SBHD: When slump-hit companies found themselves forced to lay off sales staff, they found a friend in field marketing. Though perceived as less sexy than other disciplines, it does appear to have discovered the magic formula for riding recessions and has come a long way from its Seventies’ `girls investigating cigarette brands’ image.
The Mars Group is well known for a number of things: good chocolate, a founding family which provides entertaining copy and progressive management strategies.
It is a little known fact, however, that Mars was probably responsible for spawning the field marketing industry in this country. Many of the principal players in this market either have their roots in Mars or have a clutch of ex-Mars staff on their board.
It all began 15 years ago when Mars became the first major fmcg company to investigate out-sourcing, or field marketing. A small company called CPM seemed to be the only firm around that knew anything about field marketing and as the area grew, so did CPM. Today, CPM is easily the largest of the four companies which dominate the market and was the original block from which two other major players, FMCG and Aspen Field Marketing, were formed. The Ellert Group is the only one of the big players which has remained free from Mars’ and CPM’s influence.
Ellert is heavily into syndicated merchandising and picked up envied National Lottery business; CPM provides a large national salesforce for Mars, and FMCG and Aspen provide salesforces for Mars competitors Cadbury and Rowntree.
Field marketing is an odd industry, but looks set to become increasingly lucrative for those who know how to milk it. Of all marketing services, it is arguably the least sexy but, unlike the highly-charged advertising world, it proved to be recession-proof and is growing.
The sector is estimated to be worth between £80m and £100m. Not enormous by most standards, but substantial considering this is shared between four companies. The industry has also doubled in size over the past ten years, with 1985 estimates standing at £45m.
The big four tend to brush aside the rest of the industry as one-man bands, but there are those, such as FKB Carlson Field Marketing, which are much smaller, but hardly lone operators. In fact, FKB Carlson provides all the essential services like merchandising, store audits and in-store demonstration management.
But the industry has changed quite dramatically over the past few years. Traditional users of field marketing are fmcg manufacturers within the grocery trade. But as retail multiples have taken increasing control of in-store merchandising, manufacturers have been restricted. Field marketers have been forced to look to other markets as their traditional cash cow shrinks.
Financial services, charities, the travel trade and telecommunications, among others, have all moved into field marketing.
The Ellert Group managing director Robert Ellert believes field marketing has survived more on good fortune than strategic thinking and believes that to survive, the industry must become more aggressive, and even more professional.
“The growth of field marketing outside the traditional fmcg sector has come from the migration of management from fmcg to other areas. These people have brought with them the know-ledge and experience of field marketing and sought to apply it to new markets,” says Ellert.
But as industries reduced their costs during the recession, they were forced to find alternative ways of keeping products and brands in the public eye.
FMCG managing director Mike Cottman says: “In deep recession, blue-chip firms shifted from having fixed overheads to variable overheads. Field marketers have taken on those shifting overheads.
“As companies have been forced to reduce head-counts, they have discovered field marketing is a cost-effective way of making sales calls. Often with salesforces you have a team of overpaid people merely doing a policing or administrative job. We can pull in part-time people to carry out that same function.”
The fall out from scores of sales teams being given the boot has also meant the field marketing industry is bursting with hundreds of one-man bands who fight for the bits and pieces of work that larger companies pass by.
In a very unstructured market, this mass of small operations is of concern to larger operators.
Ellert says: “As a client, if your advertising is not working, you change your agency – you don’t stop advertising. But because field marketing is new to many people, if it doesn’t work the first time, the chances are you’ll never do it again.”
There is the Field Marketing Association (FMA), but many doubt whether it has the clout to cope in this fast-growing industry. The sector is diverse – ranging from multimillion-pound organisations to the ex-salesman with a phone in his front room – and it is not easy accommodating such variety.
“I’m concerned that the FMA in its present format does not have the infrastructure to contain the industry. There are insufficient disciplinary procedures to ensure members adhere to policies. Being a member of the FMA does not guarantee that you undertake proper working practices,” adds Ellert.
However, the FMA is trying to raise awareness of the discipline among potential users. Managing director of Merchandising Salesforce David Carter says the FMA is making inroads into colleges and universities in a bid to get field marketing onto business courses.
FMCG’s Cottman believes the industry is being damaged by poor operators but hopes the larger players are keeping up standards, and says his company refuses to trade on price.
“The industry is become better understood by its clients. Although this is good and means volumes are higher, it also means margins are declining. All of us are fighting for the same piece of the action,” adds Cottman.
Nevertheless, field marketing has come a long way from the days when, as CPM new business development director Nick Fennell describes, the industry was known for sending girls out to investigate which brands of cigarettes people smoked.
But aside from searching out new marketing, the way ahead, according to Fennell, lies in data. “Companies will make sure field marketers supply their eyes and ears and record as much information about their product as they possibly can.
“For example, we are involved in the news and magazine industry where we are putting people into stores once a week and they are feeding back information on line,” adds Fennell.
As the industry looks forward to healthy growth, there could be one cloud on the horizon, in the form of an EC regulation which means part-time workers will begin to enjoy the same benefits and status as full-time workers.
Carter says the benefits and savings gained by farming out salesforce activity may no longer apply. “It is unlikely to be a long-term liability, but it will certainly affect the market and we will no longer be able to make it a strong selling point. Field marketers will have to continue to look for areas where they can provide real savings and benefits to their clients,” he adds.