It may be because my daughter is 5, but we were well aware the heroines were princesses. My daughter already had an Elsa doll before we saw the movie and the merchandise has been everywhere but I agree the trailer did not mention the word princess and mention that the heroines are princesses. At least not that I can recall.
I'm sure others might weigh in too but this is my take. Is it a "princess" movie because the heroines are princesses? Yes, definitely. Is it a traditional "princess" story? I didn't really think so. It did have some aspects of it but it was definitely not the main focus of the movie. At least not to me.
I'm sorry your children did not enjoy it. I think Disney does not always do a great job with their trailers when it concerns princesses. They seem to walk a fine line between letting their core "princess" market know that it is their type of movie without alienating or keeping away the market that stays away from anything princessy. I think they started that trend with the marketing of "Tangled" when they changed the name from "Rapunzel" to "Tangled."