Keep the customers satisfied

The creation of a forum for studying the satisfaction of consumer needs, by four large packaged goods companies, shows that marketing can still be improved. Alan Mitchell says that in a world where winners gain handsomely and losers are destro

There was something very odd about the press release announcing the formation of the Consumer Needs Consortium – the joint marketing experiment recently set up by Unilever, Bass, Cadbury-Schweppes and Kimberly-Clark.

It contained a most extraordinary admission. Here we have four of the biggest, most sophisticated consumer marketers in the country announcing in the first sentence of their release that the aim of their new venture is “to work together in order to build a better understanding of consumer needs in their respective markets”.

Surely, you might think, if anybody understands consumer needs in these markets it must be these companies?

On the contrary, consortium leader Phil Barden is the picture of earnestness. “Over the past few years we have seen a number of trends which mean that traditional methods of marketing and communications will probably become less effective,” he explains.

And, to explore different ways of responding, the four non-competing “like-minded” companies have seen the need “to pool experience and knowledge”. After all, comments Barden, “four heads are better than one”.

News of the consortium immediately prompted all sorts of speculation. According to some, the new body heralds a concerted move by big brands to force down the price of TV air time.

Others suggest the long-term implications must involve the establishment of alternative distribution channels – a means of going to market without having to rely on the supermarkets.

That makes the stated focus of the consortium’s pilot studies – “joint marketing activities, particularly in the areas of promotion and direct marketing” – seem very mundane indeed.

After all, sharing data on mothers with babies (within the limits of the Data Protection Act) and linking Lever brands, such as Comfort and Persil, with Elida Fabergé brands, like Vaseline, alongside Kimberly-Clark brands, such as Huggies, in joint communications and promotions is hardly breathtaking stuff.

On deeper inspection, however, there is some logic to the exercise. Look at the trends cited by Barden. One is the growing pressure on consumers’ time, which has important implications for “how they choose and use brands”.

A second trend is “incredible changes in technology”, including the emergence of the Internet, digital broadcasting and the mobile phone.

Another is what Barden calls “the growth of the Power of One” the rise of much more active decision making among consumers. This is driven largely by their experience of developments within financial services where the direct revolution has, he suggests, “turned tradition on its head”.

The emergence of the consortium, and the sort of programmes it’s running, suggests that trends such as these are prompting rad ical thinking among participants.

Reading between the lines, here are some of them.

First, marketing communications costs must be tackled with new thinking and new techniques, not just by making old media more efficient. Barden insists that cost synergies created by three-in-one mailings are not a driving factor for the consortium, but it certainly helps.

Second, brand and even category-based thinking is too narrow to really address consumer needs. Go back to that time issue. What is a time-pressed consumer more likely to do: order a home-delivery pizza over the phone, or spend time shopping around a range of different stores for many different so-called brands which are little more than ingredients to the end solution?

Likewise, wouldn’t it be better if marketers got together to focus on the overall task of keeping a baby clean and comfortably clothed rather than separately pushing dozens of isolated, partial solutions?

Cross-brand and cross-category thinking is needed – and hardly anybody is doing it. This, in turn, leads to the third conclusion: customer sharing, brand alliances and partnerships may be essential for future edge.

The fourth consideration is, potentially, equally radical: not only must brands add value for consumers, so must their marketing. Barden’s “incredible” changes in technology and growth of the Power of One mean that “consumers are becoming far more demanding,” he says.

A recent AT&T discussion paper made a similar point: new technologies “have vastly raised people’s expectations of what is possible, and what they are “entitled” to in terms of unbiased information, less sales pressure, greater speed, 24-hour access, etc.”

Key to the pilot, explains Barden, is not the special offers but the content of the communication. “We are trying to add value. If we can deliver interesting and relevant content over and above traditional brand communications, then consumers will be getting more from the brand”.

Which leads to the fifth point, the title of AT&T’s paper: “The battle for control of customer relationships.” Fragmentation of media, consumer experience of direct financial services, the quest for convenience – they all point to a growing tendency for consumers’ prime relationship to rest with the channel, not with the zoo of separate brands it carries.

Consumers shop at Tesco or Sainsbury’s. They then buy from among whatever products they see there. And, as AT&T suggests, the winners of the battle for control over customer relationships “will win big: occupying positions of strategic power, achieving higher margins, cementing brand loyalty… the losers will face obsolescence”.

Not surprisingly, the prime focus of the consortium’s work is deepening direct links with consumers.

Which brings us back to our starting point. The unmistakable implication of current trends is that many traditional packaged goods brands do indeed “face obsolescence”.

As Barden himself admits, to stay at the forefront of consumer marketing, marketers need “to improve our understanding of, and dialogue with, consumers in order that brands continue to meet their needs.”

But in the end, understanding isn’t enough. It also comes down to power. Somehow, it’s hard to see the consortium’s members really solving their problems without neutralising or bypassing retailer and media owner channel power, or else somehow turning that power to their advantage.

The speculation wasn’t off the mark. It’s just that when and if a brand manufacturer finds a way to tackle this issue, the last thing it will do is press release it as a pilot project.

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