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CHICAGO-Promotions have become crucial in marketing to kids, top executives said last week at the Promotion Marketing Association of America's annual Update meeting.

No longer are parents the only people scouting for in-store promotions, samples and special offers, but increasingly it's kids who are looking for product promotions on TV, in newspaper free standing inserts and at the point of purchase.

As kids become more sophisticated about promotions, marketers are putting more research into their efforts, said marketing experts from Sega of America, Toys "R" Us, Mattel and Fox Children's Network. Their remarks were made during a panel discussion on marketing to kids.

Promotions targeting younger kids are emerging, as well as specific promotions aimed at preteens. Sampling is also becoming one of the hottest of all tools used in marketing to kids, executives said.

Sega is using its Sega Channel cable TV network as a way to let kids sample five new videogames per month before they become available for sale in retail stores, and it's proving very effective, said William White Jr., VP-marketing at the company.

Toys "R" Us has discovered that giving product samples away inside its stores, along with coupons, is a powerful traffic builder. The company also said it learned through experience that it sells more toys when vendors participate in sampling programs through fast-food and cereal marketers.

Mattel's kids meal tie-ins with McDonald's Corp. and Burger King Corp., providing miniaturized toy premiums based on brands such as Hot Wheels cars and Barbie dolls, have significantly increased sales of related products at Toys "R" Us, though the retailer had no direct involvement in the promotions.

"At first, we thought it was a bad idea because they were giving away something we ought to be selling," said Ernie Speranza, senior VP-advertising and marketing for the nation's largest toy retailer. "But what happened was surprising. Right after Mattel gave away toy premiums in McDonald's Happy Meals, our sales increased. We've seen the same thing with Lego."

Toys "R" Us usually distributes 3 million sample boxes of coupons and products targeting kids each June and October in a program run by MarketSource, Cranberry, N.J.

Mr. Speranza said he hopes to step up in-store sampling efforts in the future.

Toys "R" Us also hopes to use heavier, more focused year-round promotions to counter increased competition from mass merchandisers such as Wal-Mart Stores, Target Stores and Kmart Corp. Mr. Speranza said: "We think promotions will set us apart from the others."

In addition to kids meal promotions, in recent years Mattel has also fallen in love with entertainment-related promotions, especially with tie-ins linking its products to major family-targeted films, said Richard G. De Herder, senior VP-marketing services for Mattel Toys.

Entertainment promotions are always risky, and several of Mattel's previous efforts have fallen short of expectations, Mr. De Herder said, though he didn't specify which efforts bombed.

These experiences have taught Mattel to carefully research its tie-ins to films, concentrating heavily on sure-fire winners. Examples include last year's link to Walt Disney Co.'s "The Lion King." Mattel expects similar success with this summer's tie-in to Disney's animated film "Pocahontas."

"If anything, we've learned that promotions that didn't work for us generally lacked scale," Mr. De Herder said. "In the future, we're trying to do fewer promotions overall, but each will have major impact."

There's no formula for picking winners when designing promotions targeting kids, the executives said.

"You can do research, and we do. But a lot of the time we still have to rely on gut instinct, and sometimes we're wrong," said Bert Gould, senior VP-marketing at Fox Children's Network.

Fox's "X-Men" and "The Tick" animated TV programs, each featuring promotional tie-ins with toy marketers and licensees, are winners. But last year's "Thunderbirds," based on the 1960s program developed in the U.K., was "a disaster that didn't last seven weeks."

"You have your hits like the `Mighty Morphin Power Rangers,' continuing as strongly as ever this year, but you can just as easily have a dud," Mr. Gould said. "There really is no telling what will hit."M

Kate Fitzgerald coordinates Promotion Marketing News. Reach us by fax at (312) 649-5331 or e-mail [email protected]

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