are competing not only with similar dairy products, but in the case of Hyper Cow, we are competing against soft drinks and energy drinks as well. Since our competitors have more marketing dollars, our best defense is creativity.”

Sandy Kelly, director of marketing for Phoenix-based Shamrock Foods Co., agrees that a comprehensive, detailed marketing plan is critical. “When a consumer sees any given piece you are doing, whether it’s a print ad, radio spot or package, it all works together and delivers the same, consistent message. It’s meaningful to them and what their needs are,” she says.

While promotions and advertising of some sort have always been part of the sales mix for dairy, sophisticated approaches to marketing were not, particularly with fluid milk. “If you look at the years from, say, 1965 to 1995, there was virtually no change in what milk did,” says Kurt Graetzer, chief executive officer of the National Fluid Milk Processor Promotion Board and Milk Processor Education Program (MilkPEP) Board, Washington, D.C. “From ’95 to now, there have literally been quantum leaps. (Dairy) companies are becoming really good and in some cases very adept competitors to people like Pepsi and Coke.”

J.T. Wilcox, director of operations for Wilcox Farms, Roy, Wash., has served on the MilkPEP board and says the industry’s focus on aggressive marketing tactics has changed the face of the marketplace. “I think we are working on totally different issues than we were 10 years ago,” he says, recalling how milk and other dairy products were getting squeezed by other foods and beverages. “Without some industry effort, I don’t think we’d be able to stand up to that kind of attack.”

Many of the recent hard-hitting marketing strategies for dairy products can be traced to general industry-funded programs that took shape during the 1990s. For example, as America’s dairy producers funded research projects to reinforce positive nutrition messages through the National Dairy Council and other arms of Rosemont, Ill.-based Dairy Management Inc., MilkPEP broke new ground with its bold advertising and promotional campaign for milk.

As anyone who has opened a magazine in the past decade probably knows, MilkPEP’s Milk Mustache/“got milk?” campaign, funded by both processors and producers through MilkPEP and DMI, is likely to go down in the annals of marketing history as arguably one of the most well-known and influential ad programs. Rolled out by MilkPEP a decade ago, the Milk Mustache campaign continues to focus on milk’s nutrient profile, with different twists and celebrity spokesmodels.

The ads, which can be linked to increased milk consumption among teens, have always been part of a broader project, as Graetzer is quick to point out. “What’s really important to understand is that what we do and what we get involved in and the effects of this program are way beyond just an advertising campaign,” he explains, Graetzer points to public relations efforts aimed at industry issues, promotional programs targeting retailers and schools and distribution and packaging changes that help make milk available through vending machines and convenience stores.

Currently, MilkPEP is working on a host of new marketing programs, from readying the latest celebrity milk mustache ads to updating the popular www.whymilk.com Web site to developing two new Spanish-language television ads. “People ask if it’s still a viable campaign. Every year, the amount of impressions we are able to generate increases and the press still comes calling when we have a new celebrity with a milk mustache,” says Graetzer.

Similarly, marketing is never far from mind at DMI. The group regularly works to share the results of its initiatives and research with influential members of the health profession, education field and the media, through traditional advertising and marketing elements as well as through educational and public relations activities. “It’s a monumental time right now. Not only are we working on our 3-A-Day program, which promotes milk, cheese and yogurt, but there are lot things we are doing on milk side, like the new plastic single-serve resealable bottle that will be available at McDonald’s,” says David Pelzer, DMI vice president of industry relations.

Supported by several studies underscoring the importance of milk in a healthy diet and its role in weight loss, DMI’s 3-A-Day of Dairy program is the subject of an upcoming series of ads, promotions and collaborations with processors and other strategic partners. “We have three real power periods this year,” says Kevin Burkum, DMI senior vice president of retail channel development. “March is one, with a new 3-A-Day magazine print ad and three new television spots. Then we will come back for June National Dairy Month for another series, and in the fall, we will be talking about 3-A-Day more for the weight-loss benefit.”

In addition to touting dairy’s natural health claims, the new ads highlight the appetite appeal of dairy products. “It really leverages the fact that while dairy is healthful, it is the dairy you love,” Burkum says.

Meanwhile, beyond the 3-A-Day of Dairy projects, DMI will be busy on the marketing front helping fast-food giant McDonald’s launch a new single-serve flavored milk product into all of its franchises, along with continuing its vending initiatives and school milk programs.

The group’s marketing work continues, despite a February ruling by the Third Circuit Court of Appeals in Pennsylvania that the dairy producer checkoff that helps finance 3-A-Day is unconstitutional. That verdict is expected to be appealed, and so far at least, programs haven’t been impacted. “There was nothing in that ruling that said anything about the stoppage of business as usual,” says Pelzer. “In the meantime, we continue to do our thing to increase demand for dairy products.”

As they monitor industry happenings and brainstorm new marketing tactics, industry groups are keenly aware of the importance of validation. “I think there is no question we’ve been able to stem the steady decline of milk that had been going on for 50 years,” says Graetzer. “The most recent analysis showed that the industry sales are about 4.5 percent higher than they would have been without the program.”

From the perspective of a dairy processor who has helped with his company’s marketing programs and served on an industry group’s board, Wilcox believes mutual efforts have worked to the advantage of the entire category. “The thing we’re doing the most, something I think we owe to the national campaign, is innovation, whether it’s in packaging or flavors,” he says. “The growth hasn’t been really rapid, but it’s been steady and we’ve all really taken the fight right to where our competitors are. Long term that has made a difference.”

As Wilcox notes, generating excitement in the dairy case has largely stemmed from innovation on the product development side (think single-serve flavored milks), but those products couldn’t move without effective, visible marketing initiatives. Increasingly, whether for new products, re-packaged products or existing product lines, processor marketing campaigns are becoming more integrated to create a buzz and deliver a powerful message.

“That is important more than ever in today’s fragmented media market and with increased competition for consumers in terms of share of voice,” says Kelly. “It is important to make sure everything is working together.”

To do that, Kelly says Shamrock, like other marketing-savvy dairy companies, starts with the ultimate decision-maker. “It’s making sure you focus on what the consumers’ needs are and what their trigger is, and then showing them how your product delivers on those needs,” she says. To start the process, Shamrock typically gauges its target audience through formal or informal means.

That strategy of beginning with the consumer is one shared by many dairy marketers. “In every marketing initiative, we strive to tailor an integrated message to the consumer, customer and community,” says Susan Meadows, vice president of marketing for Dean Foods’ Southwest Region in Dallas. “To reach the consumer, we begin with research to better understand our target. With our retailers, institutional and foodservice accounts, we begin every campaign strategy by asking these questions: How can we build our brand? Will this idea create more value for our customers? Will our customers be excited by this idea?”

Although product development and market research are the kickoff points for many marketing campaigns, how the product is delivered — like packaging — also is an essential marketing tool. To that end, many marketing dollars and resources have been spent turning packages into extensions of a communications strategy.

Shamrock, for instance, recently won an Achieving Excellence Award from Washington, D.C.-based International Dairy Foods Association (IDFA) for Best Overall Package Redesign, for the company’s new dairy creamers packaging. “Our packaging is really the cornerstone of our brand,” says Kelly. “We have found it is a critical part of the marketing mix and that is how we look at it – it’s responsible for closing the sale.”

Likewise, Smith Dairy, Orrville, Ohio, is known to invest heavily in packaging as part of its core marketing program. “Our package design is the most important tool we have to deliver our brand message. We take advantage of the label space to differentiate and educate,” says product marketing manager Penny Baker. “For example, our gallons of milk in yellow jugs have a stretch-wrap label that acts as a billboard to tout the benefits of milk, especially in the yellow container. We are consistent with our message that ’Yellow protects milk better.’ That message is drilled into consumer’s minds.”

For new products especially, packaging is perhaps the most upfront way to create interest for a previously unseen item. When Buffalo, N.Y.-based Sorrento Lactalis, for example, launched new Shapesters® shaped natural cheese snacks last year (an Achieving Excellence winner for Best New Product), packaging was considered a basic part of the marketing umbrella. “The package is an important part of promotions — it is a billboard on a shelf,” says product manager Mary Genco.

Traditionally, advertising has been the flashier part of marketing, a powerful and often effective way to reach large numbers of consumers through newspapers, magazines, television, radio outlets, billboards, coupons and direct-mail pieces. The checkoff-funded Milk Mustache/“got milk?” ad series is one example of the staying power of ads embraced by the public. “Our recall of advertising is stronger than Pepsi or Coke, and they spend four times more than we do,” says Graetzer, noting the campaign works on many levels. “The milk mustache campaign is not only great but it is consistent. That consistency is one of our great allies.”

Individual dairy processor advertisements have received accolades for their creativity as well. Sorrento Lactalis won this year’s Achieving Excellence award for Best Overall Television Ad for its new Shapesters commercial. “Television is very important in the beginning for initial awareness. We had to focus on that, we build awareness in store, because repeat comes with trial,” says Genco.

Although television and magazine print ads attract attention, transit advertising has long proven effective, too. Billboards are often utilized by Minneapolis-based Marigold Foods, awarded an Achieving Excellence distinction for Best Billboard/Transit Ad. Tied into a promotional partnership between the company’s Kemps ice cream and Northwest Airlines World Vacations, the most recent set of billboards highlighted a series of rotating travel-themed flavors in Kemps ice cream line, such as Moon Over Maui and London Truffle. “The billboard was a very important part of it. It gave us visibility,” says Raquel Melo, senior product manager for frozen desserts.

Other examples of traditional advertising formats include freestanding inserts (FSIs), usually with coupons, published in weekend newspapers and direct mail pieces, sent to various key audiences. Horizon Organic, Longmont, Colo., won an Achieving Excellence Award this year for Best Direct Mail, for its piece educating health professionals about the dairy company’s new organic infant formula. “It had educational information about infant formula and a sample and was mailed to doctors and pediatricians to give them an understanding about organic infant formula and Horizon Organic,” says Gwen Scherer, director of marketing. “We want to have a close partnership with pediatricians, because parents really rely on pediatricians to give them advice.”

In addition to single elements, when budgets allow, many dairies opt for advertising via numerous channels for a bigger bang. Shamrock, for example, was honored by IDFA for Best Mixed Media Campaign for Milk, a program that included advertising, public relations and promotions. Built around a new chocolate malt single-serve milk variety, the campaign targeted parents and featured traditional print and radio advertisements as well as a sweepstakes contest offering a trip to the Baseball Hall of Fame.

Kelly says Shamrock’s campaign was effective because the ads were coordinated as well as attention-grabbing. “It’s fun, it’s different and it’s creative, to get them excited about drinking the product,” she says, adding market research bore out the success of the ads. “We tracked it at different time periods and found that not only during the launch of this product — but also across the entire line — we were able to sustain growth.”

Meanwhile, as media outlets continue to diversify, there are new opportunities for advertising. Dean Foods’ Southwest Division, for example, has investigated different types of formats for its various campaigns. “Certainly TV, radio, print and outdoor are basic to us, but we’ve begun to expand into other non-traditional avenues such as mall posters, Cineplex advertising, one-sheet posting and Web site messaging with great success,” says Meadows, adding the type of advertising depends on the product and the market. “There is no one-size-fits-all solution. Each market is different and we work closely with these dairies to customize the most effective strategy for that particular area.”

Delivering commercial messages through channels that reach consumers in their homes, at work or in transit are important for generating product interest, but grassroots promotions are considered by many companies to be essential. Promotions encompass a variety of different elements, like retail point-of-sale (POS) materials, sweepstakes and sampling. “Point of purchase is incredibly important and there have been a lot of studies done on the incremental lift you can get at that level,” says Kelly, who says Shamrock has increased its store promotions in recent years.

Product launches are almost always accompanied by some sort of promotion, evident by Hyper Cow’s highly targeted efforts during the rollout of its new caffeine-spiked flavored milk. “When we launched the product, we conducted some very aggressive guerrilla sampling,” remembers Schroeder. “We branded a vehicle with our logos and passed out the product on college campuses, skate parks, high school sports tournaments and high traffic areas for young adults. We also ran radio spots and hosted a launch party with national skateboard talent at the Mall of America (in suburban Minneapolis).”

Many promotional events are annual, offered seasonally. Smith Dairy, for instance, runs at least two in-store promotions for its brands each year, most recently a “Moo Money Madness” program during the 2003 holiday season. “Our objective is to create brand awareness at the consumer level, creating a pull through at retail,” says Baker, adding Smith Dairy provided supermarkets with POS materials, prize packs, ad slicks and customized radio tags. Next up is the company’s spring and summer promotion for its Ruggles® ice cream line. The Ruggles Road Tour is a grassroots campaign to reach consumers in northern and Central Ohio through buses that make appearances at community events and retail store openings.

Kemps’ travel-themed rotating ice cream promotion is continuing this year as well, again with Northwest Airlines World Vacations and a new series of globally inspired flavors. The program was extended, says Melo, because of the success of last year’s effort. “It was a really effective promotion for us and we learned a lot from it,” she says. “We’d never had a partnership like that with a non-food company and they had wonderful resources, which were the trips. We could award trips on a national level and on a specific level, like a trip a customer could win by using their EZ-Save card at a particular store.”

Dean Foods’ Meadow Gold brand also relies heavily on promotions to reach consumers at different venues, from the dairy case to local special events. “Because the Southwest Region of Dean Foods consists of 16 strong regional brands, it is imperative that we develop campaigns that continue to build on their heritage, community commitment and loyal consumer following,” reports Meadows.

Two recent regional promotions earned Meadow Gold nods from IDFA. The company won for Best Ethnic Marketing Campaign for its promotional efforts in Utah, including teaming up with the local “Miss Latina” personality. “Our Latino/Hispanic campaign for Utah was developed in response to how the marketplace was evolving. With an ever-growing Hispanic population there, Meadow Gold’s Miss Latina campaign was a sure way we continue the local brand message while appealing directly with a celebrity in the Latino/Hispanic community,” explains Meadows, adding that coupon distribution and community events were successful aspects of the promotion. “We are always trying to come up with some new ways to market, rather than just Hispanic billboards or Univision or Telumundo (networks).” IDFA also honored Meadow Gold for Best Butter Promotion for the company’s “Butter Cow” event at the Utah State Fair, a butter sculpture that drew large crowds and media attention.

The processor is also launching a marketing campaign in Las Vegas in conjunction with the opening of a new processing facility there later this year.

As for the future, marketing campaigns will likely evolve into more integrated programs with many tailor-made elements, for different consumer segments, media channels, retailers and foodservice accounts. Just as in the previous decade, marketing programs are sure to hinge on innovations on the product, packaging and distribution aspect of the business, spurred by processors and industry groups alike “There is still an enormous way to go, we have to work better nationally and locally,” notes Graetzer.

For her part, Meadows believes dairy marketers are up to the challenge, pointing to the enormous success of the development and marketing of single-serve milks. “No longer just a commodity, single serves must now walk tall among the carbonated soft drinks, bottled water and juices,” she says. “There has been a real learning curve associated with marketing this product line, but the opportunities are great and rewarding.”