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Whether you’re a new CPG brand or an established category leader, this article will help you understand CPG marketing in this new economy. We discuss the latest strategies, trends, and challenges for consumer packaged goods brands with examples of winning CPG marketing strategies.
Having worked alongside internal CPG marketing teams at the world’s leading brands and external brand marketing agencies, we provide a unique look at what’s working when marketing consumer packaged goods. Let’s dig into marketing for the CPG industry.
What is CPG Marketing?
CPG marketing, or consumer packaged goods marketing, promotes and sells products consumers use daily. Consumer products include food, beverages, cleaning supplies, personal care items, and other household products. CPG marketing can take many forms, including advertising, public relations, promotions, and digital marketing.
CPG marketing aims to create product awareness, build brand loyalty, and drive sales in a highly competitive market. With the rise of ecommerce, integrated commerce, and click-collect changing consumer behaviors, CPG marketing has evolved to include direct-to-consumer strategies and a focus on understanding consumer data to create effective marketing campaigns.
Successful CPG marketing requires a deep understanding of consumer behavior, market trends, and innovative product development strategies.
CPC Branding vs. Marketing
CPG branding focuses on creating a distinct and recognizable brand identity for consumer packaged goods. It involves designing logos, packaging, and messaging that convey the brand’s values, personality, and unique selling proposition. On the other hand, CPG marketing encompasses the strategies and tactics employed to promote and sell CPG products.
What is the Current State of CPG Marketing?
While every CPG industry magazine leans heavily on direct-to-consumer topics, the category is trending more for information than for brands winning in the marketplace. Direct-to-consumer is still a low-risk model for mom-and-pop brands promoting their consumer goods, but omnichannel is how CPG brands will succeed in 2023.
Covid-19 gave brick-and-mortar CPG retailers the push to make them more relevant to online shoppers. This rapid increase in ready-for-pickup orders required heavy app and website development investments. The pandemic completely reframed how CPG retailers promote packaged goods.
Here’s a look at a few ways national retailers use their online presence to drive location sales.
- Synchronized loyalty programs
- Free samples at the point of pickup
- Recommended items
Case Study: Bob’s Red Mill
We’ve previously discussed Bob’s Red Mill’s online marketing strategy and how they are doing things right. Yet, with all that success, they have eliminated their direct-to-consumer model and wholly focused on retail partnerships. Despite heavy direct-to-consumer investments, Bob and his team believe they will capture more market share by aligning with the new way the CPG industry drives sales to retail stores.
Returning to retail doesn’t mean Bob’s Red Mill needs to give up on marketing channels that contribute to online brand awareness. Instead, they can turn visitors into customers through coupons, email marketing, contest sign-ups, and recipe-focused content marketing.
Marketing To Different Demographics
Personalization continues to be a growing trend for CPG marketing. As such, CPG marketers need to have a firm understanding of what influences their demographic to buy. By understanding their target audience,
Baby Boomers: As one of the most important demographic groups, Baby Boomers are a heavy target for CPG marketers. They value quality and have substantial brand loyalty. CPG marketers should focus on creating messaging that speaks to their desire for comfort, security, and nostalgia.
Generation X: Gen Xers are a smaller demographic group with significant purchasing power. They are family-oriented and value convenience and quality. CPG marketers should focus on creating messaging that speaks to their desire for ease and simplicity in their products.
Millennials: With their immense buying power and affinity for digital channels, Millennials are a vital demographic for CPG marketers. They prioritize health and sustainability in purchasing decisions and are likelier to experiment with new products. CPG brands should create products and messaging that align with millennial values.
Generation Z: As the newest generation to fully enter the market, Gen Zers are tech-savvy and socially conscious. They value authenticity and personalization in their products and want to align themselves with brands that reflect their values. CPG marketers should leverage social media and influencer marketing to reach this demographic.
Generation Alpha: The youngest demographic group, Gen Alpha, is still emerging as a consumer group. The Gen Alpha demographic is digitally native and appeals to packaging innovations. While the packaging may WOW the gen alpha consumer, brands should focus on creating messaging that speaks to parents and caregivers, who are the primary purchasers for this demographic.
For demographic marketing, CPG brands will have more than one target market to consider. Often, “influencers” impact differing demographics, making it critically important that CPG brands understand how to weave more than one demographic into their marketing plan.
Marketing To Consumer Interests
Another critical aspect of marketing a CPG brand is understanding the consumer interests of your specific demographic(s). Understanding their interests, hopes, and desires allows CPG brands to become more than just a product to their target consumer. Here’s a look at four primary consumer interests.
Health and wellness: Consumers are increasingly interested in products that promote good health and well-being, including organic, natural, and non-GMO foods, plant-based alternatives, and supplements.
Sustainability: With growing concerns about the environment, consumers are looking for products that are eco-friendly and have a low carbon footprint, such as recycled packaging, biodegradable materials, and products made using renewable energy sources.
Convenience: Busy lifestyles have led consumers to seek products that save time and effort, such as ready-to-eat meals, meal kits, and online grocery shopping.
Value: With economic uncertainty, consumers are looking for products that offer the best value for their money, such as bulk discounts, loyalty programs, and rewards for repeat purchases.
Our ideal consumer is interested in all these points of interest, but the scale weighs differently for each individual. That is why you must lean on data to understand your customer.
Leaning On Data To Understand Your Target Audience
Whether you take a D2C or B2B approach, you need consumer data to create the most effective CPG marketing strategy. All CPG categories have enough competitors that it requires us to understand our target consumers fully. Your marketing plan must have a detailed understanding of the potential consumer you hope to reach and a key insight about them, and the only way you get there is through primary consumer research.
Here are three ways (you should use all of them) to better understand your ideal consumer and how to find this information.
Existing Consumer Insights
There are two primary ways to find existing consumer data. The first and least often used method is using the traditionally used tools for search engine marketing. Using tools such as Google Analytics and Ahrefs gives you insights into what consumers seek. It also helps you determine when they are searching for them and what questions they have about the topic.
Example: Let’s say you are considering how to market your natural ghee product. Looking up the matching search terms for Ghee tells us that the most commonly asked question (apart from “what is Ghee?”) is understanding if Ghee is healthy. While we might assume that most people recognize Ghee as beneficial for health, we now see a need to showcase the health benefits of Ghee within our advertising.
The second way we can access information about our consumers is through consumer demographics and customer intent data. For this, you must open your wallet to access online reports and ai tools that provide details about the consumer and their buying intent.
Creating Consumer Insights
CPG brands, big and small, should develop their consumer demographics and buyer intent data. While we offer consumer testing for CPG brands, you can use social media and your existing email list to learn more about your consumer.
Example: Let’s say we are a healthy snack vending machine company. To create a more intelligent intent-based marketing strategy, we created a Facebook group poll to determine which healthy snacks parents prefer.
Those with an existing email list can create simple surveys. But since you are entering people’s inboxes, you want to ensure your message is clear and drives them to take action.
Sooner than later, “homebrew” insights will not be enough. A company must engage with a CPG brand strategy agency to capture critical insights through CPG market research.
Testing Consumer Insights
Do you believe everything that everyone tells you? Of course not. It’s human nature to say one thing and do another. We often have the best intentions, but our decisions shift differently. We can say the same about existing consumer insights and the data we collect through our effort.
The fact is that consumer intent differs from purchase intent. To determine the validity of your CPG insights, put your consumer insights and research to the test.
For example, if you’ve determined that moms believe healthier gummies make for a great snack, test their performance in several vending machines before committing to a large run. We want to prove product-market fit before making significant capital investments.
How does consumer intent differ from purchase intent?
When asked a specific question about preference or purchasing, consumer intent is a subjective conclusion. Purchase intent is a consumer’s uninterrupted act of deciding what product to purchase.
CPG Product Development Strategies
With this data, it’s time to move to product development. Of course, this is assuming you have yet to develop your product. If you create your CPG marketing strategy post-production, consider this for future products or when improving a formula.
Your product design is one of the secrets to success in CPG and is at the core of your marketing strategy. David Ogilvy is famous for saying, “Great marketing only makes an inferior product fail faster.”
If the product strategy is the initial marketing effort for a CPG company, then it’s essential to look at innovation and new product development strategies through this lens.
- Are you considering adding Ghee to your natural cookie recipe? How does that impact your marketing?
- Are you thinking about adding cane sugar to your low-calorie drink? How does that impact your beverage packaging design?
- Does your protein bar require refrigeration? How will that affect your retailer relations?
These questions will affect your future advertising and marketing efforts, so you must address them with your product development and marketing team.
A Note On B2B CPG Marketing
What comes first? The consumer or the store buyer? You cannot separate these two selling forms in a CPG marketing campaign, like the chicken and the egg. But with so many CPG startups knocking and asking for access, B2B CPG marketing is a must if you want in the door.
What is a B2B marketing strategy?
A B2B marketing strategy is a committed effort where you allocate time, money, and resources in a structured way to target the desired retailer. Successful B2B marketing strategies should make the retail purchaser feel as if they have no choice but to take an interest in your brand. A B2B CPG marketing includes:
- Strategic selling by brand managers.
- Print advertising in trade magazines.
- Trade show booths and event experiences.
- Digital marketing targets the decision-makers of retailers selling consumer packaged goods.
Omnichannel CPG brands must remember how important it is to remember where a transaction first occurs. Often, a business becomes your initial “target customer.”
CPG Advertising Strategies
They say it takes money to make money, including increasing consumer demand through advertising. While some of your marketing efforts will be organic, others require a committed ad spend through social, offline, or with a retail media network. This section will look at the most common advertising strategies by CPG brands and provide a unique insight into each.
When you look at Rebel Ice Cream’s minimalistic packaging design, it’s easy to see why they would choose advertising that strips away the graphic influence. While many brands have shifted their advertising budgets to the latest social platforms hoping to attract a potential customer, Rebel is using good ol’ Google ads.
At approximately $2.00 per click, Rebel is getting valuable audience data insights they can leverage through advertising platforms.
In marketing, there’s an understood principle that we should enter the conversation in the customer’s mind. This ad proves that Pure Leaf recognizes consumers’ battle about unsweetened tea being hard to stomach and sweetened tea being high in sugar. Here, compromise is the answer to how to carve a niche in this established beverage category.
Sometimes the winning CPG advertising campaigns come through with the simplest of messages. Pure Leaf’s ad campaign in HGTV magazine is an example of this.
One of the best ways to enter the existing conversation in the customer’s mind is to create a pattern interrupt at the point of the consumer being in a state of buying. In-store advertising is one of the most effective methods, yet only a small percentage of brands give it enough attention or realize its marketing effectiveness.
CPG brands should invest more money into in-store marketing and more time into nurturing the retailer relationship so that these opportunities present themselves. Often, in-store marketing requires a brand to get creative and start the conversation. Whether it’s a window display or an end cap, making the request is how most of these opportunities happen.
It’s easy to get caught up in the latest marketing opportunity, but most brands often perform poorly because their shelf presentation is stale and doesn’t resonate with buyers. CPG brands must understand the role of product packaging design in a CPG marketing strategy.
Whether when a product launches or new competition arises, the packaging design for retail stores makes consumers consider or reconsider your brand.
Packaging Design Case Study
Reaching into the SmashBrand swipe files, here’s a look at a Yucatan packaging design that increased purchase intent in multiple nations. It’s a compounding effect because the retailer gives you more shelf space when you increase the likelihood of a consumer making a “yes” purchasing decision.
Yucatan became more relevant to millennials and could influence consumer behavior by creating more “party-friendly packaging.” We determined that this was a purchase driver by most guacamole consumers through consumer data.
Marketing Doesn’t End At The Point of Purchase
While social media may have influenced the initial purchase, it may also be the reason for losing the next one. It is wrong to assume that we earn brand loyalty after single or several transactions. CPG shoppers are constantly on the lookout for the next best thing. So create your marketing strategy to reinforce a consumer’s intent past the point of the initial purchase.
Want To Outperform The Competition?
SmashBrand is a CPG brand development Agency that helps consumer brands win on-shelf. If you are a brand in the CPG market looking for a design team to provide predictable retail performance, we can help. Book a time to discuss your project with our team.