BROKERS PLAY ACTIVE ROLE IN NEW-PRODUCT DEVELOPMENT

Mark Hamstra

In addition to their roles as the frontline sales force for new products and the in-store labor providers for the cutting in of new products, brokers increasingly play a behind-the-scenes role before new products are introduced, observers said.

"One of the areas where brokers are increasingly providing a very positive and valuable service is in providing information about the retail conditions," said Kevin O'Mahoney, partner, Meridien Consulting Group, Westport, Conn. "Brokers are in stores with high frequency, and that enables them to provide information about retail compliance, and execution and implementation of new products on the shelf. Manufacturers who have a true partnership with their brokers use them not only in the execution of the rollout, but in the execution of the concept."

O'Mahoney said manufacturers make use of the brokers' in-store presence "to audit the landscape of retail conditions" before the new product is introduced, to find out what the competitive framework is within the category.

"They are increasingly being utilized in an intelligence capacity and can provide insight into the development of a new product, and to enable successful [return on investment] in that development, as well as realistic understanding of what store conditions would be like, either with a new product or a line extension.

"They are in thousands of stores every single day, and most manufacturers have a system for them to provide information back about what store conditions are like."

Many manufacturers, he said, give brokers and their retail merchandisers several questions that they want answered in a particular week about competitors' activity on the shelf and other information.

Jack Parker, executive vice president, strategic initiatives and business development, Acosta Sales and Marketing, Jacksonville, Fla., also said brokers often participate in developing the trade program around a new-product launch.

"The broker can really help as far as understanding certain things that happen at the store level," he said. "Generally a manufacturer is good at doing the consumer research that says here's an opportunity gap, or sometimes the retailer will say, 'Hey, we've got a real need for "X."' The broker can say, 'For such and such a retailer, you can't make that a 14-inch-high product because it won't fit on the shelf."'

The brand managers who develop new products, he said, tend to be "somewhat oblivious to some of the retailer needs, so that's where we can really help them very often. We can help them develop a product that will be amenable to the retailer."

In addition, many smaller manufacturers -- such as small restaurants seeing to get distribution for a bottled sauce, for example -- come to brokers lacking the sophistication of the larger food makers.

Brokers also can often assist manufacturers with in-store promotional ideas, he said.

"We can say, 'You might consider doing this kind of trial program or in-store demo because it was really successful when so-and-so did it,"' Parker said. "Sometimes you'll get those brand ideas that don't work, and we can tell them, 'So-and-so did that, so please don't, or so-and-so did this, and it was successful. You ought to think about doing that."'