How Quaker Oats Transforms Information Into Market Leadership

By Trish Baumann, Sales & Marketing Management
June 1989

“Data, data, everywhere, and not an insight anywhere” – that’s the response of many marketers to the information explosion triggered by PCs. For the unfazed few, however, all that data represents an opportunity.

Quaker Oats, Chicago, one of the first consumer goods marketers to exploit the computer’s potential, remains one of the most aggressive. Fifteen years ago Quaker set up its own software program – Addata – for its brand managers. Quaker claims that the system’s ability to handle and gain insights from some 2 billion facts about products and competitors has enabled the company to achieve number one market share in several product categories, including Quaker Oats cereals, Gatorade, Van Camp Pork & Beans, Rice-A-Roni, and Aunt Jemima Pancakes.

However, the company was aware that new technology and new kinds of data were making Addata obsolete, so a little more than two years ago the company started looking for a replacement. They considered: Analect, by Dialogue, New York City; System W, Comshare, Ann Arbor, Mich.; Express MDB, Information Resources, Chicago; and a system marketed by Metaphor Computer Systems, Mountain View, Cal., that combines the company’s proprietary workstation and software and is well known for its use of icons instead of commands and a mouse.

Analect and System W were quickly scratched, according to Steve Rubinow, director of decision support systems for Quaker’s Marketing Decision Support Services Group, because “the former was too much like our old system and the latter was more a finance system than a marketing one.” In the final showdown, Quaker chose Express MDB, says Rubinow, because, unlike Metaphor’s system, “it ran on industry-standard hardware, so it capitalized on our existing investment. ”

Today, more than 400 marketing and financial professionals at Quaker use Express MDB daily. “Its usage falls into three categories,” says Rubinow. “First, reporting and tracking, which includes running the standard reports. Second, marketing planning, where we automate the brand planning and budgeting process by adding ‘what-if analysis and marketing capabilities. Third, ad hoc queries, where people get immediate answers to spontaneous marketing based questions.”

Nancy Bydalek, brand manager for Quaker’s Van Camp products, uses Express for compiling information needed for brand planning. “By running what-if scenarios and marketing spreadsheets based on such considerations as forecasted volume, prices, and advertising spending,” she says. “I get a national view of my business compared to the competition, so I can identify geographical areas that are doing well and not so well.”

The new system is also helping Quaker sharpen its promotions. “When we plan a specific promotion,” explains Greg Peterson, marketing manager of the Cornmeal brand, “we go back in time and see the bottom-line effect that different promotional events had on sales. We then plug in the cost of a planned promotion and see what the final effect is going to be on the brand’s volume and profit.”

Another popular use of Express MDB is to produce detailed reports on brand performance, including factors such as production costs, advertising and merchandising budgets, pricing, forecasted and actual volumes, shipments, profits per case, and net profits – all broken down by product, size, and flavor. “These reports,” says Don Scheibenreis, marketing associate for Oh!s cereals, “help us remain competitive by better managing our financial position. They range from variance reports that specify percentage change for each line item when comparing one financial plan with another to expense reports that detail advertising and merchandising costs by month and account.”

Because the software’s menus and pick lists make it user friendly, it saves on training time, Rubinow says. Marketing manager Peterson claims, “I just walked myself through the menus and went right to work.”

For the less adventurous, there’s a three-hour training course on the system’s functionality. “Like any training program,” Rubinow notes, “what you learn is abstract until you actually apply it. So we also offer a one-hour refresher course where users can ask very specific questions.”

Encouraged by marketing management’s enthusiastic use of Express MDB, Quaker plans to introduce the software in the sales area. A pilot test in the Chicago branch will determine if the system can help sales managers do a better analytical job of comparing their performance against the competition.