IBM Taps Crayola License to Score Software Distribution at Walgreens

Tobi Elkin

Entering a big new retail channel, IBM’s Consumer Software Group has leveraged its Crayola-branded kids software line to gain real estate in the Walgreens drug chain.

IBM next month will roll into more than 2,500 Walgreens stores with four Crayola titles. The move follows a successful test during the back-to-school period that originated from connections within the Crayola brand’s parent, Binney & Smith, whose crayons and other school supplies have a big footprint in the drug channel. Walgreens, which begins featuring Crayola titles in a special standalone display next month, will also extend planned holiday promos to Walgreens.

Diana James-Cairns, vp-marketing for consumer software, said IBM is aggressively looking to open new distribution channels, including drug chains.

Drugstores, as their pharmacy profits continue to be squeezed by the price controls of managed care providers, have been looking to other vendor categories to bring consumers into stores. Walgreens began dabbling in software sales last Christmas and, by carrying Crayola, is hoping to expand the category in its stores, said a representative for the Deerfield, Ill.-based chain.

Meanwhile, IBM will cross-promote Crayola with its other kids’ software brands ramping up to the holidays. Building on momentum from back-to-school promos, the company will offer straight rebate checks on its Crayola, Edmark and World Book educational titles. The rebate check program on IBM’s educational titles starts Nov. land offers $10 off Crayola title purchases of $14.95 and higher; $20 on Edmark buys of $24.99 and higher; and $30 off World Book titles $24.95 and up. IBM will also offer rebates on its Via Voice software titles and its new Start-up for E-biz.

“This holiday we wanted to go with price-based promos,” said James-Cairns. “We wanted not to be lowering street prices.”

The rebates will be flagged on-pack, with end-cap signs, coupon pads, palette displays, and in co-op advertising with the logos of retailers like Staples, CompUSA, Office Depot, Office Max and Best Buy.

IBM also is mulling strategies to strengthen the positioning of Consumer Division products: Aptiva desktop and ThinkPad laptop PCs, software, PC peripherals, and other products and services.

Under Mike Braun, the division’s new gin, discussion is said to be coalescing on a new retail and identity-based umbrella strategy for 1999. Such a move would likely mean IBM’s product groups will work more closely together than ever.

COPYRIGHT 1998 BPI Communications, Inc.

COPYRIGHT 2000 Gale Group

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