Retailer Incentives

He was hired as the head of market research (aka marketing insights) from outside the booze industry. Bright eyed and bushy tailed, he decided that he was going to learn the business by talking to consumers, retailers and the sales folks on the street.

For weeks he did nothing but visit market after market and rode along with local sales managers. He learned a great deal in the field, more than by sitting at a desk and listening to presentations.

Among other things, he learned that the business is based on relationships and, for the most part, respect between the buyer and seller. He learned how the 3-tier system works, how the consumer needs to be factored into the equation and the difference between a smart sales rep and one that’s just going through the motions.

The plan was to see as wide and diverse set of retail situations as possible — bars at night and stores during the day. Some open-ended consumer focus groups were thrown in here and there, just for the learning.

One day he found himself in Detroit. The morning was spent in suburban stores and the afternoon was devoted to downtown. The local sales manager for the company was among the best. Really knew his stuff.

A new word entered his vocabulary — “bank” store. Stores in tough urban settings with thick Plexiglas separating the clerks and the customers.

At one large, important account, the owner greeted the sales rep warmly. In a Middle Eastern accent, said to the sales rep, “How are you? What do you have for me today?”

“We have a Seagram’s Gin program coming up that you might want to look into,” said the salesman.

“What will I get?” asked the owner. “Never mind,” he quickly added, “I don’t need to promote Gin. What’s in your bag? Any tee shirts or hats?”

“No, just shelf talkers, window ads, banners and sales sheets.”

“Paper” said the owner. “I don’t need no paper.” “Got any more Captain Morgan mirrors? My father-in-law saw it in the store and took it home. I want one too.”

“I’m sorry,” said the salesman. “That program ended months ago and it was so successful we ran out.”

“ What do you have in the trunk of your car?” asked the storeowner.

By now the market researcher is watching this interchange with his mouth open and in total shock.

“Listen, I’m just showing this gentleman from New York around the market and different stores. You’re an important account for us and I wanted him to see it. I don’t have sales promotion or loader items. Maybe next time.”

“Sure, sure” said the storeowner. “What do you have in your trunk?”

“Nothing.”

“Come on, come on, what’s in the trunk?” asked the retailer.

With total poise and calm, the salesman handed his car keys to the owner and said, “check for yourself.”

He went on, “but this time leave the spare tire.”

{Got any sales promotion stories you want to share?}

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Product Placements

Think about E.T. and Reese’s Pieces. Smirnoff and James Bond. “You’ve Got Mail” and Starbuck’s.

Product placements in film and TV, depending on whom you talk to, are considered a critical brand building or reinforcement tool. There are some, however, who see it as low impact — it’s ok if you don’t have to pay for it.

In doing a little research on the subject lately, I’ve come across some interesting information.

First, consider this from a study on the subject: (Link)

“…the type of product-placement an advertiser opts for should depend on their marketing goals. If you want to build awareness … it’s probably best to opt for a placement that plays a role in the story itself. But if you just want to reinforce preferences for a well-known brand (say, “Coke” versus “Pepsi”), it’s probably not necessary to go to that expense. Just having your brand in the movie works just as well.

Second, I spoke to Joel Henrie who runs Motion Picture Placement, a leader in the field and an old friend who informs me that the upcoming Wall Street: Money Never Sleeps (the sequel) had adult beverage companies tripping over themselves to pay for placement. We’re talking big bucks here.

My first exposure to product placement (albeit from a distance) was shortly after I joined Seagram. It was on behalf of Herradura Tequila.

Based on film industry connections, the company had an opportunity (which I believe turned into a mandate) to place the brand in a film called Tequila Sunrise. Aside from the title as a perfect fit, the placement involved brand exposure galore — verbal mentions, bottle exposure on the bar and consumed by the actors, signage, even a bus passing by with a Herradura ad on the side. So, there was a role for the brand in the story, not a central role, but the title alone made the brand a key element.

Even more, Tequila Sunrise was star studded and sure to have target audience appeal. Mel Gibson, Michelle Pfeiffer and Kurt Russell starred; Robert Towne wrote and directed the movie. A sure thing, right?

The movie sucked and never lived up to its promise. A Variety review summed it up nicely: “There’s not much kick in this cocktail, despite its mix of quality ingredients.” Roger Ebert wrote, “It’s hard to surrender yourself to a film that seems to be toying with you.”

The small number of people who saw the film agreed.

I’ve always been a proponent of product placement and integration. To me, it makes good sense as a brand-building tool. But, I’ve learned the following:

  • Positive impact on a brand is not a foregone conclusion. No matter how well the product is shown and integrated, sometimes, the only winner is the TV or film producer. But, that’s true for all media.
  • For adult beverages, how the product is portrayed is as important as the portrayal itself. Enough said.
  • If the story doesn’t click with audiences, the brand becomes “collateral damage.” Unfortunately, there’s no real way to predict it, but worth the shot.

Have you noticed what E.T. did for Reese’s Pieces? As I’ve been told, it was first offered to Mars on behalf of M&Ms and they turned it down. Hershey said yes.

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Absolut Tales

The Gulfstream took off from Stockholm’s Arlanda airport with a full load of executives, all of whom had the satisfaction of knowing that the global distribution rights to Absolut were signed, sealed and delivered.

If you’ve ever flown on a corporate jet, you know how great it is. You board quickly and easily, take off on time (or even ahead of time) and generally are met on the tarmac a few steps from the plane and off you go.

Despite this great convenience, I’ve heard people complain about the absence of frequent flier miles, which always makes me laugh at the silliness of the thought. For me, however, this particular flight had one disadvantage — it was full of Seagram brass. Every one of the 14 seats was taken and there was no place to hide. And, every one of the 14 had 5 or 6 ideas about marketing and how best to grow the brand further. After all, we were taking over the brand from the legendary Michel Roux who grew the brand with a series of innovative and effective marketing actions.

While getting the brand elated us, we were also mindful of the daunting task ahead. Especially the marketing guy…me.

This was best summed up by the owner who, after laying out his thoughts and vision, said, “Arturo, I have four words for you — don’t f**k it up.”

Michel Roux was indeed a hard act to follow. Carillon Importers was part of a large corporation, but he ran the brand entrepreneurially, with vision and resources to take this fledgling brand to renowned marketing levels.

There is a great story about Michel’s brand champion efforts that I recently asked him to confirm. I wasn’t sure if it was true or a booze business myth.

It seems he was in the Detroit airport waiting to depart when he noticed a man wearing an Absolut t-shirt. Alarm bells went off in his head for two reasons. First, there were no Absolut t-shirts and he and didn’t want them, so clearly it was counterfeit. Second and most important, the man in question (according to Michel) must have weighed over 350 pounds and despite the triple XL size, it was a very snug fit.

Clearly bothered by his brand portrayed in such a manner, Roux stopped the man, told him he was looking for that particular t-shirt and offered him $100 to buy it. The man accepted the generous offer. They went to a souvenir store, bought a replacement and now Michel owned it.

The man left happy with this transaction and the Absolut t-shirt was promptly tossed in the trash.

True story.

In my opinion, the Absolut brand has gone through 4 periods in its development. The first era was with M. Roux and Carillon Importers. Next came the Seagram years and further, albeit different, growth. The third period was one in which the brand began to languish despite the efforts of some (but not all) capable people. Today, the ownership of the brand is in the hands of Pernod Ricard with the difficult task of once again polishing its luster.

I plan to cover the Absolut story from these vantage points in the future.

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