Direct Response Marketing

Retail Outlet: How Traditional Brands Succeed at Retail

1 Nov, 2005 By: Donald L. Potter Response

---

There is little doubt that launching and building a brand that survives in the retail marketplace takes time, money and plenty of marketing know-how. What is not yet recognized as a universal truth is that proper application of the DRTV model can help many would-be retail brands make the transition faster and often more profitably.

Donald L. Potter

This two-part series (appearing in the November and December issues) is designed to provide an overview of the "old" and "new" marketing disciplines for going to retail. I will examine traditional branding activities in this piece, while next month, I look at how DRTV can pay off for marketers interested in retail distribution.

Laying the Foundation

Before entering the retail arena, traditional marketers concentrate on product development and consumer research. Those who don't do their homework usually become causalities in the never-ending battle for shelf space. Making strategically sound marketing decisions demands actionable information.

In order to succeed at retail, a product must perform for the trade on a consistent basis; and it must meet the perceived needs of consumers better and/or in more ways than products currently being used. Even a breakthrough product is ultimately the substitute for other products — the difference is it might require a primary sell rather than a brand switch to create a consumer purchase.

Early on, research is often conducted to qualify and quantify consumer preferences, attitudes and intention to buy. Focus groups, followed by more expansive studies, are utilized to choose the right product positioning, an appropriate name, the best package design, proper price points, the most memorable advertising message and any other issues that might impact brand sales.

Testing Offers

"Go/No Go" decisions are made each step of the way, with budgetary considerations usually dictating how long this process takes. Generally, smaller companies don't engage in extensive research and must move fast, while the larger ones have the wherewithal to bore into the marketing details and stay in the race for the long haul.

Once the planning details have been wrapped up, the brand marketer will normally take the product to test markets before making the financial commitment to roll out. This involves going into controlled geographic areas to confirm how consumers, representing the targeted demographics and psychographics, respond to the product — similar to a DRTV test.

To acquire projectable data, marketers often measure a number of test markets for many months in order to determine the effectiveness of varying advertising weights, promotional stimuli and other influences that determine purchasing patterns. This calls for additional consumer research, monitoring at the store level, tracking scan data and more. Armed with such information, the marketer must then decide if the results suggest that the product has a viable future on retail shelves throughout the country.

Moving Into Retail

Brand marketers, even after having success in test markets, are faced with the prospect of selling retailers based on the anticipated consumer demand they can create for the product. It helps to have research and test results to share with chain buyers and merchandisers. The promise of strong advertising support is a must. Even then, the marketer may still be required to pay slotting fees and promotional allowances in order to secure a place on the shelves. And, those brands that don't meet sales expectations within time constraints will be history.

Doing all of the above activities correctly — and garnering favorable results — does not ensure placement in every store that stocks a particular category. Lack of distribution has a devastating impact on a brand resulting in lost sales volume, reduced ad efficiency, and slower inventory turnover, to name a few. The only rule to depend on in the hardball retail game is that there are no guarantees.

In spite of the perils and upfront costs, next year thousands of marketers will spend millions of dollars using the traditional branding approach to introduce new items into retail channels. As I will show next month, with the DRTV model, the test can actually be a profit center and the chance of success at retail is vastly improved.

Don Potter is a 45-year veteran of the advertising agency business, a frequent lecturer and the author of the book "The 50+ Boomer: Your Key to 76 Million Consumers." He can be reached at (818) 728-8266 or via E-mail at don.potter@sbcglobal.net.

Bookmark it: digg del.icio.us technorati yahoo facebook twitter