Five ways to break through without breaking the bank
Ahold’s Giant Carlisle newspaper insert ad
1. Avoid trying to swim with the big fish before you’re ready
In many health and beauty care categories, a majority of trade promotions are allocated to the few. Massive trade budgets enable large companies to capture a large portion of premium space. According to Market Track’s promotional data, the top 10 HBC manufacturers have maintained just under 70% share of all HBC promotions in print, online and email combined from 2013 to 2015. That leaves about 30% share to be divided between the hundreds of other manufacturers in the space.
As manufacturers grow their businesses, opportunities to expand trade promotion programs will arise. Being strategic in spotting areas where companies can capture ad share requires a systematic process to monitor promotions, as well as the ability to adjust course when necessary. Waiting until a company is in a position to make an impact will increase the likelihood of greater return on investment.
2. Keep lines of communication open
Many manufacturers believe that unless they invest a ton into trade promotion, it is difficult to get a seat at the table with their retailer partners, according to Market Track. It is common, for smaller companies especially, to be resigned to the idea that retailers will ultimately promote the brands and products they want to promote, and that it all goes back to dollars.
Market Track suggests remaining diligent. Communicate openly and regularly with the buyer’s desk to learn more about their process. Arming yourself with data to support your case shows that you have done your homework. Ask about creative ways in which additional support for brands and products can be a mutual win. And most importantly, share what has worked elsewhere. Success stories are a great resource to lean on for manufacturers with limited budgets, as nobody knows your business, or how to sell your product better than you do.
3. Explore digital opportunities
The cost of gaining meaningful presence in the print circular can sometimes be prohibitive. There is endless competition for space, and retailers must cover their costs for production and distribution.
The good news, according to Market Track, is that there are plenty of other opportunities to gain promotional support from retailer partners, and many reside in the digital space. The cost of sending an email promotion, posting to social media or running a promotion on a retailer’s website is comparatively small relative to the print circular. Also, digital is increasing in its impact. A 2016 survey conducted by Market Track found that consumers across all demographics use a variety of advertising media to inform their purchase decisions. Nearly 70% of shoppers between the ages of 21 to 49 years seek deals on retailer and brand websites. More than half of those between the ages of 21 to 39 years turn to social media in search of promotions. Not only is digital a cost-conscious alternative to the print circular, but certain digital media also is used by different shopper segments as much, if not more, than print.
This opens the door for younger, smaller suppliers to focus their discussion on digital media when meeting with their retailer partners. Market Track suggests making it a goal to broach the digital subject in every conversation with retailers, and if possible, reference past successes when your brands see a lift in sales resulting from a digital promotion.
4. Execute flawlessly when you are featured
Companies that spend billions on advertising and trade promotions each year expect to have a presence in most print circulars that their retailers publish throughout the year. Manufacturers with only a fraction of their trade budget, however, may be able to count their annual promotional impressions on one hand. For these companies, executing a quality promotion is critically important, according to Market Track.
What makes a promotion high quality? There are a variety of factors that all contribute to a successful promotion, Market Track stated. First, retailers should portray their brands and products in the same manner they advertise them. If you make a brand promise in your own TV commercial or digital advertisement, you do not want retailers sending a different message. This will help avoid creating confusion in the mind of the shopper about a brand, what it means to them, if they prefer it over alternatives, and whether or not they ultimately want to buy one brand over another.
Second, be competitive on price without sacrificing brand equity, said Market Track. Give shoppers a compelling incentive to buy the product today, but do not set an inaccurate perception of what they should pay for the products.
And finally, think strategically about scheduled promotional placements. Are there opportunities to improve page location, the size of the ad or placement relative to other categories within the circular? These questions should always be a part of
the dialogue with the buyer’s desk. At the very least, it lets them know that you are thinking about how to improve the performance of your promotions.
5. Take the time and invest the resources to understand what works
Many of these tactics Market Track shared are ideal for companies trying to avoid breaking the bank on gaining promotional exposure. Call it ironic, then, that the final idea Market Track suggests is advocating for investing time and resources. Do not spend those resources just anywhere, according to Market Track. Rather, it is important to measure the success of all advertising in which you participate.
Emerging brands must have an elaborate understanding of the advertising and promotional tactics that result in the greatest “bang for the buck.” This requires time and resources spent on monitoring lifts and dips in sales performance, shopper insights and competitive activity in concert with advertising. Manufacturers have to know who their target shoppers are, how competition tries to engage them and through which media channels products see the optimal sales lift when advertised.
Consistent measurement of your business will give you a competitive advantage over other companies that are in similar situations, said Market Track. Manufacturers will be able to share with retailer partners the blueprint for selling more of their product — which is ultimately the name of the game in the retail industry.