CPGmatters: Integrated Customer Marketing Paying Off for ConAgra Foods
By
James Tenser, Principal, VSN Strategies
Through
a special arrangement, presented here for discussion is a summary of
a current article from the monthly e-zine, CPGmatters.
Over
the past five years, the sales and marketing function at ConAgra Foods
has been entirely reorganized from 100 separate operating companies into
an integrated organization. The realignment is paying off for the maker
of such brands as Healthy Choice, Slim Jim, Wesson, Pam, Hebrew National
and others.
The
latest example involves the Fresh Mixers line of shelf-stable meals introduced
earlier this year. A program of consumer-centric consciousness and integrated
customer marketing with several in-store activation tactics, contributed
to early retail success.
“I
think in the last year we are beginning to feel like we have made that
transformation, feel like we really are acting as one company against
the same goals, and we see that in our earnings and our profit and our
sales,” said Danica Konetski, senior director, shopper insights at
ConAgra.
She
explained that ConAgra’s Integrated Customer Marketing (ICM) group brought
together four functions that were previously much more loosely connected:
- Shopper
Insights and Analytics - Category
Leadership (formerly under the sales organization) - Shopper
Marketing (evolved from the account-specific marketing function) - In-Store
Marketing (shopping systems and displays, that was all done by the
brand managers and the vice presidents on the brands)
“Bringing
these groups together, we have about 75 percent of our staff actually
in the field working with the account teams,” she said in a presentation
in Phoenix at the Merchandising, Sales & Marketing Conference hosted
by the Grocery Manufacturers Association (GMA).
“We
all agree that being shopper or consumer-centric is a good idea, and
we’ve been practicing that for a long time now. Even having said that,
I find that in many meetings the conversations tend to go toward – more
often than we’d like to see – either the brand-centric or store-centric
perspective.”
Ms.
Konetski described how ConAgra’s ICM group applied a disciplined, insight-driven
planning approach as it developed an account-specific launch strategy
for its Fresh Mixers line of non-refrigerated convenience meals.
ConAgra
consumer insight research had revealed several opportunities in the shelf-stable,
single-serve, microwave steamer product form. Target customers were looking
to break lunchtime boredom with new choices. The partner retailer had
shared shopper data that showed “very nice alignment” with the target
consumer, Ms. Konetski said.
To
develop a launch promotion strategy, the ConAgra ICM team began by looking
more deeply into those segments and what they are buying.
The
program launch incorporated several in-store activation techniques, including
direct mail, handouts, floor talks, and a “nicely designed” cylindrical
display. Results from the launch program indicate that ConAgra grew its
category share at that retailer by about 5 percent. It also brought new
shoppers into the category. “Fresh Mixers brought some premium shoppers
who usually buy in the frozen aisle into the shelf-stable aisle,” Ms.
Konetski reported.
In
a separate decision process focused on aisle management, ConAgra incorporated
insights it developed about shoppers’ desire for improved shopping experience,
while simultaneously addressing the retailer’s desire to revitalize the
center store. The ICM team conducted sorting analysis and cross-shop
analysis to obtain insights about how the aisle might be shelved for
best performance.
ConAgra
subsequently moved to a six-month in-store test with that retailer, which
is presently ongoing. “We’re now testing alternatives for look and feel,
including aisle headers,” she said. “We hope to create a greater cross
shop and bring more frozen users into the shelf-stable aisle.”
Discussion
Questions: What are the benefits as well as the challenges of integrating
sales and marketing functions for multiple-brand owners? What specific
disciplines particularly benefit from such integration? Are their any
risks to individual brands?
As long as sales and marketing goals are tied to group rather than individual brand performance, there seems to be little risk for individual brands. By breaking down the silos that exist within a multi-brand company like ConAgra, the company is doing what is best for all brands and for retail partners. Retailers like the opportunity to increase basket size and ConAgra would prefer that those baskets be filled with more of their products.
This move has to pay off for ConAgra. Keeping the consumer-centric focus is today’s mantra, but very hard to manage within many multibrand companies. For example, there is great retail interest in center store development with the help of the major brands. In this sector, ConAgra is growing their line of healthy, quality, shelf-stable meals for a new store destination–the convenience aisle.
Packaging and product innovation can continue to create new selections that everyone–including retailers–want. This ConAgra structure can create sales/marketing programs across the store where everyone wins.
The explosion of information is the hardest thing for both Retailers and CPGers to manage. However with great efforts like ConAgra’s and others, we are beginning to see the value of capturing and integrating this information. The risks are minimal. I think there are bigger risks for those who are not taking advantage of this knowledge. This is becoming a competitive advantage.
The benefits of this work are visible at the store level, and very visible to the customers. taking the “gut feel” out of category management, for instance, is one benefit that is immediately apparent in the stores. This now becomes a manageable process that can generate ROI through increased basket size, higher inventory turns and fewer out-of-stocks. Coupled with additional business tools like a demand signal repository, real gains can be achieved with diligent usage and continued evolution of the analysis.