HEINZ USES TODAY'S TOOLS; NO COALITION-MCCARTHY TALKS; MORE ON BENETTON; PHONE WAR'S WINNERS; EYE OF THE BEHOLDER;
In his Feb. 20 column, Rance Crain says that Heinz doesn't get it when it comes to advertising. As a proprietor vulnerable to advertising downturns, perhaps he protests too much.
The reality is that with new technology and proliferation of television channels there are many different and cost-effective ways to reach consumers in addition to advertising. The proper marketing mix will vary by brand, by product and by market. It will also vary over time.
With the significant changes in communication media, distribution channels, trade practices and consumer preferences that are occurring with increasing frequency, no one can afford to assume that tools that worked in the past are the right tools for today's job.
Heinz spends in excess of $1.5 billion in total marketing support of its brands every year. We employ a mix of consumer promotions, trade promotions, direct marketing and media advertising. Advertising alone is expected to be approximately $300 million worldwide next year.
Your readers can judge whether this balance works when Heinz's shareholders have enjoyed a 22% increase in their share price in the past 12 months. Furthermore, Heinz has over 35 No. 1 brands in different categories worldwide, including the two brands he mentioned, Star-Kist and 9 Lives, which respectively hold market shares of 40% and 26%.
D. Edward I. Smyth
H.J. Heinz Co.
Rance Crain dissembles when he suggests that the parting of H.J. Heinz and Leo Burnett represents a brand marketer's abdication of its equity.
It's true that Heinz, and many other marketers, have undercut their brands by pouring megabucks into a deep-discount black hole in hopes of driving volume. Between 1983 and 1993, the percentage of industry marketing dollars spent on trade promotion has increased 13%-from 34% to 47%. Meanwhile, advertising expenditures declined to 25% of budgets (down 15%) and consumer promotion spending held steady at about 28%, according to Donnelley Marketing.
Unfortunately, Mr. Crain fails to acknowledge that these spending trends represent a permanent power shift to the retail trade that cannot be reversed by traditional image advertising alone.
Like every other smart marketing strategist today, Heinz now recognizes that a traditional consumer focus by itself is no longer sufficient to protect a brand's barriers of entry. They are recognizing that a consumer focus through the retailer can also build brand equity and is equally crucial to protecting a brand's barrier of entry. Heinz understands that successful brand-building today requires manufacturers and retailers to work together to develop consumer-based marketing strategies for the benefit of both parties. ... The store is now becoming a marketing and communications medium.
Over the 26 years of the Heinz-Burnett relationship, the old "ad factory" approach has been replaced by the steady transition from mass marketing to regional marketing to local marketing to account-specific marketing, and now to category marketing and co-marketing.
It is dangerously disingenuous and anachronistic to cling to the one-dimensional dogma that consumer-only marketing (powerful though it may be) is every brand's silver bullet solution. Advertising agencies like Burnett appear to be learning this the hard way.
Christopher W. Hoyt
Hoyt & Co.
I am writing in response to your Feb. 13 article on the Competitive Long Distance Coalition, an alliance of the nation's more than 500 long-distance companies. As the executive director, I would like to set the record straight with regard to the coalition's advertising efforts.
I have never talked to Larry McCarthy or anyone else associated with Gannon, McCarthy & Mason about coalition advertising. Nor has any other officer of the coalition. Your contention that the coalition is "trying to line up" Mr. McCarthy's company to "voice its views on deregulation" is completely untrue.
The coalition's voice on deregulating the communications industry is loud and clear. We are committed to working with Congress and the administration to pass a bill that ends local telephone monopolies and brings full, fair competition to all markets. A recent nationwide poll found a majority of Americans support these worthy goals, and we will continue to work for them, without Mr. McCarthy's help.
John C. Tuck
Executive director, Competitive Long Distance Coalition
Your editorial regarding a court's condemning Benetton's advertising in France (AA, Feb. 13) is commendable, and I share your views against any censorship.
It would have carried more weight but for one major inexactitude: the Tribunal de Grande Instance is not the country's highest civil court. It is, on the contrary, the lowest, and can be easily appealed. To its defense, the court was moved by the AIDS patient's sufferings, and we should not forget that when Benetton is under sentence to pay $9,600, AIDS patients are under sentence of death.
Chairman, Lintas Paris
The media war between MCI and AT&T may be helping TV stations' profitability, and certainly helping their respective agencies' bottom lines, but the war between the two telephone giants is starting to border on the ridiculous.
We note particularly that Sprint has been smart enough to stay out of the scuffle. While MCI and AT&T continue to spend millions for TV time to try and steal each other's customers, Sprint just keeps chalking up bigger and bigger profits without joining the fray.
I may be shot by my friends in the conventional advertising world for saying it, but sometimes it may not pay to be so aggressive in the advertising world.
Lauren R. Januz
Januz Promotional Advertising
Lake Forest, Ill.
In re: the letter from Eve Oster in which she commented on the ACE Awards ad, wondering "who would use a profile of a woman's anatomy to convey a message" (AA, Feb. 20). It reminded me of the psychiatrist who, having heard his patient identify several ink-blots as sexual in nature, questioned the patient's preoccupation with matters carnal. "Me?" asked the patient. "You're the one with all the dirty pictures!"
C'mon, Ms. Oster. With rape, domestic violence, sexual harassment and such all around, can't you find something real about which to become indignant?
Steven J. Fradkin
Wizard of Adz
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