RSS FeedBy M. Isi Eromosele
The biggest issue facing consumer packaged goods companies is 2011 is how to compete more efficiently in a highly competitive market. With the advent in Internet technology and consumers’ desire to gain more information before making purchases, the consumer products industry will be required to put more information on their products. By means of the increasingly prevalent social media networks, consumers can verify, validate and learn products - their origins, ingredients and how they compare with other products in terms of quality and pricing.
For many decades, CPG companies utilized advertising and marketing to shape their brands before presenting them to consumers. In 2011, this will no longer work, as consumers are now empowered with a strong voice and tools that enable information and opinions to be dispersed in an instant. Manufacturer messaging no longer carries the day as consumers are in the drivers’ seat. Consumers can access a variety of online resources to ascertain if a product’s claims are true. This puts the manufacturers on the defensive as it forces them to prove the authenticity of their products.
Information has fast become the main currency of the sales process. This carries major repercussions for CPG companies. It is imperative for them to proactively acquire and present product information to consumers in a timely manner or risk consumers shaping their products’ reputations. With the increased prevalence of private label products, consumer product companies will be under pressure to adjust their pricing, making sure that price disparity is at a minimum.
Other issues consumer packaged goods companies need to address in 2011 include:
Maintaining Growth
The ability of consumer goods manufacturers to achieve and sustain profitability will be challenging in 2011. The costs of energy, raw materials and other necessary resources continue to rise. Compliance to complex industry regulations and dynamic risk management rules are adding to onerous expenses. To achieve profitable growth in today’s competitive marketplace, CPG companies must productively steer through more dynamic, competitive, regulatory and global environments. They would need to reevaluate their product portfolios as they refocus some of their core brands. Distribution channels, which are becoming more complex, would need to be streamlined and made more efficient.
In order to maintain product success, consumer product companies would need to engage and build relationships with their customers, with social media as the main conduit of implementation. Additionally, they will have to do extremely well at fostering collaboration with their customers as well as endeavor to optimize their operations to engender responsiveness, sustainability adaptability and efficient performance.
Operations Excellence
In order to flourish in a competitive marketplace, CPG companies will need to be agile, flexible and effective in the use of their physical as well human assets. Competencies must be enhanced through tremendous in-house programs to sustain the intellectual capital that drives their operations and performance. Plants would need to be optimized to flawlessly operate in order to meet target goals and capture opportunities profitably within strict safety and quality guidelines.
Shipment and quality errors, which can damage brands, must be eliminated. Repeated delayed response to market demands and requirements should not be tolerated as this can result in loss of market share. Product quality must be enforced and electronically documented throughout the production processes, which would enable fast problem resolutions.
M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance
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