In the promotional marketing game, brand marketers are proving what's old is new again. At the least, traditional marketing tools are being utilized in different ways.
The main reason for this is an attempt to do more with less, said Sara Owens, president, Promo Pros, St. Louis, a promotion-consulting firm. While marketing budgets are in much better shape now than they have been over the past few years, companies still want to stretch the dollar as much as possible, Owens said.
"There's greater emphasis on getting more for your money," she said. "It's not like the roaring '90s when there was an investment mentality."
Owens points to the freestanding insert as an example. Large consumer packaged goods firms like Kraft and Procter and Gamble still use them, but have taken a new approach through tools like the solo-FSI, a company-specific, multi-brand FSI mailing.
Kraft's solo-FSI is called Food & Family, while P&G's is named The P&G Brand Saver. "Kraft is using Food & Family to build brands by not only providing coupon savings, but also value through recipes and information," Owens said.
Another change is increased emphasis on promotions that engage consumers with a hands-on, emotionally rewarding brand experience. A new study by the Promotion Marketing Association, New York, the trade organization representing the promotion marketing industry, shows that marketers are doing just that through event marketing.
The survey found that marketers spent 30% of their consumer promotion dollars on event marketing in 2002, up from 24% in 2001. Such programs range from event sponsorships to product sampling and couponing.
Claire Rosenzweig, PMA president, attributes the growth in event marketing to the fact that more consumers want to interact with brands and develop a one-to-one connection with them.
"People want to 'experience' a brand," she noted.
Event marketing has become so prevalent that the PMA recently created an event marketing council. The new committee joins four others: coupon, in-store, customer relationship management, and product sampling and demonstration.
The fact that marketers are spending more on event marketing demonstrates a movement toward brand building through customized experiences, said Owens of Promo Pros.
"You can't get through the hard times riding only on price. You need to create an image for your brands," she noted.
Event marketing is an important part of the promotional calendar for Reckitt Benckiser's Frank's RedHot cayenne pepper sauce, along with its other brands. Since the brand is geared to young males, the Wayne, N.J.-based company makes sure it is present at sporting, food, music and other events that appeal to the demographic.
Among them: Frank's RedHot founded the World Buffalo Wing Eating Circuit, which is expected to hit seven markets this year.
"We want to make sure we're spending money wisely and reaching our target audience," Barbara Yaros, director of marketing services, Reckitt Benckiser, told SN.
Reckitt is using its marketing dollars in other ways, including co-marketing with retailers, food-service operators and other manufacturers. Although the PMA study said marketers reduced the total dollars spent on co-marketing from 28% of the budget in 2001 to 15% in 2002, Reckitt Benckiser sees it as a growth area, especially on the retail side.
"As retailers consolidate, it becomes more practical to market with them," Yaros said.
Reckitt has had success in working Wal-Mart's in-store radio program, Yaros said. On the supplier side, it has an ongoing partnership with the Campbell Soup Co. to co-market ingredients for a green bean casserole. Especially popular during the holidays, the recipe connects French's French Fried Onion rings to Campbell's cream of mushroom soup. Reckitt's food-service partnerships, meanwhile, include programs with Subway and TGI Friday's, among others.
"We've had a lot of success in partnering with other companies," said Yaros.
CONTEST/SWEEPSTAKES AND MORE
In 2002, $233.7 billion was spent on consumer promotion, according to the PMA study. Brand marketer respondents said that over 57% of their marketing dollars went into trade or consumer promotion, while approximately 37% went into advertising.
Among other results from the PMA study:
More chief executive officers and presidents are attending promotion strategy sessions.
Spending for direct mail, POP displays and premium incentives held steady from 2001 to 2002.
Further, 5% increases were reported in contests and sweepstakes (16% to 21%) and in sponsorships (12% to 17%).
Reckitt Benckiser is among the marketers that are paying more attention to contests and sweepstakes. The marketer is in the midst of its first instant-win promotion for its French's mustard. The on-pack promotion gives consumers a chance to get a whopping $50,000. "The goal is to excite consumers and provide them with an added value," Yaros said. An instant-win promotion is also under way for Reckitt's GourMayo flavored mayonnaise. The prize is an exotic vacation.
Reckitt selected an on-pack, instant-win vehicle to help the brand stand out on the shelf and draw attention to new packaging for French's mustard.
"It's a way to incent the consumer without using heavy discounting," she said. "It's an equity-building promotion."
Mott's, Stamford, Conn., a division of London-based Cadbury Schweppes, is also using an instant-win element for a summer promotion for its Hawaiian Punch brand. Called "Soak Up the Summer!" the promotion will award 15,000 consumers "Super Soaker" water toys manufactured by Hasbro. Consumers find out if they've won through game pieces located under the caps of 1-gallon bottles and on the reverse side of the shrink-wrap for 8-ounce eight-packs.
The type of promotion tools Mott's uses depends on the product and the consumers it's trying to reach. Kids, for instance, are much more receptive to an instant win, said Chris Curran, manager, corporate communications.
"Instant-win promotions work well because consumers don't have to wait to get their prize, it's immediate," Curran said.
Certain brands geared to adults may be better suited for event sponsorships, Curran noted. That's one of the reasons why Mott's Mr & Mrs T Premium Blend Bloody Mary Mix served as the "Official Mixer" for the Maui and Palm Springs International film festivals. Among other promotions, Mr & Mrs T has also teamed with Travelocity to send music lovers to the 25th Chicago Jazz Festival. Two grand prizewinners will win a trip for two to Chicago, including round trip air transportation, hotel accommodations and festival tickets. The festival runs from Aug. 28 to 31.
According to the PMA study, manufacturer spending on couponing increased by 3% to 17% of the budget.
In most cases, manufacturers use coupons to promote future purchases of their own brands. But, in hopes of encouraging product trial, some are also distributing coupons for products and services other than their own.
Such is the case at Dannon Co., Tarrytown, N.Y., which is offering a coupon for a free kids ticket to any U.S. Six Flags Theme Park, Water Park or Property. Valued at $20, the coupon is available on packages of Dannon Danimals and Sprinkl'ins.
The coupon is part of a three-year, multimillion-dollar sponsorship agreement between Dannon and Six Flags that began in 2002.