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Food for Afterthought

By Bill Schober, Editorial Director, P-O-P Times

It's safe to say that over the past five years, we've witnessed a revolution. In-store is no longer an afterthought. Everyone, from CPGs and retailers to marketing consultants and agencies, now considers the retail sales floor to be an advertising medium deserving of the highest attention.

However, 99.9% of the printed words, speeches and expert commentary around this topic seem to focus on one thing: interaction with shoppers on retail sales floors. Relatively little of the collective conversation has addressed how we should get the tools for those interactions onto sales floors in the first place. In this issue of P-O-P Times, we'll try to rectify this oversight with a report on how some CPG marketers are re-organizing departments and re-thinking their P-O-P supply chains.

I'd also advise you to put one of the companies quoted in the article, BrawermanMarsh, which is a strategic alliance partner of the In-Store Marketing Institute, on your radar. Pete Brawerman and Whit Marsh Allen are consultants who have been pioneering a very specialized area of corporate accounting and supply chain management. I direct your attention to the graphic that shows part of their approach in a nutshell. You'll see various CPG departments that have morphed, over time, into the proverbial "silos" of sales, marketing, operations, finance and procurement. Each interacts haphazardly with the various in-store marketing suppliers who might be serving various product lines within a company's family of brands, and the various retail channels they're directed to.

It's these cumulative layers of "variousness" that the BrawermanMarsh people take a good hard look at. Basically, they seek ways to eliminate a lot of the departmental and vendor overlap that can cause the process to break down, marketing effectiveness to fall down, and budgeted dollars to fall through the cracks.

One of the basic questions BrawermanMarsh asks of any marketing organization is who "owns" the in-store merchandising process. Usually, the answer is either sales or marketing. But who owns what when the budgeting and procurement responsibility lie elsewhere, such as within a business unit or over in purchasing? To develop clear-cut accountability, the BrawermanMarsh people recommend a "centralized" in-store marketing team structure, organizing the various tasks and functions from various departments into cross-functional teams that represent sales strategy, marketing services, product supply, packaging engineering and the business unit. The team will need to possess project management confidence, a relationship to field sales and their customers, and an ability to assess retail performance.

Straighten out P-O-P ownership and you can begin to identify costs, which will be a prerequisite to making any headway toward that great mile-marker of in-store marketing progress: ROI. But the Brawerman people (who very much dislike the RFP/RFQ process, incidentally) say that most brand marketers have a lot to learn.

First and foremost: The typical CPG brand's in-store marketing costs are probably two to four times higher than they think.

Rather than analyze their own supply chains, CPGs usually try to lower costs simply by squeezing it out of their merchandising suppliers -- and usually by focusing on basic materials such as corrugate. By ignoring their own bigger picture, they lose track of their own controllable costs such as inventory storage, transportation and obsolete components.

Published: September 2007

Source: In-Store Marketing Institute

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