PepsiCo to Place Security Device
On Free & High-Value Coupons
By Jack Grant
PepsiCo’s QTG division will begin placing a special optical security device on its Free Product and high-value coupons to thwart counterfeiting.
Quaker, Tropicana and Gatorade will deploy the hologram developed by The Coupon Information Corporation (CIC), its members, and OpSec Security, a firm specializing in anti-counterfeiting techniques.
The device aims to stop counterfeiters and to provide retailers with the ability to determine instantly whether or not a coupon is legitimate. CIC is making the artwork of the hologram available free of charge to all product manufacturers, whether they are CIC members or not. To receive an electronic image of the CIC logo for use as an anti-counterfeiting device, contact CIC at (703) 684-5307.
“We applaud QTG’s proactive effort to protect shareholder value and look forward to numerous manufacturers implementing this common sense deterrent over the coming months,” said Bud Miller, executive director, CIC, Alexandria, Va.
The number of counterfeits has increased dramatically over the past five years, according to Miller. Once a rare event, new counterfeits are now detected almost weekly. A single incident can cost the industry millions of dollars. Miller stressed that counterfeit coupons hurt manufacturers, retailers, vendors and consumers.
The anti-counterfeiting device is a hologram designed to enhance the standard “Manufacturer’s Coupon and Expiration Date” statement on a coupon. The words are legible when viewed directly. When the coupon is titled slightly and viewed, a bright diffractive security image (the CIC logo) covers up the words “Manufacturer’s Coupon” and the actual expiration date.
In the “Terms and Conditions” listed on the coupon, CIC recommends adding a statement that the coupon is valid only if it has a hologram on it. Two suggestions: “Void without Hologram” and “Security Feature: Hologram.”
The Voluntary Best Practice has been endorsed by the Association of Coupon Professionals (ACP) and praised by industry experts.
“This is good news for the coupon industry,” said John Irwin, president of ACP. “CIC and the PepsiCo divisions have developed a way to deliver a significant value to the consumer with the added assurance of reduced fraud. The fact that this creative idea was developed to assure safe delivery to consumers shows the viability of coupons as a marketing tool.”
Charles Brown, vice president of marketing for NCH Marketing Services, said the CIC should be commended for taking a leadership approach in developing the best practice hologram. “We’ll suggest it to any clients who choose to issue free coupons in appropriate media,” he said. “In reality, with all the formats of coupons in circulation, a hologram on what is hoped to be most free coupons still won’t be fool-proof for cashiers, but hopefully it is a deterrent against counterfeiters even attempting to pass a bogus free coupon.
“There is no panacea solution,” he added, “but continued diligence with coupon design best practices such as the CIC’s hologram recommendation, increased investment in fraud detection and prosecution, and greater consumer awareness will go a long way to enhance the deterrence effect needed for a healthy industry.”
"With today's technology, it becomes increasing difficulty to detect counterfeit coupons," said Ron Fischer, president of RPR in Blairstown, N.J. " Manufacturers must implement as many security measures as possible to identify and eliminate fraud before the coupon is redeemed. I applaud Pepsi / Quaker for implementing the suggestions of the CIC."
According to Miller, counterfeit coupons over the years have ranged from amateurish home-made versions to high-quality, professional ones virtually identical to those issued by manufacturers.
“Unfortunately, even the amateurish coupons are often accepted for redemption, creating liabilities for a variety of industry participants,” he said. “Once a counterfeit is accepted, someone -- whether it is a manufacturer or a retailer -- is going to have to pay for it, creating uncontrollable liabilities and unnecessary trade relations issues.”
Counterfeiters have forced retailers to be more aggressive in reviewing coupons at the check out lane, according to Miller. The increase in front-end security procedures has created consumer discomfort, increased costs, and lengthened lines.
“There are a number of anti-counterfeiting techniques available to the industry,” he said. “The effectiveness of these techniques varies. However, the number of potential solutions means that cashiers are seldom trained in all of the available loss prevention techniques.
Any anti-counterfeiting solution should increase overall cashier efficiency and reduce consumer challenges by being instantly recognizable.”
Miller said some manufacturers have recently begun using foil technologies to print entire coupons. Since these can reasonably be considered to be counterfeit resistant, a hologram is not necessary for these types of coupons.
Broader of Sweetbay Supermarket
To Address Industry Coupon Conference
By Rose Anthony
Shelley Broader, the president and CEO of Delhaize-owned Sweetbay Supermarket and Kash n’ Karry, will be the keynote speaker at the annual Industry Coupon Conference in St. Petersburg, Fla. The event, presented by the Association of Coupon Professionals (ACP) in collaboration with the Food Marketing Institute (FMI), Grocery Manufactures Association (GMA),
Promotion Marketing Association (PMA) and GS1 US, is scheduled April 11-12, 2007.
The popular Coupon 101\102 workshop, which reviews all aspects of couponing in a one-day session, will precede the conference on April 10 at the historic Renaissance Vinoy Hotel.
Other sessions will include:
- Final Specifications for the new Reduced Space Symbology (RSS) Coupon Barcodes, presented by the Joint Coupon Re-engineering Committee Co-Chairs Don King of Procter & Gamble and Alan Williams of Ahold, Greg Rowe of GS1 US, and the ACP RSS Coupon Re-Engineering Committee Chairs: Jane Michels, Joan Wyndrum and Betty Lou Vontsolos.
- Consumer Purchase Behavior and Coupon Usage with Laurie Watcher of Catalina Marketing Corp.
- Electronic Clearing Test with Marv Imus of Paw Paw Shopping Center and Vijay Chetty of ScanAps.
- Promotion Marketing Trends & Activities with Claire Rosenzweig, president of the Promotion Marketing Association (PMA).
- Importance of Measuring FSI ROI with Joe McHugh of Pepperidge Farm.
- Role of Promotions in a Changing Media Landscape with David Diamond, a marketing consultant.
- Role of Spanish Consumer Promotions with Dan Kitrell of Marx Promotion Intelligence/TNS.
- Coupon Counterfeiting, Fraud and Misredemption with Mary Ann Pindulic, president of the Coupon Information Corp. (CIC).
One afternoon of themed educational sessions is planned. One track on marketing and promotions will include Internet coupons, RSS coupons, and creative FSIs; another track on finance and operations will include coupon deductions, hard-to-handle coupons, Internet coupons, and RSS coupons.
“This year’s conference is built around the theme ‘Treasures in Couponing.’ Our goal has been to build an agenda that will offer
gold-standard value for every attendee and a cache of coupon industry information available nowhere else,” said Jane Michels and Pam Samaniego, co-chairs for the 2007 conference.
For more information, call 847-297-7773 or visit www.couponpros.org.
FSIs Deliver 253 Billion Offers in 2006
Nearly 200 billion advertising pages carrying 253 billion coupons totaling over $300 billion were delivered by FSIs (freestanding inserts) in Sunday newspapers in 2006, according to the Marx Promotion Intelligence 2006 FSI Distribution Trends Report.
“FSIs are a cost-effective advertising medium to deliver consumer impressions since the consumer chooses to ‘opt-in’ and receive the message, and then actively engages with relevant products and offers,” said Mark Nesbitt, chief operating officer, Marx Promotion Intelligence. “Consumers continue to seek out FSIs to be exposed to new products, gain additional product information, benefit from purchase incentives, and plan their shopping trips.”
Here is a closer look at these totals that accounted for over $300 billion:
- The number of coupons was 0.1% less compared to 2005.
- Page volume grew 1.1%, a record level.
- Average coupon face values rose 4% to $1.19, a record level.
- Coupons from nonfood CPGs increased 3.6% to $1.45.
- Manufacturers leveraged FSIs with 384 new items supported in 2006.
Additionally, FSIs maintained consistent frequency with activity in 49 out of the 53 Sundays in 2006. The pre-Easter promotion week of April 2 had the greatest combined weight by delivering 144 total pages of FSI promotions. The pre-Thanksgiving week of November 11 delivered 128 pages of FSI promotions.
FSIs reach an average of 70 million households on a weekly basis, with household reach varying across national, regional, and local brands. The dynamics among the principles of frequency, weight
and reach provide important insight into category, competitor, and brand strategies.
The number of non-food coupons dropped (MM) was 146,160, a 2.7% change from 2005; the average face value was $1.45, a 3.0% change from 2005; the average expiration in weeks was 9.4, a -5.4% change from 2005.
The number of food coupons dropped was 106,949, a -3.9% change from 2005; the average face value was $0.82, a 1.7% change from 2005; the average expiration in weeks was 10.5, a 0.3% change
from 2005.
Five of the top 10 categories for new product introductions were also among the top 10 categories for overall FSI activity in 2006. Household Cleaning Products led all categories in overall FSI coupon activity and ranked number one in new product introductions among Non-Food categories. Snacks ranked first across all categories for new product introductions and was the top-ranked Food category for overall FSI activity. The top 10 categories accounted for 30.7 percent of all coupons distributed across the CPG industry.
JANUARY 2007
Mexican-Americans Redeem
More Coupons at Food City
By Jack Grant
Food City caters to Mexican-American shoppers in 62 supermarkets throughout Arizona. Coupon use by these consumers has always lagged behind mainstream shoppers.
First-generation shoppers are not as familiar with couponing as they should be to spike up redemption, according to Robert Ortiz, vice president of sales and merchandising for Food City, a banner of Bashas’ Family of Stores. But that is changing.
The chain has installed at-checkout coupons in all its stores, some major CPGs are issuing bi-lingual coupons in the marketplace, and second-generation Hispanics are becoming Americanized and thus are more inclined to use coupons.
“It’s new for them, but the longer that they’re in this country, the more they see the value,” says Ortiz, who adds that redemption in Food City is typically half of that in conventional Bashas’ supermarkets. “But it continues to grow year after year.”
In recent months, the chain installed printers at checkout of all the stores to issue color coupons from the Catalina Marketing network. Only a small percentage of coupons are bi-lingual, but Ortiz says the vendor it urging more CPGs to launch bi-lingual programs.
“I see them really pushing this thing and making the situation much better. Possibly with Catalina, we can double our redemption in a couple of years,” he says.
According to Ortiz, major CPGs like Unilever, Colgate-Palmolive,
and Nestle are issuing bi-lingual coupons in his trading area. These global companies that are starting to do more and more coupons and sampling, and they make sure that everything is bilingual.
A leap forward, he says, will come with the next generation of shoppers. They will be more accustomed to all kinds of promotions, including coupons.
“You’ll see a little bit more coupon usage from them five years from now,” says Ortiz. “You will see them looking for different American brands because of the advertising they’re going to see. So for us, we have to broaden our SKU count and continue to grow the variety of our offerings.”
Theoretically, the growth of the Hispanic population across the country should mean more coupons are redeemed. But Hispanics
of all backgrounds redeem coupons at a lower rate than “mainstream” consumers.
Studies at Wake Forest University attempted to find out why. They uncovered several mistakes that marketers are making today. For example, many coupon offers simply do not impress Hispanic consumers, and the media in which they are placed often do not reach them.
Anne Brumbaugh, assistant professor of marketing at Wake Forest University, addressed these issues in a presentation at the annual Industry Coupon Conference in Washington, D.C. last March. The event was sponsored by the Association of Coupon Professionals (www.couponpros.com).
One study combined media demographics with coupon redemption data. A key result was that marketers often promote the wrong products to Hispanics. Redemption rates are higher, for example, when a refrigerated food is promoted.
“Refrigerated foods came out big because it is a category that Hispanics use,” said Brumbaugh in an interview after her presentation
Also, the study suggested that estimates of redemption rates are higher when the offer doesn’t have a multiple purchase requirement and the discount is at least 56 cents. Most importantly, marketers often set the wrong expiration date on their coupons.
“Having a quick turn around on the expiration date does not seem to cause Hispanics to buy things sooner and stockpile them,” said Brumbaugh. “If they are lower affluence folks, they’re going to have smaller houses and they’re not going to have any space to stockpile. You can have a quick turn around on expiration date all day, but if I don’t have space, I’m not going to buy a gross of toilet paper.”
Another study found that an ideal scenario was to distribute a coupon at an in-store sampling event. “You have a human, a sample of the product, and the coupon all there. You’ve got that relationship prior to asking them to redeem the coupon,” she said.
Final RSS Specs to Highlight
Agenda at Coupon Conference
Final specifications for the new Reduced Space Symbology (RSS) coupon barcodes will highlight the agenda at the annual Coupon Industry Conference. The event, sponsored by the Association of Coupon Professionals (ACP), is scheduled April 10-12 at the historic Vinoy Hotel in St. Petersburg, Fla.
“This year’s conference is built around the theme ‘Treasures in Couponing.’ Our goal has been to build an agenda that will offer
gold-standard value for every attendee and a cache of coupon industry information available nowhere else,” said Jane Michels and Pam Samaniego, co-chairs for the 2007 conference.
An afternoon of “tracked” sessions is planned. One track will focus on marketing and promotions, while the other track will cover topics in the coupon finance and operations arena.
For those interested in consumer purchase behavior and the relationship to coupons, there will be a presentation of a unique set of consumer purchase behavior data-mining results
For more information, call 847-297-7773 or visit www.couponpros.org.
