The pieces no longer seem to fit the Jigsaw

Big packaged goods companies usually shroud themselves in secrecy and when they do come together in a partnership, the mystery heightens. Jigsaw Consortium, the “revolutionary” initiative set up by the three giants Unilever, Kimberly-Clark (K-C) and Cadbury Schweppes to sell directly to consumers, is supposedly in secret talks with a “third party” to revitalise the companies’ approach to building relationships with consumers (MW last week).

The talks are being held with a direct marketing (DM) agency with the aim of improving Jigsaw’s database management. It is expected that the DM agency will be given access to the Jigsaw database for commercial purposes. The three companies involved in Jigsaw refuse to speak about the venture.

Critics say that by appointing a DM agency the five-year-old consortium is finally admitting that it has run out of steam. Industry experts say that Jigsaw’s original proposition of three different companies actively sharing a database was ground-breaking. But most manufacturers share research data via a third party, and for Jigsaw to adopt

this methodology would mark a reversal of the consortium’s original strategy.

The joint venture was born in 1997 as the Consumer Needs Consortium between Unilever, Cadbury, K-C and Bass – the former drinks company whose brands are now split between Interbrew and Coors Brewer (MW August 14, 1997). The idea was born from the need to fight against the growing popularity of own-label goods, which had begun to dent sales of branded products. The consortium aimed to bypass supermarkets by selling directly to consumers. It changed its name to Jigsaw a year later, when Bass pulled out after reportedly becoming frustrated with the slow progress of the project.

Direct marketing agency Black Cat managing director Stephen Callender says that the use of relationship marketing techniques for packaged goods products often proves to be ineffective, because the additional cost fails to justify the benefit of one-to-one communication with the customer.

Nevertheless, packaged goods companies continue to seek direct communication with their consumers. This summer, Procter & Gamble (P&G) launched its audio magazine Take Five, in an effort to increase women’s loyalty to its brands. The CD magazine featured seven, five-minute radio-style programmes on women’s health and fitness, and was bundled with a book of coupons offering money off products such as Fairy, Ariel and Olay skincare.

But Take Five was not a long-term solution for P&G, with only four such mail-outs planned for the year. P&G appointed Saatchi & Saatchi to create the magazine and the direct mail campaign.

Heinz did something similar in 1994, when it developed a quarterly direct mail title called Heinz at Home. Following the campaign it claimed that its market share increased by seven per cent.

The Jigsaw Consortium was thought to be a precursor to a full-scale home-shopping service using magazines, catalogues and the Internet. But the closing of its Voila! customer magazine this year seems proof that the idea has not been popular with customers. In addition, Jigsaw’s original concept of cross-selling brands has also borne little fruit.

Previously, the Jigsaw database was used to inform consumers about the rebranding of Unilever’s household cleaner from Jif to Cif, and by K-C for its &£10m relaunch of feminine hygiene brand Kotex last year.

A City analyst says that it often proves very difficult for companies to part with valuable consumer data, even to partners. He doubts the future commitment of the three companies to the project.

Steve Barton, the chief executive of Leo Burnett’s direct agency, Leonardo, agrees that when different companies come together they will always have different agendas and clashing interests. He adds: “Jigsaw is a brilliant idea, but if it is going to work it will need a DM agency as a third party. For instance, the model of Nectar card is appropriate, because it represents all these great brands, but the consumers’ relationship is only with Nectar. I’m not sure how Jigsaw works in terms of its relationship with consumers.”

An industry insider says: “Jigsaw has not been successful from the beginning. A great idea in theory, but certainly not practical. It is all very well to say that brands need to have a dialogue with the consumers, but by simply sending money-off vouchers to your customers or sending them a long questionnaire about whether they use both Persil and Kleenex and also eat Cadbury’s is not the answer. Its internal management problems have also added to its woes.”

Last year, the consortium was hit by the sudden departure of its managing director, Liz Harlow. Her role was taken over by Cadbury marketer Georgina Walter. Walter’s title at Jigsaw is general manager.

Black Cat’s Callender says that problems could arise if one of the companies comes under significant pressure over margins. In addition, the three companies have been acting independently in trying to bypass supermarkets and win back territory from increasingly successful own-brand goods. Last year, for instance, K-C decide to cut the price of its Andrex toilet roll, making it cheaper than most supermarkets’ own-label versions (MW June 28, 2001).

Once hailed as the brain-child of Unilever boss Niall FitzGerald, the company now says that it does not know who represents Jigsaw in house. If the project is not recognised by its investors, then serious questions about its future must be raised. It certainly seems unlikely that any similar alliance of manufacturers of powerful brands will emerge in the near future.