brandcentric blog

My friends over at CPGMatters published a roundup perspective of what’s important for industry trade and marketing strategists in the new year.  They were also kind enough to quote me several times, alongside folks from McKinsey, PWC, Adesso and Synectics Group.

Not surprisingly, the list of themes is fairly consistent with many of the issues I have written about over the past few quarters.  Some of the highlights include: pricing as a strategic lever, planning price and promotion strategies together, co-opetition with private label and maintaining a total category view when selling to retailers.

All in all, an on-target story that frames up some pretty important industry issues for 2010.  You can access the full story here.

I try to separate the brandcentric blog material from my job at DemandTec, but given the subject matter the lines often blur.  AMR Research recently recognized DemandTec’s market leadership position in account planning and collaborative deal management for CPG manufacturers.  This report (note: AMR client access only) was published earlier this month by Lora Cecere and Steve Steutermann at AMR — two industry analysts that have themselves held brand and sales management roles for some of the leading CPG companies.

This recognition was the result of three solid years of market momentum by DemandTec combined with two strategy sessions and countless briefing calls I held with Lora and Steve.  Rewarding to know that a lot of hard work across the company has ultimately paid off.

As a related side note, it was recently announced that AMR Research has been acquired by Gartner.  The transaction just closed today.  I see this move as a net positive for the industry and look forward to working with the expanded Gartner / AMR team in the weeks and months ahead.

Trade promotion best practices are fairly well established across the fast moving consumer goods industry.  But looking forward over the next 1 to 3 year horizon, two “next generation” themes stand out:

1. Aligning “top-down” strategic trade planning with “bottom-up” account planning processes on a single technology platform

2. Weaving in the shopper insights dimension to what has traditionally been a brand/category focused planning framework

We are already seeing signs of both development themes taking hold among some of the larger CPG manufacturers.  Better technology made more broadly available through SaaS frameworks are fast-tracking theme #1.  And many retailers who have come to recognize the importance of more localized, shopper-centric trade planning are helping to drive theme #2 among the vendor community through richer data-sharing policies.

Note: I recently completed this thought-leadership eBook for DemandTec, my employer, to help articulate what’s on the horizon in the trade promotion space.   Hope you enjoy thumbing through it, and I look forward to any thoughts you care to share on the concepts.  Since the document has some small text, it is best viewed in full-screen mode.

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!

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.