If food and beverage manufacturers feel like pricing piñatas, blame the marketplace.
It may seem that everyone wields a stick these days. Retailers press for funds because they need to compete. Consumers switch brands in order to save. And lately, plenty has happened outside of CPG’s own direct relationships with stores and customers to affect what brands could charge, either every day or on promotion. For instance:
F3 believes CPGers assessing these trends could conclude one of their best competitive tools – one that could enable them to regain some stability and control in a fast-changing, price-driven market – would be trade promotion optimization (TPO). With it, they could better align their own enterprises and trading partners for powerful events, be more efficient, more consumer-centric, precise in targeting, and on point in media use.
Today, successful brand campaigns are about more than isolated trade events and brand sales lifts. They’re more about driving categories by understanding consumer analytics, and developing targeted campaigns based on those insights. Being predictive means being on point and true with more accurate demand forecasts – and resonating with customers who do want to save money, but also want to save time and energy, and sometimes be pleasantly surprised.
Unfortunately, just 15% of CPG companies’ sales departments focus on consumers and effectively use analytics to make decisions, reports IBM in its Trade Planning: Strengthening the Focus on Consumers, Collaboration and Analytics report.
The good news: Those leading 15%ers outperformed their peers’ stock prices by 60% over the last three years. And those leaders were 2.8 times less concerned with getting retail approval for execution, and 1.4 times less concerned with long annual planning cycles, IBM and Kantar found in their global CPG survey done in May 2013.