Navigating the CPG Market with Data Analytics
The Consumer Packaged Goods (CPG) industry has never been more cut throat. Daily new products are launched and brands experience limitations on how they can create uniqueness, adapt with consumer preferences and remain profitable. In such an overcrowded landscape, traditional methods of marketing and product strategy do not always seem to work.
To remain competitive, CPG’s need to adopt and implement a data-driven planning process. Whether it is launching a product or making a pricing decision, the use of advanced marketing analytics solutions such as Quations’ RevenueRadar, can enable companies to make better and quicker decisions that will accelerate their success over time.
The Complexity of Product Launches in a Saturated CPG Market
Understanding the Dynamics of Product Launches in the CPG Sector’s Thick Labyrinth The practice of commercializing a new product in the present day CPG sector comes with a number of hurdles. With so many products, it is not enough to just be a creative person because it requires more understanding in defining the market voids, engaging the customers and which channels to optimize for sales.
Identifying Market Gaps with Predictive Analytics
Unmet consumer needs or market opportunities may easily be determined with the technological approach that is predictive analytics. Using historical patterns, CPG can forecast the trends and the possible direction of demand.
Case Study: Successful Launch Using Predictive Insights
A leading CPG brand wished to develop a new brand of organic snack foods, however, the idea raised issues of how to be different in an already bombarded market. K&I Marketing, which employs predictive analytics software called RevenueRadar, pinpointed an opportunity within the health conscious millennial demographic for a low-sugar snack product. The analysis indicated zones which had not been tapped before but in which health-inspired products would be a hit.
What do the study findings indicate? As for the product series, within the first quarter after the launch, the sales surpassed the earliest expectations by 25% principally as a well-defined targeting strategy was employed based on predictive analytics.
Balancing Marketing and Sales Strategies for CPG Success
The proper integration of the marketing and sales functions is the antidote to the challenges that may arise in the launching of new products. However, this is often the case where there is a gap between the marketing activity and sales activity especially when compared for different channels.
CPG companies use MMM analytics system and get insights into how their marketing activities help in driving sales. It provides insight into the viewpoint of the customers all through whether it is from e-commerce, retail, or direct. Such integrated methods allow better sync between the marketing functions and sales functions yielding better results.
Example: A CPG Company launched a new beverage through multi-channel marketing found varied response in the digital ads and in-store marketing of its product. As they went through the data collected, they noted that there was more engagement on the digital ads but needed to be paired with in-store discounts. With this insight, they recalibrated their approach, raised their ROI with 18%.
Optimizing Pricing Strategies with RevenueRadar
Pricing is a complex issue in the CPG industry which requires market forces to be satisfied on a reasonable compromise. If it is too high you risk losing your consumers; too low and you lose your profit. What’s more, it is important to have several insights of the target market in real time and apply them towards formulating the appropriate pricing strategies.
Real-Time Feedback for Price Adjustments
RevenueRadar provides analytics reports on product performance at diverse price points within the same line. This requires CPG firms to seize the moment and set the price that is proportional to what the consumers are willing to pay.
Consider a CPG company that launched a premium range of home cleaning products. Initially when introduced the prices were excessive and therefore sales were minimal; but utilizing the MMM data, the company was able to determine where consumers would be willing to buy the product. And after the price change, there has been a spike in sales of 40% in 2 months.
Quantifying the ROI of Product Launches and Price Strategies
One of the most eminent features associated with RevenueRadar is the measurement of the return on investment of new product launches and any realignment of pricing. It can monitor how new products perform in several selling points and provide information on which of those selling points have the greatest redeeming value. This type of information is important for making plans for subsequent launches and setting of prices.
Example:After the launch of a new skincare product, the Company sought to keep track of revenue generated from the product in a revenue tracker known as Revenue Radar across all channels: online and Brick-and-mortar. They discovered that online sales were strong initially, while in-store purchases gave the potential for greater profit in the long run. Such information earned them the ability to redirect their marketing efforts, eventually boosting their ROI by 22%.
Driving CPG Success with Data-Driven Solutions
Data analytics has rapidly become a basis for achieving success within the CPG industry. With advanced tools such as RevenueRadar, there are insights that propel product and pricing plans that can help businesses remain relevant as the market becomes more competitive.
The long-term gains from the adoption of a data-oriented approach to decision-making are clear. It not only enables and increases the probability of great focus in targeting and pricing but also helps companies spend wisely their marketing dollars resulting in growth that is consistent.
Conclusion
In the CPG sector today, based on speculation is inadvisable. Solutions driven by data, RevenueRadar lets businesses strive for greater profitability with the right decisions and secure the business long term competitiveness. Get in touch with Quation to know how we can support your business in this rapidly changing environment.