Trading Territories

Those UK companies which want to avoid slipping up when planning pan-European point-of-purchase campaigns should look out for the European Hot Banana.

This latest piece of consumer research, carried out by the French government’s statistics department last August, divides up Europe by affluence, ignoring political borders and demonstrating that brands should market themselves city by city rather than by country. It concludes that the buying habits of consumers visiting a department store in, say, Paris have more in common with those of shoppers in Milan, London and Brussels than with people from poorer French towns.

The Hot Banana is so-called because it is based on a map of Western Europe’s most prosperous areas. By tilting a map of Western Europe from the South-east of England, over the Channel to Belgium and Holland, across to Germany and then bending it down to Italy, you get an idea of where many of Europe’s richest consumers live. What this study also shows is that research is essential when planning any cross-border point-of-purchase (POP) promotion.

While brand owners are aware of the obvious cultural differences, such as language, other issues can sometimes be overlooked. For example, climatic variations can mean plastic displays melt and their colours fade in shop windows in hot countries. They must also be aware of the strict regulations controlling POP promotions in some countries.

Helene Cochrane, director of Twenty20, says in Germany it is illegal to offer a free gift that may be regarded by the authorities as an over-inducement to buy.

Carrying out effective regional studies is expensive, but essential if a consistent brand message is to be conveyed internationally. It will also help to ensure the long-term cost-effectiveness of a campaign by revealing how well a product is perceived by consumers and retailers in specific countries – a key indication of how much space stores are likely to allocate to POP material. Where brand owners must sell cross-border promotions into individual retail accounts it is important that the components of any display are flexible enough to appeal to local retailers, who know their customers better than anyone.

Tony Barton, director of international affairs at the SPCA and deputy managing director at promotional marketing agency The Marketing Store International, says although intensive research is sometimes needed, the principles of POP do not change simply because a campaign becomes international.

“We still rely on account-specific marketing – which is understanding the needs of the retailer wherever they are,” he says. The input of local marketing teams into any cross-border POP strategy is vital if the menu of display items is to appeal to the broadest cross-section of consumers.

Martin Law, chief executive at retail design agency Fords, says his team spent weeks liaising with Hewlett-Packard’s marketing departments across the continent before finalising the launch campaign for HP’s CD writers range. Focus groups were held in four countries to look at consumer attitudes to previous POP projects, and a surveillance operation in relevant stores across Europe monitored the flow of customer traffic and the routes and diversions people took to a particular sales area.

A menu of nine POP items in 18 languages was finally produced and local salesforces ordered from it using a secure electronic intranet system.

HP’s UK marketing manager, Celina Paul, says POP was part of an integrated marketing campaign that included television advertising. “We have a strong brand positioning when it comes to printers, but needed retailers and consumers to be aware of our CD writers range, which is an emerging category. It was expensive to produce material in different languages, but POP has to sell a product like this and the range of merchandising items agreed on means every store, regardless of space and location, can have a purpose-made display,” she says.

As more brands and store groups look to expand internationally, it is likely that attitudes to shopping across the world will become less diverse, especially in developed countries. The growth of the European Union, for example, has prompted many companies, particularly those based in the US, to consider Europe as one trading territory rather than as a region of separate markets.

Tony Stratton, chairman and chief executive of field marketing company CPM International, says this trend is likely to continue. “The political, social and financial integration within Europe is bringing European consumers together – even if some national governments do not like it. Transparent pricing shown up by the introduction of the euro will force shops to consider themselves European rather than competing on a local level. All POP clients will eventually regard Europe as one region,” he says.

This is already happening in the automotive sector, where CPM has been promoting the Smart Car, which is manufactured by Mercedes- Benz. This two-seater, hi-tech vehicle has been designed for use in crowded urban areas and a field marketing initiative was launched across nine European countries – Austria, Belgium, Switzerland, Germany, Spain, France, Italy, the Netherlands and Luxembourg – in order to encourage consumers to take a test drive.

The marketing strategy, which included extensive POP, was developed by CPM’s German office.

During a ten-day period, 100 field marketing teams, comprising 1,300 promoters and 870 Smart Cars, went simultaneously to prime locations such as Paris, Milan and Berlin. More than 95,000 test drives were recorded.

For high ticket items, such as cars and electronics, it makes sense to broaden any marketing strategy beyond purely domestic boundaries, but for grocery products there remain considerable differences in retailer and consumer shopping habits.

The industry’s trade body, Popai Europe, has invested in extensive research to assess attitudes to grocery retailing across the continent and has found, for example, that

Belgian and Dutch shoppers spend less time in store, purchase fewer items and part with less money on each trip than either the British or French, who are more loyal to large supermarkets.

In fact, 83 per cent of British people use the same store every time, although they visit less frequently than other Europeans – 2.1 visits per week compared with 3.5 visits in mainland Europe. The Popai study also revealed that the average European shopper spends 8.3 per cent more than they intended when they visit the supermarket, and that 74 per cent of purchasing decisions are made once they arrive in the store. Virtually all consumers were heavily influenced by POP; not only paying attention to displays and shop signs, but admitting they were more likely to purchase a product if it was supported by POP material.

David Williams, chairman of POP consultancy NDI, says these findings are helpful when planning pan-European campaigns.

“POP is still a cottage industry in many countries and there is not yet a network of suppliers which can work together on behalf of clients. There are many loose arrangements which are not always satisfactory to brand managers, so we must make our clients aware of the difficulties we face when we are putting together a promotion that stretches past the UK,” he says.

One of NDI’s clients is Pepsi, whose trade marketing manager, Has Dosanjh, says shipping POP material to retailers in some countries, particularly outside Europe, has been a problem in the past. This, he says, is another reason why local marketing and sales teams must be involved before POP material for any international initiative is agreed.

Last year, Pepsi also launched an intranet system to help its marketers in the regions communicate and order items more effectively.

“There is a menu of Pepsi- approved displays and local offices can add their orders for, say, illuminated displays to those from offices in other countries,” says Dosanjh. “It means we benefit from economies of scale and do not have to print expensive binders to illustrate all the items.”

The timing of any cross-border POP campaign can also affect its success, especially in the entertainment sector. In-store marketing agency M3D produced 21 items for the European video release of Titanic. Key account manager Jason Casey says the company was informed of the global release schedule six months in advance and had to work quickly to produce different displays that retailers in specific countries would use to maximise the huge publicity that such a video release would generate.

In Germany, a 180-video capacity three-sided display unit, which sits in the centre of a store, was a favourite, while the French hypermarkets preferred 500-unit pallets. UK retailers went for lean-back wall displays that could hold 96 titles.

Charles Kessler, marketing director at Kesslers International, says that in every country merchandising and display is where the entire marketing mix comes together in one final attempt to influence the consumer. Like packaging, POP is three-dimensional marketing and must be used correctly to inform the targeted shopper, he says.

“POP for products aimed at men must often be more informative because they are less relaxed than women about being approached by shop assistants. This means any translations much be spot on to ensure the correct brand message is still being conveyed,” he says.

If the experts are right and the ways of European stores and shoppers converge in the future, it will no longer be only the biggest brands which can afford to think internationally when it comes to POP.

Yet across most product sectors retailer attitudes and consumer buying habits still differ enormously from country to country, which means extensive research will be necessary if a cross-border campaign is to work.