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SAN FRANCISCO-Major package-goods marketers, limited in their access to information about actual buying behavior, are devoting an increasing share of their marketing budgets to retail tie-in programs.

The attitude reflects an admission that scanner-equipped supermarket chains have the best information on purchase data, but refuse to turn it over to marketers for standalone DM programs.

"Ten years ago, when General Foods first invested in direct marketing, we seemed to be on the edge of a new era of consumer marketing; the era of the database had dawned," said Victor Grund, manager of database marketing at Kraft General Foods, at the Direct Marketing Association's fall conference here.

"Companies believed that the one of us who created the largest database and had the most information would be the master of the universe."

The problem was supermarkets rapidly developed their own scanner-based purchase data, and refused to sell or give names and addresses to marketers.

"The retailer has information that the manufacturer simply doesn't have and will never have access to," said Don Schultz, an integrated marketing professor at Northwestern University.

Despite KGF's huge database of 25 million households, it's forced to work through retailers to gain the most useful information on purchase activity.

Marketers "want to do individualized marketing, but do it in a mass-marketing environment; that's a whole new concept," said Robert Wientzen, chairman-CEO of Advanced Promotion Technologies, Pompano Beach, Fla., and former head of direct marketing at Procter & Gamble Co. "People recognize that data access is a big deal here."

KGF is testing an ambitious program with Wegmans Food Markets, an upstate New York supermarket chain, that allows KGF to inexpensively mail customized offers and coupons to members of a frequent-shopper program.

At the same time, Quaker Oats Co., Pepsi-Cola Co. and Ralston Purina Co. have delivered direct mail programs through Safeway designed to build loyalty to the chain and boost sales of their products.

A Safeway/Quaker gospel music offer targeted 170,000 black households of the 1.2 million in Safeway's Washington marketing territory, an important group that let marketers focus on more than just sheer volume of cases shipped.

"We've been able to indoctrinate people who were used to just saying, `We sent out a zillion cases,"' said Alice Fawver, a regional direct marketing manager for Safeway. "More and more, it's [a question of] who did it go to? Was it incremental? And was it profitable?"

P&G is using the lure of direct marketing to boost its wholesale volume in a year-old program that offers co-op mailings to retailers who increase shipments. Some competitors scoffed at the program's ability to provide information about who's redeeming the coupons it offers.

But KGF and P&G have become active users of systems like APT's Vision Value Network and Catalina Marketing's Checkout Coupon, which provide access to households that use their products or their competitors'.

Perhaps the biggest benefit to retail-driven programs is the ability to prove direct marketing pays off in the long term, never an easy sell to top management.

"When we got into this business (in 1984), direct marketers told us the good thing about this is it's so measurable," Mr. Grund said. "But you wind up with research budgets that are larger than some of the programs."

Quaker resorted to telemarketing to find out how responsive teen-age boys-core users of Gatorade-were to its DM programs, after realizing that few would complete surveys. But even that data is suspect, because it relies solely on self-reported data.

Several executives said direct marketing will never be profitable if used merely to deliver coupons.

"Not many marketers have the chops to swallow it unless they believe they can get an immediate response to couponing at a cost comparable to FSIs," said Mike Slosberg, executive creative director of Bronner Slosberg Humphrey, Boston.

But many early database marketing efforts remain driven by sales promotion techniques, as opposed to loyalty building offers. And that has backed many executives into a corner, since coupon redemption rates are the standard by which success is often judged.

Mr. Levin coordinates Direct Marketing News.

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