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New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
New directions: Consumer goods companies hone a cross-channel approach to consumer marketing
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New directions: Consumer goods companies hone a cross-channel approach to consumer marketing

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Consumer goods (CG) manufacturers are aggressively exploring ways to integrate new channels such as social media and mobile into the marketing mix to attract and engage consumers. However, they are …

Consumer goods (CG) manufacturers are aggressively exploring ways to integrate new channels such as social media and mobile into the marketing mix to attract and engage consumers. However, they are not ready to abandon traditional approaches to consumer marketing. CG marketers say they want to increase engagement with consumers and improve their direct-to-consumer initiatives—but are they really ready to do so?

Perhaps CG companies looking to get closer to consumers ought to think more like retailers, which have made significant investments in understanding consumer behaviour and sentiment across physical and digital environments. New directions: consumer goods companies hone a cross-channel approach to consumer marketing, an Economist Intelligence Unit report sponsored by Oracle, draws on a survey of 221 CG executives as well as in-depth interviews with corporate leaders in the CG industry to explore the changing face of consumer marketing.

The author was The author was Rob O’Regan. Gilda Stahl edited the report, and Mike Kenny was responsible for layout

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  • 1. New directionsConsumer goods companieshone a cross-channel approachto consumer marketingA report from the Economist Intelligence UnitSponsored by Oracle
  • 2. New directions Consumer goods companies hone a cross-channel approach to consumer marketing Contents Preface 2 Executive summary 3 About the survey 3 Introduction: shifting behaviours, shifting priorities 5 Nurturing engagement, loyalty and sales across multiple channels 7 The e-commerce opportunity 9 A cross-channel perspective: mixing the old with the new 11 Direct connections drive consumer insights 12 Conclusion: the road ahead 13 Appendix: survey results 151 © Economist Intelligence Unit Limited 2012
  • 3. New directions Consumer goods companies hone a cross-channel approach to consumer marketing Preface New directions: Consumer goods companies hone a cross-channel approach to consumer marketing explores the shifting behaviours—and priorities—of consumer goods companies towards their consumers. The Economist Intelligence Unit conducted the survey and analysis and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. The author was Rob O’Regan. Gilda Stahl edited the report, and Mike Kenny was responsible for layout. We would like to thank all of the executives who participated in the survey and interviews for their valuable time and insight. February 20122 © Economist Intelligence Unit Limited 2012
  • 4. New directions Consumer goods companies hone a cross-channel approach to consumer marketing Executive summary C onsumer goods (CG) manufacturers are aggressively exploring ways to integrate new channels such as social media and mobile into the marketing mix to attract and engage consumers. However, they are not ready to abandon traditional approaches to consumer marketing. CG marketers say they want to increase engagement with consumers and improve their direct-to-consumer initiatives—but are they really ready to do so? Perhaps CG companies looking to get closer to consumers ought to think more like retailers, which have made significant investments in understanding consumer behaviour and sentiment across physical and digital environments. New directions: consumer goods companies hone a cross-channel approach to consumer marketing, an Economist Intelligence Unit report sponsored by Oracle, draws on a survey of 221 CG executives as well as in-depth interviews with corporate leaders in the CG industry to explore the changing face of consumer marketing. Key findings in our research include the following: l Pushing traditional media through new media channels is not enough to reach today’s more plugged- in, product-savvy consumer. An increasingly complex, non-linear buying process requires a different approach—one that integrates multiple channels to put their brands wherever consumers are, in a way that encourages participation, not passive consumption of marketing messages. l CG companies are experimenting with new ways to establish and enhance direct, two-way relationships with their target consumers across multiple channels. Over the next 12 months, survey respondents plan to leverage social media for such activities as product promotion (73%), capturing consumer feedback (63%) and customer service (62%). In addition, social media participation is growing in importance as a tool to increase consumer loyalty. Nearly twice as many respondents say it About the survey the Middle East/Africa and 3% from Latin America. The respondent pool was senior: 40% were C-level executives, and the remainder were senior executives In October 2011 the Economist Intelligence Unit and managers. All respondents were from companies conducted a global survey of 221 consumer goods (CG) with over US$1bn in revenue. A mix of CG segments executives, sponsored by Oracle. Thirty-one percent was represented, including food and beverage (53%), of respondents hailed from the Asia-Pacific region, personal and household products (30%), non-durables 27% from North America, 28% from Europe, 10% from (11%), tobacco (4%) and agribusiness (2%).3 © Economist Intelligence Unit Limited 2012
  • 5. New directions Consumer goods companies hone a cross-channel approach to consumer marketing will become a top priority in the next 12 months (up to 33%, from 17% today). Deeper relationships, CG marketers believe, will enhance brand loyalty and drive product sales, either directly (through digital commerce) or via traditional retail channels. l Vibrant online communities can serve as an entrée into e-commerce and other direct-to-consumer sales for CG manufacturers that have traditionally sold through third-party retail channels. Forty-one percent of respondents to the Economist Intelligence Unit survey say they expect to sell products directly to consumers over the next 12 months—up from the 24% who say they currently offer direct sales. l Survey respondents and other CG executives see their nascent e-commerce efforts as complementary to, not competing with, existing retail channels. Forty-one percent of respondents say they work with their retail partners on a variety of marketing, sales and service programmes. However, 23% of respondents say that while they collaborate with retail partners, they are also committed to expanding their competing direct-to-consumer strategies. l An increasingly complex relationship between CG manufacturers and their retail partners is just one example of the evolving nature of CG makers’ direct-to-consumer marketing efforts. As marketers experiment with new channels such as social media and mobile, they are discovering that traditional messaging won’t work in these new media. But they are not prepared to simply abandon the old in favour of the new. Instead, they are finding that a blend of digital media and traditional methods such as in-store marketing is the most effective way to establish two-way relationships with consumers.4 © Economist Intelligence Unit Limited 2012
  • 6. New directions Consumer goods companies hone a cross-channel approach to consumer marketing Introduction: shifting behaviours, shifting priorities C onsumers’ online activities continue to expand, but are marketers devising novel strategies to engage these consumers? In the US, Internet users average 32 hours a month online while Europeans spend an average of 24.3 hours online monthly, according to comScore, an Internet marketing research company. Increasingly, consumers’ Internet time is spent on social networks, which in the US account for one out of every six minutes spent online. Facebook alone reaches 73% of the total US Internet population each month, with visitors’ average time spent on the social network increasing from 4.6 hours to 6.3 hours per month over the past year. Mobile access to the Internet is on the rise as well. A survey conducted by the Pew Internet Project in July 2011 found that 87% of US smartphone users access the Internet and e-mail from their devices and 68% do so daily. One-quarter of these users said the smartphone is their preferred device for accessing the Internet. Social networking (US) Share of total time spent online (%) 20 18 16 14 12 10 8 6 4 2 0 Jun-2008 Jul-2008 Aug-2008 Sep-2008 Oct-2008 Nov-2008 Dec-2008 Jan-2009 Feb-2009 Mar-2009 Apr-2009 May-2009 Jun-2009 Jul-2009 Aug-2009 Sep-2009 Oct-2009 Nov-2009 Dec-2009 Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010 Jul-2010 Aug-2010 Sep-2010 Oct-2010 Nov-2010 Dec-2010 Jan-2011 Feb-2011 Mar-2011 Apr-2011 May-2011 Jun-2011 Jul-2011 Aug-2011 Sep-2011 Oct-2011 Nov-2011 Dec-2011 Source: http://blog.comscore.com/2011/06/facebook_linkedin_twitter_tumblr.html5 © Economist Intelligence Unit Limited 2012
  • 7. New directions Consumer goods companies hone a cross-channel approach to consumer marketing“Our go-to-market As consumers spend more time online—frequently researching, discussing and even directlystrategy is to win purchasing consumer goods ranging from household and personal-care items to apparel and consumerwherever people electronics—efforts by marketers to reach these consumers when and where they shop have lagged. Inshop. As more an Economist Intelligence Unit global survey of business professionals from CG companies, respondentspeople move their cited three traditional marketing activities—in-store marketing (73%), co-marketing with retail partnersshopping habits (61%) and print/television ads (60%)—as most important for consumer engagement.online, we want to Marketers appear ready to pick up the digital pace, however. Seventy-three percent of respondentsbe present when say social media will be an important part of consumer engagement over the next year, second only to in-and where they store marketing (74%). Digital marketing (66%) will rise to the third spot, ahead of print/TV advertisingwant to make a (59%).purchase” While these figures show that engagement priorities are shifting, marketers also understandAlex Tosolini, Vice-president the importance of integrating communications across all of these channels—not managing eachof global e-business,Procter & Gamble independently—to deliver a more consistent and personalised buying experience to consumers. “Our go-to-market strategy is to win wherever people shop,” says Alex Tosolini, vice-president of global e-business at Procter & Gamble (P&G). “As more people move their shopping habits online, we want to be present when and where they want to make a purchase.” The goal for P&G and others is to establish and enhance direct, two-way relationships with their target consumers. Deeper relationships, CG marketers believe, will increase brand loyalty and drive product sales, either directly (through digital commerce) or via traditional retail channels. The opportunity is finally catching the attention of senior management: in the EIU survey, 74% of CEO-level respondents say social media is a priority for increasing loyalty over the next 12 months.6 © Economist Intelligence Unit Limited 2012
  • 8. New directions Consumer goods companies hone a cross-channel approach to consumer marketing Nurturing engagement, loyalty and sales across multiple channels CG manufacturers have discovered that the most effective engagement activities involve a two- way exchange between the brand and its consumers. Fifty-nine percent of survey respondents say they use consumer marketing to increase interaction with their brands. Over the next 12 months, respondents plan to leverage social media for product promotion (74%), capturing consumer feedback (63%) and customer service (62%). In addition, social media participation will nearly double over the next 12 months (from 17% to 33%) as a top priority for marketers looking to increase consumer loyalty. There is a tangible reason for marketers’ increased emphasis on social media: test programmes show that nurturing engagement and loyalty through social media can have a direct impact on sales. P&G’s Secret deodorant brand, for example, has fostered a Facebook community with more than 1.3m fans. More than one-half of those members regularly engage with the fan page through activities such as posting, commenting or uploading their own videos. The page also features coupons, free samples and other promotions. Since launching its Facebook-driven “Fearless” campaign, the Secret brand has increased Please rank in order of priority the importance of the following methods for increasing customer loyalty over the next 12 months. Please rate on a scale of 1 to 5, where 1=Highest priority and 5=Lowest priority. (% respondents) 1 Highest 2 3 4 5 Lowest priority priority Product promotions 43 34 14 4 4 Print coupons 9 33 19 13 26 Online coupons 14 24 24 16 21 Loyalty programmes 30 31 20 7 13 Online communities 21 32 24 13 10 Social media participation 33 31 18 11 7 Digital marketing 23 36 24 11 6 In-store marketing 46 28 15 8 4 Shopper marketing 31 32 18 8 11 Rating/reviews/recommendations 20 30 27 11 12 Source: Economist Intelligence Unit survey, October 2011.7 © Economist Intelligence Unit Limited 2012
  • 9. New directions Consumer goods companies hone a cross-channel approach to consumer marketing“The rules of market share by 7%. “When you see this level of engagement, you know something is right,” says Mrengagement are Tosolini.very different. Social media is not the only emerging channel P&G is using to connect directly with consumers. InOur actions must November 2011 the company announced a partnership with a start-up called Mobeam to distributereflect what our digital coupons via mobile phones. The companies plan to begin testing the solution—which requiresbrands stand for, enhancements to existing handsets—in 2012.and we have to Diageo is another CG manufacturer that has also turned to social media—Facebook specifically—togive consumers enhance its consumer marketing efforts and drive retail beverage sales. The global spirits makerthe opportunity expanded its brands’ collective fan base from 3.5m to 12m in one year, and an in-house study conductedto participate and with Facebook and Nielsen on five of Diageo’s US brands showed that increased Facebook activity resultedco-create with in a 20% increase in sales across those brands.our brands in a “The rules of engagement are very different,” says Venky Balakrishnan, Diageo’s vice-president ofresponsible way” marketing innovation. “Rather than just talk about it, our actions must reflect what our brands standVenky Balakrishnan, Vice- for, and we have to give consumers the opportunity to participate and co-create with our brands in apresident of marketinginnovation, Diageo responsible way.”8 © Economist Intelligence Unit Limited 2012
  • 10. New directions Consumer goods companies hone a cross-channel approach to consumer marketing The e-commerce opportunity V ibrant online communities can also serve as an entrée into e-commerce for CG manufacturers that have traditionally sold through third-party retail channels. Forty-one percent of survey respondents say they expect to sell products directly to consumers over the next 12 months—up from the 24% who say they currently offer direct sales. The percentage is even higher in the Asia-Pacific region, with 48% of those respondents expecting to offer direct sales over the next 12 months. This is possibly a reflection of Asian consumers’ increasing use of mobile phones for shopping and the expected adoption of mobile wallet services from Google, Nokia and others, which will expand the mobile commerce market. CG companies have good reason for wanting a piece of the US online CPG sales (US$ bn) e-commerce market. In the US, online revenues for the CG brands 25 traditionally slowest to adopt e-commerce are expected to more than double (through online retail and direct channels) over the next three years, from US$12bn in 2010 to US$25bn by 2014, according to Nielsen. Survey respondents and other CG executives see their nascent 17 e-commerce efforts as complimentary to, not competing with, existing retail channels. The goal, as P&G’s Mr Tosolini stated, is 12 to be wherever the consumer is. To this end, 41% of respondents say they work with their retail partners on a variety of marketing, 8 sales and service programmes. However, 23% of respondents say that while they collaborate with retail partners, they are also 5 committed to expanding their competing direct-to-consumer strategies. 2006 2008 2010 2012 2014 Some CG companies are already finding success with e- Source: http://blog.nielsen.com/nielsenwire/consumer/ commerce initiatives. For example, Solo Cup, a US$1.6bn provider five-things-to-know-about-online-grocery-shopping/ of single-use/disposable products (e.g., paper cups and plates), launched a digital storefront (solocup.alice.com ) in partnership with alice.com in August 2011 that users can access from Solo’s corporate website as well as its Facebook page. “Linking the storefront into our website and Facebook page makes it easier and more accessible for consumers to buy Solo products while they are already engaging with the brand online,” says Chris Klem, the company’s director of consumer marketing. Solo Cup’s online storefront also allows the company to9 © Economist Intelligence Unit Limited 2012
  • 11. New directions Consumer goods companies hone a cross-channel approach to consumer marketing How do you view your relationship with retailers as it relates to consumer engagement? (% respondents) We work together to serve consumers through a variety of marketing, sales and service programmes 41 We continue to work with retail partners but we are also committed to expanding our competing direct-to-consumer strategies 23 We share consumer data and insights to enable better planning, though we act on those insights separately 22 We battle for shelf space with other brands 9 We compete with retailers’ private-label offerings 5 Source: Economist Intelligence Unit survey, October 2011.“The path to promote and sell a broader selection of niche items that are harder to find in brick-and-mortar stores, Mspurchase is no Klem says. To date, Solo has seen a “nice lift” in sales from the digital store, she notes, without offeringlonger linear. specifics.We’re partnering When toymaker Mattel launched an e-commerce website in 2009 (shop.mattel.com), it used a heavywith everybody, dose of video to increase consumer engagement and distinguish its offerings from those found onincluding what traditional retail sites. The company, in effect, turned video into a direct sales tool: in the first year, asyou would call many as 42% of the top-selling products on the Mattel site appeared after a visitor clicked on a video.traditional Mattel cross-promotes the store and specific products heavily through its Facebook page and Twitterretailers, to figure account.out the most P&G is also stepping into the e-commerce space, including new social commerce stores. In June 2011,relevant way to do P&G launched Facebook stores for seven of its brands: Tide, Gillette, Olay, Gain, CoverGirl, Luvs andthat” Febreeze. Products purchased from these storefronts are fulfilled by a P&G partner, eStore Retail Services,Alex Tosolini, an online retailer that also sells P&G home care, health and other products through a dedicated site calledProcter & Gamble PGestore.com. These are just part of the company’s efforts to connect with consumers wherever they choose to shop. “The path to purchase is no longer linear,” says Mr Tosolini. “We need to connect our brands all along that new, non-linear path. We’re partnering with everybody, including what you would call traditional retailers, to figure out the most relevant way to do that.”10 © Economist Intelligence Unit Limited 2012
  • 12. New directions Consumer goods companies hone a cross-channel approach to consumer marketing A cross-channel perspective: mixing the old with the newAn innovativeblend of social S ocial media campaigns are an increasingly important part of the marketing mix—but they remain just one part.media engagement In-store marketing, for example, is a priority among survey respondents: 46% say in-store marketingand in-store will be their highest-priority channel for improving customer loyalty over the next 12 months, up frommarketing— 41% over the past 12 months. Product promotions will also increase in significance (to 43% from 41%), asincluding options will shopper marketing programmes (to 31% from 22%).to purchase online, Budgets are beginning to reflect this two-pronged approach as well. Twenty-two percent ofin a retail store, respondents say they have increased the share of total spending dedicated to trade promotion (i.e.,or even through partnering with retailers and wholesalers) to complement direct-to-consumer programmes. Another 29%a mobile device— say consumer marketing programmes have had no effect on trade promotion spending. One-quarter of theare proving to respondents have shifted some trade promotion budget to direct-to-consumer programmes.be a valuable “There is a massive intersection of things happening in social media and in the stores,” says Diageo’scombination Mr Balakrishnan. “A lot of information is extending downstream from marketing channels into the store.for attracting We need to present useful information that they can act on at the point of purchase.”and retaining Some CG companies are finding an upstream approach works as well: using packaging and othercustomers. in-store marketing promotions to drive consumers back online, where they can engage further with the brand. US-based Orabrush, for example, labels its tongue-cleaning products with “As Seen on YouTube” to fuel what the chief marketing officer, Jeffrey Harmon, calls “the engagement loop”. Viral videos drive consumers to retail outlets, which drive them back online to see more of Orabrush’s original video content, which increases awareness, engagement and loyalty. Consumers can purchase Orabrush products however they want—through retail outlets such as Wal-Mart and CVS or online from the Orabrush website. Orabrush expects sales to grow from US$2m in 2010 to US$10m in 2011. The takeaway is clear: an innovative blend of social media engagement and in-store marketing— including options to purchase online, in a retail store, or even through mobile devices—are proving to be a valuable combination for attracting and retaining customers. This approach requires CG manufacturers to look at the consumer landscape in a far different way than they have traditionally—and adjust their marketing programmes accordingly. US-based Kraft Foods, for example, has leveraged the power of consumer engagement across multiple channels to increase sales of its Philadelphia Cream Cheese brand. In 2009, Kraft launched Real Women of Philadelphia, an online community of Philadelphia users, and introduced a series of videos designed to11 © Economist Intelligence Unit Limited 2012
  • 13. New directions Consumer goods companies hone a cross-channel approach to consumer marketing help reposition Philly Cream Cheese not strictly as a spread for bagels, but as a key ingredient for making dips, casseroles and other recipes. As the number of video views and user-generated recipe submissions increased, so did cream cheese sales, rising 5-8% annually over the past three years. “The results blew us away,” says Howard Friedman, senior vice-president of marketing for Kraft Cheese & Dairy. “We achieved a scale and scope we never could have imagined.” Direct connections drive rich consumer insights insights to improve interactions with consumers. Unsurprisingly, this figure rises among larger companies: 72% of respondents at companies with revenues of US$5bn-10bn say they are very effective Consumer insights can drive brand-building and product at leveraging customer data. development. However, the ability to capture and analyse the data Some are still getting their arms around big data sets. Twenty-nine required to develop those insights is still evolving. According to percent say they collect plenty of consumer data but do not have an EIU survey of senior executives in large consumer goods (CG) the tools to analyse them effectively, while 32% believe they do not companies, gathering consumer insights to improve product (44%) collect enough data to develop meaningful consumer insights—high and marketing programmes (35%) are important objectives of numbers given advances in the tools and technologies used to their direct-to-consumer efforts. “Social media, and Facebook in capture, store and analyse consumer data. particular, is proving to be extremely rewarding in helping us listen The goal for many of these companies is fine-tuning their methods to and understand consumers and to help our brands build different for leveraging the data they are collecting. The good news is that CG types of relationships with consumers,” says Alex Tosolini, vice- marketers do not have to strain their budgets to figure out the best president of global e-business at Procter & Gamble (P&G). approaches, because digital media enable them to test and learn Access to the right data is critical to marketers’ consumer-focused quickly with minimal investment. initiatives. Nearly three-quarters (72%) of respondents agree that “With social media, you can test, learn and expand quickly on a their ability to capture and analyse “big data” has improved their limited budget,” says Howard Friedman, senior vice-president of efforts to attract and retain customers. In addition, 58% believe marketing for Kraft Cheese & Dairy. “You don’t have to spend a million their organisation is “very effective” at leveraging customer data and dollars to see if something works.”12 © Economist Intelligence Unit Limited 2012
  • 14. New directions Consumer goods companies hone a cross-channel approach to consumer marketing Conclusion: the road ahead P ushing traditional media through new media channels is no longer enough to succeed in today’s CG market. An increasingly complex, non-linear buying process requires a different, cross-channel approach—one that puts brands wherever consumers are, in a way that encourages participation, not passive consumption of marketing messages. In some cases, being wherever the consumer is means selling products to them when they are ready to buy. As CG companies continue their experimentation with direct-to-consumer sales—through their own online storefronts or social media—they will need to start thinking more like the retailers with which they have long partnered. This shift in mindset will require changes in the marketing mix to accommodate increased investments in social media, mobile and other digital channels. Measurement models will need to change as well, as marketers focus on advanced metrics and analytics that measure not just exposure to ads, but also engagement with the brand across multiple channels. Of course, marketers will also have to translate these engagement metrics into tangible business benefits, including customer loyalty and, ultimately, increased sales. Better measurement begins with better data. In the era of Big Data, CG companies need to identify which data provide the best insights into consumer behaviours and interactions with their brand or the product categories in which they compete (see sidebar, page 12). Then they need to ensure that the right processes and tools are in place to capture and analyse these data. Strategic partnerships will continue to play an important role as the consumer marketing efforts of CG companies mature. The nature of these relationships—with retailers, marketing services firms and technology providers—must evolve to accommodate new cross-channel objectives and an increasing emphasis on engagement, loyalty and direct sales. In particular, CG companies must carefully manage existing relationships with their retail partners—even as they experiment with their own online/social sales models. As CG marketers rethink their approach to consumer marketing, they will need a strong commitment from senior management to increase investments in new, direct-to-consumer initiatives. By blending traditional methods with emerging approaches, CG marketers can continue to find new ways to increase consumer engagement, deepen brand loyalty and increase direct and indirect sales across physical, digital and mobile channels.13 © Economist Intelligence Unit Limited 2012
  • 15. Appendix New directionsSurvey results Consumer goods companies hone a cross-channel approach to consumer marketing Appendix: survey results Percentages may not add to 100% owing to rounding or the ability of respondents to choose multiple responses. Please rate the importance of the following marketing channels for your consumer engagement efforts over the past 12 months. Please rate on a scale of 1 to 5, where 1=Very important and 5=Not at all important. (% respondents) 1 Very 2 3 4 5 Not at all important important E-mail 24 26 17 19 14 Print/television ads 36 24 21 7 11 Social media/marketing (eg, Facebook, YouTube, Twitter) 20 34 23 16 7 Mobile devices (eg, smartphones, tablets) 13 22 27 22 15 Direct mail 18 21 22 17 22 In-store marketing 47 26 18 4 4 Digital marketing 15 38 28 11 8 Consumer loyalty programmes 27 32 17 15 9 Corporate websites/blogs 22 30 26 17 4 Co-marketing with retail partner 21 40 25 6 6 Consumer catalogues 15 27 26 15 1714 © Economist Intelligence Unit Limited 2012
  • 16. Appendix New directionsSurvey results Consumer goods companies hone a cross-channel approach to consumer marketing Please rate the importance of the following marketing channels for your consumer engagement efforts over the next 12 months. Please rate on a scale of 1 to 5, where 1=Very important and 5=Not at all important. (% respondents) 1 Very 2 3 4 5 Not at all important important E-mail 24 31 20 15 11 Print/television ads 34 25 18 11 13 Social media/marketing (eg, Facebook, YouTube, Twitter) 42 31 15 7 5 Mobile devices (eg, smartphones, tablets) 23 26 29 13 9 Direct mail 18 21 22 15 24 In-store marketing 50 24 18 4 5 Digital marketing 26 40 20 7 7 Consumer loyalty programmes 36 26 18 8 11 Corporate websites/blogs 24 38 20 13 5 Co-marketing with retail partner 26 38 22 6 8 Consumer catalogues 15 28 24 13 20 What percentage of your total sales was achieved through the What are the objectives of your direct-to-consumer following channels over the past 12 months? initiatives? (Average % respondents) Select all that apply. (% respondents) Through retail partners 41 Enhance brand awareness Through wholesale distributors 70 27 Increase sales Directly to consumers (eg, through your website or social media sites) 69 21 Increase interaction with brand Through third-party, direct-to-consumer sites (eg, Alice.com, Amazon) 59 8 Gather consumer insights to improve product Other 44 4 Cross-sell (eg, line extensions or bundling) 36 Gather consumer insights to improve marketing programmes 35 How do you see percentages of your total sales shifting over Use as testing ground for new products the next 3 years? 30 (Average % respondents) Thwart private-label sales 13 Through retail partners We don’t currently market or sell directly to consumers 40 but we may in the future Through wholesale distributors 8 25 We have no plans to ever market or sell directly to consumers Directly to consumers (eg, through your website or social media sites) 5 21 Through third-party, direct-to-consumer sites (eg, Alice.com, Amazon) 10 Other 515 © Economist Intelligence Unit Limited 2012
  • 17. Appendix New directionsSurvey results Consumer goods companies hone a cross-channel approach to consumer marketing How have you used social media to engage with consumers How have you used social media to engage with consumers over the past 12 months, and how do you intend to use it over over the past 12 months, and how do you intend to use it over the next 12 months? —Previous 12 months the next 12 months? —Next 12 months Please select all that apply. Please select all that apply. (% respondents) (% respondents) Promote products or services as part of a marketing campaign Promote products or services as part of a marketing campaign 66 73 Paid advertising Gather feedback to drive product/service requirements 55 63 Provide customer service Provide customer service 44 62 Gather feedback to drive product/service requirements Paid advertising 42 59 Sell products (eg, social commerce) Sell products (eg, social commerce) 24 41 Other Other 3 4 Please rank in order of priority the importance of the following methods for increasing customer loyalty over the past 12 months. Please rate on a scale of 1 to 5, where 1=Highest priority and 5=Lowest priority. (% respondents) 1 Highest 2 3 4 5 Lowest priority priority Product promotions 41 35 15 3 6 Print coupons 9 22 29 16 24 Online coupons 6 22 23 18 31 Loyalty programmes 23 30 21 10 17 Online communities 10 25 26 22 16 Social media participation 17 29 23 18 13 Digital marketing 12 29 29 18 12 In-store marketing 41 28 15 9 7 Shopper marketing 22 27 27 11 13 Rating/reviews/recommendations 13 30 29 12 1616 © Economist Intelligence Unit Limited 2012
  • 18. Appendix New directionsSurvey results Consumer goods companies hone a cross-channel approach to consumer marketing Please rank in order of priority the importance of the following methods for increasing customer loyalty over the next 12 months. Please rate on a scale of 1 to 5, where 1=Highest priority and 5=Lowest priority. (% respondents) 1 Highest 2 3 4 5 Lowest priority priority Product promotions 43 34 14 4 4 Print coupons 9 33 19 13 26 Online coupons 14 24 24 16 21 Loyalty programmes 30 31 20 7 13 Online communities 21 32 24 13 10 Social media participation 33 31 18 11 7 Digital marketing 23 36 24 11 6 In-store marketing 46 28 15 8 4 Shopper marketing 31 32 18 8 11 Rating/reviews/recommendations 20 30 27 11 12 How do you view your relationship with retailers as it relates Which of the following types of data are most important for to consumer engagement? garnering valuable consumer insights? (% respondents) Select up to three. (% respondents) We work together to serve consumers through a variety of marketing, sales and service programmes Purchase data 41 61 We continue to work with retail partners but we are also committed Lifestyle data to expanding our competing direct-to-consumer strategies 38 23 Consumer demand data We share consumer data and insights to enable better planning, 33 though we act on those insights separately Market data 22 33 We battle for shelf space with other brands Demographic data 9 31 We compete with retailers’ private-label offerings Promotion response data 5 31 Attitudinal and/or psychographic data 24 Consumer sentiment data (eg, social media monitoring) What has been the impact of your direct-to-consumer 16 programmes on trade promotion? Online behavioural data (% respondents) 11 Other Our percentage of trade promotion spending has not changed 1 29 We have shifted some trade promotion budget to direct-to-consumer programmes 25 We have increased the percentage of spending on trade promotion to complement direct-to-consumer programmes 22 Other 4 Dont know 2117 © Economist Intelligence Unit Limited 2012
  • 19. Appendix New directionsSurvey results Consumer goods companies hone a cross-channel approach to consumer marketing Please rate your agreement with the following statements. (% respondents) Strongly Somewhat Neutral Somewhat Strongly Don’t know agree agree disagree disagree Our ability to capture and analyse large data sets (eg, “big data”) has improved our efforts to attract and retain customers 27 45 21 5 11 We are very effective at leveraging customer data and insights to improve interactions with consumers 19 39 30 8 3 1 We don’t collect enough data to develop meaningful consumer insights 12 20 26 19 20 3 We collect plenty of consumer data but don’t have the tools to analyse them effectively 7 22 27 23 19 2 We share consumer data with our retail partners to improve our merchandising/marketing programmes 11 40 31 9 6 4 We collaborate with key retail partners to leverage their consumer understanding and insights 21 39 24 9 3 4 Where do social media data fit in your demand signal In which country are you personally located? repository (DSR)? (% respondents) (% respondents) United States of America We are exploring integration of social media data with our retail and 22 consumer demand signals (eg data stored in our DSR) India 31 17 Our strategy is to manage social media data United Kingdom separate from retail and consumer demand signals 7 20 United Arab Emirates We bring social media data into our demand signal repository (DSR) 6 13 Canada We don’t have a demand signal management strategy 5 36 Australia, Italy 3 China, Turkey, Belgium, Denmark, Germany 2 Brazil, Hong Kong, Indonesia, Poland, Singapore, Spain, Switzerland, Austria, Czech Republic, France, Malaysia, Netherlands, Pakistan, South Africa, Sri Lanka 1 In which region are you personally based? (% respondents) Asia-Pacific 31 North America 27 Western Europe 25 Middle East and Africa 10 Latin America 3 Eastern Europe 318 © Economist Intelligence Unit Limited 2012
  • 20. Appendix New directionsSurvey results Consumer goods companies hone a cross-channel approach to consumer marketing Which industry segment do you belong to? What are your main functional roles? (% respondents) Choose up to three. (% respondents) Food and Beverage 53 Marketing and sales Personal and Household Products 40 30 General management Non-durables (apparel, footwear, recreational goods, office supplies) 33 11 Strategy and business development Tobacco 32 4 Customer service Agribusiness 20 2 Finance 19 Operations and production 18 What are your company’s annual global revenues in Supply-chain management US dollars? 9 (% respondents) IT 9 R&D $1bn to $5bn 40 6 $5bn to $10bn 13 Information and research 5 $10bn or more 47 Procurement 5 Human resources 3 Risk 2 Legal 0 Other 4 Which of the following best describes your title? (% respondents) Board member 4 CEO/President/Managing director 16 CFO/Treasurer/Comptroller 4 CIO/Technology director 4 Other C-level executive 12 SVP/VP/Director 16 Head of business unit 8 Head of department 10 Manager 26 Other 119 © Economist Intelligence Unit Limited 2012
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