Packaged goods marketers test solutions-based approach

Packaged goods companies would be well-advised to begin taking a page from Kraft which is using direct mail, print and the Internet to offer 'food solutions services' for their customers.

Packaged goods companies would be well-advised to begin taking a page from Kraft which is using direct mail, print and the Internet to offer ‘food solutions services’ for their customers.

It’s all about building relationships and satisfying the customer’s needs, says marketing professor Alan Middleton of the Schulich School of Business, York University, Toronto. And recently, packaged goods giants have begun to get in on the game.

Take Procter & Gamble. In the last year, it has launched two North American e-mail programs, dubbed ‘Home Made Simple’ and ‘Life Made Simple,’ which serve up articles, special promotions and contests to make home and life simpler. Each e-mail blast is ‘brought to you by’ several brands. In the case of the February ‘Home Made Simple’ newsletter, sponsor brands included Swiffer, Dawn, Mr. Clean, Febreze and Cascade Complete.

‘For certain brands, where we have high awareness and we’re looking to build more loyalty, we may use programs other than traditional TV and print marketing – like Internet marketing, or even direct mail,’ says P&G Canada spokesperson Win Sakdinan.

P&G has placed an emphasis on connecting with consumers through its ‘Pampers Perks’ program, for example, he says, a North American initiative launched almost a year ago. Parents or parents-to-be can sign up for the online club to receive tips, coupons and product reviews. There is also a loyalty component whereby users can earn points which they can redeem for Fisher-Price toys.

Sakdinan says the packaged goods marketer hasn’t changed its brand-oriented, mass-market approach. But there is certainly the opportunity to market complementary products together.

P&G is bringing 16 of its key products together to market them jointly through direct mail and other media that provide offers and information about several products, rather than marketing each one on an isolated basis.

The plan, which has been dubbed ‘Golden Households,’ was launched to begin to find the value of each customer and build relationship marketing programs around the brands.

‘This is an attempt to see if by bundling different brands together, they can get the same overall solution. It makes a lot of sense for what consumers want and it’s also more cost-effective,’ says Middleton. ‘Whether it makes sense for all their products or most of their products, I don’t know. It’s easier for someone like Kraft because they have the singular brand name.’

In some categories the brand is the hero – like Heinz Ketchup – he adds, but most times, people are looking for solutions.

‘I don’t want to think about what Mr. Clean does for my kitchen floor. Just give me a bunch of products that get me out of the damn cleaning as fast and easily as I can. In other words, give me the total solutions. I think that’s what Procter is getting at.’

But Procter’s problem today has been their strength in the past, says Middleton. Rather than a corporately branded company, P&G is an individual product brand company. The key question now is, ‘can it bundle bunches of different brands together, or is it going to have to bite the bullet and create a range brand at some point?’ – something it has been very reluctant to do, says Middleton.

‘I think they’re testing that idea – of creating another brand that would encompass all the cleaning products, for example – right now,’ he says. ‘They have a lot of equity in their individual brands, so for them to move from individual brand marketing to solution group marketing is a big step and a more difficult one than for a Kellogg’s or a Heinz or any of these corporately-branded organizations.’

As for marketing the Procter & Gamble name in Canada, Sakdinan says there are no plans to do so. ‘To consumers right now we are focused on building brands, and at times some cross-branding in terms of category development. There are no definite plans to market the company brand.’

All the packaged goods companies are going to be faced with the issue of corporate brands, says Middleton, driven by pressure from consumers. Most are slow to understand this – instead they are focusing on fewer brands, or creating power brands. But there are many categories and it’s not the brand, but the brand range that will be powerful, he warns.