Heinz cooks up direct assault

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The Independent Online
DON'T be surprised if a letter from Tony O'Reilly lands on your doormat later this year. The chances are that the flamboyant chairman of Heinz, the US-based food giant, is seeking to start a personal relationship.

The letter will almost certainly be sent to hundreds of thousands of British homes, for Heinz is going into junk mail in a big way to sell baked beans, soups, sandwich spreads and other products from its 300- strong range.

It is part of a new trail-blazing strategy in 'relationship marketing' being adopted by Heinz's UK arm, which aims to use direct marketing - of which junk mail is one example - in response to changing consumer spending habits.

In future, the company will reserve television advertising to puff up its brand image and overall range. Direct marketing will push specific products.

Heinz's plans are at an early stage, but the strategy could have a big impact on how fast- moving consumer goods - essentials such as detergents - are marketed by other companies.

Many companies, such as Birds Eye, owned by Unilever, already use direct marketing to reach customers, but Heinz will be the first to adopt it so comprehensively.

'This is the biggest and purest 'umbrella television campaign' we have ever seen,' said Martin Boase, chairman of Omnicom UK and a leading advertising executive.

'Some others are also using direct marketing, but these companies still highlight individual products in their TV campaign. I am sure quite a lot of food companies will be watching Heinz closely.'

Heinz, which spends about pounds 12m a year on television advertising, is the brand leader in several products, including baked beans and tomato ketchup. But it is under pressure from supermarket own-label products.

'In today's changing market place we need a rapid and efficient means of speaking to our key customers,' said Lawrence Balfe, Heinz's marketing director.

Its current television advertising, epitomised by the catchy 'Beanz meanz Heinz' campaign - which concentrates on individual products - is likely to be ditched.

The company's new brief to its two advertising agencies, BMB DDP Needham and BSB Dorland, is to create fresh television campaigns with a general theme. 'Our television ads are likely to carry thematic messages reflecting values common to lots of our products. The Heinz label stands for nutritious products for the family,' a spokesman said.

The company plans to maintain its existing budget for television advertising, and also boost substantially its direct marketing budget. Although no figures have been disclosed, industry estimates suggest its direct marketing budget could be increased by several million pounds to around pounds 10m.

The move underlines the growing sophistication of the direct marketing industry to target specific consumer groups. By using product coupons, prize draws and other sales promotion techniques, many companies have built up vast databases on potential consumers, who are then targeted through mailings.

One of the most high-profile direct marketing campaigns was carried out by British Airways two years ago, when it ran a pounds 50m campaign offering free flights. That enabled BA to build up an information database on air travellers, which has been deployed to target key customers.

Typically, direct marketing has been used to sell expensive products bought infrequently, such as cars or insurance policies.

But Heinz is breaking new ground by using direct marketing intensively for low-value, high-frequency goods. In part, the move has been influenced by its successful use in selling baby foods. 'We have had a very positive response with our baby foods products and it has helped us to build our market share from 50 to 60 per cent.'

However, it remains to be seen whether the company can repeat its success with other products. Marketing experts point out that mothers with babies are easy to target and Heinz faces a much bigger challenge with other products.

Others say junk mail suffers from serious disadvantages. 'It is difficult to see that something that arrives in the post will carry the same impact and authority as media advertising,' one specialist said.

(Photograph omitted)