AMG Strategic Advisors, a recently formed strategy and insights consulting unit of Acosta Marketing Group (AMG), which provides world-class integrated marketing solutions for consumer packaged goods (CPG) companies and retailers, has released the results from its comprehensive Trend Behind the Spend: A Study of Trade Promotion and Merchandising Spending in the CPG Industry.
The report analyzed key indicators that reflect today’s retail environment as well as emerging trends in CPG and retailer marketing—making it one of the industry’s most robust reports to date. The results include actionable steps for maximizing marketing budgets, gaining a competitive advantage and leveraging trends:
- Shopper marketing strategies are increasingly important in helping CPG companies reach target consumers. In fact, three out of five CPG companies use shopper marketing tactics, and more than half expect to increase usage next year. Seventy-two percent of large CPG companies use shopping marketing programs versus 40% of small CPG companies.
- Three out of five CPG companies use digital shopper marketing programs, dominated by Facebook and social media, and more than half expect to increase their usage in 2012.
- Account-specific marketing is on the rise. Two out of three CPG companies engage in retailer-specific marketing, including 80% of large CPG companies, with one-third of non-users planning to implement the technique in 2012.
- On average, CPG companies spend nearly 14% on trade funds as a percentage of gross sales.
- Product price increases are affecting CPG manufacturers. Nearly 80% of companies surveyed took a price increase on at least some of their products in 2011, and they expect to see continued increases in the coming year.
“Challenging economic conditions, tighter marketing budgets and increased pressure for quantifiable return-on-investment make understanding and prioritizing promotional spending more critical than ever,” says Carrie Shea, president of AMG Strategic Advisors. “Conducting original research and translating the findings into actionable, achievable measures is one of AMG’s many core competencies upon which our clients rely.”
Colin Stewart, senior vice president of AMG Strategic Advisors adds, “This research not only provides a holistic look at the changing state of shopper marketing, but also arms CPG companies with the intelligence needed to gain a competitive advantage and realize success in the marketplace.”
Focusing on topics from pricing analysis and slotting tactics to spending priorities and retailer performance, this research represents responses from 235 CPG companies across 110 store categories and 55 retailers. The full findings include more than 750 unique responses and represent more than $5 billion in trade promotion and shopper marketing spending.