Catalina grows presence in drug channel

Chain Drug Review, June 30, 2008

ST. PETERSBURG, Fla. -- Catalina Marketing Corp. is focused on bringing drug chains the same targeted marketing initiatives it has long delivered to grocery retailers and discounters.

Following a successful Catalina Marketing Network presence in Walgreen Co. stores nationwide, Catalina is launching a similar undertaking at Kerr Drug, and additional rollouts at major regional and national drug chains are planned for later in the year and into 2009.

Catalina's manufacturing clients do extensive business with pharmacy operators, notes vice president of health and wellness Sharon Glass, adding that the company's partnership with Walgreens shows how effectively it can work with chain drug retailers.

"Entering the drug store arena was a compelling proposition," says Glass. "Drug chains are definitely a high priority when it comes to channel expansion."

As part of a $100 million corporate investment in color printers throughout its 23,000-store network in 2005, Catalina has begun installing full-color printers at more than 1,500 Walgreens units and expects to complete rollout of the capability chainwide in the near future. "The ability to have beauty products represented in full color is very important," notes Glass.

Ads for beauty products and other items are printed at checkout based on a consumer's buying habits--either her historical shopping behavior or her current purchase. Catalina prints manufacturer coupons that match shoppers' preferences based on their loyalty card, debit card or credit card usage at the store. Catalina looks strictly at the number on the card and the purchase behavior associated with that number. No personal information is compromised.

For example, the company can identify whether shoppers have a dog or cat based on their pet food purchases, or whether anyone in their household is on a low-cholesterol diet, says Glass.

In the health and wellness arena, Catalina can segment consumers based on chronic conditions, including diabetes and heart disease. The company is applying that capability to its new RxConx marketing solution, which prints promotions at the pharmacy based on a prescription's NDC (National Drug Code).

The HIPAA-compliant initiative promotes over-the-counter products that complement prescriptions. For instance, pharmacy customers who get a cholesterol script may receive a $3-off coupon for a fiber supplement. And people picking up a prescription for infants might get a $1-off coupon for baby wipes.

Another pharmacy vehicle from Catalina is PatientLink, which prints messages on prescription labels. Used in more than 17,500 pharmacies, it delivers more than 1.1 billion messages annually to over 100 million patients.

With both PatientLink and RxConx, patients receive a message on their prescription bag and a coupon at the pharmacy checkout, "so they're being hit twice--once to build awareness and brand equity and the other time with a call to action," notes Glass.

The combination of pharmacy and front-end vehicles lets Catalina reach consumers "in both footprints of a store," she adds. That's important, because about half of patients who fill a prescription walk out of a store without purchasing anything else, leading to almost $5 billion a year in lost sales, she says. "If you're able to drive another sale before they leave, that's a huge win. That's one reason Walgreens is really excited about rolling out RxConx and why we are going to be aggressively expanding it."

Some manufacturers prefer such educational printings as advertisements, cause marketing messages and public relations campaigns to promotions, observes Glass. A recent message advises consumers to "eat better" with a specific fiber cereal and offered a sample pouch of the product with a sign-up for an e-mail newsletter. Another message urges action against childhood obesity and directs consumers to a web site.

Likewise, another pant message encourages patients to visit DiabetesControlForLife.com for a free personalized assessment and customized plan to help them lose weight and better control blood sugar.

Glass says the momentum behind health and wellness initiatives will be sustained by the aging of the baby boomer generation and the younger generations' desire to maintain their youth. In light of that, Catalina is investing significant resources into identifying the seriousness of consumers' chronic conditions.

"You can't treat all consumers the same," remarks Glass. "People with type 1 and type 2 diabetes are totally different. How does one properly identify consumers to create messages based on where they are with their health? Some people want a preemptive strategy to avoid getting sick, and others who already have a condition want to manage it and improve their quality of life.

"We're doing a lot of work on how we communicate to people based on the severity of their disease state."

Catalina Marketing Corp.

200 Carillon Parkway

St. Petersburg, Fla. 33716

Key contact: Ed Kuehnle, President of Catalina Marketing Services

Web site: catalinamarketing.com