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SURVEY GIVES MARKETERS HIGH MARKS

NEW YORK -- Brand marketers are changing some of their business practices for the better and the trade seems to be noticing, according to an exclusive poll conducted by the SN Group.Results of a mini-survey of retailers and suppliers conducted at the Food Marketing Institute convention in Chicago suggest significant advances are being made by manufacturers in such areas as in-store marketing, sales

NEW YORK -- Brand marketers are changing some of their business practices for the better and the trade seems to be noticing, according to an exclusive poll conducted by the SN Group.

Results of a mini-survey of retailers and suppliers conducted at the Food Marketing Institute convention in Chicago suggest significant advances are being made by manufacturers in such areas as in-store marketing, sales compensation systems and category management. These changes come at a time when relations with the trade are generally improving.

As a group, 43% of wholesalers and retailers said they regard relationships with their suppliers to be better than they were one year ago. An additional 36% said they regard the quality of those relationships to be the same. Only 14% said relationships were a bit worse and 8% much worse, the survey said.

Experience with alliances and multidisciplinary teams may be contributing to this improving comfort level. Some 87% of the brand marketers in the poll said they have at least one strategic alliance in place. Nearly half (49%) reported more than 10 alliances in effect with retailers.

Similarly, 87% of marketers said they have at least one multi-disciplinary team operating. More than a third of respondents (36%) have more than 10 account teams in operation. Another 31% operate between three and 10 teams.

In general, in-store marketing spending is on the rise, the poll found. Nearly one in two (45%) of respondents said their companies intend to increase overall spending on in-store marketing in the coming year -- 26% by 5% or more. Only 8% reported plans to reduce spending.

Among in-store marketers, sampling and demonstrations and in-store couponing are clearly the preferred activities, the survey said. Three in four companies (77%) say they use sampling and demos, while nearly two-thirds (64%) use in-store couponing.

Electronic signs and sweepstakes were next most popular, each employed by 23% of respondents. In-store audio was cited by 14% of respondents.

Store brand competition topped the list of brand marketers' concerns when asked to rank a series of industry issues for the survey. A total of 44% of respondents ranked the store brand threat first or second in importance, with 32% citing it at the top rank.

National brand competition was a chief concern for 41 percent of brand marketers, who gave it first or second ranking.

Key retailer alliances drew first or second rank among 38% of respondents, while corporate re-engineering was cited in the top two slots 32% of the time. Cost cutting came up next, cited in the top two spots 24% of the time, while improving management information systems got the fewest top rankings, at 21%.

An issue being widely addressed within leading companies is who controls the purse-strings for in-store marketing spending. Companies currently active in in-store marketing assign this authority to various corporate offices.

The marketing department was cited as controlling in-store spending in 35% of cases. Next most frequently cited were account groups or account managers, in 26% of companies. Tied for third place on the list were the advertising and sales departments, each of which drew 13%.

Brand groups and brand managers hold the authority in just 9% of cases. The trade or customer marketing department was on the bottom of the list; they had in-store spending authority in just 4% of companies.

Two thirds of respondents said they are using some measure other than pure case volume as the basis for compensating and rewarding sales performance. Total company profitability is favored by 31% of companies, while 15% of companies are basing bonuses on account-level P&Ls. Another 13% said they use some combination of volume and merchandising performance, while 8% cited profitable volume as their performance measure.