TRADE PROMO LUSTER DIMS FOR MARKETERS, RETAILERS: ACC'T-SPECIFIC PROGRAMS ARE HOT COMMODITY IN NEW SURVEY BY CANNONDALE

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Trade promotion spending is down, according to a new survey by Cannondale Associates, but the savings aren't being invested in broad-scale national advertising, which will also suffer cutbacks in 1997.

Instead, marketers responding to the study said they are moving trade funds into account-specific marketing programs.

PERSONALIZED ATTENTION

A hot button in grocery circles, account-specific marketing involves personalized attention to a retail chain by devoting a team at the marketer to service that chain's needs, often including localized advertising and promotion that back both the brand and the retailer.

According to the survey, which tracked trade promotion trends among 350 product marketers and retailers, account-specific marketing will grow substantially in the next five years.

In all, 94% of responding marketers said they will increase account-specific marketing within the next five years, higher than the total that will hike expenditures on national advertising (74%), consumer promotion (31%) and trade promotion (25%).

Currently, account-specific marketing is only a small part of the overall marketing mix. Responding marketers said only 9% of their marketing dollar this year will go toward account-specific marketing.

CHILLING IMPLICATION

However, the implication of the trend should be chilling to national ad agencies, said Cannondale partner Don Stuart, adding, "If I were a traditional advertising or promotion agency, I'd . . . do more than just talk about ways to add value to my clients [with co-equity and co-marketing programs]. If you don't understand the retail environment, there are plenty of small firms out there that do."

According to the survey, trade promotion spending among respondents will command the biggest share-44%-of the marketing dollar this year, but that's down from 49% in 1996. Ad spending's percentage of the pie also is shrinking, to 23% from 26% last year. Consumer promotion will see a decline of 1 percentage point to 24% of the marketing dollar.

Patience with trade promotion effectiveness appears to be growing thin.

Fully half the marketers responding to the survey believed their trade dollars could be better used in advertising, up an astounding 11 percentage points from the previous year.

The decline in straight trade promotion-cut-rate prices on cases, slotting allowances and the like-comes as marketers continue to be disillusioned with trade promotion's results.

Marketers said only 46% of trade promotions pay out-or generate incremental sales and profits beyond the cost of the promotion-vs. marketers' belief that at least 80% of such promotions should pay out. They said that 61% of account-specific marketing programs now pay out.

MARKETERS, RETAILERS AT ODDS

The survey also highlights the fact that marketers and retailers are still at odds over trade promotion tactics and effectiveness. A whopping 82% of marketers feel they aren't getting enough value for their trade dollar, while 73% of retailers feel they aren't getting their fair share of that dollar.

In fact, 88% of retailers participating in the study said trade promotion should grow category sales, a sentiment shared by only 59% of marketers.

On the other hand, 81% of marketers felt it was the job of trade promotion to build the brand, a belief held by only 28% of retailers. Trade promotion should increase profitability for the retailer, said 77% of retailers surveyed by Cannondale, while manufacturers, not surprisingly, believed trade promotion should increase their profitability (41%).

In addition, 73% of retailers felt trade promotion should build loyalty to the store, compared with 16% of manufacturers who felt that way.

Moreover, there are few chains or marketers viewed as handling trade promotions effectively. Of marketers responding, 39% said H.E. Butt Grocery Co. is the chain using trade funds most productively, followed by Wal-Mart Stores (23%) and Publix Supermarkets (21%).

After that, the totals drop below the 15% mark for Wegman's, Meijer, Kroger Co., Target Stores, Safeway, Dominick's Finer Foods, Jewel Food Stores and Giant Eagle.

P&G HIGHLY RATED

On the marketer side, 30% of retailers rated Procter & Gamble Co. the best in handling trade promotion, followed by a tie between Kraft Foods and General Mills, each with 18%.

After those top three, no one garnered more than 6% of the vote, including Coca-Cola Co., Kellogg Co., Pillsbury Co., Frito-Lay, Kimberly-Clark Corp., Quaker Oats Co., Nestle or ConAgra.

The Cannondale survey was conducted by mail last November and has a margin of error of 3 percentage points.promotion to build the brand, a belief held by only 28% of retailers. Trade promotion should increase profitability for the retailer, said 77% of retailers surveyed, while manufacturers, not surprisingly, believed trade promotion should increase their profitability (41%). And 73% of retailers felt trade promotion should build loyalty to the store, compared with 16% of manufacturers who felt that way.

Moreover, there are few chains or marketers viewed as handling trade promotions effectively. Of marketers responding, 39% said H.E. Butt Grocery Co. is the chain using trade funds most productively, followed by Wal-Mart Stores (23%) and Publix Supermarkets (21%). After that, the totals drop below the 15% mark for Wegman's, Meijer, Kroger Co., Target Stores, Safeway, Dominick's Finer Foods, Jewel Food Stores and Giant Eagle.

SUBHEAD GOES HERE!

On the marketer side, 30% of retailers rated Procter & Gamble Co. the best in handling trade promotion, followed by a tie between Kraft Foods and General Mills, each with 18%. After those top three, no one garnered more than 6% of the vote, including Coca-Cola Co., Kellogg Co., Pillsbury Co., Frito-Lay, Kimberly-Clark Corp., Quaker Oats Co., Nestle or ConAgra.

The Cannondale survey was conducted by mail last November and has a margin of

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