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Rethinking trade spending in consumer products
In a sense, consumer product goods (CPG) companies are just beginning to thaw out after the storm called the Great Recession. But this time, rather than returning to the same streets and sidewalks that dominated the landscape before, they’re considering new approaches. The landscape is now significantly altered–especially when it comes to trade promotions. Over the past 36 months, aggressive, highly competitive promotion levels failed to result in volume lift, eroded manufacturer margins, and decreased the size of category profit pools. Combined with persistently weak consumer spending and rising input costs, continuing down the same paths could be a recipe for disaster.
We conducted in-depth, one-on-one interviews with leaders at 23 consumer product manufacturers with more than $100 billion in sales, asking questions about everything from investment and funding strategy to communications, insights and execution. In some cases we found what we expected. But there were also lots of surprises. Leaders in the CPG industry are asking themselves some tough questions these days:
- How should we be using trade to drive profitable growth?
- How can we make smarter bets with individual retail partners?
- What capabilities do we need to execute trade promotions with retailers more effectively?
- What does a leading retail trade strategy look like?