Marketing Analytics for CPG Companies

To succeed in the fight for share growth, companies need to leverage every available resource.  One goal at Consumer Package Goods (CPG) companies is to transform their information assets into a sustainable competitive advantage.  It is believed that by providing decision-makers with actionable insights into critical information they will be able to diagnose the drivers of performance and create quantifiable action plans to improve future results.

There are several ways that CPG companies can incorporate analytics to measure and improve their marketing performance. They can incorporate analytics in action that:

Measure the effectiveness of promotions:

• Business Benefit – These analytics establish if there is a correlation between promotion and volume.  For example, tests using a control group are created to assess the efficacy of buy-downs in generating contribution.

Measure the primary metrics (share, volume, price, distribution, spend and contribution) over time allowing for various dual metric comparisons:

• Business Benefit – These analytics identify trends and can be compared with economic metrics such as inflation, employment and GDP.  For example, the trend of volume sold above or below a targeted price gap can be compared with job metrics.  Analytics such as these help optimize resource allocation.

Predict the drivers of the primary metrics:

• Business Benefit – These analytics can identify the key influencer variables and the impact they have on success and failure.  For example, the product target segment influencers could be identified and exploited.  As this group’s share is a leading indicator of brand strength over time, positive results will have a long-term financial impact.

Measure and monitor fair share:

• Business Benefit – These analytics ensure that as volume grows in a sector defined by area, channel, chain, etc., the company is growing in proportional manner.  For example, if the chain volume grows X% and the company historic share is Y%, has the ratio been maintained?

Conclusion:

While this post specifically referenced CPG companies, the analytical approach addressed here is certainly applicable to any marketing organization structured around brand management, trade marketing and category management.