FMCG Brands, Retail And Social Media

As a follow up to the prior post below...

Many of the social media guru firms simply don't fully grasp/understand the business model dynamics of FMCG brands. (e.g. They think they know P&G and Unilever because they have met with the managers of 'new media' within those management organizations, yet I can guarantee that when they leave many FMCG offices, there's always a little bit of residual feeling that those touchy-feely media types really don't understand running and building FMCG businesses, thus, they are not in the position to help as they assume they are.) Yet, it's easy for those social media firms to take 'pot shots' at something they don't have the experience to understand. The clue, which almost nobody gets, is that ultimately, the center of the social media universe for FMCG brands will be with - retailers - not with brand suppliers, as retailers move to CRM (only then will FMCG brands have a better opportunity to be more engaged with those store shoppers in social media (but the retailers will control the dialogue).

While there are some examples of online FMCG communities (e.g. tampon-brand-sponsored websites for teenage girls with tons of questions about growing up) most low-involvement, fast-moving CPG brands simply annoy average consumers with dialogue about brands who are simply trying to save 20% with a coupon on cheese or soup or soap - hence the explosion of private label brands everywhere. Private label is the 'tell' that most consumers don't really desire to talk/twitter/post/read extensively about FMCG brands - more and more every day, it's the store that matters, not the brands inside.

The concept of a FMCG brand 'relationship' is overplayed (e.g. this is not the Apple brand, this is soap), and the brief relationship with FMCG brands occurs with every trip to the store, standing in the aisle. Just think about the proven fact that DISPLAYS, more than any other FMCG tactic, drive sales growth - sometimes +100%, or more - AKA, if they bump into it, they will buy it. (Ironically, all this new technology on our PDAs, etc., now leaves us even less room in our brains to think about FMCG products - life is moving faster than it used to be.)

None of the above is particularly poetic, but it's part of a practical reality known by brand managers, which needs to be understood by social media teams/agencies.

Forrester Research And Brand Management

Here's a take in Business Week on a new POV from Forrester Research:

http://www.businessweek.com/the_thread/brandnewday/archives/2009/10/are_brand_manag.html#c149648


Forrester's idea is designed to stir controversy, and thus (self-serving-buy-our-new-research-methods) attention. But it's inaccurate. Don’t get me wrong, Forrester has valued capabilities, but as a CMO, I just can’t salute such a self-serving POV.

Brand Management has ALWAYS been about listening to the customer and consumer - new technology as just brought new tools to this central business function. New methods may be an improvement in consumer insight over prior market research practices, but they are still just new methods of market research – anything short of talking to each and every single brand consumer, is merely another form of extrapolation research.

I must add, there also seems to be a related naïve new concept about customization (as a by-product of listening), as if letting the consumer determine - everything - is all that is required with new technology, if only tired old managers would listen and embrace the technology. Listing and customizing to fit consumer desires is definitely a point of competition, but it has (and adds) a cost to be measured in any final product or service. It is but one part of any successful strategy including considerations beyond that of the ‘Brand Advocate.’ Or put another way, for example, if the ‘Brand Advocate’ is the consumer, does the consumer name the price (even at a loss to the company)? (Note: any detailed response to the last question may identify the respondent as a brand manager, not a brand advocate.)

So, to the Brand Advocate, what about business accountability? What about operating for a profit? (A contrarian concept in the land of billions of flushed experimental VC dollars, where so very many ideas are tolerated to slide down the wall after not sticking.) Yes, we’ve all read about the ‘long tail’ and ‘crowd sourcing,’ but this new push to eliminate brand management ignores the role that brand management plays in ERM and steering profitable strategy for the entire enterprise (which is the GM/profit core to any successful business model, whether it’s practiced by a brand manager, the CEO, or Steve Jobs himself).

Consider that in a world of growing scarcity, the LUXURY of customization, after the recent economic bubble celebration, is about to collide with competitive margin pressure in business everywhere. The falling value of the dollar, will no longer mean that we can just go make (and sell) anything we can possibly dream of from China. We are soon to be served Hybrid automobiles, whether we don’t want them or not. …We are about to be taught a humble lesson that was overlooked in the recent easier economic times. As a harsh and extreme summary to the point, there was a reason why Henry Ford said, “they can have any color car they want as long as it’s black.” He was trying to run a ‘profitable’ car company. …Yes, that would have made a Brand Advocate sick.