WEIGHT WATCHERS PUTS NEW STRUCTURE TO TEST

JAMES TENSER

PITTSBURGH -- Weight Watchers Food Co. is putting its newly revised trade marketing structure to a big test this month with the kickoff of "Lose 10 Pounds America," its first major integrated trade and consumer promotion. As it entered the all-important diet season, the company had just finished reorganizing to set parallel roles for trade and consumer promotions managers and also pull down the wall dividing sales and marketing.

The change is the first major step in a process aimed at re-creating the company's marketing and sales structure, said Glenda Murphy, general manager of frozen marketing.

"We are now organized with a manager on trade marketing and a manager on consumer marketing," she explained. "It is not exactly management by committee, but it is critical that they work together. Both of them coordinate through me."

The "Lose 10" program, which runs through April, represents the first test of Weight Watchers' reorganization process since it began in September. "Quite honestly, we are still feeling our way along," Murphy admitted when asked about the internal changes.

She added, "It's been an adjustment for our brand managers because they were accustomed to

having total brand responsibility." But, as she explained, the new structure also helped make the current diet-season promotion possible.

Murphy said the changes Weight Watchers made to its trade marketing structure in the fourth quarter of 1993 were motivated by a need to gain control over trade spending. Like many packaged goods companies, 60% to 70% of Weight Watchers' marketing funds have been invested in the grocery trade, she said, "but the major portion of our time" had been devoted to marketing to consumers.

In addition, like most consumer products companies, the sales effort was organized and given incentives based on volume goals, which led to end-of-quarter loading and promotions that didn't always produce adequate profits.

"We knew we needed to get a handle on how that money was being spent against the trade," said Murphy, who added that the main goals were jointly identified by Weight Watchers' vice president of sales, Gary Brockman, and its vice president of marketing, Roger Adams.

Among the key changes made last September at Weight Watchers is a change in the sales compensation structure, to reward and give incentives based on profits and merchandising performance. It is a step toward turning sales representatives into business managers.

"I would say the greatest benefit of the changes so far is that they have caused the marketing group to get very involved with the sales people and understand the markets on micro or account level," she said.

Since September, Weight Watchers has been selling its diet-season promotion for the January-to-April promotional period. More than $10 million has been budgeted for the effort.

"'Lose 10 Pounds America is the first highly integrated trade and consumer promotion at Weight Watchers Food Co. since it was formed two-and-a-half years ago," Murphy said. The basis of "Lose 10" is a $10 check consumers can earn by purchasing 20 Weight Watchers frozen food items during the promotion. The check is payable only at the retailer specified on the consumer's rebate form.

To interest supermarket retailers, Weight Watchers set up a sequence of escalating trade incentives over the three merchandising periods from January to April.

Murphy said preplanning with the trade was key. "We came out early with the program. It is four months long, not piecemeal as in the past, when we had a different promotion every month. It has played in our favor to go in with total season."

As a dividend of the enhanced planning process, she said, "We have a pretty good idea of levels of trade participation already."

She added, "For the total January-through-April period, it is already more of a commitment than we had a year ago."