For decades, fast moving consumer goods (FMCG) manufacturers have focused most of their marketing efforts, expertise and funds on their end-targets who are the consumers. The successive laws addressing the relationship between retailers and manufacturers in France have encouraged the food retail industry to undergo a fundamental shift. The retail industry completely changed its strategic and operational skills due to aggressive expansion into new markets and countries.
It cannot be denied that the current environment is not helping the manufacturers; the increase in purchase of raw materials and energy prices along with the economic crisis has had an impact on companies.
Consequently, the balance of power in the new retailer-supplier relationship is leaning towards the trading side. In addition to being the primary way for brands to reach the consumers, the food retailers have created an extremely concentrated retail market after the invention of global retail powerhouses.
As a result, FMCG manufacturers have to be very adaptable because the economic situation is quite difficult.
Danone group is one of the biggest and most famous FMCG companies which has understood the need to reverse its approach in order to retain its commercial power and hence the reason why the group has set-up a Trade Marketing Strategy for several years now. Danone has always had a strong marketing oriented strategy by paying attention to the retailers as well.
[...] At an operational level, trade-marketing is complementary to the consumer marketing strategy as it allows the market to understand the shoppers' attitudes and habits in order to be close to the consumers' wishes and increase the retailers' and manufacturers' turnovers. The category managers can choose the best product mix structure, merchandising, promotion system and pricing for each store. They form the link between the brand manager and the key account manager. They are only responsible for their product category and have objectives relative to it. [...]
[...] order to retain its commercial power and hence the reason why the group has set-up a Trade Marketing Strategy for several years now. Danone has always had a strong marketing oriented strategy by paying attention to the retailers as well. I. Danone's approach 1. Becoming unavoidable for retailers In order to be as popular as possible for retailers, Danone's strategy was clear. The brand needs to be very strong and its image needs to be positive in order to answer the end-consumers' concerns The power of blockbusters Blockbusters are brands which consumers are looking for when they go to the supermarket and are not ready to switch to another brand. [...]
[...] They are interdependent of each other: Carrefour represents 10% of Danone's turnover in the world and around 30% in France. Trade-marketing helps Carrefour to adapt it stores to each market as countries have their own specificities. The pictures below show stores in Asia, Latin America and in Europe, which are completely different. International partners will soon try and enter the Indian market together. They cannot go separately as it would be too dangerous, hard, and expensive whereas going there together is viable as they can combine their strengths and help each other. [...]
[...] This is the reason why trade marketing is used more nowadays Strategy and upstream management 1. Electronic Data Interchange Danone has set-up an Electronic Data Interchange (EDI) with the retailers in order to cut administrative costs. It has also worked on reducing the supply chain costs, by making the retailer orders automatic. As a result of data exchange, Danone and most retailers have implemented procurement of shared management technique where the retailers entrust it to the FMCG manufacturers, the warehouses or stores procurement of its customers. [...]
[...] The role of the trade marketing manager is to adapt this mix to the retail store and its consumers' needs as it will not be the same in Auchan, Leclerc or Lidl. It has to understand the entry key in the category in order to propose a good merchandising and optimize the shelf spaces. This task can be given only to one manufacturer in each product category. It is generally the role of the biggest one. Besides, this is one of the reasons why Danone wants to be the leader in every category it is sold in. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
