Building and managing global Retail, Consumer Packaged Goods (henceforth referred as RCPG) brands has never been so challenging and exciting for global enterprises. As organizations expand to newer geographies, they are implementing marketing programs in challenging business environments, as they deal with the mass migration of consumers from the traditional to the emerging marketing channels. Converting this multi-channel audience into customers and cementing their loyalty is a daunting marketing task. To stay ahead, marketers need innovative ways to understand, collaborate, reach and influence consumers who are fast embracing the emerging channels. Marketers need a robust technology platform that can offer them comprehensive support in planning and executing these operations. This paper outlines the trends that have been shaping the marketing efforts of global RCPG enterprises. By illustrating the big picture of marketing, this paper will focus on the need for RCPG enterprises to deploy a comprehensive digital marketing platform.
Marketing Trends that are Shaping RCPG Enterprises
Global RCPG enterprises are marketing their products in several countries that are culturally diverse, demographically unique and linguistically distinct. This requires marketers to standardize their marketing approach and yet gather location-specific consumer insights for improved business impact.
In addition, as a significant number of consumers migrate from the traditional channels (print, television and radio) to the emerging ones (web, mobile and social media), marketers are looking for tools that can support their decisions and generate better return on their marketing spend.
The above challenges and transformations have led to the following five major marketing trends that have been shaping the RCPG industry's global marketing programs:
Reduction in Time-to-Market of Worldwide Product Rollouts
RCPG enterprises have been experiencing tremendous pressure to develop and launch their products faster. This is supported by increased consumer demand for quality products across several countries that share similar demographics and collapsed trade barriers.
For instance, Gillette launched its Gillette Sensor razor in October 1989 in the European market and then in the North American 1 market within 2 months .The worldwide product rollout was later completed in about 18 months.A decade later, Gillette completed the launch of its next generation product,the Gillette Mach 3 razor, 2 within 12 months— from July 1998 to June 1999 .
Now consider another innovative and global RCPG enterprise – AppleInc. Apple's iPod, which was winningly marketed as a device that can put “1000 songs in your pocket,” was first launched in the 3 USA in October 2001 .Consumers in the rest of the world had to 4 wait until 2005 to buy them locally .Fast forward to Apple's iPhone launch:the global rollout was completed within 2 years – from June 5 2007 to October 2009 .
From the iPod to the iPhone, the worldwide product rollout was compressed from 4 years to 2 years.And recently,Apple's latest product offering,the iPad 2,was available in 25 countries worldwide 6 within just one month in Mar 2011!
Gillette and Apple are only a few examples that demonstrate how swiftly global RCGP enterprises are responding to consumer demands worldwide. The worldwide product rollouts are fast reducing,from the earlier 'several years' to today's 'a few months.
Figure 1: Time Taken for Global Product Rollout
Heightened Risks and Increasing Stakes in R&D and Marketing Spends
Global RCGP enterprises are spending more money on product development, global rollouts and marketing on various channels. To refer again to the case of Gillette: the company spent 13 years and USD 300 million on product development and the worldwide rollout of its Sensor razor. Comparatively, it took only 5 years but a massive budget of USD 750 million to roll out the March 3.
When the stakes get bigger even as the global rollout cycles get shorter, marketing risks can only increase exponentially. Not only are global RCPG organizations encountering these risks, but they are also seeing their advertising budgets balloon in order to reach out to their worldwide prospects.
Television advertising world wide, for instance, was estimated to ave reached USD 160 billion in 2010 , up from a tiny USD 7.5 billion in 1977 in the US — an increase of about 21 times over a period of 33 years. Similarly, as per a Forrester research report, enterprises worldwide spent about USD 0.3 billion in 1995 on internet marketing vs. USD 200 billion by 2010 — an increase of 666 times over 15 years! The emerging digital marketing channels such as mobile and social media will also witness a similar increased marketing spend in the future. Gartner estimated that the worldwide mobile advertising was about USD 3.3 billion in 2011 and was projected to reach USD 20.6 billion by 2015 .
Whether it is for product development, global launches or for advertising, clearly the stakes are getting bigger and riskier for marketers.
A Shifting Marketing Ecosystem
Forty years ago, the marketing channels available for the RCPG companies were very limited – stores, direct mailers, billboards and newspapers. Later, new inventions like the television and the telephone created television advertising and tele-marketing in the 1970s .
Today, with the advent and proliferation of the digital marketing channels, such as web, mobile and social media, marketers are experiencing a shift in the marketing ecosystem. The internet is still a growing phenomenon, with 25 billion tweets in 2011; 2 billion views per day on YouTube and 200 million views per day of YouTube via mobile .The RCPG industry has already started feeling the strength of the internet in ecommerce revenues. What used to be a negligible contribution ten years ago has started contributing 10-20% of the revenues for many RCPG companies now. Consumer research and review of products /companies as well as peer-networking is taking place mainly on the web, and all this influences buying behavior. A Forrester research report indicates that the online channels will mobile .The RCPG industry has already started feeling the strength of the internet in ecommerce revenues. What used to be a negligible contribution ten years ago has started contributing 10-20% of the revenues for many RCPG companies now. Consumer research and review of products /companies as well as peer-networking is taking place mainly on the web, and all this influences buying behavior. A Forrester research report indicates that the online channels will mobile .The RCPG industry has already started feeling the strength of the internet in ecommerce revenues. What used to be a negligible contribution ten years ago has started contributing 10-20% of the revenues for many RCPG companies now. Consumer research and review of products /companies as well as peer-networking is taking place mainly on the web, and all this influences buying behavior.
Figure 2: Advertising Spend in Different Channel
Acceleration in Time-to-Reach a Critical Mass of 100 Million Users
We noticed that the popularity and the sustainable economics of marketing on a channel peaked whenever a channel was able to reach100 million users. This, we believe, is the critical mass that is essential for the success of marketing. It is this factor that will tell you whether you are too early or too late in the game!
Telephone, for instance, was invented in 1876 but it was only in1971 that the number of Bell System telephones in service reached 100 million in the US. Concurrently, the aggregate number of fixed line users in 1990, by 2010 this number had reached a whopping 1.8 billion – that is an increase from 0.05% to 26.6% of the world population .
It took about 15 years for the Internet to reach the 100 million mar in1995. The Internet's popularity and its adoption as a marketing channel witnessed an exceptional growth after this time. Lastly, Facebook, a leading example of social media, was incorporated in 2004 and by August 2008, it had recorded 100 million users on its in1995. The Internet's popularity and its adoption as a marketing channel witnessed an exceptional growth after this time. Lastly, Facebook, a leading example of social media, was incorporated in 2004 and by August 2008, it had recorded 100 million users on its.
Decreasing Loyalty and Fast Changing Consumer Perceptions
Consumers are increasingly turning less loyal. Blame it on the proliferation of product options, high decibel advertising and promotions, but consumers are interested in trying different things and are increasingly sensitive to price changes. Over the past 30 years of organized retailing, the contribution of private labels has been increasing – a clear indication that consumers do not mind switching loyalties.
This trend is apparent in consumers' increased spending on private brands or store brands, instead of on name brands. As per a research report from the Nielsen Company, private labels contributed 20.8% in volume and 21.8% in dollar sales in 2010, to the chagrin of the established national brands, whose share was 29.7% in volume and 21.3% in dollar sales of national brands in.
The Daunting Task Ahead for RCPG Enterprises
To reach the new generation of consumers, RCPG companies must create personal, interactive, and social marketing experiences —and must do so with consistency across all channels, with tight coupling and co-ordination within multi-channel marketing campaigns. Additionally, the organization's offline presence should reinforce the online presence and vice-versa. This is a daunting task for RCPG enterprises, given the changing trends in the marketing landscape as enumerated above.
To stay ahead, marketers mus develop innovative ways to understand, collaborate, reach and influence consumers who are fast embracing the emerging channels. RCPG enterprises are therefore looking for innovative ways to:
Currently, RCPG enterprises have to invest in several separate technologies to address marketing planning, campaign management, ecommerce, mobile commerce, CRM and analytics across marketing operations.
The need of the hour is a comprehensive technology solution that supports the organization, right from the stage of strategic marketing planning and conceiving marketing campaigns to managing digital commerce and customer relationships. The comprehensive digital marketing platform should scale up for the complexity of global RCPG operations.
A Comprehensive Digital Marketing Platform
A Comprehensive Digital Marketing Platform should have:
We believe that RCPG enterprises should deploy a comprehensive digital marketing platform with the aim of improving consumer reach and achieving greater market leadership. The platform should not only support the RCPG enterprise's current marketing programs but also address the future road map for sustained long term success.
The Benefits of a Comprehensive Digital Marketing Platform
A comprehensive digital marketing platform supports an RCPG enterprise' end-to-end marketing operations, including:
Branding and Marketing:
Wipro Reach – Empowering RCPG Enterprises to Win in the Digital World
Wipro can help RCPG enterprises implement their digital marketing programs through a robust, scalable and integrated digital marketing platform—Wipro Reach. Our vision of developing the next generation of innovative marketing solutions is in complete alignment with the RCPG enterprises' digital transformation needs.
Wipro Reach enables the realization of marketing goals by leveraging on the best practices in the areas of campaign management, multichannel publishing management, web content management, digital asset management & social analytics. We blend the right strategy and the needed expertise, and utilize powerful accelerators in our digital marketing platform to transform RCPG enterprises to socially-networked digital enterprises.
To summarize, the trends that have been shaping up RCPG enterprises are increasingly adding pressure on global marketing. RCPG business strategies therefore need to be backed up with robust, supporting technology platforms. By understanding the benefits of a comprehensive digital marketing platform, it is sufficient to infer that it alone can synchronously address all marketing needs. It is the only winning platform that RCPG enterprises would ever need to succeed in the digital world.
Bharath Sarma - Rejeti Marketing Manager
Bharath Sarma Rejeti has over a decade of experience in marketing and branding of IT services and products. He works with Wipro's service line that offers business technology solutions for collaboration, content management, customer experience and business transformation. He has worked across the functions of marketing, presales and partner management.
He holds a Post Graduate Degree in Business Administration from ICFAI Business School and a Bachelor's Degree in Science (Electronics) from the Andhra University.
Sameer Nadaf - Practice Director
Sameer Nadaf has about 15 years of experience in local and international markets with a proven track record in the areas of business-technology solutions/management, business planning and operations. He has worked across sales, alliance management, product management, practice management, program management, pre-sales, and has experience in consulting, architecting, designing and implementing business solutions.
Currently he leads the Digital Marketing Platform team at Wipro Technologies. His responsibilities include product/solution development, go-to-market strategy and solution sales.