One Blog |July 8, 2010 | POS Tracking Software

Marketing At-Retail - A Core Competency - Part 1

Mark Fullerton

Part 1

Upsetting the Agenda

In the alcohol beverage supply chain we've recently seen major market changes brought about by a combination of business forces:

  • Alcohol-beverage brand fractionalization – The explosive  growth in the number of brands available to retail consumers

  • Supply-chain consolidation – The creation of very large distributors as a result of the merger with, or the acquisition of smaller distributors by larger ones

  • Mass media fragmentation – The massive increase of the media outlets from 3 or 4 TV stations to over 300 or 400 cable channels.   

The Result

The combined result of all these irresistible forces is that the consumer groups many suppliers depended upon are actually shrinking, when many thought they would continue to grow as the overall population grew.

Of course the total consumer market has grown with the overall population growth, but this total is no longer made up of a few very large relatively homogeneous groups.  Rather, the total is now made up of many smaller fragmented groups.  As the number of groups continues to multiply, each group is typically smaller still.

One-size-fits-all marketing messages no longer work in our hyper-diverse consuming world.  The rapid growth and large number of alternative media outlets makes reaching customers with a brand message that will resonate with them even more challenging.

Marketing is always evolving, to be sure.  Today, marketing is no longer simply evolutionary. Instead it’s experiencing revolutionary forces.  Forces that are transforming it and making it adapt to an almost infinitely fragmented consumer audience.

What is an alcohol beverage company to do? 

Certainly, alcohol beverage suppliers can continue to conduct expensive television and other conventional media advertising campaigns.  They can embrace Twitter, Facebook and cherry-pick specific audience-targeted websites to promote beverage products. But, even if it were possible and affordable to undertake such targeted marketing, there is one more thing to consider.

Point-of-Sale Decision Making

Over the past couple of years one more data-point has gained considerable traction.  The facts are that 70% of the decisions to buy alcohol beverages are made at the point-of-sale.

There are several reasons for this dominance of point-of-sale decision making:

  • The erosion of brand loyalty by all consumers, but especially by the younger ones who often don’t  identify with a brand-name

  • The explosion of brands available to choose from – There are over 13,000 brands of beer available in the United States and, the number of unique wines carried by some large distributors exceeds 50,000 and continues to grow with no end in sight

  • The rise of all of the socio-economic classes and the reaction of retail outlets to create attractive destination shopping places.  Now the shopping Mall can become a viable place for marketers to reach a very large and growing audience with a rich message

  • The fragmentation of mass media creates a challenge for traditional marketing approaches to “reach” their target audience.  And achieving "richness" is even more difficult to get across in a 240-character restricted world

  • The creation of entertainment retail destinations that transform shopping venues into virtual media outlets, but with a difference.  Not only can the consumer see and hear the message, they can, at that moment, also sample and buy the product.

Next Steps

With the preceding introduction to the forces and challenges upsetting the agenda for alcohol beverage marketers, we can now discuss the growing importance of Marketing at-Retail, as well as some of the tools that are available to help alcohol beverage distributors understand, measure and persuade the beverage consumer to buy.

Mark Fullerton

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