May 12, 2009 | Management, Marketing
Category Management is an FMCG term being bandied around so much that is coming to mean nothing in particular, because it is so widely used.
In its genesis, it was an expression used to describe the manner in which retailers managed their limited shelf space and range in such a manner to maximise sales and margins while best meeting their particular customers needs.
However, it has since evolved into another tool in the retailer arsenal to extract “rent” for shelf space from manufacturers, which often has little to do with meeting customers needs. This focus has left suppliers, particularly those to FMCG retailers, building a management and marketing infrastructure that focuses on the demands of the retailers, often to the detriment of their consumers. The rise of housebrands is evidence of the abrogation of FMCG suppliers around the world from the task of innovating to engage consumers, and putting resources into paying retail rent.
In many countries the power of the mass retailers is daunting, but they should not absolutely dictate, after all they are essentially sales orgainsations, not marketing ones, they rely on their suppliers for the bulk of their marketing, and have little interest in developing market and consumer behavioral intelligence .
Focus first on what your consumers need, both today and as their needs evolve, and the rest will follow.
May 21, 2013 | Branding, Category, Marketing, retail, Sales, Small business
I am old enough to remember doing warehouse withdrawals by hand. Heavens.
Then we had early data managers automate the process, an evolution that pottered on for 25 years, through to category management based on scan data, some of which can dive remarkably deep.
However, we ain’t seen nothing yet!.
The combination of retail data, personal card data, social media and the proximity capabilities of mobile applications will set off another revolution promotional and sales strategies.
Some of the technology is becoming pretty standard, the components of so called Big Data, and there is plenty around to tell you what to do, like this McKinsey article.
However, it takes resources and deep capabilities to effectively leverage the emerging possibilities, so how do SME’s compete?
It seems there are a few strategies that will become mandatory for those who actually want to survive:
- Develop scale. This does not just mean individual enterprises, which is by definition not possible for SME’s, but I see the emergence of “data co-operatives” groups of category marketers (some may even be competitors) who contribute to resourcing the necessary data science.
- Develop deep domain knowledge. This is like suggesting breathing is good for health, but the transitory and superficial culture surrounding product and brand management counters deep knowledge. This is a challenge of leadership, and personnel management, difficult topics for most businesses up to a substantial size. It is however, an opportunity to absorb the skills of the baby boomer marketers that are around, whose Intellectual Capital is becoming available for hire, as a contractor, consultant or often as a Director.
- Do extensive “Environmental Research“, and learn from what is happening elsewhere. For 30 years I have pretty well predicted what will happen in the Australian market by deeply engaging with 2 sources. Firstly the trends originating in the UK, which almost inevitably translate to the Australian scene at some point, and secondly being wrapped in social research, the stuff that details the behavior and attitudes of Australians. The original and still the best is the McKay Report. Hugh McKay has an enormous ability to articulate the complication of peoples lives and break them down into things you can use.
- Recognise and act on the simple truth that marketing is now fully accountable. No longer can marketers argue that the impact of their decisions are too hard to tie back to specific activities and costs. The ROI on marketing activity is now almost as transparent as that on capital expenditure, you just have to understand how to go about it, and get the right tools and capabilities in place.
- Differentiate. Notwithstanding the point above, you still need to stand out from the crowd, and the only way to do that is to be noticeably different, to engage with and serve consumers better than anyone else. The genuine creativity needed to do this will attract a premium, simply because it is so rare, and now the impact can be quantified, albeit after the fact.
Need help thinking about all that, give me a call, I have been there before.
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