THE GISTS OF THE REPORT

Here are some of the key results from the SN/Brand Marketing 1994 State of the Union surveys:

ome level. Fully two-thirds of brand marketers say they have some current activity, while 51% of supermarket retailers report current involvement. That number can be expected to grow -- another 33% of retailers say they plan alliances in the near future.

Positive Thinking. Brand marketers and supermarket retailers are feeling pretty optimistic about their relationships. Among retailers, 58% see relations with their suppliers as improving over the next few years. Among manufacturers, 58% see relations with their accounts improving over the next few years. Retailers with alliances and manufacturers with account teams feel even better about their prospects.

The Key to the Category. Eight in 10 brand marketers are now doing or testing category management, a level matched by supermarket chains. Independent retailers lag severely, however, at 33% participation. Volume is still king when it comes to keeping score of category performance, but most retailers tend to focus next on gross margin, while the majority of manufacturers track market share as next most important.

ECR Disconnect. Brand marketers and supermarket retailers are broadly pursuing activities related to Efficient Consumer Response, but they differ on their priorities. For 1995, 43% of retailers rate efficient replenishment as their top ECR priority. Among manufacturers, however, an identical fraction, 43%, put efficient promotion at the top of their list.

Deloading Is Real. Brand marketers estimate that the amount of excess inventory in their customers' warehouses has declined in a single year from an average of 6.3 weeks to an average of 3.7 weeks, a 40% reduction.

Forward-Buying and Diverting Slow. Supermarket retailers report some continued reduction or leveling of these activities, but it is not going away yet. In 1994, 32% of retailers reduced forward-buying, vs. 25% who increased it. For 1995, 38% plan a reduction while only 18% plan an increase. Diverting is on an even steeper decline: This year, 40% reported a reduction, vs. 22% who increased. Next year, 43% plan a reduction, while 21% plan an increase.

Manufacturers Adopt CRP. All but the smallest brand marketers say they are active in continuous replenishment programs with some of their customers. Currently 80% of manufacturers are already involved, and another 13% have firm plans to begin in 1995.

The Rise of Store-Brand Marketing. Retailers forecast an average increase in sales of store-brand items from 12.9% of units sold in 1994 to 15.1% of units sold in 1995. How will retailers make this happen? By stepping up image advertising, in-store sampling, and price promotions in support of their brands, they said.

Trade Marketing Evolves. Nearly eight brand marketers in 10 now have defined trade marketing functions, and they give them high marks for their performance. In a sign of the changing times, 51% of manufacturers said the top mission for their trade marketing departments is to enhance promotion productivity. Only 9% said that job one was to control spending.

The New Sales Force. Most brand marketer, 65%, are making wide or limited use of service-only merchandise firms to execute in-store activities once handled by their own field forces. Brokers are used to some degree by 74% of respondents. Nearly half, or 47%, are making wide or limited use of business-to-business telemarketing for sales and reorders with smaller accounts.

Promotional Spending Flat. Fully half of brand marketers kept their promotional spending level in 1994, and the remainder were split equally between increases and decreases. Average spending as a percent of net sales was 13.3% in 1994. Supermarket retailers are getting the message: 41% say they expect to see less promotional spending in 1995, while only 14% expect more.