Stop whining, start learning - co-marketing - Column

Brandweek, April 6, 1998 by Marianne Frasco

Want to see a vp sweat? Ask what he got for his latest $1 million trade promotion. Want to see buckets? Ask him what he learned about promoting in those retail accounts.

That's the irony behind the aggravation with promotion and the big predictions for co-marketing, the latest buzztrend in consumer marketing. One day, senior managers go ballistic over waste in promotion spending; the next, they sign over $20 million to co-marketing programs and unwittingly dilute the brand plan.

Why? Their sales forces and promotion agencies execute thousands of isolated promotional plans without evaluating the aggregate program in the context of the total business, so little is actually learned or improved. The chain-specific promotions are executed more sharply, yet confusion still prevails, not competitive advantage.

"Co-marketing is one big undelivered promise because marketers look at it as a tactic, not as a strategy," says Jon Kramer, president of promotion agency J. Brown/LMC Group. "We've seen increases of 25% and more in sales increases every time one of our clients runs an account-specific promotion."

Still, what's missing in the process is a common framework for planning, reporting, evaluating and improving account-level activity. Today, field forces routinely push the promotions that require the least amount of paperwork, rather than picking markets, accounts, stores and promotions based on proven sales increases from past programs. The solution? Give the keys back to brand management by instituting a fourphase co-marketing system.

For starters, pick your spots according to sales potential and in-store support. Let the co-marketing agency choose the markets and accounts with the greatest untapped opportunity, and translate brand strategy into a workable promotion plan. Check in with field sales on the promotion vehicles that succeed in specific accounts, and cut the accounts that won't buy extra cases or put up displays. Make sure the budget is allocated according to the brand sales volume and potential each account represents, not the size of the stores.

Second, shift perspective. The goal is to drive traffic in specific stores, so the market-level basis for buying media doesn't apply to direct mail and sampling. The solution is to pick the right stores for sampling and direct mail. Roll them up to market level, and then overlay corresponding GRPs based on the account's market penetration.

Third, get dirty. Manufacturers are long on data but short on evaluation. To put co-marketing in a total-brand context, there's no substitute for digging through the details, store by store. Total up the results of comarketing programs within retailers across the country on a per-store basis. Then check warehouse shipments, scanner sales and out-of-stock reports to see the promotion's longer-term impact on the brand, category and store. Did you spur volume, but create excess inventory backlogs? Did you leave holes in the shelf by underestimating demand? By factoring in sales and other activity, you can get a full picture of the ultimate return-oninvestment the program produced.

Finally, put it in the bank. What worked, what did not--when, where and why--these are the seeds of advantage. When you know that network TV, in combination with demographically targeted in-store sampling, drives incremental volume and trade support with a given account, then you and that customer have a framework for repeating success. To turn the information into an effective platform for measurable, ongoing improvement, you need to classify the results by account, by market and by type of promotion.

To increase co-marketing ROI, brand management doesn't have to work harder; you just have to make the commitment. Let the agencies plan, recommend, execute and evaluate; then hold them accountable for a smarter program the next time around. Then hand your salespeople the ultimate argument. As Jon Kramer puts it, "The single most important business result from co-marketing is the foundation for a fact-based selling strategy."

Retailers don't argue the image points when you can chart a proven path to higher profits in their stores.

Marianne Frasco is director of business development at Trade Dimensions, Wilton, Conn., a supplier of store databases.