[From iSource Business, October/November 2002] She looks like a typical soccer mom, someone you'd see at your local grocery store pushing a cart full of food while keeping track of several rambunctious kids. Her shiny brown hair is cut in a bob that frames her smiling, nondescript face. However, this woman is anything but nondescript: Her name and that all-American face are plastered on magazines, catalogs, cookbooks and food products, and she has come to represent one of the most widely recognized manufacturers of consumer products in the United States. She's Betty Crocker, and she is 81-years old.
Betty Crocker might not be "young" in terms of years, but that hasn't stopped General Mills from breathing new life every so often into her look, which has been updated about seven times since her first official portrait was painted in 1936, as well as into the brand she represents and the things that brand offers to General Mills' consumers.
General Mills is a multi-billion dollar global manufacturer of consumer products, like Hamburger Helper, Old El Paso, Wheaties and, of course, Betty Crocker. The company has nexus in all 50 states, and its international division markets General Mills' brands in more than 100 countries around the world. After acquiring Pillsbury back in November of 2001, the company now claims about 29,000 employees.
Besides having customers like Kroger, Super Valu, Albertsons, Target, Wal-Mart and other large retail stores, General Mills also markets and sells its products directly to its end consumers the average grocery store shopper. That's where General Mills Direct Marketing Inc., a wholly-owned subsidiary of General Mills, comes in. They produce the Betty Crocker savings catalog, through which consumers can purchase things like table linens, cookware, flatware and dinnerware using Betty Crocker coupon points they have clipped off General Mills' products.
According to Cherie Handberg, fulfillment operations manager at General Mills, and Chris Catania, who is currently filling Handberg's position while she is on leave, the coupon program is the longest-running continuity program in the United States, dating back to 1929. That's when the folks in charge of marketing were given the task of coming up with a way to promote new products, and they decided to offer a silver-plated teaspoon with Gold Medal Flour that was free with proof-of-purchase. The concept was so successful that it eventually evolved into the present-day practice of General Mills printing the points coupons on box tops for consumers to use toward items in the Betty Crocker catalog.
But Direct Marketing's job is more than just collecting coupons and doling out Betty Crocker merchandise. They handle things like placing customer orders and confirming the presence of inventory in the warehouses. They manage the incentives, like reduced postage and handling or a free gift offering with an order. They send out mass mailings and process requests for the catalog to be sent to individual consumers. They update the Betty Crocker catalog's Web site and process the orders that stream in from that venue. And, until recently, they did all of that on a legacy system that was over 13 years old. "For the majority of its life [the legacy system] did exactly what we needed it to," conceded Handberg. "It processed orders, updated customer files and it printed labels. But we found that we needed to become more and more competitive in terms of how we incented the consumers to buy and the offers we were presenting them with." She said the legacy software had been patched so many times it was just about ready to fall apart, it didn't have the incentive logic the group needed and, on top of all that, it was a batch processing system, causing Direct Marketing to shutter system access between 11 p.m. and 6 a.m. daily to play catch up.
So, in the same way that General Mills has been updating Betty Crocker to fit the times, Direct Marketing decided it was time to do the same for its fulfillment system. They settled themselves into what became a three-year search for a tool that, as Handberg described, "would be more productive, process orders faster and have more information available at our fingertips." Direct Marketing originally sourced a system from a company, which they declined to name, that seemed to fit the Betty Crocker catalog fulfillment needs, however Handberg said the deal finally had to be scrapped because of the supplier's failure to meet agreed upon deadlines and budgets.
That's when Gage Marketing Services stepped up to the plate. Gage Marketing Services is a 50-year-old marketing execution company with $124 million in sales and facilities in Canada, the United States and Mexico. The company's trademark is its longevity in the market, as well as its ability to cultivate and maintain long-term relationships with its customers, such as Motorola, Whirlpool, Ford Motor Co., Target and, of course, General Mills.
Gage has conducted a 26-year relationship with General Mills, supporting other consumer fulfillment and customer service for them. That history appealed to Direct Marketing and, after being disappointed by the first fulfillment provider, the company went back to its long-time partner, asking Gage what sort of solution it could provide. Gage had been in the process of re-engineering some of its own legacy systems in the trade fulfillment area, creating the Global Enterprise Management (GEM) system, which it offered to customize for customers and General Mills. However, there was one little catch: "GEM is a state-of-the-art fulfillment system, but it wasn't a direct marketing system," said Handberg. "But they thought we could bring the direct marketing expertise to the table and together we could build this total direct marketing solution."
After a collaborative session with some of the folks from Direct Marketing at Gage's Detroit facility, Tom Rivers, managing director of IT at Gage, and his team were able to put together a catalog processing system that covers both the front end and the back end of the Betty Crocker catalog needs. Rivers gave a laundry list of the services it provides: solo mailings; consumer response; incentives; order input via mail, phone and Web; data entry; warehouse management; warranty claims; financial reporting; and the list goes on.
Now Direct Marketing is able to process its orders in real time, which Handberg said will become a huge asset when they send major mailings to consumers in the Fall before the holiday season. In addition, GEM has beefed up their electronic communication capability using both eXtensible Markup Language (XML) and electronic data interchange functionality (EDI), and their financial reporting has improved with the system, thus allowing them to more effectively analyze their business data.
Soon, Handberg said they will also be able to perform ad hoc reporting for the catalog. "The legacy system before had standard, canned reports that came out every week or every month, and that was it," she explained. "But if someone had a question, like how many customers bought a particular teaspoon on Monday's in January, we couldn't get that information without having a programmer actually write a program. GEM allows us ad hoc capabilities, so in the near future our planner will be able to whip up a query and run it and we'll get the data back. Users are lining up outside her office." Rivers added: "[Direct Marketing's] people are constantly testing, constantly looking to try different combinations, and what GEM brought to them was the ability to quickly make changes in the way they market, and they've got a system that supports their marketing efforts."
That flexibility is also apparent in the capability GEM has to process not only Direct Marketing's orders, but also the orders of other businesses within General Mills that are trying to sell their products over the Internet. This new hierarchical structure allows Direct Marketing to have multiple vehicles within multiple divisions within even multiple companies, according to Handberg. She gave the example of General Mills' Specialty Items site, where hard-to-find General Mills products are posted and consumers can order them direct from the company. Direct Marketing treats the division like any other drop-shipper that wants orders processed and fulfilled: they run them through the GEM system and fulfill the order. Handberg said it's an inexpensive, easy solution for what the company wants to accomplish in terms of savings and corporate direction.
The benefits and flexibility Direct Marketing is experiencing has definitely endeared GEM to the company, but the transition from the legacy system to the new GEM system was not without its difficulties. Handberg said one of the biggest "gotchas" was when both Gage and Direct Marketing overlooked some processes: "As our partner for 26 years, Gage was doing so many things for us that we either took them for granted or nobody remembered to step back and incorporate them into GEM." So when Direct Marketing switched off its legacy system and turned GEM on, processes like the ability to control acknowledgement strategies that were going out were no longer being handled. But Handberg said the beauty of the partnership between the two companies has been that Gage has never left them high-and-dry, and that applied to this case as well. When the problem had to be fixed at the eleventh hour, "They stepped up to the plate and did it."
There was also an internal learning curve that had to be addressed as Direct Marketing's employees shifted to an entirely new way of conducting business. Handberg said they had a lot of meetings, and the entire staff read Spencer Johnson's Who Moved My Cheese? in order to spark discussion and make the change easier to handle. "At one point we just bit the bullet and said, 'Alright, we're going for it,' and perhaps that's the best way to learn. It's a trial by fire sometimes." But Handberg added, "We're absolutely getting there."
And that has Direct Marketing looking to the future for the new opportunities that GEM will bring to their business and to General Mills. When they first began realizing the need for a new catalog fulfillment system, Direct Marketing pitched the idea to the division president of General Mills as a capital project that would eventually save the company money. Handberg said the director of information technology at General Mills has a vision for the technology that he calls a "single database solution." Simply put, consumers will eventually place all their orders directly into GEM, thus eliminating manual feeds, reducing headcount and creating productivity. In addition, Direct Marketing will be handling a new initiative with the company's recently acquired Pillsbury brand. The Doughboy, in particular, is soon to have an improved online store that will incorporate points and cash, similar to the Betty Crocker Web site. Again, they will use GEM to handle the fulfillment for that product.
General Mills has found that time waits for no one, and that includes Betty Crocker and the brand she represents. However, keeping up with the pace of technology and consumer trends is the best way to beat the clock.
