Do what they can’t do
We have the opportunity to work with many different consumer packaged goods. It is one of the features we like best here at SKUFood. Many of these brands are small to medium sized businesses. It is a huge challenge to get these products developed, produced, on the shelf and into the shopping cart.
Big brands do have advantages:
They have economies of scale,
They have large sales and marketing teams,
They have the ability to hire outside resources,
Many can afford celebrity endorsements,
Their volume is significant to retailers so they get more attention,
They can buy shelf space and afford more temporary price reductions (TPR).
This can be a lot to overcome for small to medium sized brands. Reality is you probably will not be able to win at any of these games.
Where you can win is to do what they can’t do.
Focus on the positives
A number of years ago I was having a conversation with a sales and marketing person. We were discussing options and how to get the best return on the investment they were making. As we talked through the options, the conclusion I came to was they had to do what the big brands could not do. This would allow them to generate brand awareness and sales that the big brands were either not willing or able to pursue.
When we started to take this approach; do what they can’t do the tactics in the sales and marketing plan became clear and effective.
It is easy to get frustrated when you see the bigger brands spending money and getting more attention from retailers. Retailers can be influenced by these things, but what they are really influenced by is sales. When you figure out what will deliver sales and outpace the growth of your competition you will get the attention and the support.
5 options for Do what they can’t do
Micro marketing
It is true Pepsi will probably sponsor the Super Bowl. It is also true they probably will not sponsor a community event in your best markets. The reason they pay to sponsor is to give them the right to create a sales opportunity related to an event. It is possible to do this on a smaller scale. You will have to invest to become part of an event but the real payback is when you can go to retailers in your market to create a sales event. Remember you have to think about what is in it for them. It can be sales, perhaps a partnership at the actual event or maybe you take some of the employees as guests. Figure out what is important to your customers.
Plan for these sales opportunities. When Pepsi sponsors the Super Bowl they negotiate over and above displays and produce product to fill stores with inventory to sell. They work months ahead to ensure they deliver a return on the money they spend.
Do everything you can to get the credit from consumers and customers. Use social media, mass media and public relations to capitalize on the opportunity. These are usually good news stories so public relations is a real possibility. A segment on the 5pm news is worth more than you will ever know. Remember to mention retailers to give them some exposure and where people can find your products.
This all takes work! A lot of work. It is also what you have to do to stand out from the big brands and generate the exposure and sales you need to build your brand.
Celebrities in your market
We know the big brands will pay big money for Jennifer Lopez or Rihanna to promote their products. We also know they go for the personalities that are known across the widest possible market. Determine who is an influencer for your target market, in your market. This can be someone in the culinary world, an athlete who has had regional or national success or anyone else your consumers would know.
Often these people are not looking for a lot of money and endorsing a product is new to them. You should create an agreement, so you are both clear on what each party is responsible for in the relationship. They have online communities where they can talk about your products. If you pick the right person, they might get more famous and you will be there for the journey.
Educate customers about your market
The larger retailers are all located in one office. They have a lot to do and they do not get out into the market as often as they would like. Help them see what is happening ‘out there’.
If you are located outside the market where their office is send them a few photos from time to time. Their own stores and the competition. If you are doing some of the micro marketing in #1 share some photos of that, include the one where you tell people to visit store ABC for the products.
When unique things happen in your market help them understand it. Last year in Halifax we endured wildfires and floods, all within a couple of months. A category manager in Toronto might not understand the impact.
You will not always get a response but these are all things you can do to build the relationship. Chances are the VP sales at Kraft, who is in Toronto is not helping them understand what is happening in other markets.
Help them understand your category
We assume category managers are all knowledgeable and when they get the title, they are experts. Don’t quote me…but they aren’t. Many move from desk to desk and there is a lot for them to learn.
They do appreciate it when suppliers take the time to support them. This is not a sales email, it is information to help them do their job better. In the end it will help you, but it is more generic and designed to increase their level of understanding. An example could be information about the disease impacting cocoa plants. You do not have to tell them your cost is going up in this email. Just share the information so they are informed. This is even better when it is related to something in your market. Could be the water temperature rising and impacting the size of the mussel crop in PEI. Information is important to them and you are helping them look better in front of their boss.
Surprisingly the big brands are most self-serving in this area. Not all but most want to only focus on what helps them. It is more adversarial with the bigger brands and the retailers so perhaps they just figure they will only focus on what helps them. It is a real opportunity to be different.
Spend time in your stores
Many big brands have sales reps but they do have to cover a number of stores and like most other things they are probably stretched more than ever. If your products are in a limited number of stores, over deliver where you can.
Get to know the people and work with them. Jake from Mid-Day Squares will post videos of him and people in the stores they like to work with. They are growing, but still remember the employees and the small retailers who helped them get started.
Figure out what is important to these stores and how you can make it happen. Perhaps their community hosts a big event at some point in the year. Support them and try to get some extra displays. Get the inventory in there and help them drive sales. Chances are the big brands are not going to react for one store. Stores also have lots going on to build their team. We sued to have a big softball tournament at Loblaw. Perhaps you can provide some product for the team to enjoy on the tournament weekend.
This is a lot of work
Building a brand is a lot of work for small to medium sized brands. It is also a lot of work for big brands. They do it because it works. You can’t out spend them so out smart them. You need people and resources (otherwise known as money) devoted to this. Measure the results and make sure you get a return on your investment.
Peter
SKUFood Recipes for Success Podcast
The response to our SKUFood Recipe for Success podcast has been great. We want to thank everyone who has been with us as a guest. So many interesting conversations about our industry.
The story of Cedar Valley Selections is a great one. You might have seen them on Dragon's Den. I was fortunate to meet Ameen and Surria a number of years ago when I did a workshop for the Windsor Essex Small Business Centre. They were just starting and Ameen asked a lot of questions!
If you would like to be a guest send us a note. We are always working on the upcoming episodes.
Boycott of Loblaw continues for some
There are different reactions to the consumer organized boycott of Loblaw stores. I find it interesting consumers believe one large retailer is worse than another but there is no doubt they were able to engage a sizeable number of people to participate. Only Loblaw will ever know the impact.
Suppliers to retailers should understand the impact on their business. We have heard Loblaw did feel the impact and the winners were probably spread across the entire retail landscape. Measure your sales and remember the performance of your customers will have a direct impact on your sales.
Distribution is a big challenge
We think it is time for something to disrupt the methods of food distribution in Canada. we have had many examples where people use technology or other means to bring a new outlook on established industries.
Have you see anything you would see as interesting or fresh in the world of food distribution? If you have, please send me a note peter@skufood.com
It would be great to learn about some new ideas and how people might be doing it differently.
