CHICAGO -- Manufacturers and retailers can use information technology and data-base marketing to build a more effective working relationship, said James Keller of DCI, Manasquan, N.J. "We are on the cutting edge of a new spirit of cooperation that can bring enormous benefits to all of us -- manufacturers, wholesalers and retailers," said Keller, senior vice president of business development, and a former longtime executive with Kraft General Foods. He spoke here at an in-store marketing conference sponsored by the Grocery Manufacturers of America. DCI provides retailers with turnkey services, including frequent shopper card issuance, data-base management, marketing analysis and direct mail. It currently services the electronic marketing programs in over 1,200 retail stores.
The key to building the working relationship between trading partners is household-specific purchase data, according to Keller. "With traditional data, all that is known is overall market sales," he said. "Actual brand switching can only be estimated. However, with household-specific purchase data, you can deal with facts instead of estimates."
Such data, he said, can provide a full financial analysis on marketing expenditures. "Instead of guessing what the response rates are, hard facts are now available. And hard facts are always better when planning strategies, budgets, or marketing campaigns," he said. To help retailers and manufacturers better understand their customers' purchase behavior, DCI developed a software program that provides household-specific data to manufacturers. "All of this, of course, is supported by the retailer," said Keller. "The information can be used for market research studies, targeted direct mail promotions, as well as promotion analysis and evaluation." To illustrate how the relationship works, Keller used the example of a major brand marketer, whom he didn't name, who reintroduced a breakfast cereal. The traditional mass marketing methods were supplemented by direct mail. DCI targeted households that were loyal to the major competitive brands with a direct mail campaign to encourage brand switching. "Among the targeted households, only those that received the direct mail piece changed their cereal purchase behavior," he said. "In other words, if a customer was exposed only to traditional advertising and promotion, they didn't change their purchase behavior. "Brand switching behavior was measurable," he said. "Of the active cereal customers, 14% switched."
