Magazine article Marketing

Has Heinz Lost Its Direction?

Magazine article Marketing

Has Heinz Lost Its Direction?

Article excerpt

FMCG giant Heinz has shut its customer magazine. What direction will it take now?

'Food company Scraps customer magazine' is hardly the sort of headline that editors fantasise about. But Heinz's decision to pull the plug on its At Home title last week was rather more significant than it first appeared.

Since its launch in 1994, the At Home initiative has been watched with fascination by the marketing industry.

Its inception made traditionalist Heinz the first major FMCG company to place the lion's share of its marketing budget below-the-line, a move which prompted adulation among direct marketers and horror in the ad community.

Ever since, Heinz has been dogged by rumours that it was on the verge of reversing such a headstrong decision.

Last year, Redwood Publishing was appointed to develop the magazine and then sacked, all within a week, allegedly for talking to the press.

Premier Magazines picked up the business to much celebration within the Omnicom group but, in the event, only produced one issue - January 1998.

While many in the advertising industry are already saying, "Told you so" and claiming direct marketing just isn't cost-effective in promoting low-margin FMCG goods, the reality may be more complex.

A Heinz spokesman insists that the magazine was successful, with sales increases of up to 7% in some categories. And, according to sources, the January issue elicited the best response to date.

However, the decision to scrap the programme was made because the magazine had ceased to be a cost-effective way of boosting sales. The company's official explanation was typically perfunctory. Jane St-Clair Miller, corporate marketing manager for Heinz European Grocery, said: "At Home has delivered some excellent results in building loyalty, encouraging trial and improving category shares, but we feel the quarterly magazine format has run its course."

Nevertheless, At Home's demise was sudden. Only last autumn St-Clair Miller told Marketing that Heinz had built an 'optimum' database of five million consumers and confirmed the magazine as the preferred form of communication. Not only that but there were plans to develop the magazine to "combine the appeal of a news-stand consumer title with the effectiveness of a direct-marketing piece".

The wider commercial climate could throw some light on Heinz's decision. Despite attempts to create intimate relationships with customers, Heinz, as one senior advertising source put it, "is still getting slaughtered in the supermarkets by private label". …

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