Earlier this year the UK’s biggest retailer put many brands on notice with the news that it was looking to rationalise the lines it stocked. Recall the changes Unilever and P&G brought about in their brand culls. As part of its own path back to growth Tesco was looking to slash its 90,000 lines by 30 per cent.
It has drafted in management consultants to decide which products have to go and is aiming to reduce the number of lines it stocks to between 65,000 and 70,000. Everything from bread (bye, bye Kingsmill) to beer (so long Carlsberg) is being looked at as the retailer moves to get its massive stocklist into fighting shape. It’s easy to see why. Tesco stocked 28 types of ketchup to Aldi’s one, and 98 options for rice, to Aldi’s six.
As a consequence, many brands are facing an existential crisis. Being dropped, or given a severely limited presence in a store that still accounts for just short of a third of grocery sales has massive implications. These decisions could cost manufacturers tens of millions of pounds with knock on consequences for jobs and families.
You would think that this would have been a shot in the arm for brands to focus on what really matters at the moment, but a recent meeting with a FMCG player underlined that some brands are fiddling while Rome burns.
In preparation for the meeting, we supplied a strategic marketing document. Before any new business meeting agencies should take a hard look at the marketing and commercial challenges faced by a brand it will possibly be working with. In this instance this was encapsulated in a POV piece on customers, routes to market, shoppers and consumers.
In addition, a long-standing client relationship that would have been directly competitive had ended. We hoped that this experience would be of interest to the potential new client, and were ready to engage in an in-depth marketing discussion on the way ahead for this brand.
It seemed that the agenda had to be growth, customer management and consumer acquisition – the absolute brass tacks of business today. However the conversation kept circling back to peripheral campaign execution tactics – how to communicate the marketing line rather than establishing what it should be, based on the reality on the ground.
Given the challenges this brand’s sector and category faces, it was surprising its marketing team didn’t want to face more commercial matters. Getting the marketing basics right is the precursor to producing great creative, not an optional extra. To skip straight to execution is to put the cart before the horse. Marketing 101 is that strategy precedes tactics.
However in too many brand teams marketing capability is being replaced by communications ability. Brand managers are more worried about the message than the problem with TV ads taking precedence over P&L.
This isn’t what marketing is about. Proper marketing capability should pre-warn a brand about the problems it is facing with its customers. No agency can fix all of those problems, but one that starts working from sound marketing basics will have a more informed position, and that has to be to a brand’s advantage.
Clients commonly bemoan agencies for failing to understand and address the commercial problems that they face, and putting communications channels in the way of critical thinking. But clients have a responsibility to do this too – after all they’re calling the shots.
By putting marketing practice back on the agenda brands can start to address the bigger issues that face them today. In adopting the science and discipline that real marketing represents, they stand a better chance of continuing to be relevant to retail gateways such as Tesco.
Admittedly it’s harder and demands more of everyone involved than discussing the relative merits of yet another piece on uninformed creative, but in the longer term it is more rewarding. And that’s what matters ultimately.
Professor Leslie de Chernatony is a board director at Life Agency