Targeting Green Consumers
It seems every major CPG manufacturer has jumped on the green bandwagon with environmentally friendly packaging, business practices and even new brand platforms. But does this flight to greener pastures actually return an investment? Is the brand reaching the right consumer and shopper demographic? Experian’s GreenAware servicehelps marketers answers these questions and more. Experian has developed a consumer segmentation around four tiers of “greeness”, allowing marketers to uncover opportunity areas and directly reach the greenest consumers.
It’s exciting to see very targeted one-to-one marketing make a big push in to CPG-land, but my experience to date is that not all CPG marketing organizations are very well set up to take action. Some very large manufacturers don’t have a central team that “owns” the database. Consequently, marketing programs deliver excellent, fresh consumer data that often goes stale. Conversely, some smaller, more nimble CPG marketing organizations I have worked with have the right people, tools and processes in place to scale relationship marketing programs. Scary, but true.
Trade Promotion Excellence from a Retailer’s Perspective
On May 21 at 11 AM Pacific, John Carlson from Cannondale Associates and I will appear together on a webinar on trade promotion effectiveness. You can click here to register for this event. John’s insights are based on a set of one-on-one interviews that Cannondale conducted with category management and merchandising executives from large grocery retailers. These interviews focused on which manufacturers set the bar for trade promotion management, and what specifically the manufacturers were doing to distinguish themselves.
Cannondale was kind enough to invite me to provide DemandTec’s perspective on what this means for the CPG manufacturer community. I’ll plan to tee up some pretty tactical recommendations to help put into action Cannondale’s observations. As I started to sketch out my talking points, I ran a quick analysis to track share price performance of the short list of recognized manufacturers. Interestingly enough, every member of the group outpaced the S&P 500 in a trailing 2 year comparison. It would be unfair to attribute this performance to just effective trade promotion practices, but clearly there is a common thread with how this group of leaders manages their respective businesses.
The webinar will be hosted and facilitated by our friends at Consumer Goods Technology (click here to register). Hope to see you there!
Trade Promotion Marketing in a Digital World
Brett Goffin from Google spent some time with Bob Houk, Executive Director of Trade Promotion Management Associates (TPMA), discussing how and when the trade promotion discipline will adapt to the digital world. Some very interesting opportunities for sure.
As Bob and Brett discuss, the trade promotion discipline is deeply rooted around driving value for both trading partners — manufacturers gain more prominent placement for their products, while retailers monetize lucrative in-store marketing vehicles. This fair trade has taken place for at least the last century, and even more recently both parties have doubled down their investments to scale shopper marketing initiatives.
But taking this a step further, how do multi-channel retailers monetize available trade dollars in their online storefronts? Will manufacturers realize the same value from a “virtual” end cap as they do for a physical end cap? The industry consensus points to a resounding “yes”, and this model is starting to take shape. Don’t be surprised to see a case study or two on this subject at an upcoming TPMA event.
For a primer on trade promotion marketing, an overview of Bob Houk and the TPMA, and a quick history lesson on the Robinson-Patman Act, check out Part I of the video series.
Jim Stengel Act II
I’ve always admired Jim Stengel, former Global Marketing Officer from Procter & Gamble. His focus on connecting with consumers is central to just about every message he shares with CPG marketers and agencies. It’s a consistent and powerful statement for sure.
Jim recently gave a great interview with Brandweek and not surprisingly he remains busy consulting, keeping healthy, and working on a new book titled “Packaged Good”. This should be a great read when it hits the press next year.
Collaborative deal management is good for the industry (and consumers too)
Next Tuesday (April 7) I will share the stage at the Grocery Manufacturers Association conference in Miami with two DemandTec customers — Kraft Foods and Safeway — to discuss the business benefits of collaborative deal management. We’re expecting more than 250 attendees including CPG manufacturers, a few grocery retailers and a smattering of technology vendors, consultants and media pundits to join us for this session.
So what is deal management? In a nutshell, it’s how manufacturers and retailers agree to which in-store promotions make the calendar, at what terms, for which products and during which time periods. The traditional deal management process is pretty inefficient involving a combination of paper deal sheets, spreadsheets, faxes, courier deliveries and phone calls…resulting in a lot of wasted time and energy. Each retailer uses a proprietary deal sheet and deal term nomenclature, forcing the vendor community to adapt to 20+ unique processes.
Online, collaborative deal management offers a more efficient way for big retailers (like Safeway) and their entire ecosystem of manufacturers (including Kraft Foods) to bring sanity to the process. Paper deal sheets are now a thing of the past. Deals are submitted and negotiated online with deal status and comments fully visible to both parties. No lost deals, and no anxious vendors. Meaningful efficiency gains are realized by both parties, allowing everyone to focus on more strategic activities. DemandTec’s Deal Management software service leads the industry, with retailers accounting for roughly 33% of US grocery ACV using (or deploying) the software service.
So collaborative deal management is definitely a good thing for the industry. As more retailers migrate to an online, collaborative process life gets a little easier for everyone. And this is ultimately a good thing for consumers. As trade plans are entered and negotiated more efficiently, more working dollars can flow to the shelf to support an incremental program or two.
If you plan to attend the GMA conference, we’ll see you in Miami!
Social media app for bathrooms…courtesy of Charmin
This is a clever little application that I can actually see providing value to busy families on the go. A recent writeup references an iPhone app and BlackBerry app are also available for added convenience. This quote from the Charmin brand manager pretty much sums up the strategy for sitorsquat.com:
“Our goal is to connect Charmin with innovative conversations and solutions as a brand that understands the importance of bringing the best bathroom experience to consumers, even when they’re away from home,” says Jacques Hagopian, brand manager for Charmin.
Excellent!
Getting the Mix Right
Now more than ever marketers are evaluating budget allocation: where to invest, why to invest, and what to expect out of the investment. Traditionally marketing mix allocation was a mashup of last year’s plan and a few top-down financial objectives. There was little in the way of science, program simulation and predictive planning found in the allocation decision process.
A cottage industry of agencies emerged. Firms like MMA, Hudson River Group and Analytic Partners introduced modeling science to mix planning. Other strategy consulting shops like Bain and McKinsey developed marketing mix analysis frameworks. In both cases, the deliverable was either a 2 inch thick binder of recommendations and/or a “what if” tool built into Microsoft Excel. Nothing scaled beyond the initial deliverable.
There is a new breed of marketing mix modeling technology that is starting to shift how CMOs are managing their marketing investments. While the underlying science is consistent with what the cottage industry players provide, the step change is in the delivery. This new breed is delivered via Software-as-a-Service, providing always-on access, frequent model updates and broader visibility throughout the enterprise. Companies like M-Factor and Breitley are leading the charge with promising customer traction.
The big unknown here is whether marketing leadership is ready rethink how they approach mix allocation. By and large, mix modeling is still an annual (and perhaps bi-annual…maybe quarterly) process that then drives a lot of downstream decisions. Mix allocation is not really thought of as a fluid process to accommodate the week-to-week noise that filters in from the market. But the upside is potentially so big if the industry does embrace this new way of thinking. And some big CPG manufacturers have put a stake in the ground and are starting to shift behavior to be more in line with a fluid, “always on” approach to mix management.
The tools are upon us and the economic case is starting to gel for a different approach to marketing mix allocation. It should be exciting to see this new and emerging space take shape.
CPG Industry News
- P&G awarded top spot on Effie Effectiveness Index May 25, 2012
- Kraft tests touch-screen vending machine in Australia May 25, 2012
- Why some credit Ben & Jerry's for the evolution of Unilever May 25, 2012
- Kraft and Weber offer tips for summer grilling May 25, 2012
- Kabobs are the star of summer menus May 25, 2012
