Dr. Dan

SUPPORT AND ACCOUNTABILITY:

KEY TO SUCCESSFUL DEMONSTRATION PROGRAMS

by

DAN AILLONI-CHARAS

In industry meetings and in private conversations one becomes increasingly aware of growing frustrations on the part of manufacturers with their treatment by the trade. Planogram problems, growing out-of-stocks on listed items, and lack of proper compliance on programs for which manufacturers are required to pay incremental promotional funds top the list.

The support of in-store demonstrations by accounts comes under its share of criticism. In spite of their contribution to manufacturers and trade alike in moving incremental cases, benifitting both, accounts often practice benign neglect of these activities by failing to support them with incremental pipe lining and displays. Worse -- they sometimes relegate the management of their demonstration programs to exclusive third party agencies, in effect, causing a potential disconnect between the objectives sought by manufacturers in funding such programs and their eventual execution on the retail floor.

One gets the impression that some accounts tolerate and even seek out in-store demonstrations only for their ability to contribute to their bottom line the access fees they levy on manufacturers for the right to have such programs executed in their stores. Once such payments are secured, accountability for the work done is relegated to the exclusive third party agency which generally operates without any account oversight, often setting up its own rules and performance criteria.

Some accounts, for example, either through their 'exclusive' demo agency or directly, will require front end payments of access fees for all scheduled stores. They will not refund such funds for the days not worked even though they mandated the use of that specific demo supplier. While on a single account basis such unearned payments may amount to only a few thousand dollars across the board, they may add up to tens of thousands of dollars manufacturers must pay for work that was not done.

Pipe lining sufficient merchandise to the retail floor coincident with the execution of a demo program is another area where account support is often slow in coming. This often results in widespread out-of-stocks and significantly reduces the effectiveness of a demo program.

As a variant on the private label policies implemented by accounts throughout the country, one account now mandates that its preferred demo agency pair off all manufacturers brands demonstrated with a private label of their choosing. It is not altogether clear whether manufacturers have any say in this, except for paying the cost of the complete demo. It is true that some manufacturers have sought private label participation in the past, i.e. milk for a cereal demonstration or crackers to serve a new spread; it appears though that this new