Page 1: Introduction
Organisations should learn from the past but not live in the past. This case study focuses on the way in which Heinz decided to alter the way in which it promoted its brands in order to be most effective in the market place in which it operates. In particular, it focuses on the way in which Heinz has set out to develop a close relationship with its millions of consumers through the development of a direct marketing database. This enables Heinz to communicate with individual consumers about its brand and its many product lines. The main benefit of this form of relationship marketing is that this enables Heinz to treat its customers as individuals. This helps the consumers to feel valued and that their custom is important.
As we move through the 90s, competitive businesses have developed new relationships with their customers. Direct marketing is a term used to include marketing activities which are designed to deal directly and personally with customers. In doing so, they are designed to induce a direct response. These activities are dependent upon the development of mailing lists. Heinz currently has a portfolio made up of a staggering 360 plus lines. The best known are:
- Heinz Tomato Soup
- Heinz Baked Beans
- Heinz Tomato Ketchup
The combined success of these lines has created the 'brand effect'. Through this synergy far more value is perceived than that of the individual products taken on their own. Given this synergistic effect, how much sense does it make to spend money advertising individual lines? Would it not make more sense to focus on the brand?