New Study Offers Game Plan for Brand Name CPG Marketers as Private Labels Continue to Steal Share

Using econometric inputs -- including economic, cultural, social and political trends and events -- to benchmark and track the context in which consumers are considering, comparing and committing to brands, the CCI enables SAI to identify long-cycle shifts in consumer outlook and behaviors.

13 Apr 2010 --- "Tangibility is the new black." That's how Bill Melnick, the Director of Strategic Planning for leading shopper marketing agency SAI Marketing, describes the pervasive effect that consumers' focus on tangible value is having on purchasing behavior. And as SAI reveals in the latest edition of its Consumption Context Index(TM) (CCI), nowhere is the effect more evident than in the consumer packaged goods (CPG) category, where the tangibility factor has given rise to a whole new sales dynamic.

Using econometric inputs -- including economic, cultural, social and political trends and events -- to benchmark and track the context in which consumers are considering, comparing and committing to brands, the CCI enables SAI to identify long-cycle shifts in consumer outlook and behaviors. Leveraging the findings in earlier CCI reports allowed SAI to introduce the now ubiquitous term "new normal" to describe the post-downturn consumer spending reality, and identify an influential new consumer lifestyle segment called The Essentials. With its latest report, SAI reveals how "Tangibility" is the key to halting the downward trend of brand relevance for name brand CPG marketers.

In Closing the Sale with the New Normal Consumer, which is scheduled for publication this week, SAI examines the consumer attitudes and outlook that have turned consumers' intermittent flirtation with private label brands into a full blown love affair, leaving premium brand CPG marketers like P&G, Kraft and Unilever to play the unfamiliar role of rejected suitors. As disciplined and list-driven shoppers focus on lower price and need, over intangible drivers like past history with a brand or product features, marketers must link with and enable consumers with relevant solutions that deliver a higher-order benefit.

In explaining the urgency of the situation for premium brands, Melnick -- who led iconic branding efforts at CNBC, Vanity Fair, and Merrill Lynch -- points to a recently published Ipsos survey of consumers in 23 countries, in which an astonishing 89 percent of respondents said that store brands are as good as or better than premium brands. "The premium CPG brand is teetering on the verge of irrelevance in the global marketplace," he says. "To come back from the brink, CPG marketers need to position their brands in terms of the hallmarks of 'Tangibility' -- that is, the qualities, wants and needs that reflect the realities and priorities of the new consumer lifestyle."

As identified in Closing the Sale, these Tangibility hallmarks include:
 -- Trust/Safety
 -- Consumer Control
 -- Fun
 -- Simplicity
 -- Trading Down to Trade Up

Specific recommendations for incorporating Tangibility hallmarks into CPG marketing strategies, as well as a more in-depth exploration of the CCI findings and implications, can be found in the full Closing the Sale report, now available for downloading at www.SAIMarketing.com by clicking on the Insights tab.

"Tangibility marketing is the key that will unlock the wallets of consumers weighing the relevance of particular products and services," says Melnick. "With the insights gained from a deep understanding of shopper intent and behavior, marketers can adjust their promotional strategies to align with the outlook, values and priorities of shoppers."