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Growth Fuel

Rethinking trade spending in consumer products


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Ever noticed what happens to city sidewalks in a major snowstorm? Freed of the drawing-room logic of city planning, pedestrians start to carve out the paths that make the most sense when you want to get from point A to point B as efficiently as possible.

Sometimes that means sticking to the sidewalk. But sometimes it means creating a new path that follows a different logic dictated by changing conditions. Aerial photos of city grids in the midst of such a big storm show more organic, curved patterns that show the choices people make in a changed landscape.

In a sense, consumer products companies are just beginning to thaw out after the storm called the Great Recession. But this time, rather than returning to the same streets and sidewalks that dominated the landscape before, they’re considering new approaches.

Over the past 36 months, aggressive, highly competitive promotion levels failed to result in volume lift, eroded manufacturer margins, and decreased the size of category profit pools. Combined with persistently weak consumer spending and rising input costs, continuing down the same paths could be a recipe for disaster.

To find out just how consumer products leaders view this new reality and what they’re doing about it, we conducted in-depth, one-on-one interviews with leaders at 23 consumer product manufacturers with more than $100 billion in sales, asking questions about everything from investment and funding strategy to communications, insights and execution.

In some cases, we found what we expected. But there were also lots of surprises. Leaders in the industry are asking themselves some tough questions these days. Here are some fresh insights on how they’re answering them – direct from some of the most influential CPG companies in the world.

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