Promos to spice videotape sales - sales of blank video tapes at discount stores

Discount Store News, Jan 8, 1990 by Peter Hisey

Promos to Spice Videotape Sales

The undercover price war that haunted videotape sales through the last half of 1989 may or may not end this month, but manufacturers are attempting to find new ways of appealing to retailers.

The price war, which started late last summer when one major brand cut wholesale prices, never really reached the retail shelf stage. As one supplier explained it, "The consumer wouldn't be particularly impressed by a tape at $2.79 instead of $2.99, so the retailers kept the difference."

However, prices are expected to normalize in the upcoming month. That means, though, that suppliers will have to run better and better promotions to generate sales in a flat market.

One of the most radical: Taking a step up from the common popcorn and movie magazine giveaways, a new entry, American Electronics & Entertainment, will include a heavily discounted movie with the purchase of two of its new MGM blank videotapes.

According to Joe Marziotto, vice president of sales and marketing for AEE, the company will have "20 to 30" titles available at a time, with new titles cycled in to replace older ones. Suggested list for the movie (the first will be an anniversary edition of "The Pink Panther") and two T-120 high-grade tapes will be $19.95.

The new MGM label of blank tapes joins a crowded field, where top brands like TDK, Maxell, Polaroid, Fuji, Sony and Kodak have been slugging it out for shelf space. According to Marziotto, the company expects to make an impact on the strength of the MGM logo, which its research showed is the second-best-known in the United States, behind Coca-Cola's.

In the future AEE also plans to introduce an 8mm product and possibly American-made electronics, particularly televisions and VCRs, under the MGM label.

Polaroid plans to capitalize on the power of its brand name in several ways, according to Don Patrican, the company's director of marketing. A key, he said, will be appealing to female shoppers, many of whom are comfortable with the Polaroid brand name. The company has altered its packaging to describe what each level of tape is meant to do, simplifying the buying decision.

Polaroid will also cross merchandise its videotape with its OneFilm 35mm product. For a limited time, a three-pack of videotapes will include a 12-exposure roll of OneFilm. Patrican added that advertising this year (in TV Guide and People) will be more oriented toward females, a major growth area in the future.

"Buying patterns are changing," Patrican said. "Videotape is now more of an impulse item, available everywhere. Brand comfort will be an increasingly important element in the buying decision." Polaroid will enter the high grade market with its cleverly named High Grade tape, which will clearly tell the consumer that this tape is for special events or camcorder use.

Maxell is taking a similar tack. Its new packaging specifies the use of each tape: general use, special event, hi-fi or camcorder. Otherwise, the company plans to hold back on promotions and use advertising to continue to build its premium brand image.

At Fuji, the accent, as has been the rule over the past three years, is on saturation advertising. A Claymation spot featuring dancing frogs and an unctuous master of ceremonies surfaced this fall. According to Fuji's Brad Dietrich, the spot has been a hit with television viewers. Fuji also plans to expand its pallet presentation to include a 96-piece size appropriate for smaller stores.

The company will follow with additional ads and POP materials derived from the ads, he said. Apart from traditional VHS tape, Dietrich reported that sales of Hi-Band 8mm, DAT and S-VHS tape have experienced "slow going," a situation that he sees improving only over the long term, two or three years.

BASF, coming off a tie-in with HBO and Cinemax that offered two free months of service with the purchase of BASF videotape, will introduce new promotions this year that are meant to appeal to a wider spectrum of consumers.

According to Tom Niedhart, a company spokesman, one will be a 400-page book detailing sports dynasties written by The Sporting News. It will be included free with multipacks of the company's videotape. An updated version of a book of critic Roger Ebert's four-star movies, a hit for BASF last spring, may also be in the works.

BASF will also sponsor an instant-winner sweepstakes called Playback Payback. There will be several ways to win, and prizes will range from $25,000 cash awards and all-expenses-paid vacations to free videotapes.

Audio Tape

In audiotape, the trend is toward upgraded tape. A Fuji study last year indicated that most younger buyers (who are the most important consumer segment) were more interested in quality than price.

Accordingly, Fuji has introduced new metal and chrome formulations with redesigned packaging and high-impact resin shells. These should reach retail shelves early in the year, along with a new free compact disc featuring Enigma recording artists.

Maxell, which owns the largest market share in the category, has also introduced an upgraded product, Metal Vertex, that will be ready for display if not shipping this month. According to the company, the new introduction (no prices have been settled on at press time) will address the audiophile market in an affordable configuration featuring premium grade tape and vibration-resistant shells.