Marketers are getting friendly with the freestanding insert. Consumer- and customer-friendly, that is.
To heighten awareness among shoppers and with the retail trade, consumer packaged goods companies are using the FSI to promote multiple products in their brand portfolio. A few of the big marketers -- mainly Kraft Foods and Procter & Gamble Co. -- are doing so through what some call the solo-FSI, a manufacturer-specific FSI. Solo-FSIs are distributed via the Sunday paper, but separate from the main FSI co-op book.
A greater number of manufacturers use a different approach. Rather than distribute a separate FSI, they're trying to increase the value proposition of their coupons through what's often referred to as "corporate events," in which a company buys multiple pages within the main FSI book.
H.J. Heinz Co., Pittsburgh, is one such manufacturer. It started using multiple-page FSIs last year. To date, it has run three different programs, each of which featured about five to eight pages. A fourth is planned for October 2002.
Heinz is using the tactic to capitalize on the strength of the Heinz name, said Marion Findley, senior manager, consumer promotions. In doing so, Heinz can boost awareness of its brands that don't carry the Heinz name, including StarKist, Ore-Ida, Smart Ones, Boston Market and Bagel Bites. At the same time, it can draw attention to lesser-known Heinz brands, like Heinz 57 sauce and Heinz gravy.
"We're leveraging our huge portfolio under the Heinz halo," said Findley. "We want the powerful equity that Heinz has to rub off on our other brands."
The benefits of multi-page FSIs are twofold, said Lynn Liddle, co-chair of the Promotion Marketing Association's Coupon Council. Along with their advertising value, they give manufacturers more attention in the retail trade.
"From a brand's standpoint, they feel they can benefit from the synergy of their corporate name," said Liddle, who is also vice president, communications, Valassis Communications, Livonia, Mich., a marketing services firm.
The strategy comes at a time when manufacturers are relying more on FSIs as the coupon distribution method of choice. Last year, the CPG industry distributed 239 billion coupons, down 3.6% from 2000. Of this, 4 billion were redeemed, an 11% decline, according to NCH Marketing Services, Lincolnshire, Ill., a coupon clearing and processing agent.
Despite the drop in overall distribution and redemption, FSI usage increased. FSIs accounted for 84% of total distribution, up from 82% in 2000, according to NCH. One reason for this is that, during these times of budget cutbacks, brands are choosing FSIs over more expensive types of couponing, like in-store and in-/on-pack.
As manufacturers focus more on the FSI, they're exploring varied ways of using it. Many have turned to multi-page buys to help them make more of an impression.
"Companies are trying to get the most mileage from their FSIs," said Lorraine Gallaher, director of marketing, CMS, Winston-Salem, N.C., a subsidiary of Inmar Enterprises, a provider of promotional settlement and information management services.
The way corporate events are handled depends on the goal of the manufacturer. Sometimes, they feature coupons only; other times, recipe and content. Typically, a common theme, color scheme and style links the pages together.
Heinz' corporate events include not only cents-off coupons, but also rebate checks. This past March, for instance, the company offered a $7 check, redeemable at supermarkets, for consumers who sent in 15 UPC symbols for eight participating Heinz brands: Heinz Ketchup, Classico Pasta Sauces, Pup-Peroni/NawSomes! Dog Snacks, Smart Ones Frozen Entrees and Desserts; Ore Ida Potatoes, Bagel Bites/Hot Bits, Pounce Cat Treats and Kibbles 'n Bits Dog Food. Plus, consumers who bought three Ore-Ida Potato products could get one free child's movie ticket for the "Scooby-Doo" movie from Warner Bros.
For each of Heinz' corporate events, it makes sure it buys consecutive pages in the front of the book. Each page has a common background color, design and theme: "All About Family."
Coupon face values depend on the purchasing pattern of the brand, Findley said. If trial is the goal, a $1 value may be offered. If it's a continuity brand, the value could be 20 cents.
Heinz has experienced positive results for each of the events. Its first event, held in March 2001, led to the highest consumption week in the last two years of entire company, according to Findley. Several brands had record sales that week.
Heinz has tested different styles of corporate events. One resembled a photo album, complete with the picture of a family and their dog on the cover. Its March 2002 program, on the other hand, focused on savings, featuring a green banner across the page of each coupon.
Along with Heinz, other manufacturers -- including Colgate-Palmolive, Kimberly-Clark, ConAgra, General Mills and Nestle -- are using this technique, according to industry sources. Most are buying anywhere between five and 10 pages.
P&G and Kraft are the two big players in the area of solo-FSIs. So far this year, Kraft has run two programs, in January and in May, while P&G has run three: March, April and June, according to Minneapolis-based Marx, a CMR/TNS company that provides marketing and coupon promotion activity information.
Branded under the name "The P&G Brand Saver," P&G's June program featured long-standing brand favorites like Tide, Bounty, Pampers, Iams, Downey, Pringles, Sunny Delight, Cascade and Dawn, as well as new products, including Cascade Plastic Booster and ThermaCare.
Positioned as a "coupon guide," it touted $22 in savings. Summer-themed pictures -- including those of a young girl swimming with her father, and children running through a sprinkler -- surrounded the coupons.
"Keep cool with your favorite brands," the booklet read.
Gallaher of CMS noted that P&G has heavily promoted its solo-FSIs in targeted media, including Ebony magazine.
The summer issue of Kraft's solo-FSI, called "Food & Family," had a patriotic them, featuring a cake decorated like a flag on the cover. Participating brands included Cool Whip, Kraft Mayo, A.1. Marinade, CrFme Savers, Grey Poupon and Philadelphia cream cheese. Face values included $1 off with the purchase of three products; $1 off two products; $1 off one; and 55 cents off one.
The book was magazine-like in style, featuring recipes for meals like BBQ Grilled Beef Kabobs. It also publicized various Kraft promotions, including a sweepstakes for a year's supply of CrFme Savers and a seven-day Carnival cruise. Readers were also directed to www.kraftfoods.com, where they could enter to win a family vacation for a Ford Expedition.
Until a few years ago, solo-FSIs were used mostly by fast-food companies, like Burger King; not CPG firms, according to Charles Brown, vice president, marketing, NCH Marketing Services.
Brown said the strategy works best with companies with companies that have a large stable of brands. When used correctly, they offer a consumer connection in terms of corporate-branding.
"These FSIs create a look, feel and image that consumers recognize favorably with the corporate brand," said Brown.
Brown said, however, it's unclear if solo-FSIs improve the performance of coupon.
"It certainly improves the branding of the coupon. But it may vary as to whether or not the objective is to increase customer response," he said.
While Heinz considered solo-FSIs, it has found that that redemption is higher for FSIs that are part of the main co-op book, according to Findley.
Liddle of Valassis agreed that it's beneficial for brands to be in the main book. That's because solo-FSIs typically aren't distributed every week, so consumers may not know when to look for them, she said. They're also more expensive.
CPG marketers are taking advantage of the relatively low cost of FSIs in other ways. Along with bundling products, manufacturers are using FSIs to build relationships with their retail customers. Many are doing so through co-equity FSIs, or those in which a coupon for a certain brand is valid at a specific retailer.
Liddle of Valassis has seen a rise in retail co-equity programs. Manufacturers involved include Nestle, Pfizer, Johnson & Johnson and Colgate-Palmolive, according to Liddle. Most of the major retailers are participating, as well as mass merchandisers.
Heinz has worked with the Kroger Co., Cincinnati, for a retail co-equity program from Valassis called "Retail Connection." Retail Connection is a four-color newspaper insert that runs in conjunction with national coupon promotions. It features the retailer's logo, retailer's frequent shopping card, price points, and an optional retailer banner ad.