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Kmart, BK, Mars Partner With 'Transformers' -- and Each Other

Relationships Include Coupons in Kids Meals, Candy Giveaways

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LOS ANGELES (AdAge.com) -- For years, Hollywood studios have gleaned millions in soft marketing dollars from brands seeking a lift from summer blockbusters. And Paramount Pictures, with its June 24 release, "Transformers: Revenge of the Fallen," is no exception. A thicket of brands are aligned with the sequel to "Transformers," including Kmart, Burger King and Mars Snackfoods.

Kmart is among the brands aligned with the 'Transformers' sequel.
Kmart is among the brands aligned with the 'Transformers' sequel.
But those venerated entertainment-marketing partnerships, much like Transformers, have become "more than meets the eye."

In the past year, Kmart has pushed forward with a comprehensive entertainment strategy, relying on a small in-house program-development team that has beefed up the retailer's movie partnerships, making Kmart an official promotional partner rather than simply a licensed merchandiser. Now that entertainment group is taking the retailer's promotional efforts a step farther, crafting reciprocal partnerships with Burger King and Mars.

Remarkable partnership
The Burger King partnership is the most remarkable, as it is not a Kmart vendor. Participating Burger King restaurants will distribute Kmart coupons for "Transformers" toys and footwear in its BK Kids Meals. The retailer will also be featured in the fast feeder's "BK Adventures" newsletter and e-mail newsletter.

Shannelle Armstrong, director of public relations for Sears Holdings, said Kmart had developed a relationship with Burger King through the brands' promotion of Universal's "The Incredible Hulk" last summer, so it seemed obvious to team up on the "Transformers."

"We decided it would be a great partnership," Ms. Armstrong said. "It wasn't mandated by anyone to do it. Brands are just becoming much more sophisticated."

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Indeed, like any good matchmaker, Paramount has been careful not to force any couplings between its partners, instead simply making introductions where it sees common interests.

"Knowing the scope of each partner-tie-in program, we are able to identify 'plus up' opportunities for the brands to work together for additional value," said Leeanne Stables, exec VP of worldwide marketing partnerships at Paramount. She added, "Having top-shelf partners makes these pairing opportunities easy, as the companies value that association with other mega-brands."

Ms. Stables cautioned that such reciprocal marketing arrangements between brands must always come as a second or third step, after a partner has committed to a film and has its own marketing program; such a deal is never a precondition to serving as a promotional partner.

Seeking value-minded consumers
The sour economy plays a supporting role in Kmart's partnership with Burger King. The International Council of Shopping Centers expects June sales at retail stores open at least a year to show declines of between 3% and 4% this month. But Sears Holdings, the parent company of Kmart, surprised analysts and shareholders last month by posting a first-quarter profit despite a dismal retail environment, as shoppers increasingly turned to discount stores. At a time when many retailers posted double-digit drops, sales at Kmart stores in the first quarter of 2009 were off only 2.1% from a year ago.

Kmart's Ms. Armstrong said the partnership with Burger King gives the retailer access to the fast-food chain's customer base. "Burger King has a great value menu. They offer a value proposition to their customers, and Kmart does as well," she said. "If there's an opportunity to share our messaging with existing customers or touch new customers with this partnership, it's a win for our brand."

Kmart is also collaborating with other "Transformers" co-sponsors, including Hasbro -- the toymaker behind the Transformers -- and Mars. There will be "Transformers" destination boutiques within Kmart stores beginning June 22. And Mars will be creating themed window displays and hosting in-store events at two New York store locations. Movie tickets, Mars and Kmart gift cards, and Mars samples will be given away at the events.

Extra promotion for movie
Kmart is doing a significant media buy related to the movie as well. There will be TV spots and circular ads, as well as a Kmart-created comic book distributed in theaters.

All this extra interest in "Transformers" is welcome at Paramount, whose automotive partner, General Motors, was forced by its bankruptcy to provide less support to the sequel than the original. But despite the loss of some of GM's horsepower, "our overall partner campaign on this film even exceeds the program we had the original 'Transformers' movie," Ms. Stables said. She added, "We're in the enviable position of having top brands eager to be involved based on the success of the first film."

Kmart's Ms. Armstrong said she expects the retailer to pursue other, similar partnerships, noting that it's a competitive advantage in the retail space.

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