In 1977 a US restaurant chain was looking to create a better dining experience for families with kids.
They gave the challenge to Bob Bernstein who ran their advertising agency.
Bernstein thought that if kids could get a packaged meal of their own instead of just picking at their parents’ food everybody would be happier.
He had noticed his young son poring over the various items in a cereal box and thought “the package is the key.”
So, he asked his creative team to work up some packaging designed to look like lunch boxes. Then he got illustrators to add art, jokes and games to the top and side of the box. Then they added the items. The box would contain a main item, a side and a drink. Plus a toy.
The restaurant chain was McDonald’s. The box was named the ‘Happy Meal’.
It was launched in Kansas City in October 1977. Then rolled out nationally in 1979.
It’s fair to say it’s been a success. McDonald’s now sell over 1 billion Happy Meals a year in over 100 countries.
The concept was like all good ideas – simple. It was also groundbreaking – no other restaurant did anything like it.
The Happy Meal broke the rules. It gave McDonald’s a point of difference. One that they still have today.
Other restaurants have kids’ meals but only McDonald’s has the Happy Meal.
Why are we talking about this? In the FMCG world we run a LOT of promotions. They are one of (if not the…) biggest tools you have for driving sales, Need to hit a quarterly target? Then run an extra promotion.
This might work in the short term, but it often fails in the long term.
Brands end up selling a high % of their volume on deal. Some of this is subsidising the sales of shoppers who would have bought you anyway. Some of it is giving a discount to shoppers who only buy your brand when it’s on deal.
This is because most promotions follow a standard set of (explicit or implicit) rules. Meaning most brands promote in the same way.
To drive true growth you need to be different. To be different you need to do different things. To do different things you need to break the promotional rules.
So, what are the standard promotional rules and how can you break them? Here are 3 examples…
#1 Most promotions use a price discount as the incentive to buy. Go into any store and you will see a lot of promotions. The vast majority will be price promotions. Sure you now have Clubcard Prices, Nectar Prices but they are all price promotions.
You run a price discount this week. Your competitor runs one next week. Then you. Then your competitor again. You’re on the promotional hamster wheel.
To break the promotional rules you need to give shoppers a different (non-price led) incentive to buy. Something that is motivating but less transactional. “Find the purple Diet Coke can” and Kellogg’s football cereal bowl are current examples.
Give shoppers differentiated incentives. Ones that only you can give them.
#2 Most promotions are predictable – same mechanic, duration, frequency. Think about many of the brands you buy regularly. How many of them do you usually (or only…) buy on deal? Probably quite a lot of them, right? It’s easy to do so. You know the mechanic – e.g. it will be £1. You know the duration – e.g. it will run for 2 weeks. You know the frequency – e.g. it will be back again in a couple of weeks.
This predictability trains shoppers to buy on deal. Diluting the impact of your promotions over time.
To break the promotional rules you need to be unpredictable – change the mechanic, duration, frequency. You could do a mix of mechanics. Sometimes a price discount. Sometimes a bundled deal. Sometimes a non-price incentive. You could change the duration and frequency. How about a time limited promotion? Heinz have done 3-day promotions in Sainsbury’s.
Give shoppers unpredictable rewards. Ones that keep them guessing.
#3. Most promotions focus on THIS purchase. They reward promiscuity – buying a different brand each time. Nearly all promotions are focused on getting a shopper to buy the product now. They have little, or no, consideration of future purchases.
When you focus only on this purchase you enter into an ongoing battle with your competitors at shelf. You might win the purchase battle this time. But next time you have to fight the battle again. Then again. Then again.
To break the promotional rules you need to think about FUTURE purchases. Reward loyalty – buying the same brand each time. Take the battle away from the shelf. Give shoppers an incentive to buy this time. Then again. Then again. A lot of other industries do this. Think airlines. Think coffee shops. Think restaurants. They reward shoppes for aggregate spend not one-off purchases.
Give shoppers immediate AND future rewards. Ones that encourage loyalty.
So, take a step back. Look at your promotional plans.
Ask yourself a question. Are they following the standard promotional rules? If so, break them.
Don’t play the game, change the game.
Feel free to forward. Have a great weekend. Speak to you in a fortnight.