Valassis' Brown Says She Used Same Monopoly Tactics as News America

Suzanne Brown, the chief marketing officer at newspaper coupon agency Valassis, told a Michigan state court that the agency’s corporate strategy was to increase market share using the same tactics as its rival, News America Marketing. The admission was potentially important because Valassis is alleging in the case that News America was restricting its market share illegally by bundling or cross-selling newspaper coupon deals with its in-store supermarket ad offers.

Brown’s testimony came regarding a Sept. 24, 2008, 8-K filing that contained a presentation to investors. One bullet point regarding Valassis’ 2008 strategy says:

Increase share by cross selling and new client acquisition

A News America lawyer grilled Brown on that item:

Q: Where it says increase share, I assume that means market share?
Answer: I think in this context it refers to increase share of dollars being spent, with products and services that we sell.
Question: So this would be increased share of the dollars spent by the customers whether it’s a consumer packaged direct mail advertiser or retailer?
Answer: Correct.
Question: And by cross-selling, that means selling more than one product or platform, correct?
Answer: Yes.

The exchange came during a lengthy and, frankly, rather dull examination of Brown. At another point, Brown told the court that Valassis had discussed creating a relationship with Floorgraphics, an agency bought by News America earlier this year. That exchange appeared to demonstrate, again, that Valassis was not above using the same tactics as News America in order to dominate the supermarket/newspaper coupon business:

Question: Do you recall having a discussion with FGI at a meeting that took place in January of 2006?
Answer: I can’t testify to the timing. I have a recollection of having a meeting with some one or two people from Floorgraphics.
Question: And was the purpose of the meeting to discuss a joint strategy to blunt News America’s market share?
Answer: Not that I recall.
Question: What was the point of the meeting?
Answer: I believe the meeting was to discuss whether or not there might be a business relationship between Floorgraphics and Valassis in order to allow Valassis to compete against News America’s monopoly.

The trial continues.

• See BNET’s previous coverage of the in-store marketing wars:
• Valassis Wins Directed Verdict Motion in News America Trial
• News America’s Carlucci Again Accused of Threatening to “Destroy” Floorgraphics
• Valassis Exec Testifies on Anti-News America “Sock Puppets”; Paid Wyeth $1M to Stay
• News America’s Emmel Testifies on Exclusivity Payments to Eckerd, Ahold, Harris Teeter
• Del Monte Allegedly “Held Hostage” by News America; Heinz Wanted to Rip Agency a “New A Hole”
• Nestle Exec Had “Tirade” Over News America’s Pricing; Mixson Says He Always Does That
• News America Threatened to “Crush” Agency That Worked for Kroger
• News America Irked by Portrayal at Valassis Trial
• PepsiCo Exec: News America Charged an Extra $18 Mil. If We Didn’t Take Bundled Deal
  
• 450 Jobs at Stake in Valassis Trial; Is This All CEO Schultz’s Fault?
• News America’s Carlucci Admits He’s a “Godfather” Fan; Denies Unannounced Price Rises
  
• Murdoch Quoted at Valassis Trial: “Now You Have to Really Go After Them”
• News America Exec Testifies Unilever, Conagra and Kraft Got Higher Prices for Not Taking Bundled Ad Deals
• Trial: Valassis Lost Share When It Raised Prices; Tried To Hire News America’s Mixson
• Valassis Uses News America’s Own Clients Against It in Trial; Feel the Wrath of Sara Lee!