P&G USES DIRECT MAIL TO BUILD 'CO-EQUITY'

JAMES TENSER

NORWALK, Conn. - Procter & Gamble has dealt out another installment in its customized direct-mail program on behalf of two retailers in the New York-metropolitan area.

In a pair of April promotional mailings on behalf of the ShopRite supermarket chain and the Caldor discount store chain, the Cincinnati-based brand marketer leveraged its strength in database marketing into yet another competitive coup.

In the process, said a source familiar with P&G's activities in this area, it advanced what the company likes to call "co-equity" objectives. That is, it supported both its own brands and those of its retail partners. Similar principles have been labeled "co-marketing" by others in the brand marketing community.

Various P&G brands and brand groups have offered similar direct-mail programs over the past year or more. A notable example was a late summer program for Tide With Bleach, which reached consumers in Florida, Illinois and Wisconsin, among other markets. Publix supermarkets and Venture Stores were among the major retailers who participated in that round.

In the latest program, some consumers in Norwalk, a New York suburban community of 90,000, received the tri-fold direct-mail piece identifying ShopRite as the place to buy P&G paper products. Simultaneously, 30 miles away in Westchester County, New York, selected households received

a similar mailing that directed them to area Caldor stores. ShopRite is the emblem of Wakefern Food Corp., Elizabeth, N.J.

Homes in various communities in northern New Jersey also received one or the other version of the mailer, which was designed with cover graphics representing a house, and a theme, "How to help your house hold more value." Four P&G paper product brands were visible through the cutout windows -- Always, Bounty, Charmin and Pampers. Cents-off coupons for the four products were included in the mailers.

Custom copy blocks inside the mailers and in the return address areas identified either ShopRite or Caldor as the place to use the coupons. The coupons themselves, however, could be redeemed at any store.

"At Caldor, we make savings a household word," read a headline in one version. "You'll find a house full of low prices at ShopRite," said the other.

The direct-mail promotion was designed and executed by J. Brown/LMC group, Stamford, Conn., which has been P&G's co-marketing agency for about two years.

The source mentioned earlier told Brand Marketing that P&G's House of Values direct-mail piece was being made available to its retail customers nationally, although not all are using it at the same time.

"There are several time windows being offered to customers, between 8 o'clock and 12 o'clock," the source said. Choice of timing is determined by the account in consultation with its P&G sales rep, allowing for lead times and other considerations.

P&G provides the households entirely from its proprietary data base. It prints the addresses and mails out the coupons. The current promotion was targeted broadly, compared with last Summer's Tide promotion, which was aimed at "prime families."

The number of mail pieces supplied is determined by the case levels that the retailer agrees to purchase.

"It is case-driven. If retailers buy enough product, they qualify," said Ken Harris, a principal with Cannondale Associates, a consulting firm with offices in Wilton, Conn., and Evanston, Ill.

Greg Rossiter, a spokesman at P&G's Cincinnati headquarters, said the direct-mail pieces represent a "partnership effort" with the retailers in which the manufacturer handles all the production, logistics and mailing chores.

Mailers of this type, he added, are created for retailers who want to provide a "value-added promotion to their customers to differentiate the retailer and our products as well."

While a few marketing-savvy retailers already are building their own proprietary data bases through frequent-shopper card programs, P&G's program can help put the chain's name in front of new households.

"Procter's data base is clean," said Burt Flickinger III, a New York-based management consultant. "It has been built up through 800-number responses, rebates, coupon responses, and through buying names and building without taking away from retailers. So Procter is giving its customers something clean, pure and fresh in terms of data."

Added Harris: "P&G is the premier consumer packaged goods company with regard to leveraging data base information. What they have designed is not perfect but the best egg out there. Strategically, it fits in line with the goal of trade-directed consumer promotion. It leverages things that they have but nobody else has."

Said Jeffrey Hill, managing director of Meridian Consulting, Westport, Conn., "Direct mail as a means to more specifically target consumers is a major battlefield of the future. It is an increasing trend among most consumer packaged goods companies. Procter clearly is one of the leaders in direct-mail applications."

He added, "Procter also is one of the more progressive manufacturers in co-marketing with retailers across a broad range of vehicles, one of which is direct mail. The approach is a very viable one since it does positive things: it enhances relationships with the retailer and it achieves the company's overriding marketing objective of targeting specific user groups. So it is a beautiful thing."