News

Shell smacked over libel action

Clarks dares bootleg promotion

Standing out from the crowdPoints ofview

So, IBM has been slapped for wanting more than itspound of flesh. The Big Blue's long-standing contractwith the International Olympic Committee is to endafter the Sydney Olympics 2000. Looking for anumber of smaller IT companies to sponsor the

games, the 10C hopes to avoid the 'excessive demands' from onemain sponsor.

IBM, for its part, believes that the return on its investment in theOlympic Games is no longer justified, but, from my experience,Swatch, official timekeeper of the Goodwill Games in New York, hasjust shown the world how to get the mos.t out of a sponsorshipdeal.

There, sponsors such as Canon, Sony and Snapple providedmillions of US$ in cash and value in kind, and received a pre-determined amount of advertising spots, sponsor tags andassociated rites from us. But Swatch used the event as a PRspringboard, showcasing everything from its Access electronicticket in a watch,to the new Swatch Smart Car.

The company also added new dimensions to the Games byholding In-line skating, skateboarding and BMX competitions overits 'time zone extreme' course in the Goodwill Games globalpavilion. In addition, Swatch supported specific musicalperformances by providing hip-hop talent Jon Forte and thePharcyde, which in turn brought the Games closer to their naturaldemographic.

The payback for Swatch, against a comparatively small entrylevel of $1 m, entirely in value in kind for timing services, camethrough the relentless spinning of its urban philanthropy to the USmedia. Half of Swatch's pro team of skateboarders, surfers, BMXriders and assorted maniacs were summoned to Manhattan todemonstrate their skills, lifestyles, and varying good looks duringthe Games.

Swatch not only received all the benefits of a regular sponsor ofthe Games but generated over 15 hours of television coverageincluding stations such as MTV and NBC. Their achievements in thepress were equally impressive.

The next Goodwill Games will be held in Brisbane, one year afterthe 2000 Sydney Olympics where Swatch is also the officialtimekeeper. With an investment at well over 40 times that of theGoodwill Games, and bearing in mind the 10Cs new foundsensitivity, it will be interesting to see how Swatch can stand outfrom the traditional Olympic clutter.

• Tom Webster is marketing director of the Goodwill Games

'Then consider the number of different waysvouchers are used - staff motivation is only a smallpercentage of that. If the Government is going to get10% of what's left, you still have to add the cost ofadministration.

If it's just as easy to give cash as vouchers, that willsend wage inflation through the roof. It makes anonsense of the Government's attitude towardsmotivation. It will simply stifle everything.'

The VIFsaid it is currently consulting with itsmembers but is strongly opposed to the proposedending of the current exemption for incentivevouchers. 'Naturally it would mean that manycompanies would lose their pricing advantage, andthis would particularly affect those whose solebusiness is vouchers.'

The VIFhas also enlisted the help of WestminsterStrategy, ?, to formulate its response to theconsultation paper, which is due this month.

response to the writ Shell issued the press statement toIncentiveTodaywhich was printed in the Mayedition.Donovanimmediately issued a writ for libel on thegrounds that the statement implies that previous claimsthat he has made against Shellwere without merit andthat the Smart claim is bogus. Shell attempted to have thewrit struck off in a HighCourt hearing in July but failedand was ordered to pay costs.Shell has since issued itsDefenceand Counterclaimto the Smart writ and aresponse from Donovanis imminent. HighCourthearingson either matter, however,are unlikelyuntil next year.

The Voucher Industry Forum is reeling over plans bythe Government to collect Class 1 National Insurancecontributions from employees receiving motivationalvouchers. Aconsultation document, issued by the NICoffice, says it plans to levy the tax on the £700 millioncorporate incentive and consumer gift vouchermarket from April 1999, to enforce liability on non-cash vouchers. Cash-voucherl given to staff arealready subject to the tax at point of issue.

While some exemptions will apply to encourageemployers to provide childcare and vouchersexchangeable for use of sports and recreationalfacilities, those issued for meals will become taxableover a ceiling of 1S pence per day.

Paul Hunter, marketing manager of KingfisherVouchers told Incentive Today: 'I think theGovernment has over-reacted. They think the voucherindustry is a bigger source of revenue than it is. About70% of revenue comes from retail.

The legal wrangle between John Donovanand Shell UKcontinues with Donovanclaiming victory in the firstround.Shell had tried to have a libelwrit struck off andthe high court ruled that Don Marketing indeed had acase following a Shell press statement which inferred thatprevious claims Donovanmade against Shellwerewithout merit, and the curreent claim is bogus.

Donovan alleges that Shell'sSmart loyaltyscheme isbased on proposals put forward by his company DonMarketing,and issued a HighCourtwrit for misuse ofconfidential information and breach of contract in April.In

NI voucher blow looms large

A'Dare to Wear' promotion by Clarks coupling awatch to its children's fashion shoe brand, Bootleg,has been designed to drive sales during the back-to-school period. The Oldeani designed watch in a silverBootleg tin is available at £4 with any Bootlegpurchase worth £lS. The promotion is the brainchildof marketing consultancy Tequila London which alsobrought Smash Hits into the promotion. During thepromotional period, all children visiting participatingBootleg stockists will alsG receive free postermagazines developed by Smash Hits magazine.

Double account win for HH&S

New pricing to boost incentives

News

-In til'iefi - voudters

Thomas Cook Third Party Marketinghas released a revamped set ofpromotional literature to raiseawareness of its Travel Vouchers,Promotions, Prize Service and TravelClubs departments.

Whitbread Leisure Vouchers andTeletext kicked off a fantasy footballcompetition this Summer to helppromote the Nationwide Leaguepages. Heightening the interactiveexperience for viewers the promotionaimed to add value to the regionalsports pages. Viewers were invited tocreate a super league of 12 teamsfrom 72 nationwide league clubs towin £100 of Whit bread LeisureVouchers each ':'leek for the i:e~mmanager.

Whitl:!read Leisure Vouchers hasincreased the number of itsredemption outlets to over 3,200 bysigning up Dome, Cafe Rouge andMamma Amalfi restaurants.

An indication of the impact of traveland leisure vouchers on thepromotions industry comes fromCharterhouse Promotions which hasjust sold its 10 millionth Breakawayhotel voucher. Launched 15 years ago,Breakaway hotel vouchers areredeemable at over 200 UK hotels.

Pricing of electrical premiums and incentivesis set to become increasingly competitivefollowing the DTI'sabolition of recommendedretail prices on domestic electrical goods.New regulations, which came into force onSeptember 1, now mean it is illegal formanufacturers to restrict the freedom ofsuppliers to set their own prices for productssuch as TVsets, VCRs,hi-fi systems,camcorders and domestic appliances.

The DTIinitiative follows a report by theMonopolies and Mergers Commission whichuncovered several practices that have tendedto restrict price competition in this sector.According to the DTI,some manufacturers

HH&S has won two major accounts,Planet 24's The Big Breakfast and Houseof Fraser.

The London-based agency has beenappointed by Planet 24 to undertake adirect marketing initiative to promotethe Big Breakfast in the USA andEngland.

To raise the show's profile and toattract big name stars, HH&S will sendout miniature London buses to mediatrade professionals in both countries.

have effectively controlled the retail prices oftheir products by imposing terms andconditions making it difficult for retailers toset prices below manufacturers''recommended' retail prices.

Greater price flexibility is seen as animportant factor in enabling more promotersto use brown and white goods as premiumsand incentives. Leading electrical retailers arenow expected to step up the marketing oftheir incentive vouchers.

However, Ray Jobz, a partner in the TheElectric Incentive Company, believes theabolition of RRPwill not necessarily lead tolower high street prices.

The American trade will receive busesfilled with Breakfast Tea to portrayBritish humour whilst Englishcounterparts will receive buses filledwith chocolate truffles. Each bus will beaccompanied with a leaflet and a videoof classic Big Breakfast clips.

HH&S will also undertake the launchof two clothing ranges from House ofFraser. 'Platinum' for women and 'Fraser'for men will be available at House ofFraser stores nationwide. The agency will

'Retailers who have had enough of smallmargins may begin to fight back byincreasing prices,' he warns.

He claims that one retailer is alreadyproposing to charge £229 for an item thatpreviously retailed at £ 199.

'With 70 percent of redemptions in mostreward schemes redeemed on electricals,volume sales can be high - so purchasersmust assert themselves when negotiating,'says Jobz.

'Prices can no longer be based on apercentage off the RRP.lncentive buyers willhave to do their homework - or rely on theirrelationship with their current suppliers.

mail 3S0,000 FraserCard holders and1SO,OOOspecially selected persons.

FraserCard holders will receivemoney-off vouchers offering 10%discount on the new clothing ranges aswell as receiving the men and women'sbrochures.

Non-card holders will be offered a10% discount on all purchases for oneday upon opening the account. Bothoffers will run between 3 September and9 October.

Thedifferencebetween asuccessful

promotion and anadministrative

headache can belittle more than afew lines of type

and a littleforethought

The Dixons Group Business Servicesdepartment, which has more thandoubled in size since its launch andlast year smashed its first year targetwith a 100% increase in business, isoffering a Matsui personal CD playerto all who buy £2,000 or more worthof Dixons Group Vouchers inSeptember or October. The move isaimed at further increasing itsincentives sales in the next year.

Virgin Our Price and Megastores havecome out tops in a recent analysis ofVirgin Vouchers redemptions, all ofwhich are said to appeal to the needfor experience as the mostmotivational award quality. VirginHolidays proved the second mostpopular redemption choice followedby Virgin Hotels

BSP's Elite Card, developed withNatWest and de,scribed as the firstpan-European motivational rewardcard programme, marks a departurefor incentive schemes allowing staffto spend against motivationalrewards in 14 million MasterCardoutlets worldwide. Currently live inthe UK, it will soon be rolled out intoEurope.

4 INCENTIVE TODAY SEPTEMBER 1998

Flight offersJudging by the number of holiday and traveloffers we see as promotional incentives each year,it seems that the escapism of travel has not lost itsconsumer appeal. Yet as some advertisers havefound to their cost, such promotions can createtheir own particular pitfalls.

Only last month we upheld a. complaint about a promotion in thenational press, in which the availabilityof the discounted flights on offer wasseverely restricted on some dates.Because this was not made clear,consumers were disappointed. Asimilar newspaper promotion causedcomplaints last year when respondentswere unable to book their cheapflights. The advertisers hadunderestimated the likely responseand failed to set enough seats aside.Promoters would be wise to learn from thesemistakes: a badly-administered promotion isunlikely to tempt your target audience and canresult in damaging publicity.

Failing to anticipate a high response must beone of the few situations in marketing where thepopularity of a promotion can be a problem. Inmost cases, promoters should be able to show

that they have sufficient merchandise to satisfydemand, but this can be more complicated whenit comes to holiday or flight offers. Manyrespondents may want to travel on the same date,such as bank holidays, and this is whenavailability is likely to be most limited. While theASA would not have a problem with offers whereavailability is more limited on some dates thanothers, this should be clearly stated to avoid

disappointing consumers.Holidays are also one of the more

popular prizes to offer whenappealing to consumers through acompetition; again, care should betaken to avoid embarrassment ofhaving a disgruntled prize winner.Various factors should be made clearwhen offering holidays as incentives:must the holiday be taken at aspecific time? Booked through aparticular tour operator? Is insuranceincluded? Where restrictions apply, itis always prudent to consider whether

this will affect a consumer's decision toparticipate. The difference between a successfulpromotion and an administrative headache canbe little more than a few lines of type and a littleforethought. But if all this makes you want to giveup and fly off to Rio yourself, you can always seekthe assistance of the CAP Copy Advice team whenwording your promotion.

..