Beyond transactions: Building customer partnerships in consumer goods

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Beyond transactions: Building customer partnerships in consumer goods is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report and Sylvia Helm was the author. Mike Kenny was responsible for layout and design. Our thanks are due to all of the executives who responded to the survey.

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Beyond transactions: Building customer partnerships in consumer goods

  1. 1. Beyond transactionsBuilding customer partnershipsin consumer goodsAn Economist Intelligence Unit white paperSponsored by SAP
  2. 2. Beyond transactions Building customer partnerships in consumer goods Preface Beyond transactions: Building customer partnerships in consumer goods is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report and Sylvia Helm was the author. Mike Kenny was responsible for layout and design. Our thanks are due to all of the executives who responded to the survey. October 20091 © Economist Intelligence Unit Limited 2009
  3. 3. Beyond transactions Building customer partnerships in consumer goods Contents Introduction 3 Key findings 4 Conclusion 7 Appendix 1: Overall survey results 8 Appendix 2: Americas survey results 13 Appendix 3: Asia-Pacific survey results 18 Appendix 4: EMEA survey results 232 © Economist Intelligence Unit Limited 2009
  4. 4. Beyond transactions Building customer partnerships in consumer goods Introduction The global recession and falling demand have hit the consumer goods sector harder than other industries. Except in China and a handful of smaller economies, retail sales fell dramatically in 2009 throughout the Americas, Europe and most of Asia. According to an Economist Intelligence Unit survey of the sales, marketing and customer service practices of consumer goods companies, respondents cite the global economic downturn as the biggest issue facing their industry. The economy is one of several factors—including changing consumer needs, emerging new competitors and evolving requirements among retailers and distributors—that is beyond the control of consumer goods companies. Despite these challenges, survey respondents say they have strengthened customer relationships during the past year. They also say they are more engaged in developing products and services collaboratively with retailers and distributors. Consumer goods manufacturers need to satisfy two tiers of customers in order to succeed. The first is the retailer or product distributor; the second is the consumer who ultimately buys the product from the retailer or distributor. Manufacturers have to play to both audiences successfully. The majority of survey respondents say they are doing better than ever managing the first relationship, ie, with retailers and distributors. The second one, with consumers, is more problematic. About the survey effectively. Survey respondents spanned the globe, with 31% from the Asia-Pacific region, 33% from the Americas and 36% from EMEA. Respondents’ annual In September 2009, the Economist Intelligence Unit revenue ranged from less than US$500m to more than surveyed 84 executives of consumer goods companies US$10bn. The level of seniority of respondents was on the challenges of getting customer-facing high: 32% were C-level or board members and another departments to work together more consistently and 20% were vice-presidents or heads of business units.3 © Economist Intelligence Unit Limited 2009
  5. 5. Beyond transactions Building customer partnerships in consumer goods Key findings Evaluating retailers and distributors Respondents give themselves high marks for providing high-quality service to retailers and distributors. But this self-assessment appears to be based on anecdotal evidence. Because manufacturers believe they already enjoy strong long-term relationships with their retailer/distributor customers, measuring the strength or value of the relationships is not a priority. In fact, most consumer goods respondents admit that they could not estimate the lifetime value of retailers or distributors, even if they chose to do so. Since they do not have this information, they cannot prioritise investments in service campaigns and customer-specific relationships. Measuring the value of customers (% of respondents who agree minus % who disagree) Disagree Agree My company has an accurate way to estimate the lifetime value of retailers or distributors My company prioritises sales and marketing resources based on lifetime value of retailers or distributors -40 -30 -20 -10 0 10 Source: Economist Intelligence Unit survey, September 2009. Gathering customer feedback The second-tier relationship—with consumers—has always been problematic for manufacturers. It is hard for these companies to get information about consumers without going through their retailers and other distributors. Most survey respondents say they rely on point-of-sale data or second-hand feedback from store retail sales staff to secure information about their customers, followed by targeted focus groups and direct response feedback.4 © Economist Intelligence Unit Limited 2009
  6. 6. Beyond transactions Building customer partnerships in consumer goods Manufacturers admit that they are not good at using newer tools such as proprietary or third-party websites and online social media, although there have been some successes. Consuming branded goods is a universal experience in modern market economies, and social media allows consumers from all walks of life to share that experience. Twitter and Facebook provide ways to connect over the purchase and ownership of goods. Nike, Ikea, Guess, PlayStation, Adidas, Apple—all are widely mentioned across a variety of social networking, blogging, photo- and video-sharing sites. Priorities for improvement By a small margin, the top priority among survey respondents is reducing the cost of sales. As manufacturing becomes a commodity business and distribution channels multiply, more resources are required to maintain the power of the brand. This pressures margins. Moreover, as revenue growth levels off, the temptation increases to supply private-labelled goods for big retailers like Wal-Mart, Target and Costco. In the short term, private-label extensions may boost revenues, but they can also erode brand equity, exacerbating the problems caused by creeping commoditisation. Areas in need of improvement (% respondents) Reducing the cost of sales Measuring the effectiveness of marketing/promotional campaigns Maximizing repeat purchases and building consumer loyalty Creating effective consumer marketing campaigns 0 10 20 30 40 50 Source: Economist Intelligence Unit survey, September 2009.5 © Economist Intelligence Unit Limited 2009
  7. 7. Beyond transactions Building customer partnerships in consumer goods How the three regions differ Respondents from all regions have differing perceptions of the global recession and the trend towards commoditisation. Companies in some regions are working more collaboratively with their retailer/ distributor base to develop new products; others are not. And the use of newer marketing media tracks differently in different parts of the globe. Americas. The economic recession has had a disproportionately larger impact on consumer goods companies in the Americas than in Asia-Pacific. More respondents also agree than disagree that over the last five years, their products and services are increasingly seen as commodities. And the Americas region—particularly North America—is the centre of social media: Consumer goods companies there use online social media for gathering consumer and retailer feedback far more frequently than their peers in Asia-Pacific and EMEA. Asia-Pacific. Asia-Pacific respondents are the least likely to cite the global recession as their biggest problem in the past year, reflecting the healthier economy of that region. In keeping with the “export or die” mantra, Asia-Pacific is focused on creating consumer goods to order for markets in the West. Perhaps as a result, the region scores higher than the other two in terms of working with retailers and distributors to develop products collaboratively. Respondents do cite “commoditisation” as a problem in their industry, however. Their use of online social media is much lower than in the Americas. EMEA. EMEA consumer goods respondents are most likely to say the economic downturn is the major hurdle facing their business, with 80% citing it as the factor with the biggest impact. With regard to commoditisation, most respondents (53%) see no increasing trend, perhaps because EMEA-based firms have had to contend with the threat of private-label competition far longer than those in other regions. As a result, 53% disagree with the statement “We are more engaged in developing products or services collaboratively with retailers and distributors than we were 12 months ago.” Companies in EMEA, like those in Asia-Pacific, use the newer online social media less frequently than older feedback channels.6 © Economist Intelligence Unit Limited 2009
  8. 8. Beyond transactions Building customer partnerships in consumer goods Conclusion Consumer goods manufacturers are faced with the need to retain market share in a recession while fending off global competitors. Commoditisation makes their goods indistinguishable from their competitors. Their margins are squeezed and they must reduce the cost of sales. Lessons from the survey include the following: l Use online and social networking media to build brand loyalty, attract influential buyers and gain ground-level feedback. Use online services to get as much information as possible from the consumer rather than relying on retail store-level pass-back. l Develop internal procedures to analyse and segment the retail/distributor customer base. l Manage the retailer/distributor relationships based on profitability; prioritise marketing expenditures based on the value of the individual retailer/distributor.7 © Economist Intelligence Unit Limited 2009
  9. 9. Appendix 1 Beyond transactionsOverall survey results Building customer partnerships in consumer goods Appendix 1: Overall survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service and relationships: Building and managing relationships with key customers (retailers and distributors) to grow shelf presence and expand share of category 42 Differentiated marketing: Building brand equity by reaching consumers with compelling, relevant marketing 25 Operational excellence: Creating highly efficient processes 14 Product innovation: Being first to market with groundbreaking new products or services 14 Other 5 Each of the organisation’s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning and executing promotional activity 1 15 15 46 19 2 Developing and launching new products 2 12 19 38 27 1 Planning and executing marketing campaigns 5 12 27 36 20 0 Analysing and segmenting customers 8 14 29 32 14 2 Analysing and segmenting consumers 12 10 32 30 14 2 Gauging customer satisfaction 12 19 25 33 10 1 Measuring effectiveness of processes 11 16 36 23 11 4 Responding to customer demands or complaints 6 7 19 39 25 4 Incorporating customer feedback into products/services 5 23 19 36 14 2 Other 8 4 12 4 738 Economist Intelligence Unit 2009
  10. 10. Appendix 1 Beyond transactionsOverall survey results Building customer partnerships in consumer goods Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In choosing to do business with my organisation, prices are the single most important factor most customers consider 24 73 4 If price is not driving factor, my organisation can win shelf space and expand its presence in the category based on service, convenience, brand reputation or other intangibles 73 19 8 My organisation has stronger relationships with retailers and distributors than do our competitors 63 26 11 My organisation has an accurate way to estimate the lifetime value of retailers or distributors 24 57 19 My organisation prioritises sales and marketing resources based on the lifetime value of each retailer or distributor 36 45 19 We are currently developing a social media strategy 29 46 25 My organisation has more flexibility that its competitors in pricing its products 46 48 6 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 65 26 8 We are more engaged in developing products or services collaboratively with retailers and distributors we were 12 months ago 49 43 8 My organisation has integrated its activities to provide high-quality service to retailers and distributors at all touch points 58 31 11 Consumers view my organisation’s products and services more as commodities now than five years ago 46 40 13 Our margins are higher than the margins of most of our competitors 35 50 15 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Measuring/optimising effectiveness of marketing and promotional campaigns 43 Helping each function within your organisation find and Reducing the cost of sales act on ways to support the others 43 43 Maximising repeat purchases and building consumer loyalty Developing and sharing a detailed picture of 33 consumer behaviors and preferences Creating effective consumer marketing campaigns 36 31 Measuring the probability that planned promotions Involving customers in product/service development (co-creation) will result in achieving sales and volume targets 30 32 Targeting the right consumers in order to achieve Integrating tracking of retailer relationships from annual sales volume and revenue objectives planning through promotions to claims management 25 29 Cross-selling or upselling consumers Establishing common definitions, assumptions and data 25 27 Gathering consumer intelligence in the course of providing service Making each part of your organisation aware of how the others have interacted with a given retailer or distributor 24 26 Building long-term relationships with customers (retailers and distributors) Presenting retailers and distributors with a consistent 23 picture of the organisation Ensuring that service issues with retailers and distributors are resolved quickly 25 20 Prioritising resources directed towards retailers and distributors Measuring the satisfaction of retailers and distributors by total value over the life of the relationship 17 23 Segmenting and profiling consumers Our company sees no need to integrate our marketing, 13 sales and service activities Segmenting and profiling customers (retailers and distributors) 5 12 Other Other 2 2 Don’t know/Not applicable Don’t know 2 19 Economist Intelligence Unit 2009
  11. 11. Appendix 1 Beyond transactionsOverall survey results Building customer partnerships in consumer goods Which of the following trends have had the greatest impact on In which of the following ways does your organisation your business over the past 12 months? Select up to three. empower consumers? Select all that apply. (% respondents) (% respondents) Global economic downturn Offering additional value along with products (ie, in-store service, 65 merchandising improvements, sustainable packaging, etc) Evolving consumer needs 63 38 Improving usability, search and navigation of consumer-facing websites Emergence of new competitors 35 32 Creating educational forums for consumers (eg, online content, in-store Changing requirements among retailers and distributors content, communities of interest, direct-to-consumer outreach, etc) 32 32 Significant demand shifts for our products/services Building or supporting online communities of consumers 24 31 Focusing on sustainability efforts Other 13 0 Accessing key components or resources through our supply chain Don’t know/Not applicable 12 11 Finding access to credit/capital 11 Emergence of new markets for our products and services 7 What avenues of retailer and consumer feedback is your Disruptive technology developments organisation best and worst at collecting and using to improve 7 the experience of both types of customers? Other Select up to three from each column. 8 (% respondents) Don’t know We are best at collecting and using 0 We are worst at collecting and using Point of sale feedback 39 25 In which of the following ways does your organisation Feedback from in-store sales staff 36 empower retailers and distributors? Select all that apply. 21 (% respondents) Our own e-commerce site(s) 18 Making prices and sales terms more transparent for easy comparability 29 48 Third-party e-commerce sites Investing in self-service tools across multiple channels 4 (web, mobile devices, e-mail, point of sale) 39 33 Phone order interaction Improving online or self-service product support tools 26 12 25 Direct response feedback Improving usability, search and navigation of 33 retailer- and distributor-facing websites 8 19 Call center customer service interactions Other 21 1 7 Don’t know/Not applicable Targeted focus groups 14 33 13 Online social media efforts 11 26 Other 0 0 Don’t know 7 1510 Economist Intelligence Unit 2009
  12. 12. Appendix 1 Beyond transactionsOverall survey results Building customer partnerships in consumer goods How well is customer and consumer information from all sources used to accomplish the following goals? (% respondents) 1 Consistently and systematically 2 3 4 5 Not at all Don’t know Empower salespeople 18 33 34 7 4 5 Empower customer service staff 11 42 26 15 2 4 Create effective marketing campaigns 18 38 26 17 1 0 Refine product development process 15 30 35 17 2 1 Forecast demand 15 30 34 16 5 0 Improve customer service 18 37 29 11 2 2 Improve retail offerings and selections 10 45 26 10 5 5 Adjust pricing 10 42 34 6 5 4 My organisation’s greatest challenges in using information In which region are you personally based? from retailers and consumers to improve the customer (% respondents) experience are: Select up to three. Asia-Pacific (% respondents) 31 North America Synthesising information from retail outlets into coherent recommendations 30 39 Western Europe Monitoring the results of actions in terms of consumer 20 behavior and marketing metrics Eastern Europe 35 8 Persuading consumers to share experiences, both positive and negative Middle East and Africa 31 7 Putting recommendations into action Latin America 31 4 Demonstrating to retailers and consumers that their comments are being addressed 24 Persuading our employees to share feedback from retailers, Who are your organisation’s primary customers? both positive and negative (% respondents) 23 Distinguishing relevant from irrelevant retailer and consumer information 20 Dealing systematically with extremely high volumes of retailer information Individuals 20 (eg, retail) 48 Synthesising information from online channels into Businesses or other coherent recommendations organisations (eg, 15 business-to-business) 38 Synthesising information from customer service into coherent recommendations An equal mix of both 14 14 Other 1 Don’t know 411 Economist Intelligence Unit 2009
  13. 13. Appendix 1 Beyond transactionsOverall survey results Building customer partnerships in consumer goods Which of the following best describes your title? What are your main functional roles? (% respondents) Please choose no more than three functions. (% respondents) Board member 2 General management CEO/President/Managing director 40 15 Strategy and business development CFO/Treasurer/Comptroller 24 8 Marketing CIO/Technology director 24 2 Finance Other C-level executive 21 4 Sales SVP/VP/Director 20 15 Operations and production Head of Business Unit 15 5 IT Head of Department 10 15 Procurement Manager 10 27 Supply-chain management Other 7 5 Customer service 6 R&D 5 What are your organisation’s global annual revenues Information and research in US dollars? 4 (% respondents) Risk 2 Legal $500m or less 45 2 Human resources $500m to $1bn 8 2 $1bn to $5bn 6 Other 6 $5bn to $10bn 8 $10bn or more 3212 Economist Intelligence Unit 2009
  14. 14. Appendix 2 Beyond transactionsAmericas survey results Building customer partnerships in consumer goods Appendix 2: Americas survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service and relationships: Building and managing relationships with key customers (retailers and distributors) to grow shelf presence and expand share of category 32 Product innovation: Being first to market with groundbreaking new products or services 29 Operational excellence: Creating highly efficient processes 21 Differentiated marketing: Building brand equity by reaching consumers with compelling, relevant marketing 14 Other 4 Each of the organisation’s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning and executing promotional activity 4 11 21 43 14 7 Developing and launching new products 4 14 21 39 18 4 Planning and executing marketing campaigns 7 11 39 29 14 0 Analysing and segmenting customers 7 14 29 29 14 7 Analysing and segmenting consumers 7 11 39 18 18 7 Gauging customer satisfaction 18 11 18 32 18 4 Measuring effectiveness of processes 15 4 37 15 19 11 Responding to customer demands or complaints 7 4 21 46 18 4 Incorporating customer feedback into products/services 11 14 21 36 14 4 Other 7 7 14 7 6413 Economist Intelligence Unit 2009
  15. 15. Appendix 2 Beyond transactionsAmericas survey results Building customer partnerships in consumer goods Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In choosing to do business with my organisation, prices are the single most important factor most customers consider 25 68 7 If price is not driving factor, my organisation can win shelf space and expand its presence in the category based on service, convenience, brand reputation or other intangibles 68 29 4 My organisation has stronger relationships with retailers and distributors than do our competitors 64 29 7 My organisation has an accurate way to estimate the lifetime value of retailers or distributors 33 48 19 My organisation prioritises sales and marketing resources based on the lifetime value of each retailer or distributor 32 54 14 We are currently developing a social media strategy 32 39 29 My organisation has more flexibility that its competitors in pricing its products 50 46 4 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 57 32 11 We are more engaged in developing products or services collaboratively with retailers and distributors we were 12 months ago 46 43 11 My organisation has integrated its activities to provide high-quality service to retailers and distributors at all touch points 50 36 14 Consumers view my organisation’s products and services more as commodities now than five years ago 46 39 14 Our margins are higher than the margins of most of our competitors 36 39 25 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Reducing the cost of sales 39 Helping each function within your organisation find Creating effective consumer marketing campaigns and act on ways to support the others 32 46 Targeting the right consumers in order to achieve Developing and sharing a detailed picture of sales volume and revenue objectives consumer behaviors and preferences 29 32 Maximising repeat purchases and building consumer loyalty Establishing common definitions, assumptions and data 29 29 Cross-selling or upselling consumers Measuring the probability that planned promotions 29 will result in achieving sales and volume targets Segmenting and profiling consumers 29 25 Presenting retailers and distributors with a Measuring/optimising effectiveness of marketing and promotional campaigns consistent picture of the organisation 21 21 Involving customers in product/service development (co-creation) Integrating tracking of retailer relationships from annual planning through promotions to claims management 21 21 Building long-term relationships with customers (retailers and distributors) Prioritising resources directed towards retailers and 18 distributors by total value over the life of the relationship Segmenting and profiling customers (retailers and distributors) 18 11 Making each part of your organisation aware of how the others Ensuring that service issues with retailers and distributors are resolved quickly have interacted with a given retailer or distributor 11 14 Gathering consumer intelligence in the course of providing service Our company sees no need to integrate our marketing, 11 sales and service activities Measuring the satisfaction of retailers and distributors 7 7 Other Other 4 7 Don’t know/Not applicable Don’t know 4 414 Economist Intelligence Unit 2009
  16. 16. Appendix 2 Beyond transactionsAmericas survey results Building customer partnerships in consumer goods Which of the following trends have had the greatest impact on In which of the following ways does your organisation your business over the past 12 months? Select up to three. empower consumers? Select all that apply. (% respondents) (% respondents) Global economic downturn Offering additional value along with products (ie, in-store service, 68 merchandising improvements, sustainable packaging, etc) Evolving consumer needs 54 29 Building or supporting online communities of consumers Significant demand shifts for our products/services 36 25 Improving usability, search and navigation of consumer-facing websites Emergence of new competitors 36 21 Creating educational forums for consumers (eg, online content, Changing requirements among retailers and distributors in-store content, communities of interest, direct-to-consumer outreach, etc) 21 36 Finding access to credit/capital Other 11 0 Disruptive technology developments Don’t know/Not applicable 11 14 Accessing key components or resources through our supply chain 11 Focusing on sustainability efforts 11 What avenues of retailer and consumer feedback is your Emergence of new markets for our products and services organisation best and worst at collecting and using to improve 4 the experience of both types of customers? Other Select up to three from each column. 11 (% respondents) Don’t know We are best at collecting and using 0 We are worst at collecting and using Point of sale feedback 43 14 In which of the following ways does your organisation Feedback from in-store sales staff empower retailers and distributors? Select all that apply. 36 14 (% respondents) Our own e-commerce site(s) 25 Making prices and sales terms more transparent for easy comparability 18 29 Third-party e-commerce sites Investing in self-service tools across multiple channels 4 (web, mobile devices, e-mail, point of sale) 29 25 Phone order interaction Improving usability, search and navigation of 29 retailer- and distributor-facing websites 14 21 Direct response feedback Improving online or self-service product support tools 32 4 18 Call center customer service interactions Other 21 4 7 Don’t know/Not applicable Targeted focus groups 36 32 21 Online social media efforts 18 32 Other 0 0 Don’t know 7 2515 Economist Intelligence Unit 2009
  17. 17. Appendix 2 Beyond transactionsAmericas survey results Building customer partnerships in consumer goods How well is customer and consumer information from all sources used to accomplish the following goals?. (% respondents) 1 Consistently and systematically 2 3 4 5 Not at all Don’t know Empower salespeople 14 29 36 7 7 7 Empower customer service staff 11 46 18 14 11 Create effective marketing campaigns 11 39 36 14 Refine product development process 14 29 29 25 4 Forecast demand 8 27 38 19 8 Improve customer service 11 36 29 14 4 7 Improve retail offerings and selections 4 46 29 11 4 7 Adjust pricing 4 30 56 4 4 4 My organisation’s greatest challenges in using information In which region are you personally based? from retailers and consumers to improve the customer (% respondents) experience are: Select up to three. North America (% respondents) 89 Latin America Putting recommendations into action 11 36 Asia-Pacific Persuading consumers to share experiences, both positive and negative 0 29 Eastern Europe Dealing systematically with extremely high volumes of retailer information 0 29 Western Europe Synthesising information from retail outlets into coherent recommendations 0 29 Middle East and Africa Monitoring the results of actions in terms of 0 consumer behavior and marketing metrics 29 Demonstrating to retailers and consumers that their comments are being addressed Who are your organisation’s primary customers? 25 (% respondents) Distinguishing relevant from irrelevant retailer and consumer information 21 Persuading our employees to share feedback from retailers, both positive and negative Individuals 18 (eg, retail) 39 Synthesising information from customer service Businesses or other into coherent recommendations organisations (eg, 7 business-to-business) 39 Synthesising information from online channels into coherent recommendations An equal mix of both 21 7 Other 4 Don’t know 716 Economist Intelligence Unit 2009
  18. 18. Appendix 2 Beyond transactionsAmericas survey results Building customer partnerships in consumer goods Which of the following best describes your title? What are your main functional roles? (% respondents) Please choose no more than three functions. (% respondents) Board member 0 General management CEO/President/Managing director 29 7 Marketing CFO/Treasurer/Comptroller 29 7 Sales CIO/Technology director 29 0 Strategy and business development Other C-level executive 21 4 Operations and production SVP/VP/Director 18 18 Finance Head of Business Unit 14 0 R&D Head of Department 11 14 Information and research Manager 7 43 Supply-chain management Other 7 7 IT 4 Procurement 4 What are your organisation’s global annual revenues Legal in US dollars? 4 (% respondents) Human resources 4 Risk 0 $500m or less 50 Customer service $500m to $1bn 11 0 Other $1bn to $5bn 7 14 $5bn to $10bn 4 $10bn or more 2917 Economist Intelligence Unit 2009
  19. 19. Appendix 3 Beyond transactionsAsia-Pacific Building customer partnerships in consumer goodssurvey results Appendix 3: Asia-Pacific survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service and relationships: Building and managing relationships with key customers (retailers and distributors) to grow shelf presence and expand share of category 46 Differentiated marketing: Building brand equity by reaching consumers with compelling, relevant marketing 27 Operational excellence: Creating highly efficient processes 12 Product innovation: Being first to market with groundbreaking new products or services 8 Other 8 Each of the organisation’s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning and executing promotional activity 19 15 50 15 0 Developing and launching new products 12 23 27 38 0 Planning and executing marketing campaigns 8 4 23 38 27 0 Analysing and segmenting customers 12 12 19 42 15 0 Analysing and segmenting consumers 15 8 19 38 19 0 Gauging customer satisfaction 15 19 19 38 8 0 Measuring effectiveness of processes 15 27 27 23 8 0 Responding to customer demands or complaints 8 12 19 23 35 4 Incorporating customer feedback into products/services 4 31 4 42 19 0 Other 17 17 6718 Economist Intelligence Unit 2009
  20. 20. Appendix 3 Beyond transactionsAsia-Pacific Building customer partnerships in consumer goodssurvey results Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In choosing to do business with my organisation, prices are the single most important factor most customers consider 23 73 4 If price is not driving factor, my organisation can win shelf space and expand its presence in the category based on service, convenience, brand reputation or other intangibles 69 19 12 My organisation has stronger relationships with retailers and distributors than do our competitors 65 23 12 My organisation has an accurate way to estimate the lifetime value of retailers or distributors 15 62 23 My organisation prioritises sales and marketing resources based on the lifetime value of each retailer or distributor 31 42 27 We are currently developing a social media strategy 12 50 38 My organisation has more flexibility that its competitors in pricing its products 50 46 4 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 69 23 8 We are more engaged in developing products or services collaboratively with retailers and distributors we were 12 months ago 62 27 12 My organisation has integrated its activities to provide high-quality service to retailers and distributors at all touch points 58 31 12 Consumers view my organisation’s products and services more as commodities now than five years ago 54 27 19 Our margins are higher than the margins of most of our competitors 38 54 8 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Measuring/optimising effectiveness of marketing and promotional campaigns 54 Developing and sharing a detailed picture of consumer Reducing the cost of sales behaviors and preferences 46 46 Building long-term relationships with customers (retailers and distributors) Helping each function within your organisation find and 42 act on ways to support the others Involving customers in product/service development (co-creation) 46 38 Measuring the probability that planned promotions will result Gathering consumer intelligence in the course of providing service in achieving sales and volume targets 35 42 Targeting the right consumers in order to achieve sales Making each part of your organisation aware of how the others have volume and revenue objectives interacted with a given retailer or distributor 27 35 Cross-selling or upselling consumers Integrating tracking of retailer relationships from annual planning through promotions to claims management 27 31 Ensuring that service issues with retailers and distributors are resolved quickly Prioritising resources directed towards retailers and distributors 27 by total value over the life of the relationship Creating effective consumer marketing campaigns 27 23 Establishing common definitions, assumptions and data Maximising repeat purchases and building consumer loyalty 23 23 Presenting retailers and distributors with a consistent Measuring the satisfaction of retailers and distributors picture of the organisation 23 19 Segmenting and profiling customers (retailers and distributors) Our company sees no need to integrate our marketing, 15 sales and service activities Segmenting and profiling consumers 4 4 Other Other 0 0 Don’t know/Not applicable Don’t know 0 019 Economist Intelligence Unit 2009

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