In-store promotion is expected to accelerate this year as more brand marketers recognize the value of communicating with consumers at the point of purchase and allocate more dollars to that strategy.
Some brand marketers see 1995 as the year of the megapromotion, while others predict growth in cross-promotions that feature multiple brands or products.
"We want to be able to deliver to the consumer bigger-than-life promotions, something out of the ordinary. We will be spending more net money on consumer and retail promotion trade events in 1995 vs. 1994, irrespective of couponing. We will be supporting megapromotions," says Bob Monroe, director of key accounts at Coors Brewing Co., Golden, Colo.
Pillsbury Co., Minneapolis, plans to do more "bundling" of promotional activity, featuring multiple brands, rather than individual brand promotions, says Diane Slayton, director of group promotions and promotion operations.
"Bundling more brands together, developing larger-than-life promotional activity, allows us to better leverage the mix of our products with customers and consumers," Slayton says.
Bill Mitchell, director of grocery sales at DowBrands, Indianapolis, says his company, too, will focus on in-store promotion in 1995. "We are definitely doing more in-store promotion versus previous years. Our objective is to try to accomplish customer success by creating consumer value," he says.
At Coors, the new promotional focus can be traced to a restructured sales organization that is retailer-oriented, and local rather than national, Monroe says.
"We have developed eight field business areas that will be working somewhat autonomously in terms of promotion. The sales group will have a lot of input into the development of promotions -- for example, what promotions need to look like conceptually. That would give them more of an opportunity to help support lift at retail," he says.
A promotion committee, which will include representatives from sales, brands and Coors' agencies, will work on developing promotions, Monroe says.
Pillsbury's Slayton says promoting several brands together is more efficient and can bring better value to the retailer and the consumer, she says.
"Within the tactical area, we are doing far more promotional activity in-store because that brings us one step closer to the consumer. This encompasses demos, couponing, electronic delivery in-store, signage. It is a way to reach the consumer at the point in time when buying decisions are being made," Slayton says.
Says Mitchell of DowBrands, "We are collaborating with the retailer to use the store more as a vehicle to get to consumers. We view it as similar to any other vehicle, like a Sunday insert or best food day newspaper ad. By doing that, we are creating a win-win-win situation for the retailer, consumer and ourselves."
He adds, "We are trying to tailor our programs to what the retailer's hot button is. We plan to do more cross-merchandising with items the retailers want to move. For example, we are really putting a push onto cross-merchandising our new vegetable storage bags in the produce department. "In some cases we set up a display of ZipLoc vegetable bags and offer consumers a free head of lettuce with purchase, as opposed to dropping a $1 off coupon on Sunday. This helps the retailer create value for the shopper and helps us move vegetable bags."
DowBrands is encouraging the cross-merchandising of its snack storage bags with one of the retailer's private-label snack foods, he says.
Another trend is tailoring in-store promotions to store clusters rather than taking a one-size-fits-all approach, Mitchell says.
"Say we have a pallet that holds 70 items. That may work well for an A-size store, but it may be a six-month supply for a C-size store. So we may create a 10-case display for B-size stores and offer a five-case display to C-size stores. This way we can provide acceptable movement to the retailer and he won't be stuck with inventory," Mitchell says.
Anheuser-Busch, St. Louis, is using more value-added in-store promotions this year by offering point-of-purchase incentives, such as coupons for Eagle snacks or a reduction in the ticket price at one of its theme parks, says John Hanichak, vice president of national retail sales.
"These added-value promotions fully integrate the Anheuser-Busch companies and also help increase retailer margins," he says.
There will be more sweepstakes for more Anheuser-Busch brands, he adds.
"Our Budweiser family has always offered sweepstakes programs, and now some of our other brand families are planning similar promotions as a means to attract new customers, increase store traffic, build brand loyalty and encourage incremental sales. Additionally, the slight increase in the number of sweepstakes offerings also can be attributed to the sales successes we realize as a result of these types of programs," Hanichak says.
"Given the volume and profit opportunities associated with promotions, Anheuser-Busch is focused now, more than ever, on tailoring promotions to meet the needs and wants of the retailer's key customer," he says.
Kort Masteller, retail merchandising consultant at American Greetings Corp., Cleveland, says he detects great interest in building destination departments at store level, which may incorporate multiple categories such as greeting cards with party goods, candy or floral items.
"For example, American Greetings and King Soopers have had great success with greeting card and party centers. Partnerships with retailers seem to be getting stronger. We are really helping them bring about something dynamic," Masteller says.
His associate, Bill McNeill, manager of sales promotion and trade relations at American Greetings, identifies three in-store promotion trends for 1995: value-added promotions rather than discounting; customer loyalty programs, and cross-aisle promotional offers (cross-merchandising of categories).
"During the holidays there was so much discounting at retail, it was confusing for consumers. We find that the customer responds more to value-added, such as a gift with purchase."
McNeill says greeting cards lend themselves to a simple approach. "For example, instead of discounting our greeting cards, we might give a free stamp with purchase of a card. The customer walks out of the store with two items. In the case of postage stamps, which now cost 32 cents, there is a higher perceived value than just offering a discount."
American Greetings also sees "seasonal islands" coming on strong in 1995, says Don Marshall, retail creative services director.
"Retailers take a variety of merchandise and put them together in a boutique-like environment, romancing with various types of seasonal signage. The primary manufacturer of the seasonal goods, such as an American Greetings or a Disney, gets the biggest portion of the display space, but there are supplementary products tied in and merchandised and coordinated," he says.
Boutique graphics may be coordinated with the retailer's in-store graphics to create a consistent seasonal statement in decor, Marshall says. Spokesmen for both Del Monte Foods, San Francisco, and Bertolli Olive Oil, Secaucus, N.J., predict their companies will use more in-store product demonstrations in 1995.
"Demos will play an important role for new products. The demos may include hand-out coupons. The instant coupon machine or other in-store coupon delivery devices will also play a role. There might be in-ad coupons," says Mark Abele, group promotion manager of Del Monte.
"We expect to put a little more emphasis on in-store demos this year just resulting from new product activity. The products we have introduced are newer for the company and are going into some fairly competitive categories. That is driving the need for demos," he says.
Michael Besso, vice president of marketing and commercial sales at Bertolli, says his firm will probably plan demos more frequently in 1995. Some retailer customers have approached Bertolli after seeing demos performed in competitors' stores, he says.
Bertolli uses demos to increase trial and penetration of products with a fairly high price tags, Besso says. The challenge is to find the appropriate product.
"We must be very selective about who we will get together with because of Bertolli's premium quality image," Besso says.
Richard Alt, vice president of national accounts and customer development at Dial Corp., Phoenix, says his company will focus more on promotions with proven consumer response, such as its year-long association with the National Football League and efforts with the Children's Miracle Network.
He adds, "We will also be working even more closely with our customer partners on joint development of in-store co-marketing efforts. We as a company have always focused the majority of our marketing efforts towards the retail store. "Other companies may focus more on other areas such as media, but our focus has always been on the power of the retail store. We continue to improve our promotions by incorporating what we have learned from the past year's effort into the current year."