Spot the WMDs in your organisation

Donald Rumsfeld• There are known knowns; there are things we

know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know– Intelligence reports -- now shown to have been false

-- that Iraq possessed WMDs were the main reason for going in (Rumsfeld February 20, 2011 CNN)

• Cost of War to the US - $816,543,398,098• Cost of war to UK - £9,240,000000

Colin Harper 2011

• There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know. Lastly, there are things we think we know, that are actually untrue

“Facts” can have quite a hold

• “John Frum” appeared in 1936 in Tanna, Vanuatu in the South Pacific Ocean and predicted the arrival of cargo by plane for them – Cargo Cultists built planes and runways to

welcome this

• John Frum today is both a religion and a political party

Boeing won’t be worried though

The arrival of US forces in WWIIwas the "First Coming" for them and

they now await the second

In 2011 the cultists say that Christians have been waiting 2,000 years

for the second coming and for them a mere 70.

A single misused “fact” can waste an enormous amount of time and resource• Before you laugh consider for a moment

whether you are actually in possession of all the facts yourselves

• When you start to consider techniques to use have you sub-consciously already ruled some out since you “know” they don’t work

• Or use others since you believe that they do – without benefit of evidence

New Platforms for Growth

Based on re-visited “facts”

Building on the last white paper

In Place of Sales Driven Discounts there are Collaborative Promotions as

a platform for fmcg growth

Brand MarketersBuilding Long Term Brand Growth

Margin and Value Growth is very important

Brand Sales TeamsMaking the Sales

Volume Target this year using retailer

tools

RetailersMeeting their sales targets

from brand spend(retaining their own margins)

£14.2 Billion Store Marketing

£14.2 Billion Shopper Marketing

Mutual objectives

• Brand Marketing long term growth sharing budget from sales……

• Sales need to develop sales this financial year delivering…..

• Retailer growth down the aisle and increased store traffic

• Based on greater shopper engagement

40% of people had next to no impact from price discounts - you said 12%

What percentage of the product in your average weekly shop would be prompted by buying at a discounted price

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% 71-80% 81-90% 91-100%

Price Marketers Price

Discounts Mode at 11-20%

Source: IPM fast.MAP Marketing Gap

Nearly 60% of people had next to no impact from promotions you said 18%

What percentage of the product in your average weekly shop would be prompted by some other kind of promotion offer such as a coupon from any source, on pack offer,

loyalty scheme?

0%

10%

20%

30%

40%

50%

60%

0-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% 71-80% 81-90% 91-100%

Promotions Marketers Promotions

You thought more people used promotions than

discounts - Mode at 20-30%

Source: IPM fast.MAP Marketing Gap

Marketers are way out• There are 50% more light/non-users of

promotions than there are of discounts– Promotion reach outside of this is very similar for

promotions and discount– But for different people

• There is much more scope for promotions than you think – They typically cost less in incentive terms than

discounts and seem to be more effective– Promotion incentives reward actions – discounts

reward everyone for simply being there

Promotion types most usedHow often have you used these kinds of promotions in the last 12 months?

0% 10% 20% 30% 40% 50% 60% 70%

Price discounts

Prize Promotions

Rew ard or Loyalty schemes

Gift w ith purchase or enquiry

Free Prize Draw s

Sampling

Events that you attend

Printing a coupon from the internet

A printed coupon addressed to you

A printed coupon dropped through your door

A printed coupon from elsew here

A coupon w ebsite such as CouponStar, Groupon

A coupon from a pack

None of the above

Male Female

Coupon from pack

Coupon from

other sources

PriceDiscounts

Source: IPM fast.MAP Marketing Gap

Current Research Approaches – 3 Brands

• On pack “Pick me up” sticker has similar impact to price discounting– 8% redemption

• Switches on the supply chain and store staff in advance of couponing

One promotion can trigger much more than one discount

• Couponing– 34% of people search their mail for coupons

or offers – marketers expected only 12%– 38% of people open and read a letter if they

even think there is a coupon there– 44% of people have used a coupon in the last

12 months – marketers said 13%– Over 70% of Morrisons store managers said

they were increasing their stock on display because a coupon distribution impacting their store was due to arrive*

*IPM/TNT 2011

• Delivered to the catchment area of stores that are stocking, where the managers have been advised and actively support

Why are stores important? Do you ever attempt to redeem coupons when you have not bought the products specified on

them?

0%

10%

20%

30%

40%

50%

60%

70%

80%

Never Occasionally Regularly

Male Female Marketers

Most people are honest

Source: IPM fast.MAP Marketing Gap

But stores don’t deliver for shoppers!

What was the reason for the attempted mis-use of the coupons?

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

My local store did not stockthe product

My local store was out ofstock of the product

I preferred an alternative andthe store allowed it

I preferred an alternative butthe store did not allow

Male Female Marketers

88% of mis-redemption instances

caused by lack of product

Source: IPM fast.MAP Marketing Gap

New listing in this store selling at 50% rate of leading company product

Out of stock 7 days later

Matched area testing

• Trial Results available November/December 2011

• Webinars and small discussion groups (Think Tanks) available from then

Picking the right incentive

• There is nothing wrong with using money the trick lies in the presentation of the benefit…

• Scrappage Scheme rather than Discount

• But get the correct value • The average value according to Valassis is

currently (2010) 93p• People either respond to coupons, or they don’t*

– 20p coupon 38% 50p coupon 42% £1 coupon 54% £5 coupon 55%*

*Source: IPM fast.MAP Marketing Gap

Incentives choice is separate from media choice and additive

• The right incentive can drive a number of actions down a chain– Provided, of course, they know it is coming their way

• The IPA say that “Advertising coupled with a sales conversion channel such as sales promotion or direct marketing is the most effective combination to drive hard business success.

• Posters are advertising and JC Decaux already know it works with price discounts…….

0

2

4

6

8

10

12

14

16

18

20

1 to 4 1 2 3 4 5 6

Week

% S

ale

s U

plif

t

Branding

NORMATIVE DATA

15%

7%

CREATIVES SHOWING A BRANDING MESSAGE

Pre During Post

02468

101214161820222426283032

1 to 4 1 2 3 4 5 6

Week

% S

ale

s U

plif

t

Price Promo

18%15%

NORMATIVE DATA

CREATIVES SHOWING A PRICE PROMOTION MESSAGE

Pre During Post

Incentive + message = engagement

• IPM working with iMotions to measure the emotional impact of an added incentive to a communication– DM and Promotion, it makes no difference it is

the engagement with the message that matters

• Reviewing alternative incentives to money

Be cautious about your choice of promotion media

Q34. Where do you get to hear about or receive different types of promotions (including discounts)? Tick any that apply.

0% 10% 20% 30% 40% 50% 60% 70%

Friends I talk toTV advertising

New spaper advert / magazine advertInserts in magazines

Offers on Products that I buy E-Mails to me

Web advertising that I click onOffers to my mobile phone

Direct mail (addressed post)Leaflets through the post

Web sites that I useSocial Media such as facebook

Events that I attend In the store

None of the above

Male Female Marketers

Source: IPM fast.MAP Marketing Gap

You badly over-estimate Social media

But get e-mails right!

Ultimate E-Mail Targeting• E-mail lists (2 million) of active profiled

promotion/samplers redeemers– Hive

• Knowing their first and second preference stores for grocery, DIY, Health and Beauty – Presents an opportunity for brands to grow a retailers

business– Alongside retail media such as posters

• Identifying the best way to contact retail stores and managers– Including e-mail lists

• Are you interested in being kept abreast of “In Place of Price” to be extended outside of fmcg?

• Are you interested in being kept abreast of iMotions emotions tracking to identify key elements of a promotions message on a communication?

• Are you interested in being kept up to data with Ultimate E-mail Targeting results and profiling

Moving On

Promotions as core, not peripheral

What holds brands back from using promotional techniques more?

.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Concern over cost

Organisation hasother priorities

Concern overeffectiveness

No concern

Source: IPM fast.MAP UK Marketing in Action Study 2011

Costs can be addressed

• Working with fixed fee companies– Costs for activities can be both predicted, and

a fixed cost applied– Are you aware of this – and are you interested

Platforms for Growth

Based on what you told us you wanted to know about

Defining the total market• Coming early 2012

– Size of the Total Promotions Market• Market Dynamics• Market Concerns

• Under discussion for late 2012– The Promotions Hand Book

• Market Sizing• Impact of techniques updates• Usage of techniques in the last 12 months• Spend• Legal latest

Loyalty

The most important category marketers wanted to know about

Is Loyalty Important?Loyalty vs Performance

-600.0000

-500.0000

-400.0000

-300.0000

-200.0000

-100.0000

0.0000

100.0000

200.0000

300.0000

400.0000

500.0000

-15.0000

-10.0000

-5.0000

0.0000

5.0000

10.0000

15.0000

20.0000

Performance Money Linear (Money) Linear (Performance)

IPM fast.MAP UK Retailer Loyalty Study

What does this mean?

• Retailer loyalty schemes appear to make big difference to their performance

• Is this because they are focused away from their core customer needs – driving high churn– Retail Week research 2011

What better looks like

Source: IPM fast.MAP UK Retailer Loyalty Study

40% use loyalty schemes to buy more

In the last 12 months have you bought more products than you planned because of extra longer term rewards from the product/service such as these?

0% 10% 20% 30% 40% 50% 60% 70%

Club cards (e.g. Tesco, Nectar,Boots, Costa Coffee)

Token collecting offers on card (e.g.McDonalds,)

Web sites w here you can collectgoods or services (e.g. Coinks, Coke,

Tropicana)

New spaper collectable/series offers(e.g.Sun Holidays,Daily Mirror Lego, )

Other posted collectable/seriesoffers

None of the above

Male Female

Source: IPM fast.MAP Marketing Gap

Waiting for SponsorsOn Line Couponing – The

Undiscovered Country

The second most important area marketers wanted to know about

Events – working with the BCSC

The third most important area marketers want to know about

The Source of Trial

Q32. In the last 12 months have you bought a product for the first time because you had trialled it free first?

0% 10% 20% 30% 40% 50% 60% 70%

At a friends /relative/colleague

Street, shopping centre or open area

In and around Store

An event

Postal Sample

Sample you asked for from a web site

None of the above

Male Female

Source: IPM fast.MAP UK Marketing in Action Study 2011

The Trés Belle creative ran on 6 sheets in both test malls and in both high streets in June 2008.

Trés Belle: irresistible, inspirational and unavailable

Comparing advertising: prompted ad recall

Mall shoppers were significantly more likely to be able to recall seeing posters that they had passed during their shopping trip than those interviewed outside.

Ad recall in malls was almost

3 times greater than the high street.

12%

Source: DipsticksBase: 530 shoppers

Pro

mp

ted

ad

vert

isin

g r

eca

ll 30%

Summary: Power of 3

Compared with consumers outside shoppers in the mall…

- Are 3 times more likely to buy

- Are 3 times as likely to be positively

aroused

- Are 3 times as likely to recall targeted

advertising

Are events better when you have a better environment?

• Would you find a Promotions Handbook useful in your job/for your company

• Are you interested in being kept abreast of Loyalty – Building from a Firm Base

• Are you interested in being kept in touch with Events as a Driver to Growth

Remove the Weapons of Marketing Destruction from your

organisationWorking with IPM Insights