Grocery Marketing: Wholesale Clubs Add Some Bulk
Wholesale warehouse clubs are starting to compete with traditional supermarkets for consumers’ food dollars. Although wholesale clubs offer a much more limited selection and limited service, shoppers are attracted by prices that are 20%-40% lower than other food retailers. The number of wholesale clubs is expected to increase from 228 in 1986 to 475 by 1990. The Price Co., established in 1976, is the membership warehouse club industry’s leader. It had fiscal 1987 revenues of $3.2 billion, 38 clubs, and a membership of 800,000 businesses and 1.5 million individuals. It charges a $25 annual membership fee. About 25% of its 1986 revenues was attributed to food sales. Price Clubs advertise only to announce a new opening; business members are recruited by direct marketing campaigns. Price has outlets in Arizona, California, Connecticut, New Jersey, Maryland, New Mexico, New York, and Virginia and it plans to expand considerably in the near future.
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Steinberg, Janice
Full text: [Advertising Age] May 9, 1988
Consumer financial services: Eastern credit union seeks birds of a feather
In a Philadelphia campaign that features radio spots and ads in mailings and business publications, Eastern Air Lines Federal Credit Union (Miami) has greatly increased its assets and membership in Philadelphia and nationwide. To capture members nationwide, the CU pushes its bank-by-phone service and no charge ATMs. In five years, the CU’s assets more than doubled to nearly $850 million and membership has grown from 50,000 to over 120,000 (only 41,000 are airline active or retired employees).
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Newman, A. Joseph, Jr.
Rosenstein, Jay
Full text: [American Banker] May 12, 1988
Mail order means big bucks, big headaches
Not that you’d know. Raffoler, also known as Direct Marketing Enterprises Ltd., uses different business names for most of its 100 product lines. That practice has helped turn Raffoler into a $200 million-a-year mail order powerhouse, with a trail of legal trouble decades long. Raffoler, in Westbury, N.Y., is one of the largest direct mail companies. It sends out 300 million advertisements a year and has more than 500 employees. Its owners, Stephen Brown and Jerry S. Williams, each received a salary of $500,000 and had dividends of up to $13 million, according to public documents filed in 1986. The FTC enforces the only law written for the industry. Under it, companies must ship orders within 30 days, or any period stated in advertising. If not, customers must be notified and offered a refund. The industry is striving to improve its image, but Raffoler says that at its prices, it cannot afford to offer more service. Raffoler imports very low-cost imitations of popular brand-name items from Asia in million-piece lots. Lavish advertising – $88 million last year – promotes its low prices as part of a national publicity campaign. Products generally sell for under $10.
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Michael deCourcy Hinds
Full text: [Star Tribune] May 15, 1988
The post office likes cards, too
The Postal Service’s Stamp-by-Phone program, which allows customers to pay for stamps on the phone with their Visa and MasterCard credit cards, will be expanded nationally. The program has brought in $2.5 million since September 1987, with 65,000 transactions. USA 800, an outside telemarketing company, accepts the credit card orders, using Sovran Bank of Norfolk (VA) for authorization and draft capture. The orders are then sent to the post office’s fulfillment office.
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Anonymous
Full text: [Credit Card News] May 15, 1988
Telemarketers sharpen campaign after postal rise
You know the symptoms of the scripted sales call. The patter is smooth, the delivery practiced, the voice modulated. The style is at once too formal and too familiar: The sales rep sows our name like grass seed through the conversation, and the questions are designed to prompt a predetermined answer: “Would you say it’s been more than a year since you reroofed your home?” “When would you like to subscribe?” “Do you ever get tired of painting?” For those who demur, the caller is ready with more scripted responses to keep us on the line. The goal is to overcome our resistance, boost efficiency and increase sales and profits. Relevant measures include calls per hour, cost per hour and revenue per hour. One veteran telemarketing consultant is Peg Kuman, who heads The Powerline, Port Washington, N.Y. Her 15 years’ experience includes work for Fingerhut and Bell & Howell, among others. At a recent session sponsored by the Midwest Direct Marketing Association, Kuman said that success lies as much in who gets called as in what gets said.
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Dan Wascoe Jr.
Staff Writer
Full text: [Star Tribune] May 16, 1988
Special report: Oscar Mayer scores with promotion
Oscar Mayer Foods is combining direct marketing with a traditional sales campaign geared to baseball coaches and leagues who can organize proof-of-purchase campaigns to earn baseball equipment. Through ads and free standing inserts in the color Sunday comic sections of the country’s major city newspapers, the company is also offering free bats, baseballs, and mitts to consumers. In addition, cents-off coupons for cold cuts and hot dogs are featured in the ad material.
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Cleaver, Joanne Y.
Full text: [Advertising Age] May 16, 1988
Marketers Need to Think Long Term
Package-goods manufacturers seem reluctant to try direct marketing campaigns.
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Graham, Judith
Full text: [Advertising Age] May 16, 1988
General Foods Believes in Crystal Light Effort
General Foods has developed direct marketing programs centered around catalogs before, and now is attempting a newsletter campaign for Crystal Light, a diet soft-drink mix.
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Zipkin, Amy
Full text: [Advertising Age] May 16, 1988
Direct Marketing: ‘Morris Report’ Data Base Delivers Direct
Morris the Cat, created for 9 Lives 19 years ago by Leo Burnett USA, has helped push 9 Lives into the top spot in the canned cat food industry, with 27% of the market. The latest series of Morris commercials show Morris running for president and are featured in The Morris Report, a direct-mail magazine launched by 9 Lives in July 1987. The 52-page quarterly comes in full color and has been meeting its goals of building brand loyalty, converting competitive users to 9 Lives, and delivering coupons to the consumer. Eric Brown of 9 Lives asserts that the magazine helps 9 Lives reach the 1/3 of households with cats that cannot be reached by traditional mass marketing. Each issue finds 6 pages of 9 Lives advertisements intermingled with articles on cat health, grooming tips, and humorous treatments like the “Ask Morris” column. The magazine costs $6 annually, and it contains $6 worth of 9 Lives coupons to defray the cost. The magazine generates a tremendous amount of consumer mail.
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Folse, Lynn
Full text: [Advertising Age] May 16, 1988
Direct Marketing: Marketers Need To Think Long Term
Package goods companies have yet to endorse the concept of direct marketing fully. The industry is waiting for some very successful campaigns to lead the way. John Groman of Epsilon Data Management asserts that, while brand managers cannot justify direct marketing costs, combining several brands can make direct marketing affordable. Others predict that there will first have to be a change in attitude away from short-term sales and toward building long-term customer relationships. Exact statistics for package goods firms’ involvement with direct marketing are difficult to obtain. John Kuendig of General Foods Corp. says that this is one of the values of direct marketing: It keeps the competition from knowing exactly what you are doing. Many package goods companies continue to be confused over what constitutes direct marketing. Managers are still put off by the relative costs of direct marketing, which can run 10-20 times higher per 1,000 consumers contacted than mass media buys.
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Graham, Judith
Full text: [Advertising Age] May 16, 1988
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