P&G EXTENDS CO-BRANDED COUPONS;DIRECT MAILINGS WITH RETAILERS MAY BE OPTION TO FSI EFFORTS

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Procter & Gamble Co. is broadening use of account-specific direct mail couponing nationwide even as it continues a "zero coupon" test in upstate New York, industry observers say.

The most recent account-specific effort, in which coupons are co-branded with individual retailers but can be used by consumers at any outlet, was a late May mailing that featured coupons for Pampers diapers and Charmin toilet tissue. That nationwide mailing was in conjunction with several retailers.

A P&G spokeswoman, however, said the company is not moving to replace free-standing inserts with account-specific coupons, adding the account-specific programs are not related to the coupon test in New York.

INCREASING USE OF TACTIC

P&G has been using such programs for an increasingly broad range of products in the past year, said John Cummings, president of John Cummings & Partners, whose DBM/scan service tracks database marketing programs.

Though he doesn't track frequency of P&G's account-specific direct mail couponing nationwide, Mr. Cummings said P&G appears committed to delivering coupons in that form.

P&G started using account-specific couponing with Tide detergent two years ago and has since broadened the program to include mailings for Downy fabric softener, Crest toothpaste, Head & Shoulders shampoo and paper products.

Mailings that feature multiple brands also are becoming increasingly common, Mr. Cummings said.

"When we see that, we say it's got to be working, because they're using it on multiple brands," he said. "I know based on what's happened with [J. Brown LNC Group, Chicago, P&G's agency for the account-specific mailings]...that it's a fairly important program."

In some cases, account-specific mailings are going out without coupons. P&G also has used account-specific magazine mailings featuring a broad range of its brands, both with and without coupons, in several markets in the past year, Mr. Cummings said.

An industry executive familiar with P&G's New York zero-coupon test said P&G appears mainly interested in eliminating FSI coupons and still appears committed to Catalina Marketing's Checkout Coupon and account-specific direct mail couponing.

DOWN ON NEWSPAPER COUPONS

P&G officials "say electronic in-store coupons like Catalina tend to pay out, because they're cost effective and targeted directly to the consumers in the category using the product or similar products," he said. "They also see direct mail coupons as being cost effective. It's just when they're only getting 2% to 4% redemption out of newspaper coupons they see that as inefficient consumer promotion."

P&G also believes direct mail and electronic coupons help prevent fraudulent misredemption by groups who pool coupons and clip them in mass quantities, this executive said.

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