Business Strategy

3 ways CPG companies thrive in the age of the customer [this week’s reads]

3 ways CPG companies thrive in the age of the customer [this week’s reads]

The consumer packaged goods (CPG) industry is not immune to the effects of the customer revolution. Over the past decade, a confluence of factors—from the rise of mobile technologies to the ubiquity of social media—have given shoppers the upper hand, transforming the CPG world in the process.

It is no wonder that many CPG manufacturers are working hard to stay ahead of these changes. As the following articles show, many CPG brands are embracing customer-centricity, innovation and technology—all in the hopes of boosting value for today’s CPG consumer.

Here are 3 innovative steps CPG companies are taking in order to meet the needs of today’s empowered shoppers:

1. Offering something unique for different channels

Manufacturers must be nimble with product offerings by altering products to fit in different formats. For example, landing shelf space in Whole Foods may mean reformulating products with non-bioengineered ingredients. And gaining distribution in the club channel requires packaging and sizes not available in other retailers.

“In the Wal-Mart economy, you could rationalize your portfolio and reduce complexity and be very efficient with your main s.k.u.s,” [Steffen Lauster, partner and leader of the North American consumer and retail practice at Strategy&, a New York-based consulting firm] said. “We just think today that is a fool’s errand. You have to be ready to have more complexity to win in these different channels and to offer something unique because the value propositions are so different from what shoppers are looking for in different channels.” – Monica Watrous, Food Business News

tweet-this_0CPG manufacturers must customize their brands & products for different formats to connect with empowered consumers. (CLICK TO TWEET)

2. Hiring customer-centric and innovative employees

Barry Calpino, vice president of breakthrough innovation at Kraft Food Group Inc., recently noted in a radio interview that there is an effort within Kraft “to push our organization and our innovation teams to shoot for bigger opportunities, more incremental white space, new categories and new usage occasions.”

While he admits that driving innovation was one of Kraft’s “weaknesses” in the past, it is “now one of our biggest strengths,” he says.

Part of that strength comes from hiring more innovative-thinking employees to join the company, which has more than 22,500 workers.

“Our people are our competitive advantage. When we recruit, we’re always looking for a diverse profile of talent. Our objective is to bring together diverse talent and unique perspectives … which, in turn, drives innovation that reflects the needs of the consumers we serve,” Calpino says. “With our big push toward Innovation, we’re particularly focused on finding creative, conceptual thinkers – especially for roles that involve ‘white space’ innovation.” – Anita Bruzzese, The Fast Track

tweet-this_0For CPG giant @Kraft, hiring innovative, customer-centric people is key to thriving in today’s evolving marketplace. (CLICK TO TWEET)

3. Embracing social media and real-time marketing

In 2013, all of a sudden, Oreo was the standard bearer for “real-time marketing.” With a few deft social media moves–including a game-changing Super Bowl tweet–the cookie became the crumbly, creamy embodiment of the conversational, in-touch brand. In an era in which brands were told they should be acting like people, Oreo had suddenly developed a real personality. Buried beneath the famous tweet, and the wave of publicity that followed, of course, was the fact that none of this was sudden. The formation of the Mondelez global snacking juggernaut was followed by a long-term effort to overhaul hidebound systems and processes and develop a new set of skills to take a flagship brand from old school advertiser to modern content creator. – Danielle Sacks, Fast Company

tweet-this_0The secret to Oreo’s social media success? A reorganization and a long-term effort to overhaul consumer engagement. (CLICK TO TWEET)

These strategies highlight several efforts by CPG companies to become more nimble in today’s rapidly evolving consumer marketplace. But driving innovation for the sake of innovation isn’t enough. For these initiatives to lead to long-term sustained relevance and profitability, they need to be rooted in a deep understanding of your customers. For many companies building an online customer community provides a platform for immersive, foundational learning that can help companies to better anticipate the needs of consumers on an ongoing basis.

For more on the CPG industry’s transformative forces, please download Boosting Value for Consumers: Why Consumer Packaged Goods Manufacturers Must Rethink Their Relationship with Consumers and Retailers, a white paper written by Mayur Gupta, Global Head of Marketing Technology and Innovation at Kimberly-Clark.

How to win back fickle CPG customers



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