BRANDS TEST MAGAZINE TARGETING SHOPPER CLUB

JAMES TENSER

DOYLESTOWN, Pa. -- Eight grocery brand marketers are charter advertisers in a specially targeted magazine circulated to selected members of ShopRite supermarkets' Price Plus frequent shopper club.

The publication, titled Today's Family, was created for ShopRite supermarkets by Fountainhead Communications here, which provides both publishing services and advanced micromarketing capability to Wakefern Food Corp., the retailers' wholesale buying arm.

The initial 36-page issue was mailed to club members in November. It contained advertisements from All-American Gourmet (a division of Kraft General Foods that is being purchased by Heinz), Dannon, DowBrands, Friendship Food, Kayser-Roth, Kikkoman, McCain Foods and Schering-Plough. Chrysler Corp. is also an advertiser.

"This is very value-added," said Kim Biggerstaff, manager of differential advertising and promotion at DowBrands, Indianapolis. She said she decided to try two half-page ads in Today's Family after looking at the cost per household unit for a targeted message.

"They [Fountainhead] are among the most advanced of the

suppliers that we have looked at in terms of marketing to and through an account to the consumer," she said.

Alan Heyman, director of sales at Fountainhead, told Brand Marketing that his company has contracted to introduce a total of seven lifestyle-targeted consumer magazine titles for ShopRite in the coming year. Each will be published quarterly and mailed to a desirable consumer lifestyle segment, such as "golden years" empty-nesters or white-collar couples.

The editorial content of each magazine is carefully designed to appeal to the targeted group, Heyman said. Contents of the fall issue included articles on doing homework, weekend travel, cooking and home computers.

Heyman said Fountainhead is aiming toward a national network of these magazines with other food, chain-drug and mass retailers. Each will be customized in editorial, advertising and readership according to the retailer's store shopper profiles. Eventually the network he envisions would allow brand marketers to purchase highly targeted advertising aimed at shoppers throughout the country.

"We are working on a number of contracts verbally and have made presentations to 12 retailers. So far, response has been excellent," he said. The ShopRite titles will be introduced in phases during 1995: one now, two more each quarter until a total of seven are being published.

Once a network of magazines is established, said Heyman, "they would enable brand marketers to buy advertising on a national basis which is highly targeted toward most profitable consumers. This can be far more efficient than CPMs [cost per thousand] or GRPs [gross rating points] or FSIs [freestanding inserts]," he said, referring to measurements used for traditional mass advertising media.

Since consumer response to ads or coupons carried in the magazine can be measured at the store checkout through point-of-sale data, this also creates a "feedback loop" for direct analyses of consumer behavior, he added.

"This is in the beta testing process," said Jim Proud, principal of Jim Proud Associates, Naples, Fla., who has helped represent the Fountainhead program to the supermarket industry. "It can be very attractive to manufacturers at very small cost."

Proud said the consumer information that flows back to the advertiser can be of enormous value. "It shows not only how they are doing within each one of seven categories, but how the entire category is doing," he said.

To define the target audience, Fountainhead links a detailed data base of cardholder purchase behavior in each ShopRite store with a computerized analysis of each store's surrounding market by lifestyle/life stage.

Using a proprietary software process called Microparallax, which shares some similarities to geodemographic software tools such as Spectra or Market Metrics, Fountainhead maps out each store's trading area into concentric "vital" and "opportunity" zones. It then analyzes local shoppers into about 50 lifestyle segments down to the block group level. Those are then recombined into seven groups for the purpose of defining the magazine titles and creating a model store profile.

Said Thomas Xhilone, Fountainhead's director of marketing, "Brand people have been doing BPI [business product index] modeling for years. But they could never get past the market level. Now [with some systems] they can look at store clusters."

He continued, "We can do GIS [geographic informational systems] store-specific now. We can look now at the propensity to shop around the store. It is a simulation of a store market based on all variables that you are aware of."

"I am intrigued by it," said Robert Ravitz, executive vice president at Grey Advertising, New York. "I hope it works for them. Everyone talks about it [micromarketing]. They are one of the only ones trying to make it happen."

Ravitz said he has taken a keen interest in the ShopRite magazines, not only because one Grey client, Dannon, placed an ad in the inaugural issue of Today's Family.

Heyman said Fountainhead pays no fees to retailers for the rights to produce the magazines and sell the advertising. Said Xhilone, "We have been mandated by ShopRite to maintain a certain continuity throughout, so that every time we talk to their membership there is some value-added to being a member."