7 Tips for CPG Manufacturers from Category Management Experts

Speed is a problem for many consumer packaged goods (CPG) manufacturers in today's fiercely competitive retail market. While consumers are quick to change tastes and brands, operational silos can slow down the agility of manufacturers and their partners and block their adaptability to adapt. These dual challenges were the focus of two Nielsen-led panel discussions at the recent Category Management Association (CMA) annual conference, both of which offered real-world examples and proven strategies to overcome them.

In the From Silos to Aligned Revenue Success panel, Paul Morgan, Nielsen's VP of sales effectiveness, moderated a discussion about how manufacturers can break down internal and external silos with the help of the right data, analytics and planning tools. Each panellist shared their experiences in overcoming silos that adversely affect joint account planning and shared accountability, which a majority (64%) of CPG manufacturers and retailers consider inefficient. *

In The Always-On Shopper Dynamic panel, Sue Temple, Nielsen's VP of global consumer insights product leadership, described the ever-changing shopper dynamic she has observed working with consumers across 87 countries in the past 20 years. Today, the typical U.S. shopper visits at least two different physical stores and makes 56 trips to stores in one month.

Here are the highlights of those discussions:

Breaking Down Operational Silos: 4 Takeaways Operational silos are often deeply ingrained and hard to break down. The panel discussion confirmed that manufacturers and retailers would benefit immensely from a silo-free environment. The panelists agreed that a significant advantage of breaking down silos is improved financial performance, which is achieved through shared objectives between internal teams and external retail partners.

Watch the full replay of the panel now

#1 All stakeholders (internal and external) need one version of truth. Expert panelists agreed that all stakeholders want a successful outcome. As Phil DeConto, VP Category Management and Shopper Insights at Ferrero, explained, You have to assume a positive intent to establish shared objectives and ultimately arrive at one version of truth. Having this perspective will help align your goals, even if they seem to be different. Misunderstandings drive most silos, so take advantage of any resources, tools, and capabilities that would improve communication among various teams. Using different data sets can also breed distrust because teams are not on the same page. The panelists emphasized the importance of sharing common data and analytics. Having one analytics platform drives greater understanding and unity within an organization, not to mention efficiency.

#2 Foster continuous improvement to reduce the risk of making different decisions. Silos can stem from a desire to maintain the status quo in account planning and to repeat the same plan year after year because it's safer that way. That approach hinders real collaboration and advancement because it's a formula that doesn't welcome new ideas. Tyler Thompson, category manager at Huhtamaki, recommended creating an environment of continuous improvement by testing, iterating, and learning from new decisions made by stakeholders. To help foster such an environment, you need to build a culture of constant learning that conveys, it's okay to make mistakes because you'll learn and do better next time.

#3 Quantify the value of your account plan to win over the management team and retail partners. Stakeholders are usually afraid to change their account plans without a road map to guide them toward their objectives. That fear builds silos, too. To convince management teams, and retail partners, you should quantify and demonstrate the value of your plan, including optimization points. It's easier to sell your plan to product management and brand teams and other stakeholders if you can show the ROI against any tool you're using.

#4 In your technology investments, focus on a few key areas where you can excel and play to your strengths. A significant segment of CPG manufacturers (46%) plan to invest in assortment, pricing, or promotions. Still, most of them are not sure in what tools, technology, or data they'll be investing. Such uncertainty is not surprising in an industry where companies typically invest in data and tools in a cyclical pattern. For example, a company may invest in assortment this year and pricing next year, with a plan of making a similar investment for those areas every three to five years, until the company covers all operational areas. It's a reflection of stakeholders' desire to cover all functions of their operations. Tyler Thompson instead recommended focusing only on a few key areas (e.g., assortment, pricing, and promotions), and reinvest in those areas year-over-year to be consistent.

Understanding Changing Consumer Behaviors: 3 Takeaways When it comes to shoppers, there's one thing Sue Temple wants CPG manufacturers and retailers to remember -consumer behaviors change all the time. Evolving consumer tastes require agility now more than ever.

#1 Shoppers throughout the world are driven by two key factors: logic and emotions - which should be front and center for manufacturers and retailers. Temple called the two factors sense and sensibility in reference to Jane Austen's classic novel. Shoppers care about pricing (sense/logic), but they're also greatly influenced by convenience, speed, and other things that affect their moods and emotions while shopping. The emotional factor is especially critical for physical stores, which should strive for enhanced in-store experiences, in addition to excellent customer service.

#2 Shoppers throughout the world are driven by novelty, which should encourage manufa

LINK:	https://www.nielsen.com/us/en/news-center/2020/7-tips-for-cpg-manufact...
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