Special report: Sales Promotion: Strategic Alliances

You find them everywhere. On cereal boxes and Slurpee cups, soda bottles and Snickers bars, inside Happy Meals and outside boxes of macaroni and cheese. Promotional campaigns marrying entertainment programs to retailers have flourished for one simple reason: they produce results....
November 1, 1996

You find them everywhere. On cereal boxes and Slurpee cups, soda bottles and Snickers bars, inside Happy Meals and outside boxes of macaroni and cheese. Promotional campaigns marrying entertainment programs to retailers have flourished for one simple reason: they produce results. Entertainment companies get the necessary added exposure they need to draw viewers, retailers enjoy the increased store traffic and kids get cool stuff.

As long as studios do their job of keeping entertainment properties fresh and exciting, this area will continue to grow,’ says Rob Gruen, senior vice president, worldwide marketing and retail business development for Warner Bros.

As this rapidly maturing marketing technique has grown in sophistication, retailers’ expectation levels have risen. In an ever-competitive marketplace scrambling for children’s attention, studios and retailers partake in an aggressive courtship to forge partnerships that can benefit all parties concerned.

If either side has a greater hand in driving the promotions business, it is the retailer. The retailer will support programs that increase store traffic and build consumer loyalty. With so many studios seeking tie-ins to their product, retailers have more selectivity in choosing entertainment vehicles they believe will have the greatest impact on their target demographic.

The strategic alliance between Disney and McDonald’s has reshaped thinking about how studios and retailers form partnerships. In the long term, the Disney-McDonald’s partnership may be looked upon as the beginning of an era of exclusive alliances that lock up studios with retailers. In the short term, companies such as Burger King, Pizza Hut and Taco Bell become more vital to studios, while other players like 7-Eleven and KFC immediately become important alternatives.

‘What the McDonald’s-Disney alliance has done is made the [promotions] industry a valid industry,’ says George Leon, director of promotions for Saban Entertainment. ‘It’s really moved other players who weren’t really in it up to the table. It’s opened up people’s eyes that promotion is effective.’

‘With some of the key players out of the market, studios are looking for new relationships,’ says Marva Cathey, director of advertising and promotions for 7-Eleven. ’7-Eleven is getting a lot of offers to go to the prom right now.’

The key to any successful promotion is how children respond to it. Gone are the days when simply slipping a cheap toy into a cereal box works. Promoters have to be aggressive and promotions inventive-kids are simply too sophisticated.

‘We have to become much more creative and innovative about the way we implement these promotions,’ says Mary Sadeghy, director of marketing for Scholastic Productions. ‘Kids have an innate understanding of this stuff that’s extremely different than when I was a child.’

When kids see an item in a store that reminds them of their favorite TV series or movie, they are going to want their parents to purchase that product. If the payoff of the promotion results in a negative experience, that child may be reluctant to use that product again.

‘A promotion is a way to have your viewer really interact with your property,’ says Leon. ‘But you’ve got to have something substantial.’

Sadeghy agrees. She believes it is better to do one major promotion for a property that makes a huge impact, instead of several smaller programs that could actually dilute the message.

‘I don’t think there’s a danger of the market becoming oversaturated as long as people are selective and participate in tie-ins that make sense,’ adds Katie Chin, vice president of promotions and strategic alliance for Universal Studios Consumer Products Group.

Many people see the Internet as the next wave for promotional tie-ins. Sadeghy sees similarities to the early days of the entertainment promotions business. ‘There was no formula to the promotions industry 10 years ago,’ she says. ‘We kind of made it up. On-line is going to become a discipline that will be an integral part of a marketing mix.’ Provided kids find it appealing.

What’s behind today’s promotions? We went to a cross-section of studios and retailers to find out.

Burger King: Seeking a dino-mite hit

The Promotion: Burger King will be the exclusive fast-food partner for MCA/Universal’s Jurassic Park sequel The Lost World. A two-tiered promotion targets teens and adults for The Lost World and younger children with MCA/Universal’s video series The Land Before Time.

The Philosophy: Burger King has scored huge successes in recent years with such family hits as Pocahontas, The Lion King and Toy Story. ‘Promotional opportunities tied into movies help us generate short-term sales gains and drive traffic in restaurants,’ said Burger King spokesperson Kim Miller.

The dual-pronged approach for The Lost World is designed to be a promotional program that will appeal to the entire family.

With McDonald’s out of the game, the number two fast-food outlet has become ‘the belle of the ball,’ says Miller. ‘Studios are coming to us because we know how to conduct promotions that are not only good for Burger King, but also good for our promotional partners.’

7-Eleven: ‘Adding a hip feel to its stores’

The Promotion: The convenience-store chain partners with Fox to promote Jingle All the Way. 7-Eleven will offer a new coffee flavor, a new Slurpee flavor and will feature POP displays with Arnold Schwarzenegger throughout its stores.

The Philosophy: A film about a hectic businessman’s last-minute Christmas shopping was a natural fit for 7-Eleven, which bills itself as a place to take a break from holiday madness.

Jingle All the Way is the chain’s third movie tie-in in 1996. The company hopes its promotions bring a hip feel to its stores. Marva Cathey, director of advertising and promotions, says the company has moved to a more centralized promotional strategy that allows it to better execute national programs with its 5,200 stores than it has in the past. It has used 1996 as a template for future entertainment and sports promotions.

Although it has partnered with The Cable Guy and The Phantom, films that underachieved, Cathey says the promotional programs were very positive. ‘The box-office results don’t matter to us. The value we get from it comes before the movie ever opens.’

Universal seeks deals that make sense

The Promotion: Universal Studios Consumer Products Group ties in with Quaker Oats to support the Fox animated Casper series with Casper exposure on boxes of Life, Quaker Instant Oatmeal and Cap’n Crunch and with mail-in offers for unusual and fun premiums.

The Philosophy: Quaker Oats, via marketing firm Unique Product Placement, came to Universal with the idea. Universal had done its first Casper promotion with KFC earlier in the year, and this marks the character’s first entry into packaged goods.

Universal’s vice president of promotions and strategic alliance, Katie Chin, thinks the deal with Quaker makes a good fit because Casper’s current popularity and longevity make him identifiable to both kids and their parents. Additionally, the premiums, such as a bowl that changes color when milk is added, are unique and fun. ‘Kids’ expectation levels are high. There’s new technology in packaging and premiums that raises the bar. We have to meet that challenge, but I think it makes us better marketers in the end.’

Warner shoots for the moon with Space Jam

The Promotion: A full-scale merchandising assault for Warner Bros.’ first full-length, live-action/animated film, starring Bugs Bunny and Michael Jordan. Elements include theater concession tie-ins, coupons for merchandise at retail stores, and a tie-in with McDonald’s.

The Philosophy: Warner Bros. expects the film to be a hit and the merchandising to be huge.

Warner Bros. is launching a comprehensive licensing and merchandising program that it hopes to use as a blueprint for future live-action and animated feature film releases, including next summer’s Batman and Robin and the full-length animated Quest for Camelot.

Warner has provided retailers with a total signage and promotional POP package. It is using the movie to launch WB Toys, an in-house toy company that designed the Space Jam products.

Rod Gruen, senior vice president, worldwide marketing and retail business development for Warner Bros., has seen changes in the way promotions have been developed in his two years at Warner. ‘We’ve built up a track record with retailers of understanding their business. It’s not a matter of whether someone is going to do business with Warner Bros., but rather how to maximize the opportunities we offer.’

Saban: Striving to be different

The Promotion: First-quarter promotion with KFC involving Masked Rider premiums with the purchase of a KFC Kids Meal.

The Philosophy: Saban Entertainment, through its association with Fox Kids Network, and via its syndicated series, has become a promotions factory, churning out over a dozen fun, innovative promotions a year.

George Leon, director of promotions for Saban Entertainment, says the goal of his team is to take normal promotions and bring them to the next level. ‘Our promotions are what kids want,’ he says. ‘But you just can’t do promotions; you’ve got to have the right property. And with the Fox Kids Network, we’ve had the right property for the last four to five years.’

More than ever, Leon feels that retailers want a greater share in the partnership. ‘It’s not an easy sell. They [partners] want more. We’ve been able to succeed because we come to the table and we offer.’

Hasbro looks for new outlets

The Promotion: ABC Video and Hasbro join forces to release a series of home videos based on Hasbro’s line of Cool Tools, Tonka and Easy Bake Oven product lines.

The Philosophy: This is the first time Hasbro has done home videos with original programming. The videos are designed to build brand loyalty by tapping into the experience these toys provide.

‘In terms of brand building, it’s important because the repeat viewing that takes place reinforces the toy lines,’ says John Gildea, vice president of corporate licensing and promotions for Hasbro. Hasbro is using the videos as a vehicle to cross-sell its various brands to the same target audience.

Scholastic: Books count too

The Program: Kraft has redesigned its 48-ounce box of Kraft Singles to make it look like the bus from Scholastic Productions’ The Magic School Bus. Consumers get a free book with proof of purchase and a free Microsoft CD-ROM sampler.

The Philosophy: ‘Scholastic is a perfect example of a company other than a studio that can provide a valuable asset to a packaged-goods company,’ says Mary Sadeghy, director of marketing for Scholastic.

She believes that parents feel good about purchasing products with Scholastic-based properties as premiums, because they’re giving their children something that is not only fun but has educational merit.

It’s taken a lot of convincing to get promotional partners to understand the value of promoting learning and literacy. Scholastic’s Goosebumps promotion with PepsiCo, which distributed over 33 million books to kids, has served notice of how powerful companies other than studios can be as promotional partners. The promotion marked the first time PepsiCo ever aligned all of its divisions to work on one property. Says Sadeghy, ‘companies are going to start thinking about how they can do promotions in a much more aggressive and corporate-wide way that will enable them to maximize their dollars.’

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