CHICAGO -- Data-base marketing can be effective in low-margin packaged goods categories if the company sets the right parameters.
"Strict financial control is important. In building a relationship with the consumer, you have to go beyond your product and demonstrate empathy. Focus on the consumer's needs," advised Jane Horowitz, an industry consultant and former director of strategic consumer programming at Quaker Oats Co. here. Horowitz, who held that position until Quaker's recent divestiture of its pet food division, spoke at a data-base marketing conference here hosted by the Center for Business Intelligence, Burlington, Mass. Quaker learned something about data-base marketing from its program for Cycle dog food, targeted at new dog owners, she said. The market for dog food had changed. Grocery was no longer the primary outlet for dog food as pet superstores and mass merchandisers made inroads. Premium-priced brands that stressed nutrition benefits were growing and enjoying consumer loyalty, while frequent freestanding inserts for traditional brands resulted in brand-switching, Horowitz said. Cycle dog food saw a decline in its share and volume, which led to a reduced advertising budget. This made it hard to effectively convey a message to consumers, she said. The company set a goal of convincing dog owners of the importance of a life-long nutrition plan. Targeted consumers were those who really cared about their dogs' well-being -- from nutrition to showing concern about the quality of care and love the dogs received. Those consumers wanted information, which Quaker could provide with its Cycle program, she said. The company decided to target new puppy owners because people give more thought to their choice of dog food when they first bring the puppy home. If a strong relationship could be built with those consumers at the puppy stage, it might continue through the life of the dog, Horowitz said. The Cycle team elected to use data-base marketing to make a connection with these consumers and develop commitment to the brand. Data-base marketing would be highly targeted, and could communicate a more detailed and complex message, whereas a freestanding insert would have been limited to a simple, direct message, she said. Also, with data-base marketing, the message could be flexible to address the different stages in the puppy's life, she said. "We wanted to build empathy in our communications. Data-base marketing would allow us to do that," Horowitz said. A list from the American Kennel Club was used for three mailings during the year.
"We met our objectives from financial parameters and increased share requirements as well as we could monitor, based on responses to our offers and coupons. We tried to keep lowering cost. We hit our targets for coupon redemption," Horowitz said.
