brandcentric blog

My first guest blog entry comes to us from Mark Ahrens, VP of Product Management at The Nielsen Company.  Mark is a career marketer with a strong CPG industry orientation.  He shares a very interesting perspective on the tools CPG brand managers ultimately want (and need) to mine data and develop informed business decisions.  Thanks for the entry, Mark!

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Given Amazon’s recent stellar financial performance, few people remember the collective mocking of CEO Jeff Bezos when he proclaimed, during the Internet boom of the 90s, that “Wall Street (read: profits) is largely one huge distraction.”  At the time, many thought him to be another naïve webbie who couldn’t, as they say, monetize his business model if it bit him on the you-know-what.

Well, the real genius of Bezos was not that he was able to amass a wonderfully efficient network of distribution centers.  His genius wasn’t in the clever deployment of a data mining algorithm-collaborative filtering–into the buying process nor was it in being an early pioneer of shopping cart technology and e-commerce breakthroughs (e.g. One-click Shopping).  His real genius was that he assembled all of this technology as a means to an end.  Bezos’ end game, so prescient when viewed over a decade later, was to enable a consumer to purchase almost anything they could think of, have it delivered to their house overnight, and do so at a low price point – become the Wal*Mart of ecommerce.

Now, let’s take Google.  Millions of people have specified Google as their default when they launch their web browser.  Is it because they really like its creative interface?  Hardly.  Is it because Google has one of the world’s most powerful and sophisticated search engines?  Sort of… The real reason people set their web browser to Google is because they know that if they need to find something on the web, launching Google will help them find it very quickly, reliably, and easily.  Google accomplishes this simple-sounding task so well that to “Google-it” has become part of our vernacular.

The two examples above share a common thread.  Both Amazon and Google solve a first-order need state for users in a way that is faster, simpler, and better than was previously possible. At this point, you might be asking “What do Amazon and Google have to do with the CPG industry?”  They serve as reminders that technology, by itself, doesn’t solve the day-to-day tasks of CPG knowledge workers. 

No Assistant Brand Manager wakes up in the morning thinking their job is to run the latest report or produce mind-numbing rows and columns of numbers.  They don’t wake up thinking how great their BI reporting tool or data warehouse is. Rather, they wake up (or at times, are kept awake) wondering “Where’s the next big product idea?”, “How am I doing versus plan?”, or “How’s my shelf price gapping to Private Label?” 

CPG knowledge workers want, literally, to be able to “Google” for high-value, business insights. They don’t want to have to track down arcane DB names, memorize multiple passwords, or master complex navigational paradigms across multiple systems both within and beyond their corporate firewall. Rather, they want systems that “talk to one another”…not exact look and feel, but a shared context when moving from one system to another.  They want help in interpreting what caused what to happen and what should they do next. They want the proactive answers to questions they didn’t even enough know to ask.

Solving the needs states above for CPG knowledge workers will certainly involve a broad array of technologies.  For instance, intelligent, scaleable DB design, including both physical and federated integration, business-issue data marts, and a robust meta-data management system will certainly play a large part of any such solution. Other technologies such as data visualization, expert systems, embedded data mining, modeling and simulation, and social media-based collaboration will play an important role as well.

However, as we have learned from Amazon and Google, it will not be the brute-force assembly of technological piece parts that separates winners from losers in the CPG vendor marketplace.  The winners will have focused its technology laser-like against the highest value tasks of a CPG person’s day-to-day job.  The blueprint for winners will include a solution that tells someone What happened?, Why it happened?, and What they should do about it? With the same simple elegance as the search answers they currently receive from Google or the purchase experience of Amazon.

Upon reflection, Bezos’ vision is really only a present-day derivation of Ralph Waldo Emerson’s old adage-build a better mousetrap and the world will beat a path to your door. Those vendors who provide the better mousetraps to the CPG industry’s business problems and provide them in a way that is faster and simpler for users to consume and collaborate will capture the marketplace.

I’ve adapted this visual framework (courtesy of David Armano) to capture a very simple, yet important point about the role technology plays in the world of CPG marketing.  When you boil it all down, technology is really nothing more than a means to an end to driving richer (and more profitable) consumer relationships.

Throughout the past several decades, business automation, processing power, analytical software, the internet and social media have all introduced disruptions to how CPG marketers achieve their goals.  For example, instead of relying on gut instinct or store audits to infer consumption trends, gobs of store-level data is available for analysis and interpretation.  Similarly, rather than simply pushing media announcing  a great new product out through a few national broadcast TV channels, marketers are now tapping into social networks to do the heavy lifting for them. 

In both examples, technology is helping to augment, even supplant, how a marketer can do his or her job.  But it doesn’t replace the ultimate, and very necessary, objective of developing better insight and wrapping ourselves around the consumer.  So at the end of the day, each new advancement in technology helps marketers to become more consumer-centric - which is ultimately a good thing for everyone.

One thing has been consistent during my 11 years in the CPG industry: marketing, sales and brand professionals generally aren’t big fans of SAP.  So what’s up with the lackluster sentiment for one of the backbone systems used across the enterprise thousands of times a day?

I propose that part of the issue is (or at least was) a usability problem combined with an unfortunate branding challenge.

During my first week on the job at ConAgra Foods, my boss told me she would walk me through the “sap” reports.  And she said this with a detectable tinge of disdain in her tone.  “Sap” I thought?  I had no idea what “sap” was at that moment, but I already didn’t like the sound of it.   As a brand marketer myself, I felt fortunate that “Wesson Cooking Oil” didn’t have any negative inferences baked into the brand name.

After quickly discovering that “sap” was shorthand speak for SAP, I got to dive into the report query interface.  Not pretty.  Not only were we dealing with greenscreen technology, but the commands I needed to learn were cryptic and cumbersome.  Multiple cheat sheets were required just to get basic inventory and sales rollups.  It was frustrating to say the least.  It didn’t take long for the rest of my cohort of Associate Brand Managers to start referring to the “sap” reports with the same tinge of disdain in our voices.

Adding fuel to the fire, it didn’t help that Hershey Foods very publicly blamed a botched SAP implementation for a massive miss in quarterly sales and earnings.

Fast forward a decade.  While I’m no longer an SAP user, I assume that the interface issues have been largely corrected and that usability is not a major challenge.  Perhaps not?  A trusted colleague who works for a well known CPG manufacturer has been sharing his occasional SAP frustrations via Twitter.  These tweets aren’t too frequent, but frequent enough to remind me of my own frustrations a decade earlier.

I truly hope that SAP can nail the user experience.  Sure, sales and brand folks are tough-to-please customers, but software design has made great advances during the past 10 years.  SAP should not be losing points due to usability.  As for the “sap” branding issue?  That’s a tough one.  But a good old-fashioned “how can we help you” outreach campaign to the user base couldn’t hurt.

Trade promotion management systems are a lot like the plumbing inside the walls of a beautiful home.  If the pipes are installed properly, the kitchen sink, dishwasher and showers all work as they should.  If the installation is flawed, small leaks can quickly escalate into bursting pipes and damaged walls.  Major reconstruction, while painful, is often necessary.

Such is the case with a flawed TPM installation.  Dial experienced this first hand, with a trade funds management system implementation that was wreaking all sorts of havoc.  Jamie Tenser does a great job of recapping all the gory details that were shared at the recent TPMA Annual Conference (I was also in Scottsdale to see this live presentation).

Fortunately Dial brought in the TPM experts from Booz & Company to quickly assess the situation and perform surgery.  From my experience, one of the key insights for a successful software or digital marketing project is to really be clear on the process and objectives before talking technology.

Bob Baker from Dial shared a similar view: “Don’t talk about the system. Talk about the activities first. Then determine what tools are needed. The last step is how the tool would work.”

Couldn’t have said it better myself.

As a young buck associate brand manager at ConAgra Foods, I developed a deep appreciation for how big brands stay competitive at retail.  My assigned brand, Wesson Cooking Oil, enjoyed a strong affinity with loyal consumers, near ubiquitous distribution, and the halo effect from a long-time celebrity spokesperson, Florence Henderson (aka “Mrs. Brady”).  We had a sizable consumer marketing budget to build off an established base and compete for consumer mind share against Procter & Gamble’s Crisco brand.  This was the fun, “creative” part of brand management.

But what I quickly learned is that building great brands also requires sound business management and a command of the data.  Nowhere was this more important than on the cooking oil business, where a good chunk of retail sell-thru takes place between October and December — holiday cooking season.  Getting the trade marketing plan right meant securing all feature and display activity during the right weeks with the right retailers.  It meant making, or even exceeding, your number.  But getting the trade plan wrong meant a potentially devastating peak season was in store.

Fortunately for me ConAgra was (and still is) a pioneer in using predictive planning software to build better trade plans.  This made my job somewhat easier. We used two first-generation tools to predict promotion events and our overall trade plans, appropriately called PROMOMAX and TRADEMAX.  With a few key inputs such as trade allocation, product mix and merchandising assumptions, the software would spit out our expected volume and profit for a given scenario.  This was a Microsoft Excel model on steroids.  We didn’t blindly follow what the software told us to do, but we sure paid close attention to the simulated results.

So my early lesson as an ABM was that big brands need both art and science to thrive.  Strong, creative consumer marketing is critical, combined with a fundamental understanding and use of data and technology to drive the trade.  Left brain/right brain thinking at its best!

As a funny side note to this story, I had the chance to meet the entrepreneur behind PROMOMAX and TRADEMAX my first day on the job at DemandTec.  Jose Anstey, who founded Applied Information for Marketing (AIM), and I were at an industry conference in Tampa Bay.  It didn’t take us long to put two and two together.