In the highly segmented jewelry industry, manufacturers, designers, raw materials organizations, and trade associations provide both individual and combined marketing programs that aim to serve various players’ marketing needs. Sometimes costs are shared among all parties. Other times the retailer may receive the benefits of a program free of charge, just for being a good customer.
This fall, for example, the promotional group Perles de Tahiti will mount a $1.3 million campaign using major national and independent retailers, says Devin Macnow, executive director of the Cultured Pearl Information Center, who also handles U.S. promotion for Perles de Tahiti. Manufacturers will select retailers to be included in the program, and the cost will be split evenly among Perles de Tahiti, manufacturers, and suppliers.
The program will include national advertising in consumer magazines such as W, Departures, Town & Country, Harper’s Bazaar, and Elle as well as in regional newspapers. The organization also has developed two TV commercials that it will offer to retailers for a small fee in exchange for exclusive airing rights within about a 50-mile radius of the store. “We’re creating two commercials that normally cost $300,000, giving it to them for free, and suggesting that they use it for broadcast and cable TV advertising,” Macnow says.
The program also will be supported with point-of-purchase brochures, educational literature, consumer pamphlets, and—in some cases—mailers. Macnow notes that they are trying to include 400 retailers—who will be chosen by manufacturers—from around the country.
The sparkle of diamond ads. The Diamond Promotion Service (DPS) has several cooperative advertising programs for retailers and manufacturers to promote diamonds. But don’t call them cooperative advertising programs: “We call them integrated marketing programs,” explains DPS executive director S. Lynn Diamond.
Two of the programs involve manufacturers and retailers in unique ways. The first features the “Design Gallery” on the Diamond Trading Company’s popular consumer Web site, www.adiamondisforever.com. The gallery allows consumers to view more than 800 unique diamond jewelry designs from 17 manufacturers and designers. It also provides a search engine that consumers can use to find the nearest retailer offering a particular product. Manufacturers decide which of their retail customers should be included in the program.
“We provide a link to the manufacturer, the manufacturer provides a link to the retailer,” Diamond explains. While the process may seem complex, Diamond insists it is near seamless to the consumer.
To participate in the program, designers and manufacturers pay $40,000 per year, which includes the right to use the Web site’s high-resolution product images—photographed by the DTC—in their own advertising. Manufacturers and retailers arrange their own terms regarding how much, if anything, retailers pay to participate.
The program is now in its second year. At the end of the first year, as an incentive, DPS provided free advertising inserts in consumer publications for those companies that continued with the program. After the second year, DPS will help retailers conduct in-store events with manufacturers.
“We want the retailer to know how the manufacturer and DPS are bringing traffic to the store,” Diamond says.
DPS claims that since the launch of the Design Gallery in October 2001 there have been more than one million visits from “affluent diamond enthusiasts who have indicated that they plan to buy a piece of diamond jewelry in the next 12 months.”
The DTC also works with retail and manufacturing trade organizations to produce unique programs that promote diamond buying for their members. In one program, produced in conjunction with the Independent Jewelers Organization (IJO), retail members that buy $5,000 worth of three-stone or “statement” jewelry (half-carat or more) from a participating supplier can qualify to receive a marketing, merchandising, and promotional package.
The package includes exclusive use of a unique copy line—”When Words Are Not Enough”—designed to go with the venerable “A Diamond Is Forever” slogan. It will be applied to all of the material provided by the DTC, including a TV commercial (at a nominal fee), counter signs, in-case display units, and a CD-ROM with an ad slick, postcard, radio script, and on-hold telephone message.
Diamond says the DTC can work with just about any organization to tailor a program to meet its specific needs. “We like to work with organizations because it maximizes our value to the trade,” she says.
A glittering gold campaign. Over the years, the World Gold Council has had a large cooperative advertising program for independent retail jewelers, explains Rick Bannerot, vice president, jewelry advertising. In recent years, however, the group has been working with key designers, retailers, and manufacturers, and its new program will include only a handful of national and regional jewelers and department stores. Bannerot says independent jewelers might be invited into the program later.
“This is a very highly structured program,” he says. “It will not be available to the independents this fall season. We will work with key groups of department stores and key retailers. Once those have been wrestled to the ground, there will be extra money for consumer ad campaigns for local and regional advertising. That’s down the road.”
Focusing on key retailers allows the WGC to invest in those that are committed to promoting gold and that can collect sales data.
“We have to be able to track and measure the results of gold as opposed to other elements,” Bannerot says. “Accountability is the goal of the process. We will work with retailers who are making a significant commitment. We want to see the passion, we want to see the fire. We want people who are committed in the gold business.”
He continues, “We were a much bigger and wider operation 10 years ago, with a bigger operating mandate. Now we’re looking for key partners who understand what we are trying to do and are a key fit. This is so we can take it down to the gold miners and tell them it’s working. Let’s do more of this. It’s a good legitimate ground business approach based on truth and real independent analysis. We’re running our business like a business. We’re going to produce good numbers.”
The program will include advertising in the top national consumer magazines, billboards, direct mail literature, and point-of-sale materials. National magazine advertising will be split into nine regional zones, a strategy similar to past WGC campaigns that included independent jewelers. WGC is taking this approach because some national chains have different names in different markets and some large retailers are powerhouses only in certain markets. Initially, the program will focus on the top 10 stores in the top five cities.
“The idea is to get the ad campaign all the way down to a shopping bag,” Bannerot says. “We’re always trying to integrate and synthesize the advertisements.” This includes the use of billboards as well as four-page inserts that double as mailers, which can be sent out to the top 30,000 customers and cross-referenced to the store’s actual customer base.
“If you buy the right billboards, magazines, and Amex customer base, you’re hitting the customer with frequency against the best possible audience. It can be as simple as getting counter cards from the magazines to the store so people can see them. It’s another little visual touchstone, a point of familiarity. Gold is out there asking for the business as part of the campaign.”
Bannerot says that retailers invited into the program will pay anywhere from 30% to 60% of the costs. However, he notes, “We bring a buying power they can’t get on their own, and it gives them a national presence with a retail tag in their region.”
Timely marketing campaigns. Watch manufacturers work hard with retailers to market their products, and some do it in unique ways. Bulova, for example, has two cooperative advertising programs that incorporate the Accutron watch, which is sold almost exclusively through independent retailers.
The first program uses advertising inserts in national consumer magazines that are targeted to very limited areas where independent retailers reside, says Francie Abraham, Bulova’s vice president of marketing. The placement can be as focused as a zip code. Bulova sales staff organize the program for their customers, and an outside company prints the inserts and places them in the proper magazine subscription base.
“It’s a great opportunity for a jeweler in a given area to have his ad run in all subscriber copies of publications such as Time, Newsweek, US News & World Report, and Sports Illustrated, she says. “Usually they get pretty good exposure. It’s something that we’ve been doing for five years. It’s important to tell customers where the stores are located.”
The cost of the program is split fairly evenly between the company and the retailer.
Bulova’s other program incorporates the Internet—and it doesn’t cost the retailer a penny. Retailers with Web sites can link to a specially created Bulova site, but, unlike similar features on other Web sites, linking to the Bulova site does not give the user the impression that he has left the retailer’s site.
“It looks like it’s just part of the retailer’s own Web site, but the customer can click on Bulova and see all the watches within the Bulova brand,” Abraham says. “It means the jeweler doesn’t have to do any photography or updating. Consumers never realize they are going outside the jewelry Web site, and we make sure anything they click on will take them back to the jeweler’s Web site. They’ll never end up at their dealer locator. This is a totally separate site that we maintain for our jewelers, and it’s totally transparent to the consumer.”
Some companies don’t have cooperative advertising programs but are still able to provide marketing assistance to retailers.
“We have never had a co-op advertising program. We do have market development funds we allocate to market retail opportunities,” says Cheri McKenzie, chief marketing officer for Swiss Army Brands. “It’s disciplined and focused with best strategic uses to build the brand with retailers.”
The company offers all of its Swiss Army displays at no charge to retailers. They will work with specific retailers to help with their advertising and marketing campaigns, including assistance with a jeweler’s holiday catalog, billboards, and marketing. McKenzie says the company’s sales reps have a great deal of clout in dispensing funds for retailers, and the criteria for retailers to participate vary.
“Certainly sales volume is one of the things taken into account,” she says. “Potential for growth, opportunity for the future, and how significant the marketing opportunity might be may also be considered. Then we look at the most effective advertising vehicles. Sometimes it’s a charitable effort the retailer is undertaking and we feel it’s important that we join them.”
Although each marketing and advertising co-op program is different, all are based on a concept as basic as a Sesame Street lesson: Cooperation gets the job done better and faster—and everyone’s a winner.