TIE-UPS WITH TIE-INS

Cross-merchandising sounds great, but marketing tie-ins of video releases with branded merchandise will need better coordination in the field if they are to live up to their potential.

ves are not fully informed about them. "The dissemination of these promotions is the biggest issue," said David Pierce, senior vice president, sales, Columbia TriStar Home Video, Burbank, Calif. "When a promotion comes together at the high end of a studio or of a consumer products company, the plan is drawn up, and it sounds very nice and looks very pretty. But in disseminating that to a studio field staff, and then to wholesale, and at the same time working with brokers, it becomes a massive logistical problem. That's where these things break down," he said. According to Teri Severinsen, manager of video services at Roundy's, Milwaukee: "It depends on how willing they are to work with the grocery department and the video department to coordinate something," Often the commitment the companies make for the rebate is the extent of their funds and they don't offer anything else." In the following discussion, SN's video roundtable also consider the best products to tie-in with videos and their advertising potential:

SN: Is the industry getting better at cross-merchandising?

SEVERINSEN: It depends on the company that's doing the tie-in, whether they are aggressively looking to do something with the store. We've done some things in the past with the Nabisco tie-ins. On "The Return of Jafar," the rep went to our people and said: "We want to do something. We're willing to work with you to promote this title." So it depends on how willing they are to work with the grocery department and the video department to coordinate something. Often the commitment the companies make for the rebate is the extent of their funds and they don't offer anything else.

SN: What needs to be done to make these programs more successful?

SEVERINSEN: First, people who work for the tie-in company have to be informed about it. A lot of times, we see someone from the tie-in company, and they don't have a clue that there's this promotion going on. They haven't received any materials or any information, and we're telling them about it. Obviously, that isn't going to work. If they've been informed, are aggressive and if they go out and pursue it, it's going to happen, and be good for everyone.

INGRAM: Do cross-promotions work better with nonfood products than they do with food? I've heard it is like the Great Wall of China among supermarket departments. For example, if you've got Colgate or some nonfood item cross-promoting with the video, it is easier logistically to work with than a food item. Or does it just depend on the manufacturer?

MUELDENER: You've got to look at the turns of the product. Part of the situation with Colgate was, it's not a high-turn item. Then, you look at Nabisco, and it's a high-turn, high-impulse snack item, easy to merchandise. You've got a rep who is servicing your store from Nabisco. You've got the studio sales rep, who went out of his way to sit down with the Nabisco sales region to plan the program, and then talked to each individual rep in that area, and followed it through all the way down.

INGRAM: So you're saying it is case by case?

SEVERINSEN: Yes. Another problem is, when the studios think about doing these promotions, they want to make it flexible for the customer, so they throw in all these products. It then becomes a nightmare in terms of advertising. If they have to buy four different boxes of a Nabisco product, and there are 10 products, it's very hard to incorporate all that into an ad. Sometimes it's easier to advertise if it's just one product.

BERNS: It's the old adage, "Keep it simple, Stupid."

MUELDENER: Also, you're not going to bring in two or three shippers of toothpaste to fill up an end-cap, because you'll be sitting on toothpaste for the next four years.

FINCHER: Toothpaste and video don't quite work together as well as snack products and video.

MUELDENER: Often bottlers get excited about these promotions. But the problem with pop is we've got 27 distributors in our area, and none of them are going to give up money. If Pepsi is dominant in a market with a 60% to 70% share, and you are promoting with Pepsi, that local distributor won't give you a penny because it doesn't have to. PIERCE: You've hit on it. The dissemination of these promotions is the biggest issue. When a promotion comes together at the high end of a studio or of a consumer products company, the plan is drawn up, and it sounds very nice and looks very pretty. But in disseminating that to a studio field staff, and then to wholesale, and at the same time, working with brokers, it becomes a massive logistical problem. That's where these things break down. I agree with Steve [Berns]: We need to find the simplest way to do this sort of thing. If there's an opportunity to put one or more sell-through titles out there tied in with a consumer products company, and they are giving you a display, that is fine. Displays are wonderful. Space on the front of the cassettes is very valuable to exchange for pure media. Ultimately, what's going to drive the product off the shelf is more advertising. It's simple that way. There's nothing logistically that has to be disseminated down to the field, other than, you've got the studios spending money and you've got the consumer products company spending money. It's a win-win for the studio and for the retailer. I don't like the concept of trying to create a national presence. It just doesn't work for all retailers. It becomes a regional issue or a retailer issue. There's more opportunity to do retail-specific promotions. These might be done in conjunction with wholesale. As major retailers, you have clout with consumer products companies. If you want to do something exclusive, then it is much simpler. You've got the wholesaler who's going to deliver the product, you've got the studio with the support, and you've got the retailer saying, "Yes, we can make this work."

MUELDENER: That would only work if the MDF [market development funds] for it are flexible.

PIERCE: Absolutely. Of course.

MUELDENER: Up to now, that has been the big drawback, the flexibility in the MDF and co-op, because you are talking large numbers for ads.

PIERCE: Do these types of promotions really drive the product? I have some hesitation about it. We may put a sell-through event title in the stores, and spend a tremendous amount on media up front in the first 30 days to drive it. But is that really a key factor in driving your sales?

MUELDENER: The advertising gives you national exposure. But does it drive product? It depends on the product, vendor participation and commitment.

BERNS: This is not a new issue. Even when I wore a video specialty retailer hat, I thought there was a problem with the dissemination from the studio level, down to distributors and then to retail management, where there is constant turnover.

I had always believed that the simplest and best way of making these promotions successful would be to have more ads in the local newspaper and on television. That would drive the consumers into their respective retail channels, as opposed to going through the whole rigmarole of all this couponing.

PIERCE: Especially if these truly are destination departments, where people know they can buy and rent video. The product's already at an attractive price. You can run a coupon and you can make it look more attractive. But I'm not sure that's the driving mechanism.

BERNS: I think studios would actually change their viewpoint if they actually went and saw it at a particular store. The consumer now is at the store and picks up the title, and wonders, "Do I have to buy these two Procter & Gamble items here, or where?" Then they ask a sales clerk who has been with you for maybe a day, a week, a month, and the answer is, "Read the packaging, I don't know." In many, many cases, it ultimately doesn't succeed.

SEVERINSEN: It depends. If you're advertising what the tie-in is, and you have it in your store, then you're going to move that product. But the tie-in has to be communicated effectively to the consumer.

FINCHER: Well, obviously it works or Nabisco wouldn't continue to try to do it. Their sales are outrageous.

PIERCE: The consumer product companies want to be part of the glamour of this product.

STAGNER: Their name is being advertised, and they like that.

SEVERINSEN: I don't think it necessarily drives the video sales. If the consumer is going to purchase the product, then they're going to do it. The intent is already there. But if there is an opportunity, and if it's easy and if it's a value, they will pick up whatever product is associated with it to qualify for the rebate and get the extra savings.

PIERCE: That's the retail side of the coin. From a pure studio standpoint, I'm a little skeptical. I'm not so sure I want the coupon, but it's good to have some media money to drive the product.