Shopper Marketing has been described as one of the key success drivers for companies that want to reach excellence in execution. And sometimes when it comes down to applying it in practice or organizing it into the company, this is not necessarily easy to do.
As we described in our last post on Shopper (See post “Build a Shopper Marketing Strategy and Model“), Shopper Marketing can be defined as the use of insights-driven marketing and merchandising initiatives to satisfy the needs of targeted shoppers, enhance the shopping experience, and improve business results and brand equity for retailers and manufacturers.
At this point, some organisations already face a challenge when it comes to differentiating between Shopper Marketing and Trade Marketing. To keep it simple, Shopper can be understood as a methodology or approach on how to transform shopper insights into effective commercial actions; while Trade Marketing is usually the name of the department in charge of making the link between Marketing and Sales. But this is not the only difference.
In general, since Shopper Marketing tends to be “a philosophy”, there are different ways of approaching it and integrating it into the company’s roles and functions. The boundaries between Shopper Marketing and Brand Marketing or between Shopper and Sales are always fuzzy and can differ from one organisation to another.
After developing several Shopper Marketing and Commercial Strategy projects, at Connociam we proposed a framework that can help to understand what Shopper Marketing means in practice and how it can be broken down into functions, roles and processes integrated into your organization’s way of operating.
In a general sense, Shopper Marketing should be organised to maximize return of shopper insights to the company and the effective allocation of resources to support sales, taking advantage of the characteristics and needs of each type of point of sale. To carry out this process, we can identify four steps.
By dividing the Shopper Marketing approach into four concrete steps we can clarify team roles, gain focus and obtain better results at the Point of Sales.
These 4 steps are as follows:
- Obtain actionable knowledge: to understand shopper and the channel and manage different sources of information
- Define Channel Strategy: integrate Channel and Shopper information with Brand and Category strategy and develop a unique strategy for each type of channel or PoS. Channels need to be privatized and some specific channels could be difficult to cover.
- Trade Plans definition: translate channel strategies into concrete Trade or client plans, objectives, execution standards and materials for each channel or customer, and supervise results
- Implementation: execute the Trade Plans and implement execution standards at the Point of Sale
All these steps can be assigned to a specific team. Depending on the size of the organization, these can be developed by the same team, or split between different functions to ensure a better focus and a deeper knowledge and specialization. When split across the organization, it is crucial to ensure optimal coordination and responsibilities. Clear R&R, process and leadership definition ensure this coordination.
One of the keys on execution is to narrow the control scope and specialize functions. Following this principle, the four Shopper Marketing areas outlined above, tend to be organised into 4 different functions as we can see on the following chart.
In terms of departments, we see different options on how to organize these 4 functions, according to company characteristics and resources.
- Obtain actionable knowledge: this can be done by Market Research, Customer Insights or Category Marketing. In some organisations, the Market Research position is global for all types of research, be it consumer or shopper, while in others it can be divided up between the Marketing and the Sales team
- Define Channel Strategy: this can be executed by the Revenue Growth Management or the Category Marketing/Manager. CocaCola, one of the best practices companies in Shopper Marketing, has built a very relevant function with Revenue Growth management, integrating all strategic analysis and commercial opportunity build up. Depending on the organization’s level of “Shopper maturity”, a higher priority can be assigned to this function, while in very mature organizations, priority tends to be assigned to keep execution right
- Trade Plans definition: the teams in charge of implementation are usually Customer Marketing/Development, Trade or the Channel Manager. In some companies this part of the Shopper Marketing process receives the name of Trade. However, in order to differentiate it from traditional Trade Marketing, most organisations call it Channel or Customer to indicate that this is the part of the organization closer to clients and dealing with their plans
- Implementation: this is the area where you can find a greater diversity of names and detailed functions. This part of the process can be either integrated into the Sales team or can be another part of Trade. Some organisations have specific implementation teams, such as Coca Cola with RED, or have appointed specific PoS Managers within the sales organisation
The way you finally choose to organize the different Shopper Marketing functions within your organisation may vary depending on your Shopper maturity and competitive dynamics. However, in any case, you should have a clear vision as to how to split the functions and who you are going to assign them to in order to build a strong Shopper Marketing culture in your organization and make sure you build up strong processes to deliver excellence at the Point of Sale and maximize the value of your brand portfolio at the “moment of truth” or “last three feet”, as many companies call it.
Organizing your shopper activities in a smooth and relevant way inside your organisation allows you to optimize your Trade Marketing investment and ensure Point of Sale excellence in execution, two critical success factors for competitive marketing today.
Are you ready to install the Shopper Marketing approach in your organization?