Blame it on the Gorilla – Can we blame the Gorilla for Kraft’s take-over of Cadbury?

Mixed feelings abound as far as this particular corporate story goes. Warren Buffet’s disapproval must be off putting even to such a successful business leader as Kraft’s CEO Irene Rosenfeld. Buffet’s comments on Kraft’s bid for Cadbury were typically frank. “If I had the chance to vote on this I’d vote no” and commenting that he feels poorer, leave nothing to the imagination. http://www.ft.com/cms/s/0/de9cbfec-05d3-11df-88ee-00144feabdc0.html As Kraft’s single biggest investor and with a legendary record for making good investment choices his words have great significance, but so does his decision not to sell his shares in Kraft for the time being.

Many people in the UK are lamenting the loss of a successful British company to American ownership, and some UK commentators think that the valuation of the company is still too low, and that job losses are unavoidable in Britain. Certainly we are seeing the end of an era, although the company is hardly still run exclusively according to its Quaker origins any more. Cadbury has already cut thousands of jobs in the UK over the last few years, and some argue that it lost its Quaker ethos as ago as the 1960s when it first floated on the UK stock market.

Cadbury and its advertising were the subject of a heated debate at MediaCom last autumn, when the Kraft offer first was initiated. (http://www.mediacomuk.com/smarter/smarter-june09.asp). Author and commentator Jonathan Salem Baskin used the iconic Gorilla and Eyebrow advertising as an example of what NOT to do with your brand. He argued at our conference that the advertising worked to gain attention, but had very little to do with either eating chocolate or with the core target market for the product. Baskin was challenged by a senior marketer who pushed back citing the Kraft bid as an outcome for the advertising that had in fact been extremely successful because its impact had reached the money men (and women), far beyond the marketing community.

Expert opinions vary on the immediate and medium effects of the Gorilla advertising on the sales of Cadbury chocolate. Econometric analysis suggests that the advertising, although high profile, was not as successful as Galaxy’s more targeted approach in growing share (Galaxy is a MediaCom client, so we’ve looked at it in some detail). But clearly if the intended roi is about share price then Cadbury’s advertising certainly delivered the required level of fame.

We will all be watching to see if the ads change style once the brands change ownership.

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