IN MY OPINION 1994-04-04

Jonathan M. Kramer

The news that A&P's Master Choice private label "is starting to act like a national brand" is being greeted with trepidation, to say the least, by national-brand marketers. A&P's plans to use Actmedia's in-store merchandising programs at 72 Farmer Jack stores in Michigan would seem to confirm a recent study by Meyers Research Center that 91% of retailers expect to begin merchandising their store brands more aggressively.

Just when it seemed that retailers and marketers were mending fences, the brand demolition derby took a new -- and apparently ominous -- turn. National-brand marketers who were beginning to believe they could build productive "partnerships" with the trade are now feeling like they've been duped again.

They should take a fresh look at the real situation. National-brand marketers cannot afford to succumb to the popularly held notion that a retailer's category/store objectives and a marketer's brand objectives are mutually exclusive. While circumstances vary by category and by store, it absolutely is possible to achieve both category/store and brand objectives simultaneously.

Let me tell you a little story. Back when I was in advertising, I was involved in the launch of Frito-Lay's Grandma's Cookies, which were to be tested first in Kansas City, Mo. Just as Grandma's was about to be introduced, a story appeared in a major business publication that was critical of Nabisco, a key rival.

Feeling the heat, Nabisco charged into Kansas City and bought up all the media it could find for cookie advertising. The cookie category in Kansas City grew like it was on steroids.

Buying all the media in Kansas City sounds like an expensive proposition, but in fact marketers can achieve a similar effect on a lean-and-mean budget. For about $80,000 (less than 10% of the cost of a national freestanding insert) a brand could own any of all but the largest markets for a typical promotion period. A local spot television campaign, in which brand advertising is combined seamlessly with retailer images (not tags), can be funded out of trade allowances. A direct-mail campaign, ensuring that brand and retailer communications reach the highest-potential prospects, can be implemented the same way. Integrate the TV and direct mail with co-op radio consumer promotions that tap into local consumer lifestyles. Few consumers in a market saturated with that kind of integrated, multimedia, account-specific campaign will miss your brand and store-building message.

This approach, if developed strategically and long-term, provides a genuine and solid foundation for true, brand-building cooperation between marketers and the retail trade. For example, it's well known that when a consumer buys laundry detergent, it's usually part of a major stock-up trip to the supermarket that produces a large total transaction at checkout.

Of course, it may not be necessary (or even possible) to grow the detergent segment of the laundry category per se. However, if a laundry detergent promotion were combined with a related offer for a more elastic product -- say, fabric softener -- both the marketer and retailer, brands and categories, could benefit.

An especially interesting twist would be to make the related offer a store brand. Weight Watchers did this successfully with Kroger Co., Cincinnati. A tie-in between Weight Watchers' breakfast items and Kroger's Spotlight coffee resulted in significant gains, in both sales and image, for both the retailer and the marketer.

Marketers and retailers should reduce their emphasis on price-based, SKU-squeezing activities.

Jonathan M. Kramer is president of J. Brown/ LMC Group.