In the second part of the Popai/GfK survey findings series, we will review what’s happening with brand manufacturers, and we’ll do a similar review next week for retailers, and the following week for agencies.
The survey respondents in brand manufacturing were predominantly in middle management (58 per cent), with a further 16 per cent reporting to the MD, and 18 per cent being junior management with no direct reports.
For two thirds of brand manufacturers, shopper marketing is actively supported, either through active executive promotion of the function (39 per cent), or that the function has been identified as a priority (28 per cent).
For more than eight in 10 brand manufacturers, shopper marketing is either perceived to be core to what they do and a key growth driver (42 per cent) or likely to become integrated into a broader version of what category, customer, and consumer marketing already do (43 per cent).
This is demonstrated by where the various category and shopper functions report to (see Figure 1 below). For some, category is a catch all bucket for category, channel, shopper, and to some extent customer/trade marketing.
Marketing is more likely to have shopper marketing and shopper insights (and some customer marketing). To be expected, sales tends to hold category and channel functions, and some trade marketing (particularly where it is retailer specific).
The number of people in shopper functions is partly a factor of the size of the company.
For shopper marketing in 2014, 35 per cent of brand manufacturers had four to five people in shopper marketing (this is likely where the rebadging of trade marketing is occurring), with 21 per cent having two to three shopper marketers, and a further 18 per cent having either one person, or at the other end of the spectrum 8+ people.
Shopper insights, customer/trade marketing, category, and channel teams were all more likely to have two to three people in the team.
Looking ahead, around one fifth of brand manufacturers expected to increase their shopper marketing team resources in the medium term, but nearly one third expected to increase their category resources medium term to align to the nearly 50 per cent planned retailer increase in category resources and therefore associated expertise.
The overall growth of shopper and category functions is reflected in the further planned resource additions by manufacturers in shopper insights (19 per cent), customer/trade marketing (17 per cent), and channel planning (17 per cent).
At an experience level, brand organisations were not quite as experienced in shopper marketing as some of the individuals in them (see Fig 2 below). This presents a ‘brain drain’ risk as the lack (two thirds) of documented go to market processes in manufacturers means that the more experienced individuals in companies take their know how with them when they leave.
Where people resources are expected to increase a little, shopper budgets haven’t really changed much since 2011.
Only one third of brands have dedicated shopper marketing budgets, with a similar number sourcing budget exclusively from other functions and one quarter having a combination of own budget and top up sourced elsewhere.
The good news is that budgets are forecast to increase, with 47 per cent planning to increase their shopper marketing budget and 53 per cent to increase their shopper insights budgets.
Three quarters of brand manufacturers believe that shopper marketing is gaining in momentum and focus, and a similar number believe it is assisting with manufacturer/retailer collaboration.
Currently the largest areas of dissatisfaction for brands are a limited set of activity types, competition internally for funding, and brand centricity which is impeding the ability to get programs over the line with retailers.
So that’s the current state of organisational play in brand manufacturers. We’ll discuss what brands are activating and what they see as the future in further articles.
“The Unrealised Potential of Shopper Marketing” POPAI/GfK industry benchmark report is available from Popai for members for $395 and non-members for $995. For more information, click here.
Norrelle Goldring is head of shopper experience and retail performance at global retail research house GfK. Norrelle can be contacted on 0437 335 686 or email firstname.lastname@example.org
Lee McClymont is GM of Popai Australia and New Zealand and has 15+ years’ industry experience in specialty retail, agency, and brand. Lee can be contacted on 0414 941 585 or email@example.com.