No one will argue that there are challenges that come with emerging markets. Are there solutions as well? Yes. CPG Analytics is proving to be a great tool for understanding developing markets. CPG firms are now leveraging the power of analytics across different areas, including:
- Pricing Alignment: CPG manufacturers have their eyes set on growing profitability. Prices have been increasing. However, indiscriminate price rises not only hurt the brand sales, but their proposition of providing value as well. (Value for Money is a key topic in the landscape of emerging markets.) Brands should arrive at optimal pricing through a rigorous pricing analysis (e.g. conjoint) to maximize revenue gain.
- Integrated Consumption Forecasting: Analytics helps CPG managers simulate different scenarios and the corresponding business projections. This integrated business planning tool helps stakeholders to align their forecasts, as consumption slowdown is reflected not only to marketing and sales departments but also to departments along the supply chain. However, such a tool takes time to deliver results, as market nuances must be ironed out (Such a tool is a good marketing mix modeling example as well as S&OP support). So the need is to embed it, use it in a disciplined fashion, and patiently wait to see the results.
- Digital Media Analytics: If there’s one significant consumer change that every marketer grapples with, it is the advent of the Millennials. Digital media analytics (using commercial listening tools or tools such as Multi Channel Attribution) helps organizations understand these consumers and provides needed context for conversations. These conversations can help brands engage with Millennials, developing a long-lasting dialogue with them.
- New Category / Brand Launch – Impact and Marketing Strategies. Analytics can not only help a business launch new products; they can also help leaders assess where established categories are heading. Let’s consider each of these points individually:
- Impact of “New” Product Development: New products must identify and retain their unique set of consumers. Firms need to isolate the incremental impact of their NPDs. They need to ensure that the NPDs are not cannibalizing sales from other brands in their portfolio. In time, these new products have to become part of the mainstream portfolio without declining once their novelty factor is lost. Consumer Research and Revenue Cannibalization analysis can help manufacturers gauge impact and modify their marketing strategies accordingly.
- Addressing Category Maturity: Introducing categories at the right moment in the economic evolution curve is key for long-term planning in emerging markets. This includes weighing economic and taste factors. For example, even with the doubling of India’s GDP per capita in the past decade, Parle-G (a low-cost snack cookie) remains the country’s top-selling cookie. Modeling of market movements across categories helps CPG managers plan and time their activities for the most impact.
- Regional Spend Optimization: To improve profitability, organizations are looking to optimize spends across regions, countries, and channels. They want to allocate investments in a more disciplined and logical fashion. Analytics allows global CPG manufacturers to run spend optimization exercises across regions to allocate spends scientifically, and not based on gut feel.