Using Sales Promotion to Target African Americans

The African-American market has become very important to many marketers as this segment accounts for two-thirds of the money spent by minorities in the United States and commands an estimated $572 billion in purchasing power. African-Americans represent about 13 percent (36.4 million) of the U.S. population, and nearly half belong to the middle class. According to the most recent U.S. census, 5.3 million of the 12.8 million African-American households earn more than $35,000 annually; nearly 14 million now live in the suburbs, and 10 percent of those suburban dwellers earn more than $100,000 annually.

Traditionally, marketers have targeted African-Americans and other ethnic markets by running ads in the various TV, radio, and print media that reach these markets. However, many marketers are discovering that sales promotion techniques are often more effective ways to reach these markets and can be very valuable in developing relationships with them. For example, American Airlines has developed several programs to entrench its brand in the African-American community. One of these programs is called "Comfort Zone," an effort whose name played on two themes: the literal comfort of the extra leg room in American cabins, and the figurative level of satisfaction African-Americans have with the airline. The program centered on Comfort Zone parties in American's five hub markets. Urban radio stations held call-in contests giving away passes to the parties, which featured raffles awarding trips and cruises. American followed the campaign by sponsoring Sisters in the Spirit, a national gospel tour, and also teamed with Coca-Cola for a sweepstakes giving away trips to Hawaii that were advertised in various African-American magazines including Ebony and Black Enterprise.

Other companies are using ongoing promotional programs to reach the African-American market. For example, Volvo Cars North America has launched its largest minority-targeted promotion ever, a Buckle Up for Safety campaign run in conjunction with the Edward Davis Education Foundation and the National Highway Traffic Safety Administration. The goal of the campaign is to promote seat belt usage within the African-American and Hispanic communities—particu-larly among young adults—and to reinforce the proper use of car and booster seats for infants and children.

Mott's Inc. has expanded its annual Hawaiian Punch Black History "Our Words! Our Art!" contest from 8 to 16 markets.The month-long promotion asks students to share what they have learned about African-American historical figures. First- and second-graders submit artwork, while fourth- through sixth-graders write essays. Forty-five winners, selected by the National Association of Black School Educators, win family trips to Disney World. Burger King also has developed a connection with the African-American community by celebrating its heritage. The company sponsors Black History month through a campaign called "Everyday Heroes" that recognizes the achievements of more obscure figures such as chess grand master Morris Ashley and Brigadier General Ronald Coleman. The chain distributed more than 10 million special calendars through its restaurants during the 2002 promotion. African-Americans and Hispanics account for 30 percent of Burger King's overall sales.

Marketers are also using sales promotion tools in conjunction with cause-related marketing to connect with African-Americans. For example, Kraft Foods recently partnered with Motown Records on Women of the Times, a 10-song CD featuring African-American singers such as Erykah Badu and Patti LaBelle that was sold through point-of-purchase displays in grocery stores. The CD could be purchased for $2.99 with three Kraft proofs of purchase, and the company donated 25 cents of each purchase to the United Negro College Fund.

Sales promotion is becoming an integral part of marketer efforts to reach the African-American market and build a genuine connection with this important segment. As DiversityInc.com notes, "The African-American market is positioned to make or break profits for many leading U.S. companies." Many companies are hoping that their promotional efforts will help them fully entrench their brands in the African-American community.

Sources: Matthew Kinsman,"Equal Opportunities," Promo, February 2002, pp. 14-16; Lafayette Jones,"A Sign of the Times," Promo, February 2002, pp. 16-17.

Belch: Advertising and Promotion, Sixth Edition

V. Developing the Integrated Marketing Communications Program

16. Sales Promotion

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to build databases for future direct-marketing efforts. As marketers continue to shift from media advertising to direct marketing, promotional offers will probably be used even more to help build databases. The technology is already in place to enable marketers to communicate individually with target consumers and transform mass promotional tools into ways of doing one-to-one marketing.17

Short-Term Focus Many businesspeople believe the increase in sales promotion is motivated by marketing plans and reward systems geared to short-term performance and the immediate generation of sales volume. Some think the packaged-goods brand management system has contributed to marketers' increased dependence on sales promotion. Brand managers use sales promotions routinely, not only to introduce new products or defend against the competition but also to meet quarterly or yearly sales and market share goals. The sales force, too, may have short-term quotas or goals to meet and may also receive requests from retailers and wholesalers for promotions. Thus, reps may pressure marketing or brand managers to use promotions to help them move the products into the retailers' stores.

Many managers view consumer and trade promotions as the most dependable way to generate short-term sales, particularly when they are price-related. The reliance on sales promotion is particularly high in mature and slow-growth markets, where it is difficult to stimulate consumer demand through advertising. This has led to concern that managers have become too dependent on the quick sales fix that can result from a promotion and that the brand franchise may be eroded by too many deals.

Increased Accountability In addition to pressuring their marketing or brand managers and sales force to produce short-term results, many companies are demanding to know what they are getting for their promotional expenditures. Results from sales promotion programs are generally easier to measure than those from advertising. Many companies are demanding measurable, accountable ways to relate promotional expenditures to sales and profitability. For example, Kraft Foods uses computerized sales information from checkout scanners in determining compensation for marketing personnel. Part of the pay managers receive depends on the sales a promotion generates relative to its costs.18

Managers who are being held accountable to produce results often use price discounts or coupons, since they produce a quick and easily measured jump in sales. It takes longer for an ad campaign to show some impact and the effects are more difficult to measure. Marketers are also feeling pressure from the trade as powerful retailers demand sales performance from their brands. Real-time data available from computerized checkout scanners make it possible for retailers to monitor promotions and track the results they generate on a daily basis.

Competition Another factor that led to the increase in sales promotion is manufacturers' reliance on trade and consumer promotions to gain or maintain competitive advantage. The markets for many products are mature and stagnant, and it is increasingly difficult to boost sales through advertising. Exciting, breakthrough creative ideas are difficult to come by, and consumers' attention to mass-media advertising continues to decline. Rather than allocating large amounts of money to run dull ads, many marketers have turned to sales promotion.

Many companies are tailoring their trade promotions to key retail accounts and developing strategic alliances with retailers that include both trade and consumer promotional programs. A major development in recent years is account-specific marketing (also referred to as comarketing), whereby a manufacturer collaborates with an individual retailer to create a customized promotion that accomplishes mutual objectives. For example, Coppertone's promotion agency created an account-specific promotion for "Spot the Dog Scavenger Hunt" that was based on the iconic Little Miss Coppertone losing her dog in a Wal-Mart store (Exhibit 16-6). The in-store scavenger hunt involved having consumers find clues throughout the store, fill in a game piece, and receive a prize. The game piece promoted Coppertone's rub-free adult and children's spray and included a $2 Wal-Mart-specific rebate coupon. The promotion resulted in a 6 percent increase in Coppertone sales during the promotion.

Continue reading here: Consumer Franchise Building versus Nonfranchise Building Promotions

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