To launch its new popcorn product, Smartfoods Inc. got wild and crazy. The Marlborough, Mass., company hired snow skiers and windsurfers to skid around in oversized versions of its package. It sent similarly attired employees to pass out free samples in the middle of traffic jams. And it parked logo-splattered trucks on downtown streets, whereupon stand-up comedians and street performers entertained passersby.
Smartfoods did just about everything, in fact, but spend money on conventional advertising. Result: The company was able to sell $12 million worth of popcorn in only its third year of business. With the product about to go into national distribution, Smartfoods, now owned by PepsiCo Inc., is predicting $100 million in sales within two years.
In its own offbeat way, the popcorn company is part of a revolution in the way companies sell. With consumers under assault from electronic and print advertising and with store shelves groaning with more new products every year, marketers have been scrambling to find new ways of breaking through the din.
Promotions are nothing new. But their ever-increasing flair, frequency and ability to siphon money from corporate tills has begun to chip away at the old-fashioned mass-market pitch that has been the foundation of consumer marketing for almost a century. The new school of selling goes by a variety of names: "relationship marketing," "micro-marketing," or as Smartfoods likes to call it, "guerrilla marketing." But in each case, the intent is the same: to reach consumers in ways that are more involving and personal.
"Television advertising is now so extraordinarily expensive that forward-thinking marketers have to develop alternatives," said Dana Gioia, the marketing manager of General Foods's Jell-O Desserts. "In the old days, we used to throw a couple of million dollars onto the air and not think twice about it. We can't do that now."
To get closer to its affluent customers, Porsche this spring began pitching its sports cars to 300,000 carefully screened individuals in what the company calls the most sophisticated direct marketing program in the auto industry. Porsche not only knew where these people worked, it knew what their jobs were, roughly how much money they made, the types of cars they owned and where they lived, among other things. The company says it is prepared to stay in contact with each of these prospective buyers through personalized mailings for years to come.
So-called "event" marketing -- corporate sponsorship of everything from race cars to symphony concerts -- has more than doubled in the past five years to become a $2 billion business, according to Special Events Report, a Chicago-based newsletter. For a sense of how competitive the field has become look no further than the laundry-detergent field: Wisk sponsors fireworks festivals, Dash does marathons, Cheer underwrites Hispanic music concerts and Tide has its logo all over Darrell Waltrip's race car.
"The idea," said Jim Andrews, editorial director of Special Events Report, "is to hit people on the lifestyle level." Indeed: Clorets breath fresheners sponsors the Gilroy Garlic Festival.
Traditional newspaper and television advertising, of course, isn't going away as a means of reaching consumers, but the money being spent on such mass-media campaigns appears to be leveling out after years of steady expansion. Although spending on broadcast, print and outdoor ads topped $120 billion last year, total spending grew only 5.6 percent, barely ahead of inflation, according to the ad agency McCann-Erickson. One academic study suggested last year that media advertising hasn't grown relative to the gross national product since 1984.
Marketers spent almost as much on promotions, sweepstakes, coupons, contests, free samples and other consumer-oriented promotions last year as on regular advertising. The dollars devoted to a third category -- money paid to retailers to support price-discounts and assure shelf space -- surpassed advertising in 1984 and has been growing, according to an annual survey of consumer-goods companies by the research company Donnelly Marketing.
"There's no question marketers are trying to put their money into more targeted kinds of vehicles," said Don E. Schultz, a professor of advertising at the Medill School of Journalism at Northwestern University. Schultz credits the shift, in part, to leveraged buyouts among retailers and manufacturers that stimulate a need to boost short-term cash flow with such immediate stimulus as contests and giveaways.
Promotion-mania has swept up even the likes of CBS and NBC, which last fall dispensed with their usual promotional strategies and linked up with K mart and Sears, respectively, to run cross-promotional sweepstakes.
Such short-term approaches may be fueled as well by the proliferation of new brands. Gorman's New Product News, a newsletter, counted 12,055 new products on the market last year, a 65 percent increase from 1985. In the face of that kind of competition, "everyone wants to see a quick reaction from the consumer," said David Martin, a veteran ad agency executive and the author of a book about brand-building. "Brand advertising has to take place over the course of several years."
Apart from sheer need, the shift in marketing is being driven by technological change and innovation. Sophisticated management of consumer databases enabled Porsche to cull its 300,000 prospects from lists covering 80 million car owners. Meanwhile, by linking the data from product-scanning devices and "frequent shopper" identification cards, retailers now have the power to monitor which products are selling and who is buying them.
This information makes possible a whole range of highly targeted mailings, said Schultz. For example, a family that buys only a few dollars worth of groceries at a particular market each week could be mailed coupons and other incentives to boost their purchases, he said.
"This kind of marketing isn't necessarily cheaper" than mass-media advertising, Schultz said. "But it is more efficient because you cut down on waste. You're hitting the 'right' people with your message."
It isn't just grocery chains that are testing "frequent shopper" programs. In February, book retailers B. Dalton, Waldenbooks and Crown launched a marketing battle with discount programs built around high-tech purchase-tracking systems.
Under the programs, the chains give discounts to customers who sign up for a membership card. The cards are the key to keeping track of who buys, say, a science fiction book or a cook book. By matching customers with their purchase preferences, the chains know whom to mail an announcement to when a new book of the same genre arrives in stores.
"We're moving closer and closer to the day when each individual store will be targeted exactly to the demographics and psychographics of its neighborhood," said Hunter Hastings, a vice president with the Ryan Partnership, a marketing consulting firm.
In a similar vein, the media itself is becoming more customized. The major innovator in the field has been Whittle Communications, headed by Tennessee entrepreneur Christopher Whittle and half-owned by Time Warner Inc.
In addition to his controversial Channel One video network, which beams commercials and news snippets to captive audiences of school children, Whittle has developed such "targeted" advertising vehicles as single-sponsor magazines, a line of magazines for doctors' waiting rooms called Special Reports and advertiser-sponsored books by such authors as David Halberstam and William Greider. Whittle's latest project: a magazine for patrons of hair salons.
The idea behind these media, said a Whittle spokesman, is not only to avert the clutter and expense of broadcast television and mass-circulation publications, but also to "deliver" a select group of consumers to specific advertisers.
In other words, Whittle's magazine for travel agents, Travel Life, is a natural partner for American Airlines, its only sponsor.
Taking a lesson from Whittle, other big players are muscling in: Ted Turner's Turner Broadcasting System announced last month that it was developing a video programming service for supermarkets called the Check-Out Channel.
Turner envisions a string of supermarkets with satellite dishes affixed to their roofs capable of receiving news from his Cable News Network. Idle shoppers would watch the programs on TV sets mounted behind cash registers. Not incidentally, the network would be advertiser-supported, presumably by marketers whose products are on sale in the store.