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Sample Local Marketing Agreement Radio Station


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									Retailers and the American Alcohol
Point-of-Purchase Environment:
Y Terry-McElrath*, E Harwood**
J Myllyluoma†
D Erickson**, L Fabian**, S Slater‡, F Chaloupka‡
13th Alcohol Policy Conference
Boston, MA; March 14, 2003

* Institute for Social Research, University of Michigan
** Alcohol Epidemiology Program, University of Minnesota
† Battelle Centers for Public Health Research and Evaluation
‡ Health Research and Policy Centers, University of Illinois at Chicago
ImpacTeen is….

 …Multi-site research collaborative

 …Alcohol, tobacco, and illicit drugs

 …Prevention research

 …State, community, and school level responses
 to youth substance use
The Alcohol POP Environment:
What is it?

• Point-of-purchase: retail, “off-site” environment
• Marketing and advertising efforts:
   • Products and product placement
   • Pricing
   • Advertising, including counter advertising
   • Functional objects
   • Promotions
The Alcohol POP Environment:
Why Worry?

The research community’s concerns regarding
 underage drinking and risky alcohol use:

• U.S. monthly consumption of alcohol is:

  • 20% underage drinkers (aged 12-20)1
  • 30% adult heavy drinkers (>5 drinks/sitting)1
The Alcohol POP Environment:
Why Worry?
Underage drinking and risky alcohol use:
• Price and ease of access to alcoholic beverages have
  been associated with injury2 and violence such as rape,
  robbery, and assault.3
• Retail price advertising is related to domestic violence
  toward children4 and the probability of drinking and
  driving among all drinkers.5
• Product placement is related to sales volume.6
• Youth see more alcohol advertising in magazines than
  adults7. Little is known about comparative exposure to
  advertising in the retail environment.
The Beverage Industry’s Interest in POP
 Marketing and Advertising:

• 70% of consumers’ final buying decisions are made
  once inside the store. 8
• In-store ad materials increase overall beverage sales in
  supermarkets by 2%-65%. Increases for beer may be
  up to 17%. Layering more than one advertising method
  pushes sales increases even higher. 8
• POP marketing is essential to reinforce TV, print, and
  radio advertising. 8
The Beverage Industry’s Interest in POP
 Marketing and Advertising, cont.:

• 74% of all beer sales are in retail establishments, led by
  convenience stores and gas stations.9
• Young adults (aged 21-27) are most likely to purchase
  beer in package and convenience stores. 9
• 75% of teens shop at convenience or convenience/gas
  stores weekly.10
Variation in the POP Environment
•   State regulations on sales outlets and advertising
•   Local ordinances on percentage of retailer window
•   Store-type variance

Measuring Community Alcohol POP Activity
•   What to look for?
•   How to reliably measure POP issues?
•   Are there national comparisons?
Selection of Alcohol Retailers

•   Random or Systematic Sample:
    •   State or local liquor licensing lists
    •   Commercial business lists (InfoUSA, Dunn&
        Bradstreet) based on SIC codes
•   Convenience or Target Sample:
    •   Select stores in certain neighborhoods, near schools,
        or known to sell to minors
•   Random/Systematic sample for research and
    national comparisons. Convenience/target
    sample OK for local activist/media efforts.
In-Store Observation Protocol
•   Follow a standardized protocol
•   Comprehensive training includes field practice
    and certification
•   Observations conducted by adults
•   Observations conducted unobtrusively
•   Notes taken inside the store, data recorded
    outside of store
•   Data recorded on standardized form
Quality Control Issues

•   How to measure quality of observational data
•   Inter-rate reliability as a measure of quality
     • We found a 92.5% overall item
       agreement using repeated measures by
       multiple observers in 16 venues within
       short time of each other.
Why Placement of Beer or Other
Relevant Products is Important

•   Ease of access (self service vs. clerk-assisted)
•   Readiness to be consumed (cooled vs. room
•   Affordability (availability of singles)
•   Advertising (visual impact of product displays)
Types of Placement

•   Refrigerator/Cooler
•   Shelves
•   Floor Display
•   Singles in Bucket
•   Behind the Counter
•   Locked or Closed Cabinet
•   Other
Placement – In Cooler
Placement – On the Shelf
Placement – Floor Displays
Placement – Floor Display
Placement – Singles in Bucket
Placement – Behind counter
Price and Promotion

•   Price and promotions indicate marketing
    activity to promote certain products
•   Collect price data for very specific brand
    and quantity
    •   Bottles vs. Cans
    •   Larger quantities more prevalent
    •   Constantly changing in marketplace
    •   Without sales tax
Types of Promotions

•   Special volume discounts (twofers):
    •   Buy a case, get a 6-pack free
    •   Three 12-packs for the price of two
•   Special price offers (special words):
    •   Sale price, special offer, special discount,
        promotional offer
    •   NOT everyday low price, discount price
•   Coupons, freebies or points for merchandize
•   Other (sweepstakes, discounts on tickets, etc.)
What are Functional Objects?

•   Indicates industry presence in the store
•   Bears an alcohol brand, product name or
•   Has a function other than to display or
    advertise the product
•   Is not for sale to customers.
Observing Functional Objects

•   Count items with alcohol brand logos
•   Items belonging together are counted only
    •   Several price boards displayed as if they were
        one board
    •   Grocery handbaskets
Functional Objects – Ashtrays and Doormats
Functional Objects – Trays,
Clocks, and Bulletin Boards
Functional Objects – Mirrors and
Functional Object – Price Board
Advertising of Alcohol Products –
•   Are ads only where product is displayed or
    sold or elsewhere in the store?
    •   Relevant in stores that sell other products in
        addition to liquor
•   Are any ads at child’s eye level (less than
    3.5 ft from the floor)?
Interior Advertising – Not Just Where
Product is Sold
Beer Ad at Child’s Eye Level
Advertising of Alcohol Products –
•   We collect data 2 ways:
•   Count ads by size on store window, door, walls
    •   Less than 1 ft in any dimension; 1-3 ft, or larger than
        3 ft
•   Overall impression of advertising (subjective but
    provides a measure of the visual impact)
    •   No ads
    •   Discreet
    •   Moderate
    •   In your face
Exterior Advertising – Moderate
Exterior Advertising – Moderate
Store Exterior Advertising – Moderate
Exterior Advertising – In Your Face
Exterior Advertising – In Your Face

•   Signage to warn about age of sale
•   Signage to warn about health effects of
    alcohol consumption
•   Signage to warn about driving while
Store Characteristics

•   Observed Store Type
    •   Standard criteria based on milk and raw meat
    •   May differ from SIC code
•   How many cash registers
    •   Proxy for Store Size
•   Drive-Through/Kiosk Only
The US Alcohol POP Environment:
•   Since alcohol purchasing patterns vary by
    store type, does the alcohol-related POP
    environment also vary by store type?
    •   Data collected in 2000 and 2001
    •   Focus: alcohol advertising and functional objects,
        and beer placement

•   Does beer price and promotion vary by
    characteristics of communities,
    neighborhoods, and stores?
    •   Data collected in 2000
    •   Focus: beer price and promotions.
•   Communities surrounding schools
    participating in nationally representative
    surveys of 8th, 10th, and 12th grade students
•   Target of 30 retailers per community (either
    tobacco or alcohol, randomly selected by SIC
•   Two-person field staff observation teams
•   Data weighted to account for community
    clustering and store selection probabilities
Measures: Advertising, Placement,
and Functional Objects
Years: 2000-2001. N=3,961 retailers in 329 communities.

•   Any alcohol POP marketing: exterior, interior,
    or property advertising; alcohol-branded
    functional objects
•   High-intensity advertising
•   Low-height advertising
•   Alcohol control or counter-alcohol signage
•   Presence of alcohol-branded functional
•   Beer placement
                Community Alcohol Retailers

% of Retailers Observed

                          30                                      Liquor stores
                                                                  Convenience stores
                                                                  Mom/pop groceries

                          10                                      Supermarkets

                          5                                       Drug stores/
                                Store Type                        Other*

          *Includes gas stations, general merchandise, tobacco stores, and other
Overall Alcohol POP Marketing
•   94% of all stores had some form of POP
    marketing (advertising or functional objects)

    Advertising: Exterior and Interior
•    92% had interior alcohol ads
      • 37% were categorized as “high-intensity”

•    39% had exterior alcohol ads
      • 27% were categorized as “high-intensity”

•    48% had alcohol control or counter-alcohol
                     High-Intensity Advertising

                                 Supermkts        Convn      Convn/gas     Grocery     Drug     Liquor

                          80                                          80
                          70                                          70
% of Retailers Observed

                          60                                          60
                          50                                          50
                          40                                          40
                          30                                          30
                          20                                          20
                          10                                          10
                          0                                           0
                                    Exterior Advertising                      Interior Advertising
                               All store types significantly higher      All store types except drug stores
                               than supermarket referent                 significantly higher than
                               (p<.001)                                  supermarket referent (p<.001)
Low-Height Interior Advertising
•   44% of all stores with interior alcohol
    advertising had some ads at a height of 3½
    feet or less (child’s eye height)

    Functional Objects
•    51% of all stores provided at least one
     alcohol-branded functional object.
                     Low-Height Ads and Functional Objects

                                 Supermkts      Convn     Convn/gas     Grocery    Drug     Liquor

                          80                                       80
                          70                                       70
% of Retailers Observed

                          60                                       60
                          50                                       50
                          40                                       40
                          30                                       30
                          20                                       20
                          10                                       10
                          0                                        0
                                     Low-Height Ads                         Functional Objects
                               Convenience/gas and liquor stores      Convenience, grocery and liquor
                               significantly higher than              stores significantly higher than
                               supermarket referent (p<.001)          supermarket referent (p<.05). Drug
                                                                      stores significantly lower (p<.05).
Beer Placement

•   Behind counter or        1%
    locked/closed cabinet
•   Coolers                  96%
•   Floor displays           44%
•   Shelves                  23%
•   Singles in ice buckets   16%
                     Beer Placement

                                 Supermkts       Convn     Convn/gas      Grocery     Drug     Liquor

                          80                                         50
% of Retailers Observed

                          50                                         30

                          20                                         10
                          0                                          0
                                   Singles in Ice Bucket                            On Shelf
                               Convenience, convenience/gas and        All store types but drug stores
                               grocery stores significantly higher     significantly lower than supermarket
                               than supermarket referent (p<.01)       referent (p<.05).
Variations in Beer Price and
Promotions in Retail Stores: 2000

    160 communities across the U.S.

    2,024 Retail Stores
Conceptual Model



Outcome Variables

    Price ($$)

         --6-pack of Budweiser or Miller (Mean=$4.71)

    Promotions (Some “1” or None “0”)
         (25% of stores have “some” promotions)

             --discount offers
             --special prices
Independent Variables
Community Characteristics (School Catchment Area)
      U.S. Region

           --Northeast (12%)
           --South (44%)
           --Midwest (17%)
           --West (27%)

      Urbanicity/population density
           --Urban (70%)
           --Suburban (6%)
           --Town (11%)
           --Rural (13%)
Independent Variables, cont.
Neighborhood Characteristics (Census block)
    Median household income ($$)
         -- Mean=$39,280

    Racial diversity (% white)
         -- Mean=78%

    Youth population (% of whole)
         -- 12-17 year olds (Mean=8%)
         -- 18-20 year olds (Mean=9%)
Store Characteristics (Observed)
    Store type

         --Gas station convenience (38%)
         --Liquor store (18%)
         --Convenience store (14%)
         --Grocery (11%)
         --Supermarket (9%)
         --Drug store/pharmacy (6%)

    Store size - # of cash registers
         --1 = small (60%)
         --2 = medium (19%)
         --3 + = large (21%)
Statistical Methods

   Cross-sectional hierarchical regression models

        -- nesting of stores in communities
        -- community as random effect
        -- region, urbanicity, store type and size as fixed effects
        -- beer brand as control variable
        -- continuous (price) and dichotomous (promotion) outcomes
Summary of Findings
Beer price varies significantly by:

    Community characteristics
       -- Lowest prices in West & Suburbs
       -- Highest prices in South & Urban

    Neighborhood characteristics
       -- Lowest prices in low/moderate income & less racially diverse

    Store characteristics
       -- Lowest prices in drug stores & large stores
       -- Highest prices in gas convenience & small stores
Summary of Findings, cont…
Beer promotion varies significantly by:

    Community characteristics
          -- Least likely in Midwest & Urban
          -- Most likely in Northeast & Towns

    Store characteristics
          -- Least likely in convenience & small stores
          -- Most likely in drug & large stores
Store-Type Variation in Alcohol POP
Environment: Analyses Conclusions

•   General alcohol marketing
    •   Heavy in retail establishments frequented by
        youth such as convenience stores

•   Beer access
    •   Attractive pricing in high volume stores
        typical of suburbs and small towns
1. Foster S et al. (2003). Alcohol consumption and expenditures for underage
   drinking and adult excessive drinking. JAMA 289(8):989-995.
2. Ohsfeldt R & Morrisey M. (1997). Beer taxes, workers’ compensation, and
   industrial injury. The Review of Economics and Statistics 79(1):155-160.
3. Cook P & Moore M. (1993). Violence reduction through restrictions on
   alcohol availability. Alcohol Health and Research World 17:151-156.
4. Markowitz S & Grossman M. (1998). Alcohol regulation and domestic
   violence towards children. Contemporary Economic Policy 16:309-320.
5. Stout E et al. (2000). Reducing harmful alcohol-related behaviors:
   Effective regulatory methods. Journal of Studies on Alcohol 61:402-412.
6. Skog O-J. (2000). An experimental study of a change from over-the-
   counter to self-service sales of alcoholic beverages in monopoly outlets.
   Journal of Studies on Alcohol 61:95-100.
7. Center on Alcohol Marketing and Youth (2002). Overexposed: Youth a
   target of alcohol advertising in magazines. Washington DC: Center on
   Alcohol Marketing and Youth.
References, cont.
8. Beverage Industry. (2001). POP proves its worth. Beverage Industry
9. Miller Brewing Company. (1997). Beer is volume with profit. Milwaukee,
   WI: Miller Brewing Company.
10. Point of Purchase Advertising Institute. (1992). The point-of-purchase
    advertising industry fact book. Englewood, NJ: The Point of Purchase
    Advertising Institute.

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