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Part Five Developing the Integrated Marketing Communications Program
Belch: Advertising and
Promotion, Sixth Edition
Exhibit 16-24 Kellogg’s
Eet & Ern loyalty program
targets younger consumers
V. Developing the
Integrated Marketing
Communications Program
16. Sales Promotion © The McGraw−Hill
Companies, 2003
members in its AAdvantage program, while Marriott International has enlisted more
than 18 million business travelers into its Rewards program.
Many packaged-goods companies are also developing frequency programs. Pillsbury,
Nestlé, Kraft, and others have recently introduced continuity programs that offer
consumers the opportunity to accumulate points for continuing to purchase their
brands; the points can be redeemed for gifts and prizes. For example, Kellogg
launched a frequency program called “Eet and Ern” that targets younger consumers.
The program allows them to find a 10-character code on the inside of speciallymarked
packages of Kellogg products, enter the code at the EetandErn.com website,
and receive a downloadable reward (Exhibit 16-24). They can also participate in other
special promotions including contests, sweepstakes, special offers, games and other
activities. The frequency program has been very effective and has helped Kellogg
increase its sales despite the overall decline in cereal industry sales. 49
Frequency programs have become particularly popular among grocery stores. 50
Nearly 7,000 supermarkets now have loyalty programs that offer members discounts,
a chance to accumulate points that can be redeemed for rewards, newsletters, and
other special services. Loyalty programs are also used by a variety of other retailers,
including department stores, home centers, bookstores, and even local bagel shops.
There are a number of reasons why frequency programs have become so popular.
Marketers view these programs as a way of encouraging consumers to use their products
or services on a continual basis and as a way of developing strong customer loyalty.
Many companies are also realizing the importance of customer retention and
understand that the key to retaining and growing market share is building relationships
with loyal customers. Frequency programs also provide marketers with the opportunity
to develop databases containing valuable information on their customers that can
be used to better understand their needs, interests, and characteristics as well as to
identify and track a company’s most valuable customers. These databases can also be
used to target specific programs and offers to customers to increase the amount they
purchase and/or to build stronger relationships with them.
As frequency programs become more common, marketers will be challenged
to find ways to use them as a means of differentiating their product, service, business,
or retail store. It has been argued that many of the loyalty programs developed by
packaged-goods marketers are really short-term promotions that overreward regular
users and do little to develop long-term loyalty. 51 Marketers must find ways to make
them true loyalty programs rather than just frequent-buyer programs. This will require
the careful management of databases to identify and track valuable customers and
their purchase history and the strategic use of targeted loyalty promotions.