CPGmatters: Schering-Plough Aims to Develop Custom Shopper Marketing Programs

This is a great idea--in principle. And, as with all great ideas, the Devil is in the details.

As an aside, I always get a tad nervous when a manufacturer wants to change the retail dialog away from price. Makes perfect sense for them, but somehow never seems to make as much sense to the retailer.

Ryan Mathews, Founder, ceo, Black Monk Consulting

It's very easy to talk about adding value--but not very easy to do. Good plan-- it'll be interesting to see if S-P can create ways to bring more value to the consumer at the point of purchase, thereby improving sales/profits and providing retailers with a point of differentiation.

Dr. Stephen Needel, Managing Partner, Advanced Simulations

It takes a special sort of brilliance to come up with a (1) retailer-specific creative plan to engage shoppers that's (2) not price-driven and that's (3) profitable to both the retailer and the brand. And if it was profitable, what would keep it from being copied 500,000 times? I hate to be a pessimist, but great marketing ain't easy.

Mark Lilien, Consultant, Retail Technology Group

Bravo! My suggestion is to expand the group to include an agency with deep competencies in retail. An agency can be your best "bridge"...And help accelerate results!

Anne Howe, Founder, Anne Howe Associates

After attending the National Association of Chain Drug Stores Conference for years and seeing what the vendors go through, this sounds like a great idea and could be a tremendous win/win.

Let's face it; there is only so much time and a lot of vendors. Many merchandisers are waiting for the vendor to come up with the promotional ideas and creative ways to make their job easier and more efficient. This will assist Schering-Plough in getting more exposure, premium locations and better data. It reminds me of the old saying, "The squeaky wheel gets the grease."

Susan Rider, President, Rider and Associates, LLC

This is an interesting idea that opens up a whole lot of possibilities along with a number of caveats.

I can understand why manufacturers want to team up with retailers to both build a marketing partnership and reach more customers. Ultimately, it is the retailer who has the customer's attention at the point of purchase and any influence they can extend will impact their choice. Building a strong partnership with the retailer can only improve the manufacturer's position with the retailer. If it means a shopper uses a particular retailer for additional categories, that is even better. That's the good part....

The other side of this whole thing is "who is the retailer meant to serve?" If the retailer really regards the consumer as their customer, then do they risk a loss of independence by collaborating with certain manufacturers? At what point does the consumer simply regard the retailer as a "manufacturer's outlet" and no longer look at them as their agent?

This kind of moves into my pet peeve with retailers and manufacturers who agree to pack the "don't bring this back to the store if you have a problem" slips inside product boxes. If I did not want a local contact where I can resolve problems, I would have bought the item online. I will often make the decision to use a brick and mortar location based on my follow-up concerns. Those slips defeat my whole objective.

There is another issue in this whole thing although I don't know whether it could be legally fought out. Robinson Patman says the manufacturer must offer the same prices to everyone. Could this be applied to marketing services? If the same services must be offered to all retailers then I am not sure where this will go.

Bill Bittner, Principal, BWH Consulting

"Changing the conversation" is nothing new, and gets tiring quickly.

The biggest opportunity is to aggregate and interpret the data. The low hanging fruit is to use an intelligent forecast (one that handles lost sales, promotions, and new items) in place of historical data, such as P52W, when planning your in-store activities.

Dan Desmarais, President, Cantactix Solutions Inc.

I applaud S-P for advancing this concept. They are the latest in a string of CPG companies that are working with retailers to improve the shopping experience and therefore increase sales.

As Ryan said, the devil is in the details. Untold programs have died due to poor execution at retail. Will this be one of them? Only time will tell.

Max Goldberg, Founding Partner, The Radical Clarity Group

"The last ten feet" are always critical whether they lead to the retailer, the consumer, Wall Street's approval, or the electric chair. So you always want to make the most of that trip. But when a manufacturer wants to change the dialog from price to value it frequently means the objective is to improve margins not necessarily to serve customers better.

Schering-Plough knows that natural forces always prevail. It would benefit more by innovating discernibly superior products.

Then value would supersede price in the customer's equation and the retailer could concentrate on supplying customer wants.

Gene Hoffman, President/CEO, Corporate Strategies International

As several above have commented, it's not exactly a new idea and it's tough to do...or it used to be.

Both physical and online communication has advanced quite a bit, allowing different communications to differing consumers, but more importantly, allowing communications to occur ONLY to certain consumers. An example of this is the Aquafina product launch Pepsi did last spring using a variety of online behavioral components aimed at specific consumers.

This example bypassed the retailer, but it seems as if consolidating consumer targets across retailers, and then finding a common communication that can be transfered onto them through the retailers might be a viable approach.

Mike Spindler, Managing Partner, Panther Mountain Companies, LLC

Looking at new data sources is key. Every entity that has a touchpoint with the consumer looks at the interaction with the consumer for that touchpoint and forgets that it is only one dimension of the consumer's entire consumption behavior. If you want to increase your share of the consumer's wallet, make sure you are looking at the entire wallet and not just a couple of pockets.

Joy V. Joseph, Director, Business & Consumer Insights Group, Information Resources, Inc.

OK, we all agree this is a great idea that is tough to execute. But is it really? Here's a counter thought. This is really easy to do IF YOUR BRAND POWER WARRANTS IT. We do a number of "customer equity assessments" every year and two things are usually true.

1. The importance of shopper marketing prowess is rising in terms of building equity with retailers (customers);

2. Brand power always trumps that (and every other attribute) in terms of total customer equity versus your competitors.

Clearly, both I and our firm are big proponents of building shopper marketing capabilities. Several other aspects of the vendor/customer relationship are critical as well--including excellent customer service/fulfillment and professional account teams with multi-functional capabilities. But you have to have a truly meaningful consumer brand franchise first. Period.

Ben Ball, Senior Vice President, Dechert-Hampe

At the retail level the consumer needs and wants will change per the RTA. Customizing programs to segment the consumer, gain stronger brand loyalty, and increase purchases will be of tremendous benefit to the retailer.

As the business evolves and it becomes easier to track data, it is only natural to refine marketing approaches. I feel it is a very smart approach.

Carlos Arámbula, Managing Partner, Arámbula-Phillips Communications, Inc.

I thought the quote about how we called this effort various names over the past few decades was something of an admission that this isn't actually new, we just may have better data to help drive it. If there is a breakthrough, it may be in the manufacturer and the retailer sharing data about customers to jointly figure out how to better market to them.

Jeff Weitzman, CMO, Buysight, Inc.

Great plans, but is this not the kind of approach that happens on a daily basis on the internet? Go talk with any internet marketing platform and they already empower retailers, brands and most of all consumers.

Ron Verweij, Chief Innovation Manager, Mbarc

This is the future formula for success and S-P seems to be recognizing the important role influencers and true shopper-driven decisions at retail can make to the bottom line. We have been watching this trend to engage retailers unfold both in the US and through the eyes of our UK operation (e.g., the "Boots Experience" and other examples). Retail shelves have to be much more than simply a place to store items that have to speak to the customers!

Dave Wendland, Vice President, Hamacher Resource Group