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Advertising Age reports on how a loyalty marketing program begun by kellogg's just a year ago now "touches more than 90% of Kellogg's products, and the company's customer-relationship-management team expects to expand it outside the US ... The sprawling initiative, known as Kellogg's Family Rewards, relies on codes printed on product packages from Froot Loops to Keebler FlipSides crackers. Consumers submit the codes online in exchange for points -- say, 100 points for a box of Special K -- that they can use to collect discounts and prizes like toys or sports gear."

According to the story, "Kellogg's 16-digit loyalty codes, unique to each package, signal product type, size, and flavor, in addition to the store where consumers purchased items and store location. The codes are on around 2.5 billion individual packages." What this means is that when a customer registers a purchase, he or she is connecting personal information to highly specific product information, which then allows the company to understand precisely who is buying specific items, and then respond with relevant marketing communications and offers.
KC's View:
As long as the communications are relevant, to a great extent consumers are going to be highly accepting of the program. Kellogg's has to make sure it doesn't abuse the privilege of having all that information, but it seems to me that this kind of program is an intelligent move by the company. (It also is notable, I think, that Kellogg's is basically going around retailers to connect with its shoppers.)