Judging by the fuss in the wake WPP’s latest results, you’d think that marketing was about to die. The latest results and warnings shouldn’t really haven been a surprise to anyone. But, judging from the tumble taken by the share price, perhaps it was. A cut-back in advertising spend has been on the cards for a while, and while Unilever getting spooked by Kraft Heinz may have refocused that business on some of its excesses, they have purportedly been driving a zero-based budgeting approach for marketing for some time. But while it isn’t news, it should still be seen as a wake-up call to both brand-owners and agencies. Consumer goods marketing is going to have to step up, pronto!
What does this NOT mean for consumer goods marketing?
There have been a number of calls emanating from this apparent existential crisis for consumer goods marketing. First things first, it doesn’t mean that marketing is dead. Marketing is an essential business practice – connecting customers to brands still needs to be done.
And it doesn’t mean that brands should divert their funds towards shopper marketing either (I know, I bet some of you thought I was going in that direction!) But no! Far from it. All the data we’ve gathered suggest that a lot of in-store expenditure suffers from the same problems as consumer marketing expenditure. Poor return on investment, not enough evaluation, and, quite simply, too much generic activity. The problems that plague consumer marketing occur frequently in shopper marketing too.
Some have suggested that the answer lies in brands collaborating more with retailers. But the idea that cozying up to retailers with more joint working and category management also seems flawed. Too much trade investment is geared towards the needs of retailers, and historic trends. Channel and customer investment strategies are based on historic sales and investment rather than where the future may come.
What does this mean for consumer goods marketing?
Over ten years ago, P&G CMO Jim Stengel suggested that marketing is just a little “broken”: we are “applying antiquated thinking and work processes to a new world of possibilities”. While consumer goods marketing has clearly evolved since then, perhaps we need more than evolution? What is required is the acknowledgment that winning consumer goods takes more than a cool brand and a big ad budget. It takes more than a cozy relationship with your major customers, too. And it takes more than rebadging all of that sales promotion activity as ‘shopper marketing’ We need to win, and win on three fronts.
- We need to win consumers hearts and minds, and win pragmatically, consumption occasion by consumption occasion.
- We need to win with our target shoppers: because if we fail there, then the consumer doesn’t get to experience our fabulous product. No matter how cool the ad was.
- We need to deliver incremental value to the key retailers that can help us win those battles.
And we can’t afford to win everywhere. We need to pick our battles. Which consumers do we need to win with, which shoppers, and which retailers, and retail channels?
We need, in short, a better consumer goods marketing that begins to evaluate, to judge, and to look far beyond the siloed worlds of marketing and sales. Isn’t it time to Zero-Based-Budget the whole of marketing, shopper, trade, category and retail? It’s time for brands to see consumer marketing and shopper marketing as two equal parts of the marketing game, rather than seeing shopper marketing as just another way of dealing with retailers?
A better approach to consumer goods marketing – why now?
And why does the industry need this now? Because the industry is under more pressure than ever before. Consumers and shoppers now have more choice than ever before. The old world of limited numbers of manufacturers selling more to fewer and fewer retailers seems to be over. Different shoppers are using different channels for different missions. And things are changing at an alarming rate. The one size fits all approach, always an approximation, simply doesn’t work. Investing in all consumers and shoppers across all channels is, it appears, simply unaffordable. The demands on marketing and sales expenditure are growing faster than the sales that they bring.
Yes, some of the answer lies in improving shopper experience (but that doesn’t always mean what you think it means). It also means improving the consumption experience too. The fact that household brands are now sold at less than half price is a brand problem as much as it is a trade issue. This new paradigm requires us to transform the way we think about consumers and shoppers and retailers: and asks us to think through all of these things simultaneously, in an integrated manner. Maybe it’s time to rip the organization chart up and start again with something quite different – something that enables a customer-centric view of the world (and by that, I mean three customers – consumer, shopper, retailer) – rather than the fragmented view many organization currently have.
It’s time to take a new look at how brands are marketed, and how brands can make effective investments across consumers, shoppers and retailers. If you’d like to know how to implement these changes in your organization, please get in touch.
We’re in for a bumpy ride, no question about it. Are you ready?