experiment since Nestlé was experimenting with the building of the
Buitoni brand on the basis of a one-to-one relationship with the consumer.
It was likely to have a major impact on the whole of Nestlé’s marketing
strategy, if successful. Because this new initiative was launched by the sub-
sidiary of one of the largest and most well-respected worldwide companies
in the marketing of food products, developments around the Casa Buitoni
Club experiment had been closely monitored.
At the centre of the initiative surrounding the Casa Buitoni Club was the
realization that Nestlé, like many other companies, was finding itself
increasingly cut off from the final consumer. One factor that caused this sep-
aration was the usual go-between, the retailer. There was the growing con-
centration and much-talked-about power of retailers which, particularly in
the UK, had taken on enormous proportions. There was the booming
private label business that made branded manufacturers unnecessary in the
retailer–consumer relationship. There was the growing sophistication of
retailers. For one thing, retailers had slowly become smart about their
advantage of close contact and natural proximity to consumers. Retailers
had become good users of market research information given to them
through Direct Product Profitability (DPP) accounting, and Electronic Point
of Sale (EPOS) systems, including bar-code scanners. These data were avail-
able to retailers ever cheaper and faster. Retailers increasingly used the
information to fine-tune their stores’ product offerings, to test market new
products, and to make quick product listing and elimination decisions.
Moreover, retailers, whether multiples or independents, figured that if
consumers could be turned into regulars, the implementation of so-called
customer loyalty systems would suit them just fine. It would also be an
effective weapon against the store competition from, perhaps newer, retail-
ing formats as well.
Another factor was the quality of communication of the retailers with con-
sumers. In Europe, it was not the branded manufacturers that spent most on
communicating with consumers. It was, in fact, the retailers: in the UK,
Sainsbury, Tesco and others had advertising budgets exceeding those of even
some of the strongest brands.* In Germany, C&A, the discount department
store chain, claimed the biggest advertising spending. Retailers like Tesco
spent money communicating with consumers at two levels: about the
quality and value of all their products in their stores, as in a classic umbrella
advertising campaign, and also in particular about the quality and value of
their private label business. Because Tesco’s individual stores could place the
tailored messages in local media, they effectively circumvented expensive
mass media that had become a pain from a cost point of view, anyhow.
The customer market domain: Managing relationships with buyers 69
*Figures from the 1994 Register-Meal showed that Tesco spent £2.5 million on tel-
evision, press, cinema and poster advertising. This compared to the spending of
Nescafé of £1.6 million, which was the top spending individual brand in the UK.