DIGITAL SOLUTIONS
SECTION ONE
SECTION TWO
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SECTION THREE
Integrating Digital into the
Traditional Marketing Mix
Consumer goods (CG) manufacturers are aggressively exploring ways
to integrate new channels such as social media and mobile into the
marketing mix to attract and engage consumers. Perhaps CG companies looking to get closer to consumers ought to think more like retailers, which have made significant investments in understanding consumer behavior and sentiment across physical and digital environments. It is all part of the changing face of consumer marketing.
For example, pushing traditional media through new media channels is not enough to reach today’s more plugged-in, product-savvy consumer. An increasingly complex, non-linear buying process requires a different approach—one that integrates multiple channels to put their brands wherever consumers are, in a way that encourages participation, not passive consumption of marketing messages.
“Our go-to-market strategy is to win wherever people shop. As more people move their shopping habits online, we want to be present when and where they want to make a purchase,” said Alex Tosolini, vice president of global e-business with Procter & Gamble.
The goal for P&G and others is to establish and enhance direct, two-way relationships with their target consumers. Deeper relationships, many CG marketers believe, will increase brand loyalty and drive product sales, either directly (through digital commerce) or via traditional retail channels.
The opportunity is finally catching the attention of senior management. In a recent study by the Economist Intelligence Unit (EIU), three of four (74%) CEO-level respondents say social media is a priority for increasing loyalty over the next 12 months.
The study, sponsored by Oracle Consumer Goods, aimed to determine how CG companies are integrating new channels such as social media and mobile into their marketing mix. The report found that the use of social and mobile channels are increasingly helping CG companies become more comfortable with the direct-to-consumer selling model, with the number of companies selling products directly to consumers expected to increase from 24% to 41% over the next 12 months. The results also showed that over the next 12 months CG companies plan to leverage social media for a broad range of marketing activities, including product promotion (74%), capturing consumer feedback (63%) and customer service (62%).
In addition, 74% of CEO-level respondents say social media is a priority for increasing loyalty over the next 12 months. Nearly twice as many survey respondents (33%) say social media will be a top priority in the next 12 months as those who say it's a priority today (17%) Despite the growing social and mobile marketing trend, survey respondents and other CG executives see their nascent e-commerce efforts as complementary to, not competing with, existing retail channels, but are committed to expanding their direct-to-consumer strategies.
Consumers spend more time online, frequently researching, discussing and even directly purchasing consumer goods ranging from household and personal-care items to apparel and consumer electronics. But efforts by marketers to reach these consumers when and where they shop have lagged. Survey respondents cited three traditional marketing activities—in-store marketing (73%), co-marketing with retail partners (61%) and print/television ads (60%)—as most important for consumer engagement.
Marketers appear ready to pick up the digital pace, however. Three of four respondents say social media will be an important part of consumer engagement over the next year, equal to in-store marketing. Digital marketing (66%) will rise to the third spot, ahead of print/TV advertising (59%).
While these figures show that engagement priorities are shifting, marketers also understand the importance of integrating communications across all of these channels—not managing each independently—to deliver a more consistent and personalized buying experience to consumers.
“It is critical in today’s highly-competitive global economy that consumer goods companies take advantage of every touch point with the consumer. This now involves a combination of physical and digital environments, including social media and mobile platforms,” said Cassandra Moren, senior director, consumer goods industry marketing for Oracle.
In October 2011 the Economist Intelligence Unit conducted a global survey of 221 consumer goods (CG) executives, sponsored by Oracle. All respondents were from companies with over $1 billion in revenue. A mix of CG segments was represented, including food and beverage (53%), personal and household products (30%), non-durables (11%), tobacco (4%) and agribusiness (2%).