The Lee Apparel Company used market test data from a field experiment to build a cus- tomer database and help successfully launch a new brand of jeans. A few years ago, the company decided to market a new apparel line of jeans under the name Riders. The manage- ment team seized the opportunity to begin building a customer database. Unlike the typical process of building a customer database around promotions, merchandising, and advertising efforts that directly benefit retailers, their goal was to use marketing dollars to build both the brand and the database. The initial launch of the Riders apparel line went well with rollouts in the company's Midwest and Northeast regional markets. The initial positioning strategy called for the products to be priced slightly higher than competitive brands and marketed at mass-channel retailers like Ames, Bradlee's, Caldor, Target, and Venture. During the first year, the communication program emphasized the line's "comfortable fit," and within two years, the rollouts went national, using major retail channels like Walmart.

Initially, Riders used a spring promotion called "Easy Money" to generate product trial and to gather name, address, and demographic information about the line's first customers. These data were collected using a rebate card and certificate from the retailer. Upon com- pleting and mailing the rebate card to Riders, the customer was rewarded with a check in the mail. This initial market test provided valuable data on each customer, such as the exact type of product purchased, how much was spent, whom they bought for, where they heard of the Riders brand, and their lifestyle interests. As part of the test market, Riders supported the effort with point-of-purchase (POP) displays and promotions in Sunday newspaper cir- culars. In addition, the management team funded the promotion and handled all develop- ment, redemption, and fulfillment in-house. Results of the first test market were as follows: A total of $1.5 million in certificates were distributed yielding a 2.1 percent response, or just over 31,000 customer names. About 20 percent of the buyers bought more than one item.

Another part of the test market design was the follow-up phone survey among new customers three months after the initial promotion. Of the customers surveyed, 62 percent had purchased Riders products. The survey provided detailed information to salespeople and consumers. Riders then repeated the test market design, adding a postcard mailing to existing database names. The promotional effort netted over 40,000 new customer names and information for the database. It also proved the responsiveness of database customers 33.8 percent of the database customers who received the postcard promotion came into the store to make a purchase, compared to a 2.8 percent response to the POP and circular ads.

To build a successful customer database from test market designs, the critical first step is figuring out the most efficient way to gather the names. The second step is deciding how you want to use the information with customers, prospects, and retailers. Finally, you begin the process of testing and evaluating the relationships, and applying what you have learned to build customer loyalty.

Focus on Retail Partnerships

The main goal of the test marketing was to create valuable information that could be used to build relationships with Riders consumers and those retail accounts Riders depended on for distribution. The growing philosophy within the Riders brand management team was "The more we know about our customers, the better the decisions we'll be able to make

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in dealing both with them and with our retailers." Moreover, the detailed information such as hard dollar results of each promotion as well as the demographic profiles is shared with retailers, as is the research showing the consumer behavior benefits. For example, a track- ing study found that purchase intent of database customers was twice that of nondatabase customers in a given trade area. Unaided brand awareness likewise was high (100 percent, compared to 16 percent of the general population), and awareness of Riders advertising was 53 percent compared to 27 percent.

The Riders team believed so strongly in tying database information with promotional efforts that they insisted a database component be part of any chain-specific promotions. Management hoped to convince the retailers to build their own database capabilities to share their information. For example, retail account information can identify more product and promotion opportunities. Riders believed the real payoff comes when both manufac- turer and retailer use data, from either source, to do a better job of attracting and keeping the key assets for both channel membersthe customer. Riders must continue convinc- ing retailers that putting Riders merchandise on their shelves is bringing people into their stores. From test marketing to creating complete customer databases, the Riders team has begun to put a major part of its marketing investment into image-building advertising strat- egies focused on print and television media.

For instance, they say, "The more we know about our customers and their prefer- ences, the better we'll be able to hone our advertising messages and media buys, pinpoint what kind of promotions work best, and understand what new products we ought to be developing. As competitive pressures continue to mount, Riders expects detailed customer information to become more valuable in helping define the brand position clearly. Defining ourselves and what's different about Riders products is going to be an increasingly impor- tant element in drawing customers who have a great many choices to stores where Riders products are on the shelves. Although it initially began with test markets guiding the devel- opment of a complete customer database program, it's now the databases that are guiding the inclusion of key elements in our test market research. Riders' ultimate goal is creating a tool that is going to make its products more attractive to retailers and to consumers."

Hands-On Exercise

Using your knowledge from reading about market tests, answer the following questions:

I NEED TO ASNWER THIS QUESTION BASED ON THIS LECTURE, CAN YOU PLEASE HELP ME? THANK YOU SO MUCH. 3 QUESTIONS

1. What was Lee Apparel Company's overall goal for conducting such an extensive test market of its new line of jeans under the brand name "Riders"? In your opinion did the company achieve its goal? Why or why not?
2. Identify and explain the strengths and weaknesses associated with the test market process used by the Lee Apparel Company.
3. In your opinion, should the company give consideration to the development and implementation of Internet-based test marketing strategies? Why or why not?