Oh, Baby

Mack Jenks spent a little time with his calculator before settling on the prize package for Gerber Rewards. The baby food leader wanted to “give away something significant,” says Jenks, director of marketing services for Fremont, MI-based Gerber. A quick forecast showed that 18 years from now, college tuition will hit $200,000 for a top-rated private school, $100,000 for state school. What the heck, Jenks figured, let’s cover it all with a $250,000 scholarship. And Gerber’s first loyalty program was born.

The sweepstakes kicked off Jan. 1, and the first scholarship was awarded July 1, with a second drawing set for December. After the full-year run, Gerber will refine the Gerber Rewards program and likely relaunch it next year, with versions that piggyback on grocers’ loyalty card programs.

Consumers who buy 16 Gerber products (baby food, juice, toddler snacks, cereal) in one trip get a gamepiece at checkout, generated by Catalina Marketing’s Checkout Coupon system. Each gamepiece has an 800-number and a PIN; shoppers call from home and punch in the PIN to get 10 entries into the sweeps. Each time a shopper calls, the system tells how many entries that household has, and how many days until the next drawing. PhoneWorks, St. Petersburg, FL, handles the tallies. The July winner had 180 entries – that’s 18 shopping trips, 18 phone calls, and at least 288 jars of baby food.

Gerber’s dominance of the $747 million baby food/snacks segment makes it tough to justify the expense of a loyalty program. Gerber holds a 71 share with $531 million in sales, up 6.5 percent for 52 weeks ended July 19, according to Information Resources Inc., Chicago. Beech Nut sales dropped 10.5 percent to $104 million, a 14 share; Heinz fell 1.5 percent to $103 million, a 14 share, per IRI.

Gerber Rewards’ goal is to bump up the average purchase to 16 items from 12. “If we can get those four extra jars into the house, they aren’t pantry-loaded, they’re consumed,” sometimes by an older sibling or even parents, Jenks says. (A warm jar of Blueberry Buckle is great on ice cream, he adds.) About 200,000 households buy 16 items each week, and 20 to 25 percent enter the sweeps. When a shopper first calls, she registers her baby’s birth month. That prompts the system to play age-appropriate product messages during later calls – a message about Simple Recipes when the baby is six months old, for example, or Gerber Graduates toddler snacks when he’s 12 months.

TV, print, direct-mail, and in-store displays introduced Gerber Rewards to consumers, with ongoing support in Gerber’s regular mailings. Gage Marketing, Minneapolis, also worked on the program.

Weaning off trade dollars Gerber has also spent the last year formalizing its Account-Specific Advertising & Promotion program (ASAP), running nearly 100 turn-key consumer promotions since November ’97. ASAP has converted 10 to 12 percent of Gerber’s trade dollars to consumer promos, Jenks says. He credits an IRI market-mix analysis that shows how much 10 different consumer-driven tactics each boost volume. “That’s given us the muscle to go back to retailers” with consumer promos, Jenks says. Grocers also like Gerber’s direct-mail expertise, a cornerstone to ASAP, which is handled in-house. The program launched at the same time Gerber was converting to brokered sales from a direct sales force. That put extra pressure on sales and marketing managers in the field to execute campaigns well. “We had to be sure it all went right so retailers were happy with it,” Jenks says.

When the grocer’s happy and Mom is happy . . . the baby smiles in Fremont.

Instant Results A new study has found that instant redeemable coupons woo more consumers than higher-value FSIs. The analysis, commissioned by Promo Edge, a division of printer Menasha Corp., Neenah, WI, found that a 50-cent IRC outperformed a $1 FSI.

That “allows a brand manager to use a substantially lower discount,” Promo Edge concluded. A smaller discount offsets costs associated with higher redemption rates, giving the brand deeper penetration without substantially more cost. Plus, small discounts don’t heighten consumer expectations for future discounts. “Consumers who purchase because of a large discount are more likely to expect large discounts on future purchases compared to consumers who received smaller discounts,” Promo Edge concluded.

Promo Edge distributed 50-cent and $1 FSIs and IRCs for body wash brands for two months, each coupon in two markets for a total of eight markets. Store-level data analyzed by Information Resources Inc., Chicago, showed that IRCs out-performed FSIs of equal value, and that the 50-cent IRC boosted share volume 18 percent more than the 50-cent FSI, and 23 more than the $1 FSI.

“We have no idea why the 50-cent IRC beat the $1 FSI, but it’s real-world data,” says Promo Edge exec Patty Mulvey. Maybe the shoppers are just sharper in the study’s IRC markets Gainesville, FL, and Wichita Falls, KS, than in FSI cities Fresno, CA, and Charlotte, NC.

Menasha prints IRCs for packaged goods companies including Kraft Foods, S.C. Johnson, and Pillsbury.

Help Wanted: Retail Experience It seems pretty obvious that if shoppers have a bad experience in a store, they won’t come back. They’re also half as likely to buy anything: 82 percent of shoppers who have a good experience end up making a purchase, while only 42 percent buy something if they have a bad encounter in a store.

It happens more often than some retailers realize: Nearly one in 10 shoppers switch retailers because of a bad experience. More than 35 percent of shoppers experienced “marginal or critical incidents” while shopping, according to a Frankel & Co. survey of 3,228 households making 15,000 shopping trips in November to December 1997.

Shoppers said the best stores were bookstores and mass merchandisers; the worst were computer and electronics stores. Because consumers shop for big-ticket items less frequently, they’re less familiar with store layouts and merchandise and need more attentive service, not less, says Jim Lucas, Frankel director of planning and research.

“You can’t set up an electronics store like a mass merchandiser because consumers shop it differently,” he adds.

In the short-term, retailers should address issues that consumers think the store can control, like slow service, out-of-stocks, and defective products. For long-term “recuperation,” retailers should improve training, logistics, and store design to help shoppers navigate the aisles. Retail chains also need to “manage shopper expectations across different types of stores in the same chain,” like Wal-Mart and Sam’s Club, Lucas adds.

Malt-O-Meal Co. plays to consumers’ childhood memories of the hot-cereal brand with two display-driven promotions that run through March. An on-pack offer that broke during the back-to-school shopping season shrink-wraps two boxes of Malt-O-Meal with one of three classic toy keychains: mini Etch A Sketch, ViewMaster, and Wooly Willy magnet drawing board. The second August to March effort reprises Malt-O-Meal’s classic tagline “Good Stuff, Maynard!” – the line originated with the brand’s TV spots in the1970s and became a cultural catchphrase. The current sweeps awards $1,000 to a winner every week. Consumers call a toll-free number and enter code numbers from their boxes to see if they’ve won. WatersMolitor, Minneapolis, handles.

Malt-O-Meal designed the promos to give it a strong shelf presence at the beginning of the hot-cereal season to bring consumers back into the franchise after summer. The brand’s two biggest user groups are kids under 12 and adults 55-plus; its top markets are in the Great Lakes region and west of the Mississippi.

As a niche player in hot cereal, “our challenge is to create personality for the brand that’s perhaps larger than the brand itself,” says Sally Literski, director of marketing for hot cereal for the Minneapolis company. The Maynard campaign “still speaks to people today, and we can build on it into the future.”

Malt-O-Meal holds a share of the $713 million hot cereal/oatmeal segment, dominated by Quaker Oats Co.’s $402 million in sales for 52 weeks ended July 19, per Information Resources Inc., Chicago. Malt-O-Meal sales fell 6.5 percent to $18 million, while the category grew 1 percent, IRI reports.