CATALINA SEES ELECTRONIC SYSTEM GAINS

MARC MILLSTEIN

ST. PETERSBURG, Fla. -- Brand marketers are beginning to take advantage of electronic marketing opportunities. But there's still a long way to go before the promise of more efficient, highly targeted electronic marketing vehicles is fully reached.

That is the opinion shared by Tommy Greer, Catalina Marketing Corp.'s chairman and chief executive officer, and George Off, president and chief operating officer.

Catalina, which had sales that topped $71 million last year, now has four electronic marketing programs that manufacturers and retailers are participating in. They are Checkout Coupon, a scanner-driven coupon-dispensing system; Checkout Direct, which provides incentives to consumers based on extended purchase patterns; QuickCash, a frequent-shopper program administered by retailers, and MarketMatch, which offers shoppers incentives for products and services outside the supermarket industry based on their in-store purchases.

Catalina's systems are currently in place in more than 6,500 supermarkets nationwide.

In an interview at Catalina's headquarters here shortly before the Food Marketing Institute's annual convention last month, Brand Marketing sat down with Greer and Off and explored a wide range of issues. Here's what they had to say:

BM: How do you view electronic marketing compared with other promotional vehicles today?

OFF: I don't know if our message has changed. We still believe that freestanding inserts start out inherently with a lot of waste. Take the baby diaper category, for example. Only 11% to 12% of households in the United States need to purchase baby diapers or related products. So in that area alone, FSIs start out with an 88% waste factor.

Then when you also take into account all the other factors, such as misredemptions, it becomes clear how inefficient and expensive the traditional practices are. We think our system can accomplish a wider variety of objectives and do a much better job in reaching a selected targeted audience -- and do so much more efficiently.

BM: Are there any new programs Catalina is launching or expanding in the second half of 1994 that brand marketers should know about?

OFF: Our main emphasis this year will still be on our existing programs. We are continuing to make progress on the education front in terms of stressing the benefits of electronic marketing to retailers and manufacturers.

GREER: But we do have some new things. Our Checkout Direct program, for example, is fairly new, and we've already gotten a lot of manufacturer interest in it. We have a lot of brands who have been testing the product with us and we have a lot of brands signed up to take part in our expansion this year. OFF: We also have designs and ambitions to create a sweepstakes game that would be run through our system. It might be something like: buy one soda brand and have a chance to win a prize right at the checkout. We're working on several programs like that.

BM: How quickly do you see brand marketing participation in programs such as these increasing?

OFF: I think they are just beginning to learn how to use the flexibility inherent in these types of systems. Brand marketers are anxious to learn how to use our tools. I think some of them would even like to see us move more quickly in expanding into new areas.

Some have also said they would like to see us targeting other classes of trade, like drug stores and mass merchandisers. We're looking at that carefully, at least on a research-and-development basis. But we feel we still have a long way to go in supermarkets.