Power Points

Point of purchase is no longer the Cinderella of marketing, now that technological innovations which allow companies to measure effectiveness against sales targets can prove it works.

Not many areas of marketing merit the attention of the Monopolies & Mergers Commission (MMC). But, surprisingly, point of purchase (POP) is one of them.

Two years ago, the refrigerators and chillers given, or leased, to retailers by ice cream and soft drinks manufacturers were subjected to MMC scrutiny. At issue was the alleged unfair practice of restricting which companies’ products could be displayed in them, or denying access to key products unless certain units were installed.

While no action was taken, it is the clearest indication yet that, for some product categories, what happens at the point of sale (POS) is critical. This has been underlined by MORI research showing 45 per cent of consumers make brand choices in store. Other studies indicate it can be as high as 70 per cent.

Bearing in mind that in a supermarket the time between shoppers identifying the product category, making a brand choice and putting the item in their basket can be as short as eight and a half seconds, it is clear why more attention is being given to POP than ever before.

Britvic Soft Drinks marketing director Andrew Marsden says understanding the shopper has never been more important in the development of POP. “It depends whether they are buying for themselves or someone else. In the classic retail environment, a mother buying for the family is less influenced, but if she is buying for herself in a confectioner, tobacconist and newsagent (CTN), she is more likely to be. So anything that makes the brand more salient at that point is good,” he says.

This is why fridges and cabinets have become such an important battleground for rival brand owners. POP is becoming more scientific, and moving up the marketing food chain.

Marsden says this is evident from his company’s activities: “With something like the Pepsi Star Wars promotion, POP was an integral part of the planning, which took place several months in advance. It is about trying to get it well ensconced early in the process. It is no longer tactical POS.”

Gone are the days when trainee sales executives toured retailers trying to get them to accept the latest display units, flash cards or dump bins. These days, merchandising has to align with the marketing strategy for the brand. It also has to conform to much tighter controls imposed by retailers.

Charles Kessler, sales and marketing director at Kesslers International, says: “Merchandising is part of marketing. The more integrated into the marketing campaign it is, the greater the total effect.”

In recent years, this has resulted in a significant shift in attitude, whereby clients treat POP agencies on an equal footing with sales promotion, PR, even advertising agencies. “The best briefs co-ordinate how all these parts come together,” says Kessler. He points to the POP produced by his agency for the launch of Elida Fabergé’s Physio Sport. As a new product category, it had to define the sports and leisure personal care and grooming proposition, explain the product, and also pick up on the Olympic rings ad theme.

Given the growing power of retailers, POP agencies have found themselves in the unusual position of dealing with both trade and consumer marketing issues. In-store promotional opportunities are a revenue stream for retailers, who are also keen to ensure their own brand values are not compromised.

This can make some outlets extremely hard to merchandise effectively – such as Boots, where arrangements for runs, shelving, lighting and promotions are identical for all the brands it stocks. A beneficial effect of such tight controls has been to raise the overall quality of POP. “A lot of the peripheral, tacky cardboard has disappeared,” says Marsden.

Developing relationship

Many clients are keen to develop closer relationships with their POP agencies and involve them fully in their marketing programmes. Coutts Retail Communications managing director Harriet Young cites Terry’s Chocolate Orange as a good example of a brand which is fully integrating POP into its marketing plans. “We get involved in the company’s brainstorming days, where it develops the year’s strategy. It helps us to make sure we all know what direction it is taking with the brand values. It means any other brief we get subsequently has to fit that strategy,” she says.

Significantly, the brainstorming occurs before the marketing spend has been divided between agencies, and each is encouraged to suggest ways in which the brand object ives might be met by both their own and other disciplines. “Out of that day, we might identify that there would be a good opportunity for PR, even though we are a POP specialist. As a business, Terry’s encourages participation outside of our area,” says Young.

For agencies in the chain, especially promotional marketing specialists, striking the right balance between using the skills of POP suppliers and retaining a focus on the brand objectives is not always easy.

Often the sales promotion agency is charged with handling a particular campaign that includes POS and merchandising. It will then have to determine whether it can handle the in-store elements alone, or if it needs to pull in a specialist.

Specialist brief

“In many cases, we brief specialists, so we are acting as the client,” says Teamwork Marketing account director Nelson McConnell. “We do it because there is an element of specialist knowledge involved, and some make a good contribution to the campaign,” he says.

POP specialists have to offer inventive executions of promotional ideas which are acceptable to target retailers. “The reality is that you have to produce things which are cost-effective and technically acceptable. If you go to a specialist, you might get a more innovative solution that is still based in reality,” says McConnell.

The one danger he identifies is that POP agencies are often keen to sell a new mechanism or idea they have developed. While this may fit the campaign brief, the risk is the agency may have also sold it to other clients. “You get POP agencies offering you a range of things they want to do, but they are not necessarily one-offs,” he says.

POP techniques are growing in sophistication, with a more scientific approach evolving around how to develop and measure it.

“If we’re doing work for Procter & Gamble on Sunny Delight, for example, before we produce 500 display units, we will test several options in retail outlets and see what works. We do pre-research, then fine-tune the design. We produce and evaluate it afterwards,” McConnell says.

Clients are assessing the effect of POP activity by running a campaign in specific outlets and assessing the sales uplift through comparisons with identical shops where none took place.

Dynamic POP campaigns are becoming commonplace, with displays that can be changed to reflect the different shopper profile on a Monday morning compared with, say, a Thursday evening or Friday lunchtime.

Martin Law, chief executive of POP specialist Fords, points out that the agency was involved in the launch of a Hewlett-Packard (HP) CD-writer a long way upstream from the POS. “We were involved with focus groups, product research, packaging, how it looked in store, and the supporting POP,” he says. “Having been involved with the client, researchers and ad agency right from the start, the important thing was that we got a real handle on what HP wanted. We understood the total process.”

This was reflected in the POP campaign, which was dynamic enough to work in large retail distributors such as PC World – where the product would be on display – through to smaller outlets where it might be kept behind the counter. HP voted the work the best POP it had ever done. “We know if we can research a project early on we will do a better job,” says Law.

Growing stature

There is no denying POP has grown in stature and importance. Gone are the days when it meant shelf wobblers and cardboard dump-bins, although these still have their place. POS is becoming a destination point in a outlet that has to represent the brand, respect the retail environment and communicate with the consumer.

This makes for a complex marketing brief. Understanding customer profiles and consumer psych- ology is central to POP, as is evaluating its effectiveness against sales targets. It is the fact that it both works and is accountable that is driving the sector. As Kessler says: “Everything else makes consumers warm to the brand. This is hand-in-pocket time.”


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