VENDORS, RETAILERS SAID TO STRESS CUSTOMER TIES

DAVID ORGEL

WASHINGTON -- Companies are doing a lot more than talking about meeting customer needs. Food manufacturers and retailers are taking bold steps to make sure they understand their customers and are linked to them, according to presentations last week at the Annual Business Conference and Partners Program here of Food Distributors International, Falls Church, Va.

The urgency to please customers is present whether customers are consumers or other trading partners. Key efforts to build customer loyalty include creating merchandising excitement, researching preferences, stressing brands, training employees and building meal solutions.

Following are transcripts of presentations by a few executives at a general assembly entitled "Creative Marketing Strategies: New Directions and New Solutions."

A Change in Thinking.

Food retailing has great potential for growth despite talk about loss of business to restaurants, but supermarkets must change their mode of thinking in order to tap into that growth, according to Thomas Johnston, chief executive officer and president of Sutton Place Gourmet, Bethesda, Md.

"Supermarkets are becoming the Dewey Decimal System of food," he said. "Consumers have to shop every aisle, go up and down and right and left. We try to catch them in the aisles with displays. And we try to teach some recipe ideas. But category management and some of the ways we discipline ourselves stand in the way. You can't get coffee next to cream; you can't get parmesan next to the pasta sauce.

"We must make our stores more entertaining and exciting and cluster product that meets needs for breakfast, lunch and other meals."

Sutton Place Gourmet has built a niche gourmet business, he said.

"At our stores, we want people to shop with their eyes and see food in a total solutions manner. We want to make the stores smell like food."

Johnston said Sutton Place also puts tasting on the front burner through sampling programs. He stressed the importance of hiring real food professionals to teach consumers how to cook and provide culinary direction.

Building Relationships.

As a company that markets to food-service operators through retail stores and other means, Smart & Final, Vernon, Calif., is looking forward to the sharp growth expected in that sector, said Roger M. Laverty, its president and CEO.

In particular, the company is seeking to find ways to link more closely with its food-service customers so they remain loyal, even with the possibility of better prices from Smart & Final competitors, he said.

"We want to know how to wrap ourselves around the customer, so that competitors don't try to lowball us on price," he said. "Our customers need help in training, marketing and technology, and the more they buy from us, the cheaper those services will be for them. So customers would lose a marketing, training and technology consultant by changing suppliers."

He stressed that the company is intent on building relationships to increase its share of customers. That contrasts with the old industry strategy of focusing only on increasing market share. "Growing market share is an antiquated strategy," he said.

Laverty also stressed the importance of developing the company's employees. "Develop your people, they are your key asset," he stressed. "Develop a reverence for learning in your organization."

The Importance of Branding. As firms attempt to balance the efficiency focus with moves to meet consumer demands, branding will play a more important role across retail channels, said Paula Sneed, senior vice president of marketing for Kraft Foods, Northfield, Ill.

"For manufacturers whose brands are sold primarily at retail, there is a big opportunity to make those investments pay similar dividends through food-service distribution," she said. "There is a broader participation of all our brands across food channels," Sneed said. "It means moving our retail brands into food service, for example."

The Taco Bell brand has been extended beyond fast food and made into a successful retail brand, Sneed noted. Likewise, Oscar Mayer hot dogs, a successful retail brand, has now made a major name for itself in food service. "Branding has a role in Center Store, food service and home-meal replacement," she said. "Consumers get a quality commitment."

Sneed said it is imperative for companies to not only research consumers, but turn that knowledge into meaningful insights. Kraft has been tracking trends through a number of efforts, and has used many tools to address consumer needs. A company web site provides recipes, tips and other services to consumers, she said.

Partnerships become more important as the rules of meeting consumer needs change, she added. "We reorganized our sales and food-service organizations to do that partnering," she said.

Sneed urged executives to be optimistic about the future of consumer marketing. "Our success depends on how we see the future coming," she said. "The clues are very subtle. If you have a few good insights on consumers and believe in brands and are aggressive in partnerships, then you may be on the way to success."