GMA IAR - November 2009

What’s the buzz about your brand online? Hyperlinked consumers with a gripe about your product can vent their complaints in very public spaces in 140-character tweets or Internet blogs for all to see.

Is your company prepared? It is imperative today that companies have a corporate advocacy presence on social networks. Companies also must nuture loyalty to their brand online and place great importance on speedy and appropriate responses to consumer postings.

GMA pulls together all the opportunities – and the challenges – of leveraging the social media in a concise, expert-led day of intensive training session at the first-ever GMA CPG Social Media Forum Dec. 9-10 in New York City.

An impressive program includes a keynote by CEO of Tremor Steve Knox on innovative word-of-mouth marketing service from The Procter & Gamble Company. Supermarket Guru, columnist, consumer marketing expert and tweeter Phil Lempert moderates a panel on using social media to protect and enhance brands. He is joined by Julie Craven, vice president, corporate communications, Hormel Foods Corporation, and Rick Tarrant, CEO, MyWebGrocer.

President of SheSpeaks Aliza Freud shares tips on building social media communities, and William MacLeod, senior partner at Kelly, Drye & Warren LLP, discusses Federal Trade Commission rulings on disclosure, paid bloggers, legal liability and more.

The industry’s first-ever Trading Partner Alliance (TPA) Supply Chain Conference Jan. 31-Feb 2 at the J.W. Marriott Desert Ridge Resort in Phoenix unites manufacturers and distributors in a three-day forum spotlighting the latest supply chain issues, trends and case studies.

The conference combines GMA’s annual Information Systems and Logistics/ Distribution Conference (IS/LD) and FMI’s yearly Supply Chain Conference for the first time.

Peter DeNoia, director of logistic operations and customer development, Kraft Foods Inc., and John Patriquin, director U.S. supply chain services and solutions, Delhaize Group U.S.

One in seven Americans struggled to get enough to eat in 2008, the U.S. government announced earlier this month. The numbers are higher in 2009 as the recession deepened and unemployment climbed.

The hunger crisis is doubly tragic as Thanksgiving approaches, drawing attention of top national leaders. President Obama called the highest total in the numbers of hungry in 14 years “unsettling” and pledged to reverse the trend. Vice President Joe Biden this month helped serve food at a Washington, D.C. homeless shelter to spotlight the unprecedented increase in the number of individuals receiving food assistance.

CEOs of GMA member companies are stepping up with their own hunger programs – many of which began decades ago.

True Thanksgiving Miracle: “The rich miracle of Thanksgiving this year is not a gigantic feast celebrating the harvest meal of the pilgrims and their Native American neighbors,” Industry Affairs Vice President Stephen Sibert said. “Rather it is the tremendous effort being made by our food companies across the nation to extend America’s traditional bounty that Thanksgiving epitomizes to its growing numbers who do not have enough to eat.”

GMA has partnered with the largest national network for hunger relief, Feeding America, for almost 30 years, since that organization was founded under the name of Second Harvest. At GMA’s Executive Conference in late August, the association pledged renewed commitment by its organization and its member companies on behalf of the nation’s hungry.

In an effort to spotlight these programs, Sibert said GMA’s annual December reception in Washington for member of Congress and high-ranking Washington officials is dedicated to the Feeding America partnership. Also, GMA Industry Affairs staff is volunteering during December at a Washington, D.C. food bank.

(Editor’s note: What is your company doing to reduce the incidence of hunger in America? In the coming months, the Industry Affairs Review would like to highlight your programs. Send details and contact information to pgiles@gmaonline.org.)

GMA Senior Vice President Stephen Sibert (left) joined three other colleagues in a panel discussing winning trends of the leading CPG companies today as part of the 2009 PepsiCo CPE Conference Nov. 11 at PepsiCo’s headquarters in Purchase, NY. More than 500 industry executives attended the conference.

PricwaterhouseCoopers Senior Partner, American Retail and Consumer Industry Leader John G. Maxwell moderated the panel, which also included Senior Vice President and CFO of PepsiCo Americas Beverages Jane Nielsen, Director of PricewaterhouseCoopers Retail and Consumer Advisory Practice Patrick Yost and Vice President of Karabus Marty Weintraub.

Panel discussion topics included the impact of the economic crisis on leading CPG companies, how these companies were driving growth and maintaining sustainable cost reductions. Also corporate social responsibility was explored, as well as the evolving relationship between CPG and retail companies today.

Principals at Bain & Company Kara Gruver and Kristy Cunningham presented the findings of the GMA Sales Agency Committee-sponsored report Maximizing the Impact of Outsourcing: How CPGs Can Best Use Sales and Marketing Agencies in a Changing Environment at a meeting earlier this month at GMA’s MSM Conference in Phoenix.

The report, also commissioned by the Association of Sales and Marketing Companies Foundation and developed by Bain & Company, points out that nearly two-thirds of CPG manufacturers that outsourced to sales and marketing agencies reported a positive impact on selling costs after switching. (For more information on the report, see GMA Research, below.)

GMA Sales Committee meeting at the MSM conference earlier this month heard Partner Matt Egol of Booz & Company outline the findings of a major new study – Shopper Marketing 3.0: Unleashing the Next Wave of Value. (See GMA Research below.) The study was sponsored by the GMA Sales Committee in cooperation with Booz & Company and SheSpeaks. Additionally, A.T. Kearney’s Joy Peters and Sumit Chandra outlined GMA’s strategic review results, and GMA Senior Vice President Stephen Sibert presented an update on the GMA-FMI Trading Partner Alliance objectives. For text of the shopper marketing study, click here.

GMA’s annual MSM Conference drew more than 275 senior-level marketing and sales executives from CPG manufacturers, sales agencies and all channels of retail distribution Nov. 2-3 to hear how to leverage consumer insights and use collaboration to grow business.

Left to Right: Tracy VanBibber, senior vice president, chief customer solutions officer, The Dial Corporation; Grant LaMontagne, senior vice president and chief customer officer, The Clorox Company; Dennis Belcastro, vice president, customer development and industry affairs, Kraft Foods, Inc.; and Linda Hefner, executive vice president and chief merchandising officer, Sam’s Club.

GMA’s Information Systems Committee launched a report on steps companies can take to maximize returns on innovation and lifecycle stages to create winning products that consumers want to buy. In partnership with Accenture and Information Resources Inc. (IRI), the IS committee unveiled Product Innovation and Growth: Getting the Winning Product in the Right Place at the Right Time for the Right Duration at a special session at the MSM conference featuring Laura Barry, vice president of consumer insight and shopper engagement, Kraft North America; Thom Blischok, president of IRI; Mike Gorshe, partner, consumer goods and services, Accenture; Terry E. McDaniel, president and CEO of The Inventure Group Inc.; Dennis Mullahy, group vice president, merchandising and supply chain management, Meijer Inc.; and Darian Pickett, executive vice president of sales optimization, Acosta Sales and Marketing. An overview of the report will be available in the next issue of Industry Affairs Review. View now by clicking here.

From Kansas to the East Coast, ALDI operates more than 1,000 stores in 30 states. A top 25 U.S. food retailer (Supermarket News, 2008) ALDI has grown without merger or acquisition, serving 18 million customers a month.

As we continue to grow, ALDI is looking for suppliers interested in working with us.

Our philosophy is the foundation of our less-is-more approach to grocery retailing. Everything we do, from selecting suppliers to scouting locations; to building and operating stores; facilitates savings substantial enough to impact everyday living.

To respond to growing demand, ALDI opened 100 new stores in 2008 and will open 80 in 2009 and 2010. ALDI also entered the Florida market in 2008 and will enter the Texas market in 2010.

Just what is the secret to our success? We concentrate purchasing power, carrying approximately 1,400 of the most frequently purchased grocery and household items, 95 percent of which are ALDI select brands. As a result, we get the lowest prices from our suppliers—and pass the savings on to our customers.

Our quality standards are stringent. Every product we sell must match or exceed the leading national brand in taste, appearance, and/or performance. Our premium produce is shipped faster and smarter, so it comes to your table fresher and less expensive. We’re so sure of the quality of what we sell that we back it with our exclusive Double Guarantee, so customers can always shop ALDI with confidence.

In the last 10 years ALDI has more than doubled the number of items in our stores from 700 varieties to more than 1,400. As we continue to grow, ALDI is looking for suppliers for both our food line and general merchandise line to grow with us. The majority of our everyday products are produced in the U.S. with a range of suppliers from Fortune 500 suppliers to small family-owned local suppliers. Our primary focus when working with suppliers is quality and service.

Partnering with ALDI is an excellent way to increase sales by producing products under one of our labels. Our select assortment model offers you monopoly on the shelves and the opportunity for volume is huge. For instance, our unit sales of 15.25 ounce canned whole kernel corn outsold the Green Giant® brand by 34 percent (IRA data 52 weeks ending Jan. 27, 2008).

Following the no-nonsense approach, ALDI works directly with our suppliers, not brokers. We pay our bills on time … always, and do not take unwarranted deductions. There are no shelf policies, no rebates, coupons, advertising, in-store displays or slotting fees. You can also save money on freight through the use of our centralized distribution model.

There has never been a better time to join ALDI and be part of growth. For more information about how to become a supplier visit www.aldi.us or contact supplierinfo@aldi.us or 630-482-5244.

Even in hard economic times, consumers are making purchases on factors other than price. A new GMA Sales Committee survey done in cooperation with Booz & Company and SheSpeakes found that nearly half of food and 60 percent of health/beauty/household shoppers bought their preferred brand even if less expensive products were available – frequently using coupons or price promotions to justify the product decision.

The study – Shopper Marketing 3.0: Unleashing the Next Wave of Value – focused on what works best in-store, how in-store marketing compares with out-of-store, and how to bridge the measurement gap. Some 3,600 shoppers participated in the comprehensive survey spanning multiple retail formats and covering categories that represent 80 percent of GMA members’ sales. Additionally, interviews were conducted with leading CPG manufacturers, marketing agencies, varied format retailers in addition to analytics firms and in-store media providers.

The survey notes that while the importance of shopper marketing continues to grow among CPG manufacturers and retailers, most manufacturers have not yet aligned shopper marketing with other advertising or promotions to reach consumers.

This results in a disconnect in marketing messages and missed opportunities to drive sales. This gap also makes it more difficult for manufacturers and retailers to concentrate on establishing marketing priorities overall and to determine where or whether to focus spending across a range of marketing opportunities. Integrating and quantifying shopping marketing results is critical if industry companies are to take advantage of this fastest growing and most promising area of marketing spend.

Using sales and marketing companies costs 23 percent less than employing a direct sales force at retail, a study sponsored by the GMA Sales Agency Committee and the ASMC Foundation. The study, conducted by Bain & Company and entitled Maximizing the Impact of Outsourcing: How CPGs Can Best Use Sales and Marketing Agencies in a Changing Environment, was released earlier this month.

The report findings are based on survey research and interviews and provide analysis of performance results of CPG companies before and after outsourcing to sales and marketing agencies.

In addition to the cost savings, 56 percent of surveyed companies that outsourced to sales agencies reported a positive impact on merchandising as well. After moving customer headquarter selling activities to sales and marketing agencies, 73 percent of small-cap companies surveyed had a positive impact on overall sales and 45 percent reported a positive impact on selling costs. Large-cap companies surveyed also reported reduced selling costs.

This month’s publication follows a review of sales agency utilization published in 2007. Both studies are available here.

Retail Brand Modeling Helps Companies Meet In-Store Objectives

By John Dranow, President, SmartRevenue

In the good old days of limited competition and information, big media worked to drive pre-store decision-making. Mom shopped at the local grocery store and shopped all the aisles. Traditional research and media planning were sufficient to enable big brands to win.

Today, we are confronted with 24/7 information, millions of products, a fragmented media and multiple retail channels. This has resulted in shoppers increasingly making more decisions later in the purchase process. In the challenging present, more than 50 percent of purchase decisions are made in-store, requiring brand differentiation at the point-of-purchase. As a consequence of this shift, understanding where the purchase decision is made and developing and activating effective pre-store and in-store marketing is essential to drive profitability for manufacturers and retailers.

To provide optimized marketing and merchandising strategies and solutions for consumer goods companies and their retail customers, SmartRevenue has developed a “Brands to Retail” system that integrates insights, planning, innovation and quantification.

We begin with differentiated insights to identify which decisions are made pre-store and in-store and what drives those decisions. Purchase drivers are integrated with point-of-purchase behaviors and product selection to develop shopper segmentations by category, which are linked to existing consumer segmentations.

Purchase understanding facilitates internal alignment of sales, marketing, and innovation to drive product development plans to meets and exceed shopper expectations, and resource allocation plans to optimally target pre-store and in-store purchase decisions.

Activation of marketing, sales, and innovation plans require the strategic channeling of resources to meet tactical requirements: Internal teams and their resources must be brought into alignment, and external suppliers must be identified and coordinated with internal teams.

Finally, through the analysis of sales data and control-store shopper insights, the performance of marketing, sales and innovation plans are quantified and evaluated to assess their effectiveness and calculate ROI.

By knowing where the purchase decision is made, “Brands to Retail” provides an integrated approach to optimize pre-store and in-store marketing and merchandising, and provide retail leadership to drive categories in a highly competitive marketplace and media space.

Contact: SmartRevenue

Source - Planet Retail - www.planetretail.com