Defense

The Mondelez Challenge

21 Mar , 2012  

Kraft today announced that it will call its new snacks company Mondelez International.

Later this year Kraft Foods will split into two companies, a grocery business and a snacks business. The grocery business will retain the Kraft brand name, which makes perfect sense because many of the grocery products actually use the Kraft name: Kraft salad dressing, Kraft Macaroni & Cheese and Kraft Miracle Whip. The snacks business will take on a new brand name.

Finding a new company brand name isn’t easy. The name has to be unique in order to secure a trademark. It has to have the proper meaning, or at least no negative associations. The name has to work in multiple languages. It has to be available on-line.

Kraft seems to have settled on a very solid name. It is fairly easy to pronounce and spell, and has no obvious negative associations. It is also an available name; if you Google Mondelez you don’t get much aside from Kraft’s announcement. The only thing that really pops up is French, when the word monde (world) appears before the word les (the).

But the team leading Mondelez now has a challenge; they have to build a brand that people know and value. Mondelez won’t be prominent on specific products but the brand will be important for employees, investors, government regulators and business partners.

Intentionally, I suspect, Kraft is starting from the very beginning.

CEO Irene Rosenfeld and CMO Mary Beth West explained today that the name actually has some meaning. They said:

 

“The Kraft brand is a perfect fit for the North American grocery business and gives it a wonderful platform on which to build an exciting future,” said Chairman and CEO Irene Rosenfeld. ”For the new global snacks company, we wanted to find a new name that could serve as an umbrella for our iconic brands, reinforce the truly global nature of this business and build on our higher purpose – to ‘make today delicious.’ Mondelez perfectly captures the idea of a ‘delicious world’ and will serve as a solid foundation for the strong relationships we want to create with our consumers, customers, employees and shareholders.”

“It’s quite a job for a single word to capture everything about what we want the new global snacks company to stand for,” said Mary Beth West, Executive Vice President and Chief Marketing Officer. ”I’m thrilled with the name Mondelez International. It’s interesting, unique and captures a big idea – just the way the snacks we make can take small moments in our lives and turn them into something bigger, brighter and more joyful.”

 

This is a bit of wishful thinking; I suspect most people don’t know what to think when they hear the word Mondelez. Defining this, building the brand, will be a big challenge requiring significant investment and smart marketing.

But the first step is done: finding a name that can become an important global brand.


5 Responses

  1. john peters says:

    great company lousy name why not cadbury or nabisco international a name you can trust

  2. Y. Shaban (Entrepreneur & Kellogg MBA Fall 2012 applicant) says:

    ninichissimart: From the article it doesn’t look like they’ll erase the name “Kraft” from their products. Mondelez is just for their partners/employees, govts, etc.

    I think their strategy makes sense. They don’t really have to build a lot of brand equity. If they were changing their name for consumers, then yes, that would be a huge wrong move, probably would immediately chomp off a couple of billion dollars from their valuation on the stock market too.

  3. Call me wierd but when I read it first time, my first associations were nothing French or ‘big sounding’ but more like ‘speedy Gonzalez’. Joke aside, I would agree very much with what you have said: “most people don’t know what to think when they hear the word Mondelez”. This is exactly how I find it as well.

    Kraft’s choice for such branding is rather challenging. Having a completely detached brand, they have picked the branding strategy that bears highest costs, complexity, incrementality. One might say that subrands are strong enough for themselves (e.g. ‘Milka’ in Europe), but regular joe would be quite confused for some time with Mondalez in the place where ‘omnipresent and known’ Kraft used to be. I would not be surprised to see that some would perceive lower quality with such move (even where it is not in reality!).

    In the end, Kraft is strong company and strong brand and I am sure that they will throw in a lot of money and pull it through. But somehow I am still not geting why they did such (costy!) move in the first place…

    • Tim Calkins says:

      One can certainly debate the merits of the split. The story is just strange: Kraft was a slow-growth company, so it went out and bought a lot of faster growing brands and now it is spinning off the faster growing brands. So Kraft will be, again, a slow-growth company.

      On the bright side, I’m confident the investment banking firms did well on all the transactions.

      But once Kraft decided to split, then a new corporate name was essential. Keeping the Kraft brand in any way would have created a lot of confusion.

  4. Y. Shaban (Entrepreneur & Kellogg MBA Fall 2012 applicant) says:

    I wonder how much of the reason behind the name change is to make the company name actually sound as big as the company really is. Kraft is so much bigger than just cheese, but that’s probably the only thing that comes to mind for many when they think about it. Mondelez International sounds like it would be a big, powerful company, especially compared to just “Kraft” or “Kraft Foods.”

    I also wonder if a big-sounding name could possibly help make the expansion into emerging markets easier.

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