Packaged goods marketing as a battlefield

By Tom Dougherty

10 July 2014

Product benefits in packaged goods marketing aren’t enough anymore

Packaged goods marketing companies, like P&G and Unilever, fight for every drop of margin they can squeeze out of a crowded category. Traditionally, their brands power forward through product innovation, research and development. New advertising campaigns roll out when product improvements warrant them. Pampers, LUVS, Tide, ALL, and Mr. Clean are all a case in point.

package goods marketing

P&G is synonymous with packaged goods

In packaged goods marketing, preference and margins cannot be found in product enhancements and efficacy. These two improvements are simply the cost of doing business. Your preference and margins stem directly from your brand, especially in today’s crowded market space. In reality, most brand marketers and brand managers are actually product managers. And they are hard pressed in describing their own brand in any terms other than banal category benefits.

Packaged goods marketing margins come from your brand importance

This pitfall in packaged goods marketing happens all the time. Universities and colleges fail to understand the intricacies of a brand. Thus, they do not prepare future brand executives accordingly. The famous brand management pathway at Proctor and Gamble merely indoctrinates future brand managers as traditional product managers. Furthermore, it is nearly impossible to mend a brand from the inside out. You need dispassionate brand evaluation and analysis. Insiders have trouble doing that.

For example, Pampers is not the brand. It is only a name. Pampers is not about dryness and efficacy. Those claims were effective years ago when the brand was new and the category immature and less crowded. Back then, brand marketers looked for the unique selling proposition (USP) that identified a differentiating product benefit. “How the product is different and better” became the marketing mantra and R&D became the means to an improvement.

The end result

As a result, the brand becomes product development driven in packaged goods marketing. Inevitably, the market changes over time. The consumer sensibly believes that everything within the retail category will deliver product performance. They know that all laundry detergents clean clothes well.

Unilever is a packaged goods marketing powerhouse

Unilever competes in almost every segment

There is no mystification among consumers that all brands of disposable diapers keep their baby dry and comfortable. Most diapers fit well, stay in place and eventually end up in landfills. Therefore, the diaper shopper believes that there is little difference between Pampers, Huggies, Luvs or the store brand. Sometimes, the shopper chooses based on the experience of right fit. Frequently, the shopper decides because of price or an emotional connection that’s neither examined nor understood.

Packaged goods marketing still operates as thought the shopper is influenced by the latest cartoon character. Or that the color scheme makes the most difference. Those marketers  are still caught in the times of the stale USP paradigm. What’s left if it is so difficult to justify the margins based on product efficacy?

The brand is the customer

The value the consumer invests in the brand itself remains potent regardless of category or product. Product benefits don’t matter in brand preference. An investment in self-description and often hidden precepts matter greatly. Consumers buy a reflection of themselves and their lives today in packaged goods marketing. When they choose a brand, they are in fact reinforcing their identity, who they believe they are at that very moment in time.

We call this extension of identity a brand face and your consumer shows many. Effective brand development is more akin to anthropology than marketing. In packaged goods marketing, you have a customer for life if it sees a reflection within a brand and affirms, “Yes, I want to be that.” Recognizing and evoking the most acute and important brand face is a difficult process. But you will find preference, margins and loyalty in that germinal seed of self-description.

Being first in packaged goods is secondary

Read a market study on the packaged foods category