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Retail Relationships Key To Surviving DRTV Turmoil

Quantum Global New Zealand

Thursday 11 April 2002

High sales forecasts this year for marketing and distribution company Quantum Global New Zealand are in sharp contrast to the recent demise of its chief rival, L V Martin and Son Ltd’s direct marketing operation.

Quantum Global New Zealand says it is tracking in line with forecasts as it starts the new financial year with a new general manager (see accompanying release).

New general manager Kim Gardiner, appointed through internal promotion, says Quantum Global New Zealand is well poised for some notable success this year. She largely credits the company’s survival through the ‘at times’ turbulent waters of direct response television (DRTV) marketing to realising the importance of strategic alliances with credible retailers.

“We are not just about direct response television. Rather, as a marketing and distribution company, we’ve used the DRTV model to expand retail distribution and continuity. Quantum Global New Zealand has leveraged its DRTV model as a tool to create strong retail relationships that are now a major focus of its operations,” says Ms Gardiner.

“When the novelty value of infomercials started to wane in 1997 it was a signal we didn’t ignore. Development of products in certain markets has matured to a more traditional TV-to-retail model, incorporating spot advertising and print advertising that leads customers to a retail store rather than a toll free phone number. It’s the evolution of smarter ways to leverage DRTV within a marketing mix, but couldn’t have been achieved without a determined focus on developing strategic alliances with our key retailers.”

Regional retail sales now contribute over 80% of Quantum Global New Zealand’s total revenues.

“Directing customers to a familiar store enhances the credibility of DRTV, which has been a tough area to survive in,” says Gardiner. “Many viewers simply see all DRTV marketing companies as one and the same, but that’s an image we’ve managed to break out of. Quantum Global New Zealand is recognised as a credible marketer of quality products through key retailers; yet, part of our operations will retain opportunities for customers to buy products from their homes.”
Quantum Global New Zealand’s retail distribution networks reach customers nationwide through retail stalwarts such as Farmers, Unichem, Life Pharmacy and Repco. Flagship product Natural Glow has been on the market for ten years, and sells strongly through Unichem and Life Pharmacies.
Unichem’s merchandise manager Simon Cook says, “Experience shows that, despite the Internet and television, people still like to destination shop. If ‘direct to consumer’ companies are going to achieve success they definitely need some retail involved in the distribution. Quantum Global gives strong evidence of that. Natural Glow, for example, has been an incredible product, and its cut-through really is based on the amount of support that Quantum Global has given it.”
Cook says the TV-to-retail model is a winning solution. “It gives Unichem the ability to utilise Quantum Global’s strong media presence to enhance its brand; and in return Quantum receives strong retail locations. The retail alliance also strengthens consumer confidence in the Quantum Global brand.”

Kim Gardiner agrees on the value of a retail option. “For the customer the ability to walk straight into a store, touch the product, feel that it’s ‘real’, and then being able to take it home immediately, as opposed to waiting on delivery, gives instant gratification and enhances their confidence of having a genuine retailer standing behind the product and the sale.”

Do It All, Fat Free Express, Great Wok and Turbo Tiger are but a few product offerings that carry Quantum Global branding in Farmers stores.

As a supplier to Farmers and undertaking its own advertising for the products it sells through the chain, Quantum Global is in a unique situation. Farmers’ merchandise divisional manager Rod McDermott says the relationship works exceptionally well due to a good alignment of business. “Both businesses are results focused, know exactly what they want to achieve and work together very closely. Farmers has confidence in the saleability of Quantum Global’s products, and the company’s commitment to each one of them. It’s a successful business partnership built on perseverance and a solid, committed relationship. We are both working on expanding the range of Quantum Global products available through Farmers.”

After changes in the international ownership of Quantum Global in 2001, the company has emerged in a more stable position than it has experienced for some time. Under the previous structure as Quantum Prestige Limited the company was negatively impacted by its American parent company e4L until a new US based investor acquired the business last year.

The new investor, V.I. Holdings, sees a positive future for Quantum Global New Zealand, which is just one of the companies within the successful Quantum Global Group that has businesses throughout Asia Pacific and Europe. Quantum Global New Zealand has secured its position at the forefront of the DRTV/Retail leveraged business model and is being used as the catalyst for introducing the model in other international territories.

“From the New Zealand perspective, we’re focusing firmly on the future and how we can expand our retail relationships as well as continuing the strategic use of DRTV and investigating the potential of export markets. We’ve come through the challenges thrown at us buoyed by confidence in our ability to achieve results. Businesses and consumers will be seeing more of our commitment to quality products this year,” Ms Gardiner concludes.

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