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In its effort to cut costs and greater efficiency in its in-store marketing business, Catalina Marketing has decided to stop dealing directly with independent retailers, instead working with these small companies through their wholesalers and advertising groups.

According to Susan O'Neal Gear, executive director of corporate marketing for Catalina, the size of the independent retailers is not as important as the number of transactions required to do a Catalina installation - it has to generate 7,000 transactions per week.

MNB learned of the shift in Catalina policy late last week, when several members of the MNB community told us that they were concerned that Catalina was abandoning the retail sector. But Gear said that the company was not abandoning independent retailers as much as adjusting to the realities of the situation. Because of its own competitive problems, Catalina has been working to "tighten up" its business, and found that independents largely hadn't responded to a marketing program developed by the in-store marketer; in addition, those who did sometimes were unable to deliver on their responsibilities, which convinced Catalina that it was necessary to create a model that was more efficient and effective, establishing a "single point of contact" at a wholesaler or ad group.

"We have to have a level of confidence that things will move forward" when business relationships with independents are established, Gear said.
KC's View:
Probably not a huge deal, though it certainly does reflect a kind of disconnect between the independent sector and companies like Catalina.