Marketing & Promotions: Money well spent?

I would be fascinated to know just how much brand owners spend on promotions and point of sale material every year. It must be a significant amount. And what must be galling for them is that half of the spend is just dead money.

A sweeping statement? Well, a look at research carried out by the Pulse Group would suggest not.

Taking in views from licensees around the country, the Pulse Group sought a definitive view of what exactly the people on the pub frontline thought about the state of on-trade brand promotions. The results are a valuable lesson for brand owners across the industry.

What is so striking from the research is how many licensees are uninterested in promotions - they seem to be suffering from promotions fatigue.

This is hardly surprising. Anecdotal evidence suggests that many licensees chuck new promotional material sent to them by brand owners straight into the bin - some without even opening the package.

The ideas are the same, the execution is the same and there is little evidence that the brand owner has bothered to ask the retailers what they actually think about the material they get.

A major problem is the growth in the length of the 'food chain' in this area of the industry, particularly when it comes to leased, tenanted and managed pubs. A marketing and promotions idea will move from brand owner, to agency, back to brand owner, to pub company marketing head, to the local business development manager and only then to the licensee.

The chain is so long and laborious, it is no wonder the person at the pub who is expected to implement the promotion is never consulted.

But this is not the only problem.

Here are the key points from the research - which comprised 750 phone interviews, face-to-face interviews and head office interviews:

• Only one in five of those interviewed actually does promotions

• Only 35 per cent of those interviewed believe promotions are effective

• Responsible price promotions are considered by licensees to be the most effective means of promotion (58 per cent said it was the most effective, ahead of guaranteed reward promotions, free samples, scratchcards etc).

• Price promotions are very much seen as a short-term solution. They will lead to a lot of brand-switching - people moving over to the promoted brand and then switching back when the promotion is over.

• Functional PoS that supports brand serve (ice buckets etc) and table talkers DO WORK. Coasters and bar runners DO NOT WORK

• Highly visual and very simple PoS works best.

Rachelle Headland from the Pulse Group, says the endless stream of boring PoS highlighting promotions is in danger of becoming counter-productive.

"Our research showed us that licensees are simply getting swamped by coasters and bar runners," she says. "There is just too much of it. And actually some of the people we interviewed were very angry about it.

"Fewer than 30 per cent of publicans participate in brand-sponsored promotional activity.

"It was only slightly higher in managed estates (about 40 per cent), even where head offices exert their influence.

"Perhaps surprisingly, pub groups told us that their participation doesn't necessarily guarantee compliance, since a high proportion of expensive freebies end up being given away by publicans to 'reward' their staff and regulars."

The findings showed that over-complicated promotions that add no value to the drinking experience are the main problem, rather than mischievous intent or lack of marketing savvy on the part of the publican.

Rachel adds: "Two-thirds of publicans believe activity linked to a relevant drinking occasion or event is the most successful at getting more people into the pub and getting them to stay longer - the two most important requirements of any promotional activity.

"The qualitative element of the research told us that publicans will also 'tailor' these events to their outlet in a way that appeals to their customer base and gives them a point of difference.

"In contrast, a scratchcard promotion to win tickets to the next big sporting event does not enhance the pub experience or provide publicans with an opportunity to build relationships with their customers." n

• To find out more about the research contact Rachelle Headland at the Pulse Group on 020 7288 8000 or go to www.pulsegroup.com