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HOW TO SHOP FOR A CONSULTANT

Patrick Lynch has just hired a trade marketing consultant.The divisional manager of trade marketing for the Andrew Jergens Co., Cincinnati, Lynch completed a search for consulting services this summer for a project that is now under way. In the process his team had to define its objectives, ask penetrating questions, check references and untangle a morass of conflicting definitions.Some days, he says,

James Tenser

September 5, 1994

8 Min Read
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JAMES TENSER

Patrick Lynch has just hired a trade marketing consultant.

The divisional manager of trade marketing for the Andrew Jergens Co., Cincinnati, Lynch completed a search for consulting services this summer for a project that is now under way. In the process his team had to define its objectives, ask penetrating questions, check references and untangle a morass of conflicting definitions.

Some days, he says, he felt like he needed a consultant to help choose the consultant.

"This is the first time we have brought in outside help for trade marketing," he says.

With the industrywide push toward Efficient Consumer Response and category management coming into full swing, these are boom times for the consulting field. Jergens is just one of hundreds of brand marketers who rely on outside counsel to help them manage change better.

Most manufacturers of fast-moving consumer goods say they believe they are getting their money's worth from this. They correctly reason that the fresh, outside perspective and tactical guidance dispensed by consultants could never be generated internally. They know their competitor across the aisle is actively seeking an edge in dealing with the retail trade.

Trade marketing, ECR and category management are intricate, complex sets of activities. A lot of money is at stake. Expert advice is essential. Brand marketers are actively seeking it -- and paying a hefty price for it.

But some also harbor a sense of unease about dealing with consultants, who represent, after all, an unregulated, unlicensed, unaccredited industry that purveys knowledge and trades on the reputations of individuals.

Even the definitions are sometimes unclear. One prominent consultant defined trade marketing consulting as but a tiny subset of the universe of marketing consulting overall. Marketing consulting in turn is a fraction of management consulting, which Business Week recently estimated to be a $17 billion industry.

"Trade marketing is that narrow set of disciplines dealing with moneys earmarked to be spent within the trade," says the consultant, who asked to remain anonymous. "Trade marketing consulting has focused on how to get a percentage of those moneys reflected in the price or against the consumer, better ads, events, local marketing events."

Others define the discipline more broadly, encompassing account-specific promotion, category management, and any activity under the Efficient Consumer Response heading.

"There are 10 different definitions of trade marketing at packaged goods companies," says Mickey Goodman, managing partner at Market Growth Resources, Wilton, Conn.

He identifies three distinct consulting practice areas that fit loosely under the trade marketing heading: "One is a focus on account-specific marketing, consumer programs that generate take-away. Another is organizational consulting, which deals with trade marketing department organization and the structure of the sales organization. The third is category management and trade promotion analysis, planning, shelf management," he says.

"In the consulting industry everybody comes at it in a different way," says Mike Shinall, managing director at Meridian Consulting, Wilton, Conn. He agrees, however, that many trade marketing consultants are writing sales and marketing programs their clients can take to the trade.

Lynch of Jergens says such an objective led it to hire outside help this year. "We are in the process now of using our first outside consultant to put together a whole menu marketing approach." He adds says his company practiced trade marketing for almost two years before seeking outside consulting help. It used as its models the early efforts of such pioneers as Johnson & Johnson and DowBrands, both of which reportedly invested heavily in organizational consultants going back five years or so.

Lynch said his group waited until its objectives and budgets were clearly defined before hiring its consultant. "We spent the first year and a half trying to internally define what trade marketing is," he says. "Nobody told us what it was going to be. We boiled it down to the key elements. Now we are ready to go on out and say, 'Here is our mission.' "

Jergens may have found the handle, but in the world of marketing consulting, even the largest and most sophisticated manufacturers wrestle with that part of the decision-making process.

A consulting industry insider describes how a large packaged goods manufacturer hired one of the nation's largest consulting firms at the considerable fee of $250,000 per month. The firm's initial four-month assignment: "Determine what its assignment should be."

That a major corporation can spent a million just to identify its goals and objectives can be taken several ways. It may be regarded as protection of an even larger future investment in marketing activities. Or it may be seen as a reflection of the confusion some companies are facing as they try to pursue multiple interlocking objectives under the varied headings of ECR, category management, consumer promotion and co-marketing.

Each brand marketer comes to the table with a distinct set of needs and objectives.

"We brought in some consultants to help us really approach the customer," says Rick McDermott, director of trade marketing for Ocean Spray, Lakeville, Mass.

"We really did it for two reasons," says McDermott, who outlined his company's actions at a recent conference in New York. "We thought it would be cheapest to go out there and bring in some people and essentially acquire some skills in fact-based selling presentation. "Secondarily, we brought them in so that they could bring us the strategic hook, if you will, for each six-month plan. And to help us define how Ocean Spray and its products can be a solution to retail problems that we can hang the presentation on and hang the approach on."

Domenick Celentano Jr., vice president of frozen pasta maker Celentano, Verona, N.J., says his company has taken a different approach. "We have used consultants to advise us on how to approach different channels of distribution, but not specifically on trade spending programs." Celentano says his company is small enough to closely track each of its customers on its own. "We can determine through our broker network how customers are doing."

Celentano began its search with a list of its objectives, which it circulated to a number of candidate consulting firms.

"The list was pretty long, but it shrank down quickly," says Celentano, who explains that his modest budget quickly narrowed it down, as most larger firms couldn't work under his limitations.

"We were looking for a tactical plan that we could hand off to the sales force," he says. Recent successful sell-ins of the line at Fred Meyer and Super Kmart Centers would seem to indicate that Celentano got its money's worth from its consulting services.

Says another brand marketing executive, who asked not to be identified, "The use of consultants is relatively controversial inside this company, depending on whom you talk to." The rub, he explained, is that his company has not made funding as freely available to the sales, marketing and promotion area as it does to other areas, such as information systems or organizational consulting, areas one source estimated make up more than 80% of consulting industry billings.

Lynch of Jergens says his department of four managers is too small to take on the program development work that he has hired a consultant for, which is why outsourcing makes sense.

Despite that, Shinall of Meridian says in most cases the widening use of consulting services is not driven by a lack of resources within companies. He identifies a pair of motivating factors:

"Every corporation has a unique discipline, a way of thinking. That typically drives you toward certain conclusions. Consultants are hired to bring in other forms of thinking and then to see if it leads to other conclusions."

Such "out-of-the-box" thinking, he says, tends to promote a broader perspective than usual within a corporation.

He continues, "The second reason why people hire consultants is for their objectivity." Some "adversarial relations" still persist between retailers and manufacturers despite the rhetoric of trust and cooperation currently in fashion.

Consultants everywhere live in paradox, says Shinall. "While we work for the client, we are also telling them what to do."

Can the client consultant relationship grow too close? Ken Harris, a consultant with Cannondale Associates, Evanston, Ill., refers to the "assimilation enigma," which states that the more a consultant gets involved in the day-to-day politics of an organization in working with a client, the less his objectivity, the less good he can do for a client.

"They are paying you for your objectivity," says Harris.

He also recommends an evaluation tool that prospective clients can use to help manage consulting assignments. He calls it SMAC, for Specific, Measurable, Attainable, Compatible.

Make the assignment specific, he says, relating to a clearly delineated problem, and be explicit about the timing, approach and who is involved.

The assignment should also be measurable, with a predefined yardstick to quantify success or failure.

It should be attainable, with realistic goals. If there is a problem, a solution must exist.

Finally, the assignment must be compatible with the needs of the business, Harris says.

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