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Five Areas FMCG Companies Need To Re-examine For Business Growth [Ventures Africa](Ventures Africa Via Acquire Media NewsEdge) VENTURES AFRICA – Channel marketing has evolved substantially since the 1990s as Fast Moving Consumer Goods (FMCG) companies have realised the importance of enhanced shopper understanding to drive business growth. If channel marketing is to ensure the strategic agenda of the business is reached and category growth is realised, FMCG companies need to create stronger integrated, cross functional teams. This is according to Sane Mdlalose, associate consultant at Aperio, a business consulting company focused on accelerating growth of FMCG brands in South Africa and Sub-Saharan Africa. "In the 1990s most companies were organised according to key account teams and category and sales teams operating independently of each other. This later gave rise to a closer alignment between the category agenda and customer/shopper understanding," she explains. At this time customers understanding was largely based on the format of an outlet. For example, large outlet such as hypers, were deemed to meet monthly shopping needs. "However in the early 2000s research from leading research houses started to show that consumers were shopping across different outlet formats for the same shopper mission and outlets were meeting more than one shopper mission across a multitude of categories," she says. "This gave rise to the need to move from a category view of the world to a shopper mission and channel based view of the market place." The channel team's primary focus is to understand shopper's behaviour across a range of categories, within a set group of outlets, which are similar in structure and meet the needs of the shoppers, who they service. She explains that FMCG companies need to re-examine what is the most effective and relevant role of channel in the business. Multinationals have led the approach to setting up channel teams with companies following suit, however one of the primary challenges is lack of clarity with regards to roles and responsibilities across marketing, channel, and customer teams. Mdlalose adds that typically when a channel team is implemented companies tend to go for the "best practice model" but do not make any adjustment to the roles and responsibilities of the marketing and sales team. "Developing an effective channel team requires a review of the other business units as well," says Mdlalose. "In as much as sales and marketing are structure across business, channel is the same." "The consequences of not getting this right are that the channel/shopper team is less effective, can be 'perceived' as being incompetent and ultimately driving category growth becomes difficult." Mdlalose outlines the most problematic areas: BTL & ATL Traditionally, marketing briefs Below the Line (BTL) are promotional campaigns, but the briefs are not shopper focused. In addition, Above the Line (ATL) campaigns are not integrated with the shopper in mind. This dilutes the communication, impact and effectiveness of promotions. Brands have to review the roles and responsibilities in terms of who briefs agencies and who own BTL promotions. Should channel brief and get input from marketing? Or should channel lead this? Some companies have created joint briefing and review teams, using channel for strategy and input throughout the process, yet retaining the management of the agencies within the marketing teams. Strategy On the other side of the coin when it comes to customer and sales: the strategy should be driven by the channel team. This means the strategic thinking role needs to be adapted. Companies need to break the line between consumer and shopper thinking, that in-store equals shopper. The strategic input from channel needs to be redefined. Resourcing Another key issue is that the channel team takes the marketing strategy and adjusts it to maximize growth by influencing shoppers in outlets. This means that the calibre in terms of capability is directly proportional to the effectiveness of a channel team. Companies have a tendency of placing more junior people than marketing and customer teams into channel marketing. More often than not individuals in marketing and customer teams have a deeper knowledge of their area of expertise. Placing people who are less experienced into channel marketing, results in a situation where the channel team is not able to adequately engage, influence and implement the shopper agenda as they have do not have enough knowledge about consumer or customers, to drive growth. Data and shopper information Most companies "talk" shopper but the available information sources are either at a consumer or customer level, not a shopper level. This means there is very little understanding of what happens in channel and the shopper is not well understood. Most IT database systems are organized according to the customer and they are not adjusted or reorganized according to shopper definitions. This creates non-alignment between what channel teams are doing and the rest of the business. The ability to analyse and use information is therefore undermined. Classification of outlets How an organisation classifies its outlet into channels can undermine the channel team's effectiveness. There are many ways to segment the outlet universe, but in having a one dimension view is risky. A multi-dimensional view of the consumer, customer, category and shopper is ideal, however the rest of the business and information sources, collage, structures, KPI's and so on are structured differently, creating a disconnect. Mdlalose concludes that companies need to re-examine their internal processes to accommodate the requirements of the channel and shopper approach in the following ways: • Reviewing and clearly defining the roles and responsibilities of marketing, channel and customer teams. • Revising channel segmentation to include more dimensions. • Adjust IT systems and ways of working to capitalise on this new channel architecture and business structure. • Ensure that people placed in channel have equal to or higher capability then their marketing and/or customer counterparts – it is helpful when these people have had management experience in marketing and or in Key Accounts before being placed in channel. • Educate the marketing teams on the importance of a shopper approach. (c) 2014 Ventures Africa. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info). |