One Blog |August 15, 2014 | POS Tracking Software

POS Marketing Topic: Think You’re Too Small to Advertise?

Mark Fullerton

Purpose of This Blog

This blog is intended to focus somewhat narrowly on the marketing of “small” beverage alcohol brands and products such as craft beers, small yield wineries and “limited edition” liquors.

Nevertheless, many of the points made here are applicable to the broader beverage alcohol categories, perhaps even including some of the mainstream, household name brands and products available at your favorite off or on premise retailer.

Our Customers Rely On Point-of-Sale (POS) Marketing

Our customers, who supply or distribute malt-beverages and wine and spirits products, rely first on POS marketing, second on social media and some mobile, and third on traditional word-of-mouth-marketing (WOMM) to promote their brands. And this is especially true when it comes to marketing craft beers, “small” wines and limited supply liquors. In most cases the reasons for distributor’s reliance upon POS marketing for these products is that their suppliers simply don’t have the millions of dollars required to advertise on traditional electronic media outlets, like TV, in any substantial way.

In addition, we have heard our distributor customers frequently tell us that "Nothing will be featured by our retail customers that has not been sampled." Sampling a new craft beer is something TV isn’t good at either, as we all have figured out. Now along comes a recent web-article stating that “55% of Craft Beer is sold on premise.”

To read additional findings pertaining to Craft Beers click this link: Brewbound: Technomic Research on Craft Beers

Sampling comments from our customers and the many articles to be found in trade publications, and on-line blogs on the subject of brand/product introductions and brand building, suggest that:

“At the point-of-sale is both the best place and offers the highest ROI of all of the paid marketing at-retail initiatives and programs.”

 

How Much Money Do You Have To Advertise?

Excluding Sam Adam's ability to spend $45M on traditional media advertising this year, it is accurate to observe that most craft suppliers simply don't have the multiple-millions of TV ad dollars required to even make a small, superficial impression upon their target market. They can’t afford to make an impression – and this has nothing to do with the inherent quality of their products. Remember, even Sam Adams had to start small.

For those “too small to advertise” suppliers, POS marketing offers a fighting chance to educate, influence and persuade today's shoppers to become buyers.

B2B sampling activities are, for many suppliers (both breweries and distributors), the least expensive way to get a new product "on the menu" so to speak. B2C tastings likewise, can be conducted at-retail and can often build grass-roots WOMM that can yield impressive spot sales.

Now that your local grocer not only has Friday night wine tastings, but also beer pairings, it is possible to get maximum local exposure courtesy of the craft beer distributor's sales reps.

Other reasons that traditional (TV) advertising may not make sense even if the craft or small batch beverage supplier has a few spare millions:

  1. Cable “Cord Cutting” is up by 44% since 2010 to 7.6 million homes who no longer pay to subscribe to TV, rather electing to pay for Netflix or Hulu – and Netflix’s "Orange is the New Black," airs commercial-free, for example
  2. Gaming consoles are getting into the original programming "game". Xbox One started "broadcasting" this year. Is advertising an option here? Not yet.
  3. As if we don't have enough channels: Amazon and HBO are working together so that Amazon Prime members can access HBO original programming. Yahoo! is also joining the growing list of non-broadcast, non-cable, non-satellite providers with its own original programming. 

What’s the answer?

In the face of this diminishing power of traditional advertising, POS Marketing is gaining ground. One key reason is that there are now tools available that traditional electronic media has never had, and quite likely never will. With new marketing technologies, supplier and distributors have the ability to:

Directly correlate their POS marketing investment to incremental sales.

Traditional ads will offer advertisers the promise of so many "eyeballs" (often called CPM) and there is the concept that the more eyeballs on your ad there are, the greater your sales will be. But the correlation between the eyeballs of that target market and subsequent sales continues to weaken due both to audience fragmentation and especially the massive number of channel options.

The "good-old-days" of consolidated audiences and only 3 or 4 channels on TV are gone. About the only place suppliers can enjoy some certainty of a consolidated "audience" is at the point of shopping; or as Anheuser-Busch/InBev calls it, “the POC” – the point-of-connection between the brand/product and the consumer.

You may also argue that you can convert a shopper to a buyer on-line, and that too is accurate to a degree. But the truth is there is no better place to connect with a potential buyer, at the time of their decision (to buy), than in the store; and of course in the specific aisle, where your product is available for purchase. You see, shoppers often like the ability to instantly buy and take home, rather than wait even one day for their purchases to arrive.

For information about OnTrak’s marketing technology tools that will help you track, measure and manage your investments in POS marketing, and correlate that investment to sales results, please click this button:

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