Tuesday, June 29, 2010

Be Brand Selfish

The idea of “information sharing” and collaborative planning became popular in the CPG industry during the 1990’s. The Category Management promise was that if you help retailers grow their categories, as the category leader, you create a unique opportunity to grow your own brands. While true for the early adopters, the competitive advantages were short lived. As manufacturer after manufacturer hopped aboard the category management bandwagon, category insights became cheap commodities. A retailer can ask any manufacturer and get the same information. Multiple sources of reliable information was available from the trade.

While retailers got smarter it came at the manufacturer's expense. Working collaboratively with manufacturers, retailers had greater visibility into manufacturer brand plans and strategies, long term objectives, and short term promotions and pricing. Category insights gleaned by retailers were used to grow their own private label and house brands. AC Nielsen is reporting that private label brands surpassed $86 billion last year, up $14 billion since 2007. Sharing information also has an unintended consequence. Confidential plans often ended up in the wrong hands. Manufacturers with close retailer relationships had easy access to their competitors plans.

So can manufacturers slow the growth of the private label monster they helped to create? Probably not. But they can certainly stop feeding the beast and let it hunt for food on its own. Now is the time to be brand selfish and be more discrete about what and how information is shared with trade partners.

While information about categories, consumers and trends can be valuable in closing a sale, it should be used for just that purpose, closing the sale. Any extraneous information, detailed research or facts that can be used to grow the category or private label should not be shared. It becomes a distraction and potential liability.

Information is an asset that should be guarded with more caution. This includes an internal information governance process and educating the sales force in what is permissible to share with the trade and what is not. Information gatekeepers should work with the brand teams to distill valuable information and insights down to key sales points. This means that instead of publishing binders of elaborate business plans and useless data that show the retailer how smart you are, an information guru creates a few sales sheets with relevant facts and data to support the customer sale. Designating a point person mitigates the risk that proprietary information gets released.

By managing your brands and not the entire category, you are doing yourself a big favor. Let the other manufacturers worry about the category; your number one priority is to manage your brands. Be more brand selfish.

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