A Humongous Pitch for the Kiddie Niche

When a mom named Shelley Day gave voice and vision to a little purple car called Putt Putt back in 1990, the character lived only in her mind and that of her three-year-old son. Ten years and three corporate incarnations later, Putt Putt and friends Freddi Fish, Pajama Sam and Spy Fox entertain and educate children across the globe.Bothell, Washington-based Humongous Entertainment Inc. develops and markets software for children featuring these original characters as well as stars of Nickelodeon's popular preschool television show "Blues Clues." In addition, the company's Backyard Sports titles feature animated "junior" caricatures of famous pro athletes from major league baseball, football and soccer.Humongous is currently the number four publisher of educational software in the country, according to PC Data. So far, all of the company's learning software has been in the form of CD-ROMs for home computers. Going forward, the company hopes to release its first game console titles, raising the target age for Humongous products from pre-school and pre-teen to teens and older.The company also licenses plush dolls, puzzles and picture books featuring its own characters.Last year, Humongous was purchased by Infogrames Inc., a subsidiary of Paris-based software developer Infogrames Entertainment, S.A. As a result, the company is adjusting to changes as it works to develop new products and rethink its product marketing."Nine months ago we made a formal decision to divide our company into two distinct but paper-walled mini-studios, one focusing on original characters and the other handling sports characters," says Public Relations Director Brandon Smith. Both development and marketing sides of the business follow those new functional divisions. A third area, that of licensed properties marketing, is in transition. "We used to have a licensing manager, but with so many experts in licensing at Infogrames, they are trying to house that function at the corporate level," explains Smith. At present, P-O-P for all three groups is created in-house at Humongous.The company employs just under 200 illustrators and programmers on the development side and about 100 in marketing, creative services, public relations and channel sales. Of that group, 20 are involved in the day-to-day creation of P-O-P materials.Humongous spends between 10 and 15% of each new title's launch budget on marketing. Of the overall marketing budget, about 30 to 40% goes to retail marketing efforts with the balance directed to consumer advertising. Of the retail budget, about 25% is P-O-P."Marketing, sales and public relations work together to come up with the program," says Smith. "Sales drives the process of making sure P-O-P serves its function, is in the right place at the right time and is supporting the right products. PR and marketing make sure the message is on target."Once the strategy is in place, the triumvirate forwards the creative brief to creative services, an agency-like department consisting of manager Nikki Gilchrist and two designers, two illustrators, a production assistant and a prepress specialist. "The creative brief is submitted at a kickoff meeting attended by myself, a designer or two, and one of our illustrators, as well as the marketing person requesting the project from us," explains Gilchrist. "From there we go over the objective and decide how we can best represent their objectives through the creative in the P-O-P."New titles are launched with a standard complement of in-store materials: a corrugated merchandiser, shelf cards, counter cards and a pole poster. "We always launch a new title with a 24-, 48- or 96-unit display, for visibility," says Susan Miller, director of channel sales and marketing. No matter how tall, the unit seldom exceeds a 24-inch-by-24-inch footprint. "That smaller footprint is critical in order to get a higher quantity produced and placed," says Marci Knutsen, director of marketing and creative services.Pole posters work very well too, according to Knutsen, because their small size allows retailers versatility in placement. "All of the retailers have their own restrictions," agrees Miller. But across the board, she says, "You get the biggest bang for your buck by going a bit smaller so you can get P-O-P materials into a wider market area."Along with the P-O-P, the package itself is getting smaller. "Certain retailers are really pushing for us to go down to a smaller size carton on the shelf," says Knutsen. Shrinking the standard software package down to a DVD-size box presents problems. "Educating the consumer about the product is the largest barrier," she says. "There's bound to be some confusion with consumers mistaking a CD-ROM for a DVD or a video." That means more information needs to be included in a smaller space."When you're going smaller, you have to be sensitive to what elements are included on the package so that you communicate very quickly to the consumer what it is," Knutsen says. And until the smaller size requirement spreads to all retail channels, Humongous will continue to produce both package sizes, and that means engineering a corrugated merchandiser that will accommodate either size.A Moving TargetEvery package and point-of-purchase item produced for Humongous since day one has had to address a key issue: how to target a buyer who's not the end user. Designed for children as young as three years old, the product has a clear target. But the advertising and P-O-P is more challenging."Our past philosophy has always been to consider both consumers, the parent and child," says Knutsen. "We're definitely seeing that if we can come up with multi-tiered campaigns that have a particular advertisement directed to the kids and another to the parent, we're going to see far better results."Focus groups with parents and children held in Atlanta, Oklahoma City, Portland, Ore., and Seattle in the past year have yielded information on both the product and its promotion. "The focus groups helped us to determine that we have to consider our properties much more individually than we ever have before. In the past we thought that our product was for kids three to eight or three to 10 and tried to bracket them in that area, but now we're seeing that we can focus in on each product even more narrowly," says Knutsen.That dual audience leads P-O-P designers on Gilchrist's staff to carefully handle the placement of elements on all materials. "We make sure there are a lot of character visuals lower on the displays where kids can connect with them and key selling information at eye level for parents," says Gilchrist.Original characters like Putt Putt and Spy Fox are the most tricky, adds Knutsen. Merchandising materials must clearly communicate the product's uniqueness and differentiate it from other titles in its series. "If it's the third Pajama Sam game we've produced, we want to make sure the consumer understands how this game differs from the last." One way to do that is to base the graphics on the story line as much as possible, she says.The company releases an average of six to 10 new CD-ROMs annually along with ancillary product releases, such as updated and repackaged titles. Most launches are accompanied by a sweepstakes or giveaway program."With anything we're doing now we should be looking at some type of added value," says Knutsen. "We really want to give the customer the perception that they're getting a lot for their money."Sometimes the additional value is more immediate and across the board. For the launch of"Pajama Sam 3: You Are What You Eat From Your Head to Your Feet," the first 1,000 purchasers received a free metal lunchbox. Creative services built the lunchbox right into the body of the corrugated display.Simple, straightforward displays that are heavy on color and feature a lot of characters seem to be the key to Humongous' success, although creative team members aren't afraid to experiment. In fact, the need to think creatively and stay sharp regarding marketing and merchandising is supported throughout the company. "After the kickoff meeting, we'll find an excuse to get out of the office atmosphere -- go have coffee or tour a store to see what's out there and what's working, what's not," says Gilchrist."We want to come up with a design that is really sensible and that will allow us to place as many units as possible without being too elaborate," says Knutsen. "Creativity is great but if it's not sensible, it defeats the purpose."Most displays are corrugated units because the material simply "works with our budgets," she continues. Interactive and permanent displays play a much smaller role in the merchandising of software, at least for now.Interactive units produced in the past have been successful, but again, Miller says, "I don't see us returning to that format in the near future." Even though the cost of interactive displays discourages their use, the results are undeniable. "Store managers like them so much that they don't want to take them down," says Knutsen, recalling a past unit that incorporated both sound and motion.The Corporate Image, Seattle, produces most of the company's displays. Collateral materials are printed by CCS Digital Printing Inc., in Bellevue, Wash., and K/P Corp. in Seattle. "I don't use too many different vendors," Gilchrist says. "Once you find somebody that really understands the way you work and your quality requirements, why change what's good?" Nevertheless, she says, "you should always keep your vendor base open and not restricted to a certain company, just in case they can't handle the next job."Cycles of LifeUntil recently, the company limited its major P-O-P efforts to product launches. That too is changing. "We're doing a lot of research on how we can support the product after launch beginning with our next fiscal year," says Miller.Unlike other types of software with shorter lifespans, Humongous games remain viable for years. "Because our products target such narrow age ranges, we see entirely new batches of children come into our fold every couple of years. So the product is renewed again and again," says Smith."We have products from 1995 that are still selling very well. We have to manage that lifecycle," restates Knutsen. In the past, notes Miller, the brands have experienced spikes in sales associated with launch and seasonal promotions. "Our goal now is to flatten the line somewhat by supporting the product throughout its lifecycle," she says.In the last quarter of 2000, marketers began identifying a lifecycle management program to deal with products that were released three to five years ago, says Miller. "We're managing those [older titles] back out into the channel," by way of pallet displays, she notes.Last year the company took its "Backyard Football" title to four major supermarket chains. "It was a test for us to try to broaden our visibility to our customer base," says Miller. "But since then, we've determined that our best market is software retailers such as CompUSA and Zany Brainy."Despite the growing realization that marketing dollars are best spent in traditional outlets, Humongous marketers don't shy away from cross-promotions. In the past year, the company has partnered with Keebler, Nutella, Twizzlers and Coppertone. This summer, Miller says, "Dairy Queen will have promotions tied to all of our characters and sports titles. That's huge.""We have fine-tuned our merchandising programs down to an art; we know how much the display costs and where to put it, so we get a very good return on our investment," says Miller. "Every display is built and placed for a reason, and it gets up because we've done our homework. We know who will take displays and who won't and we know exactly how much space we're getting because we're paying for it." The software developer is accustomed to slotting fees in 100% of its accounts, she says. "We don't build displays and hope we can place them. We work with our buyers first."Given the company's steady growth and successful track record, it's understandable that while the marketing team is excited about responding to changes, they are still cautious. "We have a lot of new directions in front of us," says Knutsen.In other words, no resting on any laurels, no matter how pretty or soft they may be. "P-O-P in the software market is pretty competitive and were it not for our Ambassador group we wouldn't be so well-respected at retail," says Miller. The six-year-old Ambassador program consists of about 20 employees who service key markets throughout the country. "If we get a call from a store saying they didn't get their display or don't have time to get it out, an Ambassador will hand deliver it and set it up," says Miller.Recognizing what they have going for them and giving credit where it's due seems to be par for the course at this software developer. But they're not just being big about it. They're Humongous.

A Humongous Pitch for the Kiddie Niche

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