Friday, January 15, 2010

Point of Sale: The Battleground for Brands

Garima Mamgain, P C Sreejith, IIM L

Information asymmetry may not be a bad thing for marketers, as when the victim is the consumer, and the opportunist is the marketer.

Couple of decades ago, Doordarshan was the only channel available; the audience was hooked on to it and it provided an effective medium to the marketers to reach out to the country. Today, Indian viewers have access to 360 television channels and applications for another 160 await the government's nod. The media fragmentation and advertising clutter has made it difficult for a marketer to pass on the message to the consumer effectively. Moreover, the consumer these days is usually on a remote zapping spree which makes it difficult for the brands to catch audience attention. All these factors have taken the competition between brands out of the people’s living rooms to the streets (in the form of out of home advertisements) and finally to the points of purchase.

As per some experts, 76 per cent of all purchase decisions are being made at the point of purchase. Point of purchase is rapidly evolving into the point of decision making.

What, Why and How of PoS Advertising
PoS advertising can be defined as any promotional material placed at the point of purchase; e.g interior displays, printed materials at shop counters or windows displays. The broader definition also includes in-store broadcasts, shopping-trolley advertising, wastepaper baskets and interactive kiosks. Besides these specific instruments, POS communication material may also include product storage and organization in the retail store, product presentation and packaging.
POS advertising is often termed as Below the Line activities of a brand. However, from a marketer’s point of view, point of sale is becoming the point of marketing itself. It has become critical for the marketers to provide the right communication material to the time-deficient audience at the point of purchase.

Point of sales advertising materials are often considered important because they initiate impulse purchases. The other objectives for using POS materials include increasing visibility, increasing recall, providing information, initiating query generation and emphasizing positioning of the brand.

The competition at the POS is intense in the telecommunication scenario. Every major player including Airtel, Vodafone, Idea, Virgin mobile including newer players such as Uninor use variety of POS materials which range from traditional banners, scrollers, strips, danglers to interactive kiosks and eye catching air balloons. The POS market is not limited to mobile companies alone brands such as Cadbury, Kwality Walls, Britannia, Kellogg and many more have been developing unique POS materials to attract attention of its consumers and provide cues to initiate purchases. Carbonated Soft Drinks manufacturing companies such as Pepsico and Coca Cola provide retailers with refrigerators enabling them to serve cold drinks better – these also double up POS materials.

However, not all POS materials help; some important points necessary to ensure success of a POS material are:

1. In-line with the advertising: The media fragmentation and advertising clutter is battled through an Integrated Media Communication (IMC) to reinforce beliefs of the consumer. It also produces a greater multiplier effect thus ensuring greater returns.

2. Matching the product characteristics: Outline of differences in POS material depending on the appeal of the product are presented in the following figure as:

3. Constant evolution of POS material is essential: The consumer fast turns a blind eye to the clutter of POS material of competing brands. In order to break the clutter the POS’s have evolved from basic posters, banners, danglers to more sophisticated kiosks, dynamic scrollers etc bringing in the element of innovation.

4. Designed keeping in mind the needs and limitations of the retailers: Depending on the nature of the distribution channels and the POS material, the communication material is either directly provided by the company to the retailers or they reach the retailer through the distributor route. While the objective of the company executives is to catch the consumer attention at the final point of purchase, the retailer has to optimize the space in his shop in order to display the POS materials of competing brands. Some dynamic materials may attract consumer attention but also cost the shopkeeper a lot in terms of electricity it consumes and space it requires. Alternately, simple banners providing information help consumers make an informed purchase reducing his load. Since the retailer decides the positioning and stocking of the POS material, it becomes important for the marketers to understand the retailer’s preferences and develop retailer friendly materials.

Some companies have begun to overcome this problem by introducing the concept of co-branding where the front banners of the retail shops are provided by the company. The attractive banners save costs for the retailers and serve as advertisements for the brands at the final leg of a purchase decision.

5. Product packaging should be utilized as an effective POS communication: Attractive product packaging is the most basic and effective POS communication. It should reflect the same message as the IMC developed for the brand.

Shortcomings and Future Trends
Communication at the Point of Sale has its own set of shortcomings. Critics complain that the PoS messages are directed at consumers who have a pre-decided consideration set. Hence, it is not seen as an alternative for advertising but as a support activity to the above-the-line activities.

Moreover, most of these messages are missed by consumers who shop passively. The diversity of the country in terms of regional languages spoken and formats of retail (both in organized and unorganized sector) makes it difficult to maintain message continuity. Finally, large amount of POS materials create a clutter and are avoided by the consumers which makes this form of communication ineffective.

Despite the shortcomings, with increasing competition and the constantly increasing difficulty of reaching the consumers, the battle at the final leg of purchase is bound to intensify in the coming days. The traditional static POS material is giving way to mobile or active POS materials such as motorized displays and use of high technology to develop interactive POS such as kiosks (device by means of which the consumer can interactively retrieve information about the shop and the supply) etc. In future, a lot of marketing activity backed by consumer behaviour research can be expected in the area of Point of Sales communication


mintradz said...

Very thought-provoking. A wise man once told me that "money may have use-value across infinite contexts, but there are also plenty of contexts in which the use-value of money falls to zero." This is why we need to increase our leverage to maximize and use our set of skills, so that we can practice it in marketing campaigns. Like investing for a POP sign products, that will do. That is surely worth the penny.

Ambitious said...

Helpful article. Thanks.

robert yarn said...

Your post is really good providing good information..Your article provide very good information on PoS point of sale materials printing which are are used for executing advertising campaigns, exhibitions and presentations. As an effective marketing tool, well thought out and properly presented POS materials attract consumer attention and promote the brand. Due to their appealing and informative nature, POS materials are capable of stimulating purchases directly at the point of sale.

Harper smith said...

First of all i would like to thank you for the great and informative entry. I has to admit that I have never heard about this information I have noticed many new facts for me. Thanks a lot for sharing this useful and attractive information and I will be waiting for other interesting posts from you in the nearest future. Keep it up.
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Allison Mishen said...

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Elena Smithson said...

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Soy Sofiane said...

To Elena Smithson, what can you tell me about my POS system? How can I improve it?

Janet Cara said...

Thanks a lot for that information. That was a really Intresting post and I would really like to know more.
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