Blithe Spirits?

Through the promotion of more holidays and expanding its use of premiums, the alcoholic beverage industry's competitiveness is producing more point-of-purchase materials than ever. At the same time, the industry's retailers are becoming more fragmented and more wary of what point-of-purchase materials they allow in their aisles. These opposing elements are causing marketers to take a careful look at what they produce, how effective it is and who they are creating it for."We're more detail oriented than we were five years ago," says Matthew Borgard, manager of promotional marketing for Barton Beers Ltd. in Chicago. "We work closely with our wholesalers to ensure greater execution, to be more focused, efficient and targeted to the retail promotion than ever. We have to all work together."Michael C. Porter, vice president of marketing for the Stroh Brewery Co. in Detroit, agrees. "We've found that consumers are making more purchase decisions at the point-of-sale than they were five years ago," he says. "Because more choices are being made in this manner, it is imperative that we concentrate on creating attractive, eye-catching displays that will help stimulate purchases. While it's always been our goal to create effective displays, it now is more important to do so than it was before."The result of this heightened focus has been an increased need for creative ideas as well as increasing in-store clutter. "You have to use a lot of tricks to be effective today," says Charles Crane, senior vice president and account group head for Siebel/Mohr in New York, which works with the House of Seagram on promotional campaigns. "There are a lot of restrictions that are inherent due to budgets, quantities produced and legal constraints. You have to stay on the cutting edge."Cary Schwartz, marketing services manager for Carillon Importers Ltd. in Teaneck, N.J., adds that any firm that isn't constantly improving its displays is being passed by. "If you limit yourself, your ideas get old, and there are a lot of people doing great stuff," he says. "But at the same time, you don't change just to do something new. Customers need to become familiar with concepts."Continuity Is Key"Using the same concepts aids impulse sales, because customers see a campaign they've been exposed to in magazines or other media," Schwartz says. "It also brings them into the store and aids recognition when they get there."A move to higher-quality materials, even in short-term promotional displays, is also on the rise, the experts say. "We're using more woodsy, down-to-earth material than ever," says Mary Beth Finnerty, merchandising manager for Chatham Imports, located in New York. "There's definitely fewer modern-looking displays. Everyone is returning to old-time values with a rugged, rough, untouched, natural look."This results in more semipermanent and higher-quality displays, says Ken Toumey, senior marketing manager for the Smirnoff brand at Heublein Inc., Farmington, Conn. "Retailers rightfully are demanding better-quality displays with themes targeted to building their business." At the same time, Barton Beers' Borgard points out, "There are so many companies vying for space and so many new promotions that retailers are demanding faster turnover. You have to target your production to fit the length of the promotion."One answer, he says, is to provide high-quality displays that retailers can reuse, even once the product is off promotion. Barton had great success with a Corona palm tree case stacker early in 1993, he says. Some retailers restacked it with other brands after the initial promotion and then restocked with Corona when it was on promotion again, he says. "Any time your name is out there, you're getting some benefits."Skip the GimmicksHigher quality doesn't necessarily mean more gimmicks or complexity, the experts emphasize. "Retailers are giving a very cool reception to displays with sound and light today," says Borgard. "The novelty wears off quickly, and the displays bug the employees." Carillon's Schwartz agrees. "We are constantly looking for something different, not just the same motion and lights," he says. "There are lots of motion displays out there, and we are getting away from it."Siebel/Mohr's Crane finds that displays with dissolving images are particularly effective for projecting dual messages, such as accompanying mixers and gift options. "In any approach, simple motion is the key," he says. "Otherwise the assembly and complicated concept detract from the retailer's incentive to use it."The same holds true for lights, he adds. "Most stores have bright fluorescents, which make it hard for lighting to be effective. It's often wasted." Even with on-premise displays, lighting has to be used carefully, says Barton's Borgard. His firm has developed a Corona bottle glorifier that uses lights that blink on for five seconds and off for 55. They're working on other variations, too. "We don't want to distract customers, just attract their attention," he explains.Others add that displays featuring motion achieved without using batteries or electricity are most in demand. The result is a challenge to vendors to remain on top of technological changes."Displays for both on-premise and off-premise accounts are becoming more technologically complex, but their design is simpler," explains Chatham's Finnerty. "No matter how it's accomplished, pleasing the retailer is the bottom line."The concepts that work best for marketers today are value-added promotions and premiums. These include glassware and special gifts with the purchase of the product. Traditional offers include coasters, barware and other consumption-oriented pieces. "Liquor has gotten closer to the cosmetic industry's approach with gifts and free offers," says Siebel/Mohr's Crane.That combination is not surprising, as many marketers say they look to such industries as fashion and cosmetics for new ideas. "We're in a fashion and entertainment business, so we look to them for ideas that we can adapt to maximize our own look," says Heublein's Toumey. Other industries most often mentioned include tobacco, nonalcoholic beverages and automobiles.Holidays Mean OpportunitiesAnother current approach centers on targeting a special holiday for promotion; and the definition of holiday is expanding rapidly. More firms, particularly the large domestic beer companies, have focused new attention on St. Patrick's Day and Halloween. Now, says Barton's Borgard, they are eyeing Corona's promotional niche celebrating the Mexican national holiday Cinco de Mayo (May 5). "Even though Corona is the number-one beer from Mexico and the number-two import to the United States, we can't just sit idle and assume that Cinco de Mayo is our holiday," he says. "We have to be actively and aggressively going out to develop better units and programs for wholesalers and retailers to maximize sales."A key reason for this focus on value-added items and special holiday themes, most agree, is that the other option -- rebating -- is a short-term solution at best. "Rebates develop expections and lower the price ultimately that the consumer will pay," Siebel/Mohr's Crane says. Adds Carillon's Schwartz, "Rebates can be a bottomless pit. Once you do it, customers expect it and then want to know what else you're giving them this year."Another concept catching on quickly involves offering catalog merchandise with the brand's logo, Crane says. "This creates billboarding for your brand, which is great." His firm will skew merchandise to the regional tastes of the customers where the brand is most popular. This includes focusing on country-themed items for brands most popular in Texas, Louisiana and Oklahoma, for instance.Brand name enhancement also is coming to the forefront in the store environment, Crane adds. Siebel/Mohr is looking at such ideas as providing retailers with boards -- carrying the product's name or logo -- announcing lottery numbers, as some cigarette companies do now, as well as supplying security mirrors or other fixtures. "It's difficult to develop a loyal franchise today, and if you have one, you want to keep it," he says. "The simple things still work."Retailers More WaryFinding new ways to infiltrate the retail environment is a key consideration today, because more retailers are restricting the P-O-P materials they will accept. "Retailers appropriately object to clutter for the sake of clutter," says Stroh's Porter. "We think retailers continue to be interested in merchandising materials that truly help draw attention to their inventories and help stimulate impulse purchases."Adds Chatham's Finnerty, "Compactness is a big consideration in both on-premise and off-premise materials. We want it big enough to attract attention, but we don't want retailers to turn us down after we've made a major investment because the display's too large for their use."Complicating this effort is the fact that the channels of trade are fragmenting, all agree. That creates new types of stores with targeted audiences, each with its own ideas about what works most effectively. "We are developing many more programs with particular channels in mind in order to help them move more product," says Heublein's Toumey. "In the past, there was much more of the attitude of giving everyone the same picture on a stick. Now we're focusing on putting the customer first. Different channels sell differently."Several marketers mentioned that they were in the process of developing larger units for warehouse stores that feature larger case stacks. At the same time, they also pointed out that other types of retailers are requesting smaller banners and displays to keep their view down the aisles clear to prevent shoplifting. "This is a concern that we are hearing more and more today," says Toumey.Down the road, many marketers are expecting new technologies to aid their quest for effective displays that maintain the retailer's desire for compactness and visibility. Siebel/Mohr's Crane mentions new banner materials that allow the message to be seen from one side but makes it see-through from the other. Barton's Borgard said his firm was examining the possibilities of a light-thief device with an illuminating cardboard coating that reflects lights from overhead fluorescents to create a twinkling effect.Carillon's Schwartz pointed to the Absolut vodka in-store holiday promotion, which used a three-dimensional technique to replicate its print ad. "It was a new technique that has more impact than a typical cardboard display," he says. "We considered motion, but that doesn't do it by itself any more. It doesn't sell the brand. Something new is necessary."In addition to retail restrictions, liquor companies of all kinds must deal with governmental restraints. The variations from one state to another create particular difficulties for providing one uniform, effective promotion, marketers say. Some executives say they plan their promotions for the strictest regulations, which tend to originate in California, in order to avoid treating states differently. Others say they group their promotions according to states' requirements to provide the most effective concepts allowable.For some, however, budget restraints make such targeting impossible. "It's tough to produce a huge program and spend huge amounts of money and then not be able to use it in some states," says Barton's Borgard. At the same time, some specializing will be done if the market justifies it, he says. Corona created a special banner to comply with a 1,000-square-inch-maximum rule in Michigan for its summer Jimmy Buffet promotion, because the singer has enormous popularity there. "We try to focus our efforts where they can do the most good."Partners in PromotionsBecause of the variety of both legal and retail restrictions, marketers are seeking to work more closely than ever with their retail accounts. "You have to be a partner with the retailer," says Siebel/Mohr's Crane. "You have to give them a reason to put your material up. If you don't have a reason, they don't need you." A recent promotion his firm created for Seagram's featured a coupon book offering discounts on rolls, paper plates, barbeque sauce and other items related to cookouts. "This type of promotion created multiple sponsors and cross-merchandising opportunities," he says. It also allows the company to stretch its budget by joining with other marketing efforts.Other executives mentioned trying to cross into the produce department or create racks to display products near the frozen orange juice. In each case, communicating with retailers and receiving feedback is critical. "We are always talking with our customers to learn what's happening," says Heublein's Toumey. "They tell us when we're on the right track. And if it isn't working, we hear about that quickly, too."Barton's Borgard agrees that the key is to be in the markets seeing what materials the competitors are producing, how many retailers are using the displays, how much space the brand is getting and how fast it's moving. "We're not sitting in our ivory tower saying we're great," he says. "We're getting out in the trenches and fighting it out. We have to maneuver our resources to get the best return we can. We can't go head-to-head with the big boys, so we try to outfox them in a few specific ways."

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