In Belgium, specifically within the Fast-Moving Consumer Goods (FMCG) sector, the battleground has been shifting. For years, the focus has been transitioning from volume growth to value growth. This evolution reflects a deeper understanding of the market dynamics and consumer behavior, signaling a paradigm shift in strategic marketing approaches.
Interestingly, major FMCG companies are now establishing dedicated customer teams, moving the spearhead of customer contact from knowledge-based key accounts to category management. This shift is largely driven by the realization that, particularly in economically challenging times, enhancing not just value but also margins becomes crucial, rather than solely focusing on market share against competitors. Gone are the days when key account managers could approach retailers with a story centered around market innovation, hoping that a new product launch would magically boost category growth.
Today, it's imperative for suppliers to present a comprehensive category narrative, one that encompasses both short and long-term visions of how the category is expected to evolve. This narrative shouldn't zero in on individual products; instead, it should offer insights into segments and entire subcategories, illustrating how they're anticipated to drive penetration, value, and margin growth.
A category vision must also differentiate between the consumer and the shopper. While there's considerable debate in literature about involving the consumer, I firmly believe it's necessary. Often, shopper analysis treats the shopper as a purely rational entity, focusing on their journey, mission, and needs. However, like anyone, their decisions are emotionally driven, even if they rationalize them as logical. For instance, asking a shopper why they chose a 12-pack of Coca-Cola off the shelf elicits a rationalization of an emotional decision.
Marketing is essential for building equity and pricing power, complemented by shopper insights to develop a robust category vision. Depending on your brand's positioning and strength, this internal vision might adjust to maximize company profits. Brands with less strong equity might need to sacrifice top-line growth to generate higher promotional pressure and agree to more invoice conditions.
A powerful category vision is naturally supported by an effective trade marketing plan. Yet, too often, these operate in parallel when they should be intertwined. Trade marketing should bolster the vision. If the aim is to build penetration among young people, offering a notebook as a gadget, despite promising ROI, misses the mark. The art of value creation lies in the synergy achieved by aligning different functions perfectly. Marketing, category management, and trade marketing, with revenue management as the gatekeeper, should operate in concert. But more on that later.
If this resonates with you but you're seeking a partner to help implement these strategies, don't hesitate to reach out to LIVE FROM THE WHITE HOUSE , a boutique Belgian agency specialized in strategic marketing and category management. With extensive expertise in the FMCG sector, we're adept at navigating the shift from sales-driven to category-driven strategies, ensuring your brand not only adapts but thrives in this evolving landscape. Our team is passionate about fostering growth and building sustainable value for brands in the FMCG industry. Let's discuss how we can elevate your category management and strategic marketing to new heights.
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