Tag Archives: CPG

Differentiate or be commoditized

This is the second in a series of short posts related to The CMO Agenda research. Informed by recent CMO conversations and CMG Partners‘ collective experience helping top marketers develop marketing strategy, we have compiled a list of seven ideas or jump starters for further conversation. These are meant to spark discussion, ideas, and action as we all enter a difficult 2009.

True differentiation is increasingly hard with faster moving markets and better-educated shoppers. This means the task of constantly exploring whether your products and services stand out in the mind of the consumer is critical.

How will you differentiate for the long-term?

Forecasting the “death of the American Brand” as one CMO said, forces you to think about the private label explosion and house brand strength by the likes of Target and big chains. These house brands are successful because very little separates them from the old standards.

This trend is happening in everything from CPG to Computers to Insurance. Dell rode the wave as it commoditized the PC market, which now tries to find a sure footing again. Even service markets like insurance are seeing this trend as GEICO and Progressive lead the charge to commoditize auto insurance and drive down prices — even large cost-ridden competitors are following them in this practice.

In this tough economic market, for many the first reaction is to discount or attempt to push value and rationale messaging, but marketers need to understand the long-term impact. It is time to reassess the market and understand current strategic impacts to make decisions and trade-offs on how your company can differentiate in a unique way.

Mirror post at cmgpartners.com/blog

Reblog this post [with Zemanta]

Skittles is turning over the brand to consumers

Skittles
Image by Special via Flickr

The maker of Skittles, Mars Snackfood, is turning over the brand to consumers. The new website design at skittles.com, designed by Agency.com, is linked to social media content as its website content. The site includes wikipedia for product information, twitter comments on the home page as news and “chatter”, YouTube channel for video and Facebook to see Skittle friends.

This is a very innovative idea and I give a lot of credit to the courage of the brand managers at Mars Snackfood. Not many corporations would try something like this and I think this point is lost in the blog and twitter chatter of pros and cons.

More importantly, this is a great experiment on turning the keys over on your brand. I would say that Skittles is a fairly one-dimensional product that makes it easier to experiment than say a company like IBM.

The Bottom Line:

Short-term this is a stunt that has and will continue to get a lot of press, giving a renewed voice to one small brand in a crowded category. Success.

Long-term, less sure how this will play out, but I value the experimentation and courage displayed by the marketing team and agencies. Transparency and control are very sensitive topics for marketers and corporations to address head on and Skittles (a little brand that could) is leading here. The lesson for marketers is to watch, listen, and learn from this live experiment happening before us.

Reblog this post [with Zemanta]

CPG vs. Service Marketers: skill-sets and executive hiring decisions

Headgear is mandatory in amateur boxing
Image via Wikipedia

Recently, I posted a question on LinkedIn in a effort to get some outside opinion on marketing skill-sets and how that is driving hiring decisions. While I was underwhelmed by the number of answers I received — three in total — I was intrigued by two responses.

My Question: What are the pros and cons of hiring a traditional CPG marketer vs. a Service Marketer? More specifically, what is the rationale you are using to make this decision.

I further referenced the following examples: CPG – P&G, Unilever, Kraft;  Services – iTunes, Scottrade, Netflix. Primary basis in these examples was a consumer-to-consumer apples to apples comparison.

The Responses:

Tough question – The necessity to qualify past performances and the other integral parts of the hiring process can’t be overlooked, but on a macro level this is [my humble opinion].
The traditional service marketer is able to move left to right brain more fluidly, based on the career choice to associate themselves with something that is fundamentally “untouchable”. The career progression of being successful in any one of your service company examples shows a high level of measurement as well as creativity. In my experience, the ability to think on both sides of the brain has become integral to any top performing marketing exec.
Matt Gill, Senior Vice President, Pile and Company- Executive Recruiter for Marketing Talent

Your service examples are really consumer products in that they are tangible goods. However, to answer your question: a traditional CPG marketer is usually working with a tangible product of defined value and generally a defined brand image. He/she is used to dealing with measureable goals and defining strategies against share of market objectives. Tactical tools are known and also quantifiable, such as promotions, packaging, collateral support. A good CPG marketer knows how to use these tools to best effect. On the other hand, a service marketer is selling something that is usually very intangible and tough to measure in terms of cost and value to its intended users. As Matt says, there is more need for both the left and right side of brain to come up with strategies and programs that will be of relevance to the user. In my experience, successful marketers of intangible services can more easily and effectively cross over to traditional product marketing. It is much harder for a traditional CPG marketer to cross over to selling intangible services. – John Fricks, CEO at Frix Group – Marketing/Strategists

The Bottom Line:

Flexibility, versatility are the highlights in favor of service marketers provided by Matt and John. Matt’s point that top marketing executives need the “ability to think on both sides of the brain” is more associated with service marketers. CPG marketers need to demonstrate they can sell what you can not see — a great analogy to selling the value you can create for an organization.

At CMG Partners, we have been conducting qualitative research with a number of top marketing executives across a number of industries and find that those with a “seat” at the executive table are best at working across the enterprise to drive transformation or change that enables growth.

Reblog this post [with Zemanta]

Service brands: vision of the future?

As a marketer and consultant, I always find it difficult to explain what a brand is to people that are not familiar with the concept (e.g. my mom). This task of explaining things becomes increasingly difficult when the brand is not something you can touch or feel like a service.

Service Brands are populating the landscape today and I feel a strong desire to learn from them as many other marketers should. Why? Because the idea of customer engagement, loyalty, or the idea of employees living the brand are old news to the service brands that get it right. Sure, the work is never done, but they are light years ahead of the consumer packaged goods companies.

I have put together the below diagram as an example of how the landscape of product-to-service brands is complex:

Examples Service Brand Landscape

The Bottom Line:

Three brands to take a page from are: Scottrade, Netflix, and Red Hat.

  • Scottrade has mastered customer service in my opinion. I must admit that I have a couple of accounts with them and within hours of making a major transaction on-line the local office (1 mile away) calls to make sure everything went as I expected.
  • Netflix mastered a simple concept of adapting to consumers lives and taking away the hassle of the rental store and late fees. Simplicity is their virtue. The next chapter of on-line and downloads for movies will likely test them.
  • Red Hat sells “free software”. In the early days, they boxed free software and made it easy to buy. Now they are leading and prospering in the enterprise business software arena and wining more than their fair share. The company’s culture of transparency and openness that is shared with the open-source community which fuels the software is Red Hat’s greatest asset. How else could you actually sell free stuff?

Links of interest:

Chris Grams Blog – Senior Director of Brand Communications & Design, Red Hat

The Official Netflix Blog

Scottrade YouTube Channel

Reblog this post [with Zemanta]

New 16 oz (pint) aluminum bottle from Miller Lite

Miller Lite testing aluminum pint packaging

Miller Lite testing aluminum pint packaging

Would love to get reader reaction to this new 16 oz aluminum packaging from Ball and Miller Lite. They launched and I happen to live in one of the test markets.

  • 16 oz (pint) bottle
  • Packaged as a 9 pack cube
  • Wide mouth opening
  • Entire bottle and cap are recyclable

I know Budweiser has tried the aluminum bottle with a few different brands, but not sure if they have been successful. My guess is that since I have only seen them on occasion is they have not. Why would Miller follow Budweiser’s lead?  Maybe Ball presented them with an offer they could not refuse.


Good wine-in-a-box discovered

Good wine-in-a-box

Good wine-in-a-box

This week with the help of my mother-in-law (kindly known as Gran), I discovered Bandit. I tasted both the Merlot and the Cabernet and prefer the Cabernet as the Merlot is a little too sweet for me.

Besides a great value (33% more wine in my box), Bandit’s packaging is ecofriendly — made from paper and lighter for reduced carbon emissions in transportation.

I would recommend you at least try it once. It is worth it for the chance to have a story that you found a wine-in-a-box that does not suck.

The makers of Bandit are Three Theives.


Our customer minds are an illogical place

New email I just read from MarketingProfs.com looked at a 2004 study that shows consumers perceive longer packaging to have more volume vs. containers that are shorter. They also go on to highlight that unique packaging vs. standard bottles, etc. has the same effect. This is where a lot of “innovation” in consumer package goods is taking place and has taken place recently. I thought it was interesting and wanted to share…

Link to read the email: http://www.marketingprofs.com/news/customer-behavior/index.asp?nlid=641&cd=dmo121&adref=NcbW4a8


Follow

Get every new post delivered to your Inbox.

Join 796 other followers