Background
Cat food is the 15th largest category in supermarkets in New Zealand and Mars had a problem. The company had only a 19 percent share of the dry cat food segment compared with the dominant player Nestle Purina, which had 65 percent. The leading brands in the category were both owned by Purina. ONE had a 33 percent share and Friskies a 22 percent share. Mars had the third brand Whiskas, which only had a 14 percent share. To add insult to injury, it had been gradually losing share for the past six years, with growth in the category being driven by Purina brands, especially ONE.
Due to the gradual decline of Whiskas, the brand had become reliant on price and promotional discounting to try and hold sales. This was a slippery slope, as brand perception and profitability were declining. Distribution losses, reduced range and poor shelf-placement added to the woes. Something had to change if it was to turn around.
What's new
Mars relaunched Whiskas Dry in mid-2009, with new product, a new packaging format, new artwork, increased pricing, new positioning and a new locally developed marketing campaign.
The new product was inherently superior to its predecessor so Mars repositioned Whiskas up towards the premium brands rather than competing in the price sensitive mainstream segment. This really was a major gamble, even though Mars was confident in its research and the new direction. Despite the long term decline, Whiskas dry was still worth $12m in sales to Mars annually. But with the significant price increase, it faced the likelihood of alienating the existing consumer base without gaining any new premium customers. In order to re-establish the brand as a credible player, the strategy was a risk that it was willing to take.
The launch was the most successful in Mars New Zealand's 21 year history and, in looking at the market, it is hard to find any other brand from any pet food manufacturer that has grown as much or changed the category in such a dramatic way in such a short space of time.
The premiumisation of the brand involved a significant price increase and therefore a higher margin, allowing Mars to offer the consumer a far superior product. It also addressed internal profitability issues, freeing up funds to invest in the brand and improve trade margins, thus gaining support from key retailers.
