Catalina’s Digital Age
Catalina is a renowned personalized coupon-printing and digital marketing company that prints coupons for customers by installing media servers and on-demand printers at the retailers’ check-out lanes and faces a number of issues as it responds to the digital age of marketing its product line. Partnering with Consumer Packaged Goods (CPG) companies and food retailers sponsoring Catalina’s coupon printing and distribution exists with phenomenal $130 per 1000 coupons. Consumers can redeem these coupons at retailers, thereby attaining discounts on various product purchases. Catalina’s check-out coupon business success remains founded in its extensive network of more than 35,000 retailers in USA followed by use of largest transactional database with more than 200 million entries. The following discourse addresses several questions that arise in connection to the action plan and the specific steps the company needs to take for incorporating its operation into the digital age.
CPG Firms and Retailers
As stated above with the entry into online and mobile the manner Catalina positions itself providing its service to CPG and retailers looks to a specific service that fits this part of its marketing focus. Catalina offers one services to CPG companies and retailers providing support for strategic planning and marketing promotions. Analysis of the traditional coupon process at retail food stores at checkout now shows a declining trend in redemption rates of printed and mail cents-off coupons in USA followed by increase in use of smart phones and mobile applications that create an extensive market for digital coupons. At the same time, even with acknowledging the mobile scenario as a “hot” trend the problem with making it the core part of Catalina’s business meant having to play at pricing and margining levels undesirably below its typical standing. The outcome of specific research of the CPG and retailer for Catalina resulted in both CPG and retailers becoming a part of Catalina modularizing its business by providing scanning where needed and loss prevention in the self-checkout all intent on driving retailers adopting the new approaches.
New leadership in the Catalina organization opting out of making a Catalina branded mobile app framed around not want to put the organization in completion with its retail clients and resulted in white labeling the retailer’s name on the app. Marketing looked at selling this to its retailers even to the extent of no cost in the beginning intended to get them on board for adopting the process with Catalina pushing CPG and the retailer content through. With modularizing its efforts Catalina addressed the issue of retailers already using the app process at different levels
In-Store Distribution, Online and Mobile Flankers
While Catalina does not face any competitive threat in check-out coupons resulting in phenomenal margins nonetheless the digital advertising and promotional landscape proves extremely challenging to decision making needs because of its oligopolistic environment due only a few digital giants such as Google, Yahoo, Face Book and Microsoft leading in low pricing scale aimed at thwarting new entrants. Catalina, thus, installed a digital infrastructure with capabilities for online coupon distribution but it has been facing several challenges regarding mobile coupon penetration, coupon pricing, market positioning, modification in business model and structure and strategic focus towards in-store or digital couponing. Although it is an emerging industry Catalina must adopt digital couponing, promotions and advertising because the tech savvy millennial generation shoppers appreciate reliable online channels to save time and money.
With entry into online and mobile (and possible expansion from promotion into advertising) Catalina should be positioned with its CPG firms as both an in-store and digital promotion company facilitating its relationships with store and online shoppers by redefining advertising strategies. In fact, Catalina offering similar promotional coupons for its mobile app users then allows shoppers redeeming coupons both in-store and online. As far as the retailers are concerned, the short run cents-off promotion concept could be strengthened as it enables CPG firms to reduce spending on separate online brand promotions and digital marketing campaigns, instead using the Catalina load-to-card coupons and digital services for market penetration. It should be argued that the “in-store” distribution should remain the core product, with online and mobile as flankers because the consumer spending in online grocery shopping and food retail may account for 15 - 20% of total industry size in next few years. Therefore, it is imperative for Catalina to focus on tradition check-out coupon business as a significant majority of consumers would continue visiting hypermarkets and retail stores for packaged products. In other words, the other elements such as online and mobile would not be equal elements in the Catalina product line.
The success of Catalina coupon business based on CPG and retail in-store coupon redemption brought challenges as it understood the need for restructuring its business model to accommodate the digital age. New leadership saw the importance of marketing online apps with its CPG and retailers meaning building a better differentiating process with specific incentives for continuing its successful relationship with these core elements in selling its products.