STUDY: VENDORS NEED MARKETING STRATEGIES FOR RETAIL

CAROL ANGRISANI

WESTPORT, Conn. -- Manufacturers have a long way to go when it comes to marketing their brands effectively at retail, according to results of a survey of retail marketing executives issued last week.

The study, conducted at www.reveries.com, a Web site for marketing professionals, showed that of the 200 respondents, more than half said most marketers either lack a retail marketing strategy or don't know if they have one.

Among other results, 69% said marketers view retail primarily as a distribution channel, while just 3% see it as a marketing medium. Also, only about one-third of respondents (35%) said most retail programs are consumption-driven. Meanwhile, 32% said they were shipment driven and 27% described them as both consumption- and shipment-driven.

A profile of the respondents showed that 30% identify themselves as advertisers or brand marketers; 17%, representing consulting firms; and 19% representing marketing-services firms. Other respondents said they worked for ad agencies, promotion agencies, retailers and public relations firms.

"Manufacturers better wake up," Mel Korn, chief executive officer, Collaborative Marketing Worldwide, New York, told SN.

Today more than ever, manufacturers need to work with retailers to convert consumers into shoppers, Korn said. Doing so requires building brands when and where purchases are made.

"Marketers need to focus on the shopper and drive up their productivity in the store," he said.

Korn noted that the reclassifications by the Financial Accounting Standards Board and Emerging Issues Task Force make it even more important to maximize return on investment from trade spending. Under the rules, key expenditures in advertising and promotion -- including slotting allowances, bill backs, off-invoice allowances, coupon redemption, discounts, rebates, free products, co-op advertising and price reductions -- have been reclassified to a reduction in net sales or revenue.

"With a whopping 60% or more of most marketing budgets allocated to trade spending, marketers no longer have the luxury of blindly sinking dollars into the black hole of trade promotion spending," Korn said. "The pressure is on to ensure that every trade dollar invested in a brand helps to grow that brand, in image and equity as well as sales."

Some marketers are trying to do just that. When asked which manufacturers are doing a good job of marketing through retail, survey respondents named Kraft, Procter & Gamble, Pepsi-Cola Co., Frito-Lay and Coca-Cola, among others.

"Frito-Lay's off-aisle presence drives extra consumption and keeps brands away from the competition," one unidentified respondent said.