SBV, Pepsico Set Sights on Teen Market

After last fall's successful launch of its Mall Perks shopping rewards club program, Simon Brand Ventures (SBV) is targeting 15 million teen-agers with a rewards program intended to boost sales at 203 shopping malls throughout the country.

SBV, a subsidiary of the Simon DeBartolo Group, Indianapolis, the country's largest shopping mall developer, entered into a strategic marketing and vending alliance with the Pepsi-Cola Co. and an undisclosed technology partner.

The agreement will make Pepsi the exclusive soft-drink vendor in Simon DeBartolo's properties and will allow the groups to use their large customer databases to try to acquire a greater share of the teen market.

SBV undertook a major national marketing initiative to promote the Mall Perks program and is planning a similar campaign for its teen program.

“The teen-age years are the time of life when loyalties and intelligent relationships are established,” said Karen Corsaro, co-president of SBV. “Teens spend more than 100 billion dollars a year and they frequent malls 40 percent more than any other group of customers.”

Corsaro said the program, which will be rolled out nationally two week before the start of the 1998-99 school year, has three main parts. First, under the Teen Affinity Program, teens who purchase Pepsi products will earn points that they will be able to redeem at retail stores in the Simon DeBartolo properties.

“We have all the national relationships with retailers that can help provide the value back to the teen consumer,” Corsaro said. “The malls will give the retailers and teens the ability to create a channel of communication.”

A database of club members will be compiled to help provide SBV brands with information on consumers. The information in the database will not be sold, but SBV will use it to help drive its direct marketing efforts and strategic mailings.

The next part of the program will implement a national vending program that makes Pepsi the exclusive soft-drink vendor in all Simon DeBartolo's properties.

“This is going to make them more accessible to our shoppers, and it will provide Pepsi with a platform to test their new vending and rewards program,” she said. “Teen-agers will also be able to use smart cards. These are personalized cards that kids can use in the vending machines to buy Pepsi that will keep track of the amount of money they spend.”

Corsaro said Pepsi will be introducing new vending technology but declined to give any details. She said that the technology will allow the two companies to integrate vending-machine purchases into the rewards program.

Lastly, a series of national promotions at Simon DeBartolo properties will be tied into Pepsi's annual events calendar.

Details on becoming a member of the program still are being discussed, but Corsaro said that purchasing Pepsi products will be the primary way teens will be able to join the club.

The companies expect to reach millions of teens from three large databases through national television, radio and newspaper ads and by using SBV's ATM network along with interactive kiosks in the malls. Pepsi also will use on-can, on-pack and under-the-cap marketing to promote the program.

SBV is using the Mall Perks program as a model for its new program. Mall Perks lets consumers earn points by spending a certain amount of money at a Simon DeBartolo mall. The points can then be redeemed at any retailer in the mall.

“I think with the Mall Perks program, we showed the capacity to manage the technology needed to stage a successful national shopper-loyalty program that was marketed nationally,” Corsaro said. “We planned to get a million members, and we did.”

The Simon DeBartolo Group has properties in 34 states that are visited by close to 1.6 billion shoppers a year.

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