GLOBAL MARKETING TRENDS FOR CONSUMER PRODUCTS
The market of consumer goods globally is huge. The marketing trends we can discuss today, perhaps tomorrow will change since the market conditions are different form country to country and they are also changing.
The most important international marketing trends are the following:
1. Real product differentiations are becoming rarer.
Companies struggle for launching new products which will be different from the existing ones. Consumers’ perceptions for what a new product is do not coincide with companies marketing strategies and policies. Moreover, big supermarket chains “encourage” companies for new differentiated products.
2. Marketing expenditures will continue to rise.
Regardless of sales increases, marketing budgets will be higher due to competition and due to complexity of distribution channels. Retailers have an increasing number of requirements for shorter delivery times and more regular shipments.
3. Dramatic increase of outsourcing.
During the last 2-3 years, we have experienced a considerable increase of outsourcing in marketing and sales. For the next 3-5 years, the expenditures related to outsourcing will be increased in the areas of marketing communications, logistics, marketing and sales strategy and planning, marketing and sales training. Outsourcing will be a suitable strategy not only for small and medium size companies but also for larger corporations.
4. Exceptional customer service will be a key strategy.
Customers recognize excellent service as a unique differentiating factor. Based on research we know that one unsatisfied customer talks about his/ her negative service experience to seven people. Mass advertising and promotion activities can not easily reverse this situation. In the very near future, we are going to see: a bigger number of customer service departments, friendlier call centres, service oriented and customer focused employees, better trained people in the customer service area and an increasing number of customer satisfaction measurements
5. Moving from call centres to contact centres.
Today, the main purpose of call centres is selling products/services. During the next years, their image will be redefined. Their new name will be “contact centres” and apart from sales, there will be greater emphasis on high quality service. Their main characteristics will be: handling of complaints, customer satisfaction measurements, information to consumers. They are going to act as separate profit centres and they will be an integral part of the marketing and service strategy.
In addition, there will be a huge increase of call centres worldwide: 50% increase in Europe, Middle East and Africa up to 2008. According to research in 26 countries, the number of call centres will exceed 45,000, employing more than 2,6 million people. Also, we are going to see call centres which will be specialized, covering new markets: hospitals, hotels, restaurants, department stores, public services
6. Companies will focus on their most successful brands.
Product portfolios are shrinking, especially in multinational companies. Products with lower brand awareness and brand purchase will be eliminated and there will be concentration in mega-brands with big market shares and higher profit margins. The investment on advertising for those brands will be huge. The risks of such a strategy are: consumers’ acceptance of global brands is not the same everywhere and they may switch their brand which has been abolished with a competitive one. In addition, we are going to see a new war in supermarkets for shelf dominance.
7. Increasing skepticism over advertising messages.
Too many advertisements have caused the well-known “clutter effect” and advertising promises are not taken into consideration by consumers. The result is a lower degree of brand loyalty. Also, research shows that viewers do almost anything else during a commercial break except watch the TV. Therefore, companies will increase the frequency of social marketing and cause related marketing programmes, decreasing budgets of the traditional commercial advertising
8. Sales promotion is becoming a strategic marketing tool.
As a result of the advertising clutter, an increasing number of marketing people have started to use sales promotion as a main element of their marketing strategy. In the area of sales promotion we are going to see joint efforts between two or more brands of the same company or between different companies and tie-in promotions between retailers and their suppliers.
Another important trend in the same area is that loyalty marketing campaigns will be enriched. Although the number of loyalty programmes is increasing, consumers require more creative and innovative approaches. So, companies will have to use new techniques which will require deeper consumer’s involvement and loyalty campaigns will be an integral part of the marketing communication strategy.
9. Mystery shopping comes out of the shadows.
Mystery shopping is more than “spying” on the staff. Mystery shopping will be used as part of the training process which is related to personal selling, negotiation skills and consumer service. Using mystery shopping, companies may receive more accurate information, regularly, about the shopping experience of their customers at the time of purchase. The spending on mystery shopping will be steadily increasing
10. Use of on-line surveys to increase.
The on-line market research sector in Europe and N. America is set to rise according to a recent survey. More than 80% of interviewed managers expect that on-line research will be booming since it is a cheap and fast way of collecting data.
11. Crisis in business decision-making related to marketing.
Two surveys – in Europe and USA – reveal the continuing trends of marketing executives making more complex decisions in less time, flooded by data. The main problem will be the volume of data which will double and triple comparing to previous years, making decisions more complex. The solution to that problem is the development of CRM and MIS from the company’s centralized data warehouse which will act as information provider to the marketing and sales departments.
12. Predetermined purchases and higher frequency of shopping visits.
An increasing number of consumers visit supermarkets having a predetermined shopping list. This is happening due to reduction of their disposable income. Also, consumers prefer to visit supermarkets more often, spending less each time.
13. Criteria for purchasing a new product in the supermarket.
The type of the sales promotion activity is one of the most important criteria for consumers to buy a new brand for the first time. Although consumers act less and less impulsively, certain sales promotion techniques will help new brands to achieve higher rates of brand trial. It seems that consumers prefer the following types of promotions for new products: free samples, coupons, displays/ point-of-purchase (POP) material and on-pack promotions.
14. Increasing power of large supermarket chains.
There are three facts. The first is the quick expansion of discounters, and then is the strong competition between retailers and finally the price war between supermarkets “squeezes” their profit margins. The impact of those facts on suppliers is: higher listing fees, lower prices and bigger quantitative discounts and year-end discounts to supermarkets.
15. Continuing expansion of discounters in Europe.
The main reasons for this expansion are: Consumers are becoming more price-conscious, they are less brand loyal and they are less interested in brand image. The main characteristics of discounters are: smaller outlets, less staff, limited product categories/product lines and private labels
16. Dominance of private labels?
The answer is “no”. Brands will prevail. However, private labels are gaining consumers’ acceptance. They are not considered as “inferior” products. They are cheaper or much cheaper compared to advertised products. It is obvious that private labels will make marketing people’s life more difficult since they have to develop and pursue strategies aiming at new product development, continuous advertising and promotion support, focus on merchandising and stronger presence in supermarkets.