CHICAGO -- In a first for Lever Bros., the company has completed two tie-in promotions linking its Snuggle brand fabric softener with store-brand bleach through on-pack coupons.
The two, month-long promotions in March -- at most of the IGA supermarket network and at supermarkets in four wholesaler divisions served by Shurfine-Central -- generated strong display activity and incremental sales at a very low promotional cost, said Donald R. Eckers, senior manager of trade development for New York-based Lever.
More importantly, the efforts have set the stage for continued cross-promotional tie-ins with store brands, or even with complementary national brands, Eckers said.
"I believe that in the future you are going to see a lot more of these programs, not only with private label but between major manufacturers," he said. Eckers presented details of the programs at a conference here of the Grocery Manufacturers of America. The conference was entitled, "Co-Marketing and Coexistence of Brand and Private Label."
Looking to build on redemption rates from last month's promotions, which ranged between 2% and 11%, he said, "We have entered into another test with Kroger Co. where we are going to be doing our bar soaps with their facial tissues." Time frame for the Kroger activity is this month.
And more similar tie-ins could be on the way. Eckers said that his company is testing a strategy under which it would seek to pair its "mid-level" brands with related store-brand items and its top-tier brands with noncompeting national brands for joint trade promotions.
He also declared Lever's intention to continue to test similar tie-in promotions with different
levels of spending in order to expand its tactical expertise. A cross-promotion using a high value on-pack coupon would offer little or no trade money, while a lower-value coupon would be supported with somewhat higher trade spending.
"We initially went in on this one with a low level of spending. We will try it again with a mid-level and a high-level later on," Eckers said.
IGA, based in Chicago, is a store licensing corporation that provides a national identity for its 3,600 member stores. Shurfine-Central, Northlake, Ill., provides private-label and other product marketing programs for 27 co-ops and wholesalers encompassing 10,000 food, drug and convenience stores in the United States.
For the March promotions, Lever supplied a total of 3.1 million coupons worth 50 cents off Snuggle to multiple private-label manufacturers who attached them to bottles of liquid laundry bleach.
"At Shurfine, we went out to test this in four of their most cooperative divisions," Eckers said, identifying client wholesalers Associated Grocers in Baton Rouge, La., and Birmingham, Ala.; Roundy's Midland Grocery division in Muskegon, Mich., and Affiliated Food Southwest, Little Rock, Ark.
"We had to learn to work with their suppliers. This was very important because we had no education in how to work with private-label suppliers. We needed them to share information with us," Eckers said.
Nine outside suppliers were involved and Lever needed each to provide one month's worth of promoted bleach movement data, so that the promotion could be planned. Those numbers tallied to 175,000 bottles, he said.
"What we gave them in return was a 50-cent, instantly redeemable coupon on Snuggle, with a six-month expiration date and universal product code," he added. "For marketing purposes we set up a separate post office box for easy tracking on this."
Eckers said Lever's costs were very low for this type of promotion: Printing of three million coupons cost $5,300; redemptions, which averaged out at 4%, amounted to $3,500; handling was 8 cents per redemption. Grand total for the Shurfine test came to $9,396.
He said, "With a case rate you would have probably spent around six times this amount of money to achieve the same amount of cases involved."
Promotional lift on the store-brand bleach, as tracked using data from Information Resources Inc. here, was 19%, he said.
For the IGA side of the test, Lever had to learn to work with 11 outside suppliers, he said, whose one-month promoted movement came to 552,000 bottles. Here too, a 50-cent instantly redeemable coupon with UPC coding was employed, although it was printed in a different color than the Shurfine version to simplify redemption tracking. Results were tracked through accounts' scanner data and IRI information.
Coupon-printing costs for this promotion were $17,200. Redemption was approximately $11,000. Handling costs were $1,700. Total cost came to $30,116. "Again, when you are talking about this type of dollar expenditure for over a half-million impressions, that is very low," Eckers said.
He continued, "The great part about this particular run was that we got out there in time to facilitate huge amounts of retail displays."
Data on the promotional lift on the IGA bleach were not yet available, but he reported a 33,000-case lift on Snuggle alone for the month of March, equivalent to about 2.0% to 2.5%.
Eckers said the favorable results of the Snuggle/bleach tie-ins are likely to lead to repeated activity, despite initial skepticism at Lever and at the private-label manufacturers. He described convincing Lever's own marketing people to back the idea as "probably the largest hurdle I have ever jumped in my life." Initial efforts to enlist cooperation from the store-brand manufacturers were also met coldly at first.
"If you don't have corporate help and backing on these programs, they will not fly. Because for me to go and talk to a private-label manufacturer was like talking to that wall over there," he said.
"We needed to talk to buyer and category manager at corporate level to get their support to actually tell these people that they were going to do it. So that is the first place to start, with the category managers."
He added, "Every private-label manufacturer also has their own sales force out there. We benefit from that fact that you have two sales forces out there selling this promotion."
