case study

California Milk Advisory Board
Real California Cheese
This case was written by Professor Michelle Greenwald, Visiting Professor at HEC, Paris, for use with Advertising and Promotion: An Integrated Marketing Communications Perspective – 7th edition by George E. Belch and Michael A. Belch. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.
In 1982, faced with declining milk consumption and a surplus of milk production, the California Milk Advisory Board (CMAB) hired the Stanford Research Institute (SRI) to conduct a comprehensive analysis of the growth options for California’s dairy industry. The CMAB, a promotional board that is an instrumentality of the California Department of Food and Agriculture, represents all California dairy farmers by developing and executing generic promotional programs for the state’s dairy products, including cheese. The SRI analysis concluded that cheese was the industry segment that offered the greatest profit and growth potential for California dairy farmers. Per capita cheese consumption in the state at the time was 23.3 lbs., exceeding the national average of 19.7 lbs. Moreover, California’s population was projected to grow faster than the nation as a whole with a major portion of the growth coming from Hispanics, an ethnic group that consumes a significant amount of cheese. However, Californiawas a net importer of cheese as out-of-state manufacturers supplied 80 percent of the natural U.S. produced cheese consumed in the state and nearly all of the processed cheese. Cheese also had faster historical and projected consumption growth rates than other dairy categories such as butter, ice cream and cottage cheese.
Cheese production was viewed an excellent growth opportunity as it takes approximately ten pounds of raw milk to make one pound of cheese. It was also more profitable to produce. Because of the higher price per pound and greater density of cheese versus other dairy products, it could be transported economically and thus had the greatest potential for sales in other geographic areas. The SRI study recommended that California’s dairies focus on retail (mass grocery and specialty food stores), foodservice (restaurants), and food manufacturing (prepared or frozen foods). 
One of the first steps taken by the CMAB to implement its new strategic direction was to create a distinct and compelling identity that would be the focal point of an integrated marketing communications program. The challenge facing the CMAB was that it needed to represent a wide range of products from many different producers. The CMAB created the Real California Cheese (RCC) seal as a certification mark that could be used to identify natural cheese made in California from California milk. By doing so, the CMAB has been able to promote many varieties of cheese from cheese makers who qualify for and use the seal on their packaging.
The RCC seal that was created depicts the image of California with a rising sun and rolling plains, on a golden, cheddar cheese-colored background. The seal assures consumers that the cheese they are purchasing is natural and is made in California, exclusively from California milk. The seal has been placed on applicable cheese packages, in all forms of advertising, on all RCC coupons and point-of-sale materials, and even on restaurant menus and table tents. Placement of the seal in all of these communication elements reinforces the message and maximizes awareness of the certification mark.
Advertising Creative
The CMAB has relied on advertising to promote Real California Cheese since 1985. Between 1985 and 1995, several ad campaigns were run in California to promote RCC that used television and radio advertising, as well as newspaper, magazine and outdoor executions. The campaigns were also supported by extensive consumer and trade promotion activity. However, in 1995 the CMAB decided to take a more emotional approach in its advertising as it wanted consumers’ affinity for Real California Cheese to be more emotionally based. The CMAB felt that it was difficult to differentiate its products based on rational superiority claims and decided that the focus should be on creating an emotional bond with consumers and affection for Real California Cheese. From 1995 to 2000, the CMAB ran a very popular campaign using the tagline “It’s the Cheese” which made humorous exaggerated claims suggesting that the real reason people come to California is because of the cheese. The campaign presented a simple positioning message that “California cheese is great cheese.” However, after running the campaign for five years the CMAB decided that it was time to take a new creative approach and also to strengthen its message by telling consumers why California cheese is so good.
In 2000 the CMAB hired a new advertising agency, Deutsch LA, which took on the task of developing a new creative strategy to promote California cheese. The agency’s creative team decided that rather than focusing on the cheese, which is really a commodity, the campaign would revolve around the idea that California cheese is better because it comes from contented cows. The tagline developed for the campaign was “Great Cheese comes from Happy Cows. Happy Cows come from California.” The humorous ads feature cows that talk and seem to think and process the world just as people do as they enjoy California’s best known features such as sunny skies, a lack of snow (in contrast to their Midwestern counterparts), beautiful scenery, and even earthquakes (which are portrayed as “foot massages”). Their dialogue has been described as “being at home in a Woody Allen movie.”
A number of different executions of the humorous commercials have been created including one that features a cow who is still traumatized when she recalls the blizzards she endured while living in the Midwest. Another features one bull talking to another who has just moved to California from back East and explaining how the “babes” in California are different because of the sunshine, clean air and good food. Their conversation is interrupted when a California cow walks by and the resident bull delivers a classic pick-up line (Hey! You work out?). Another popular spot features a herd of cows grazing peacefully in a field when suddenly the ground starts shaking as a small earthquake hits. The cows are not even phased by the trembler and actually seem to be enjoying it as one refers to it as a foot massage while others moo in delight. The spot ends with the contented cows complaining that the foot massages never last long enough. All of the commercials end with an image of cows grazing in a beautifulCalifornia pasture and the campaign theme, “Great Cheese comes from Happy Cows. Happy Cows come from California. They also show the Real California Cheese seal and give the URL for the web site. Photo boards from two of the commercials are shown in Exhibits 1 and 2.
Deutsch has also extended the campaign to other media including outdoor, radio and the Internet. The success of the TV commercials has paved the way for Deutsch to add radio to the creative mix as people now have images of the cows in their head that they can visualize when listening to 60 second radio spots. The popular radio commercials feature bantering between Janice and Diane, two of the star cows from the TV commercials. Research has shown that the advertising has generated high awareness and is very popular with consumers, who report purchasing more California cheese since the campaign began. Retailers cite the campaign as a reason for increasing the number of California cheeses they carry. The ad campaign has also been translated into Spanish for Hispanic audiences.
Media Strategy
The media strategy for the CMAB’s advertising focuses on reaching the primary purchaser: women 25-to-54 who have slightly higher income than the national average and who are likely to be married with children. The annual marketing budget for the integrated marketing campaign is $33 million. The greatest emphasis goes toward the identity-building ad campaign, followed by a retail promotion program that includes in-store coupons and sampling programs. Public relations and foodservice programs round out the mix. The TV commercials have been supplemented by outdoor billboards, bus and transit shelter ads as well as the radio spots featuring Janice and Diane In 2004, national cable advertising was introduced, since the business had started to achieve critical mass in terms of geography. In 2004, and again in 2005, the CMAB ran commercials adjacent to the Super Bowl. Roughly 60 percent of the spots air during day parts and 40 percent during prime time. Advertising on national television has given Real California Cheese credibility as a brand and provided retailers the incentive to add new California cheeses.
Channels and Trade Promotion
At the time of the SRI study, 53 percent of all California cheese moved through retail outlets. This included 39 percent through chain or independent warehouses, ninepercent through direct-store delivery, and five percent through non-grocery outlets such as delicatessens. The remaining 47 percent moved through foodservice outlets and food manufacturing operations. Over the two decades the plan has been in place, all channels have seen significant growth, although foodservice and food manufacturing sales have increased the fastest.
The primary objectives for the mass-market retail channels have been to expand distribution and promote the RCC seal in-store, thereby reinforcing the quality image and identity generated by the advertising. Retailers have been provided co-op monies for newspaper ads, flyers and store banners and they have been asked to time their ads to support in-store sampling demos and coupon programs. To capitalize on increased interest in cheese by consumers due to factors such as more prevalent travel, diet fads and increased interest in gourmet foods, retailers have expanded their cheese selections in an effort to differentiate themselves from each other. Cross-promotion coupons placed on other categories of products such as bread, crackers, tortillas, luncheon meats, wine and champagne also serve as a form of in-store merchandising throughout grocery stores. Because these cross-coupons have proven so effective, the CMAB has opted in recent years to eliminate costly and underutilized point-of-sale materials.Example of the cross-promotion coupons are shown in Exhibit 3.
The multi-faceted foodservice industry is another important channel for the RCC program. The CMAB regularly attends local, regional, national and international trade shows for the restaurant, hotel and hospital industries. Examples include the National Restaurant Association Show, the International Pizza Expo, and the Midwest Pizza Show. Today, 43 percent of California’s cheese production is in Mozzarella cheese. Pizza retail sales nationally are enormous at approximately $32 billion annually. To reach this market, the CMAB advertises in publications such as Pizza Today and Pizza Marketing Quarterly. For years, the CMAB has sponsored a “Pizza of the Year” competition at the industry’s major trade show, Pizza Expo, to encourage pizza owners to develop new recipes that use Real California Cheese.
Co-op funds are paid to restaurants that feature the RCC seal on their menu boards, table tents, in-store posters, promotion mailers, TV commercial tags, recipes, take-out food boxes and menus (Exhibit 4). Sbarro, the 900-unit, mall-based, national pizza and Italian food chain, features the RCC seal on 28 million take-out pizza boxes it distributes each year (Exhibit 5). To build consumer awareness, the CMAB has run a promotion during October (National Pizza Month) with radio advertising that encourages Californians to visit pizza restaurants and request pizza with Real California Cheese. The promotion includes a contest for both pizza operators and consumers. Foodservice distributors receive co-op monies for promoting the RCC products by placing the RCC seal on packages, sales flyers and sell sheets, and they also receive sales incentives to increase their cheese purchases over prior years.
Trade shows are extremely important to the food industry and the CMAB has created a strong presence at important trade shows such as the Pizza Expo and most notably, the International Dairy-Deli-Bakery Association (IDDBA) which is attended by wholesalers, supermarket chain reps and brokers. The CMAB traditionally has the largest cheese display on the show floor – a “California Street of Cheese” display where many of the state’s cheeses are sampled as shown in Exhibit 6.
Consumer Promotion
The objectives of the CMAB’s $7 million consumer promotion program are to create and maintain top-of-mind awareness and generate trial and repeat purchase for all cheeses bearing the RCC seal. Three primary tactics are used to accomplish these objectives including cross-promotions in-store that utilize instant redeemable coupons, in-store product sampling, and self-liquidating premium offers. As with the advertising, all promotional efforts must equally support all California cheeses. The CMAB oftenpartners with other companies to do cross-promotions with products that are frequently consumed with cheese such as bread, crackers, tortillas, pizza crust, wine and luncheon meats. Most of these cross-coupons are instantly redeemable when these items are purchased along with Real California Cheeses. This program has been highly successful, with redemption rates of up to 21 percent in some markets. The cross-promotions are a very effective tactic as they stimulate awareness and purchase interest in RCC cheeses throughout the grocery store and serve as an effective form of in-store merchandising. They also increase the likelihood of purchase since cheesecomplements the partners’ food and wine products.
Another commonly used promotional tactic is in-store product sampling to showcase the quality and variety of cheeses. The CMAB samples five different cheeses on a rotating basis four times a year, in 50 to 65 percent of a particular market’s grocery stores. The full line of RCC cheeses carried by the store are placed on display and the product samples are accompanied by cents-off coupons which can be redeemed on any RCC product. A third promotional tactic used by the CMBA is self-liquidatingpremiums that reinforce the ad campaign. The CMAB has created a “Happy Cow Merchandise” section on its web site that sells items such as talking plush cows, T-shirts with images of the cows and phrases from the ads, cookbooks and aprons, neckties, watches and polo shirts with the RCC seal.
Real California Cheese Website
A major component of the integrated marketing communication campaign for Real California Cheese is the web site ( which is handled by theDeutsch agency’s interactive arm, iDeutsch. The web site is consistent with the mission, personality and look for Real California Cheese and reinforces the “Happy Cows”campaign. The home page carries the RCC seal and has as its background a “wall” of Cheddar cheese (Exhibit 7). For consumers, the web site has links to the “Happy Cows”campaign where they can watch the TV ads and order merchandise; a shopping section where they can buy cheese online, download coupons and view a map showing locations of cheese producers; a culinary delights section that contains cheese recipes and information on how to pair wine with cheese; , a state map with links to different cheese producers, and a section with fun stuff such as Happy Cow calendar, desktop wallpaper and interactive games for kids. The web site also has a section for retail and foodservice professionals such as chefs and restaurant operators that provides recipes and information on issues such as cheese handling, merchandising, wine and cheese pairings, and a link to press releases and recent articles. The web site gets more than 25,000 visitors per month and is extremely popular among consumers, who have become fans of the Happy Cows campaign, as well as industry professionals who utilize the information.
Public Relations
The objective of the CMAB’s $1.7 million public relations program is to enhance the image of California cheeses with key constituent groups including consumers, culinary professionals, “food influentials” and the trade. A variety of media are targeted with different public relations angles according to each outlet’s target audience interests. Examples include recipe ideas for food publications such as Gourmet and Saveur as well as the food sections of major newspapers; wine and cheese pairing ideas for wine magazines such as Food & Wine and Wine Spectator; stories about the industry’s success in business publications such as BusinessWeek; the best cheese producers to visit in travel publications such as Travel+Leisure and The New York Times travel section; and marketing program success stories in industry trade publications such as The Cheese Reporter, Pizza Quarterly, Adweek and BrandWeek. In recent years California cheeses have won top awards at numerous national and international cheese competitions including recognition for its brie and cheddar at the World Cheese Awards. These awards are publicized through press releases and on the press room section of the CMAB web site.
When the Real California Cheese campaign enters new markets, public relations efforts are used to target fine restaurants, specialty stores, gourmet cheese shops, chefs, specialty store buyers, media personalities, radio stations and newspapers. The media coverage creates awareness for small cheese producers who cannot afford large advertising campaigns and for whom coupons don’t make sense. One of the CMAB’s most successful initiatives, implemented under the public relations program, has been the program it created to nurture the state’s nascent artisan and farmstead cheese industries (cheeses made by skilled craftspeople using old world techniques, often on the farms where the cows are raised). The national and regional food media have taken great interest in these small farmer success stories and in the national and international cheese awards these producers have won.
Results of the CMAB’s Integrated Marketing Program
By all measures, the program to expand California cheese production and consumption has been tremendously successful. Much of this success is a result of the integrated marketing communications program developed by the CMAB and its agency partners to promote Real California Cheese. The advertising campaign has won numerous creative awards and the ads have helped establish an emotional bond between consumers and the contented California bovines. In terms of campaign awareness and recognition, three out of every four Californians report having seen the RCC seal where they shop. Of those, 95 percent report purchasing cheese that carries the seal. Prior to 2004, the CMAB ran the Happy Cows campaign primarily in markets where Real California Cheese had a major presence. In 2004 Real California Cheese achieved national distribution in several major retail accounts as well as in the food service industry and the advertising and promotional efforts were expanded to a national level. The campaign has been expanded to other markets and has been very successful in increasing awareness of California Cheese. Exhibit 8 shows the increases in advertising awareness levels across various markets, as well as percentages of consumers who report purchasing California Cheese since the campaign began.
The real success of the campaign is seen in the numbers. California has become the nation’s leading dairy state and the country’s leading cheese producer. Cheese isCalifornia’s fastest growing dairy product, as 48 percent of the state’s milk supply goes to cheese production. California cheese production has increased more than 600 percent over the past two decades which is seven times the national growth rate. In the period from 1990 to 2005, California cheese production increased by 248 percent, from 614 million to 2.14 billion pounds. California’s steady increase in cheese production reflects growing national demand as U.S. per capita cheese consumption has grown from 22.5 pounds in 1985 to 31.2 pounds in 2004. Between 1994 and 2004, 48 percent of the U.S. increase in cheese consumption was supplied by California and the state is expected to supply 56 percent of the increase through 2013. The CMAB has also been actively promoting California cheese outside of the state under the Real California Cheese seal. Today, cheese bearing the seal can be found in supermarkets across the country and even abroad and California cheese is also available though foodservice and pizza distributors in almost every state
Discussion Questions
1. Analyze the “Happy Cows” campaign that was developed for the California Milk Advisory Board to promote Real California Cheese from an integrated marketingcommunications perspective. Why do you think the campaign has been so successful?
2. What was the role and importance of the Real California Cheese certification mark in implementing the positioning and IMC program elements? How and where was it implemented? Do you think it made a difference to the program?
3. What was the role of advertising in establishing the Real California Cheese brand personality? What were the constraints the advertising agency had to work around in developing the campaign? How would you describe the personality that was created? What are the pros and cons of the advertising approach? Can the campaign be continued indefinitely? If not, how might it be changed or adapted going forward?
4. What role did consumer promotion play in generating trial and awareness of Real California Cheese? Which tactics were used? Which were most effective and why? How did the consumer promotion tactics reinforce or supplement other marketing elements such as advertising, trade promotion, or public relations?
5. Discuss the role of public relations in the CMAB’s integrated marketing communications program? What type of press coverage and stories could be generated about Real California Cheese? What were the different public relations angles that were used to generate the interest of the different media?
6. What has been the role of the Real California Cheese website? How does it reinforce or support the other “legs” of the integrated marketing communications program?
7. Which marketing metrics did the CMAB use to evaluate their programs? Are there any others you feel they should focus on? Which do you feel are most important?
8. In light of consumer trends (demographics, food trends, and media “consumption”), are there other advertising or promotion opportunities that should be pursued by the California Cheese industry?

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