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IRI identifies 4 elements key to driving productive promotions

BY Michael Johnsen

CHICAGO – CPG marketers rely heavily on promotions to drive growth, and in 2015, the reliance on merchandising activities escalated across nearly half of CPG categories. Despite this increased investment, lift from merchandising support declined across 58% of CPG categories, according to the latest IRI Times & Trends report “Merchandising for Growth: Connecting the Dots for Maximum Activation.” 
 
The report also offers a strategic approach to pricing and trade projected to result in a 1% to 2% sales lift and grow industry sales by up to $12 billion, while improving margins, building customer loyalty and delivering a lasting competitive advantage.
 
“The reality is that CPG marketers are investing heavily in promotional efforts in the hopes of spurring brand, category and industry growth,” stated Susan Viamari, VP thought leadership, IRI. “Unfortunately, the results of those efforts are not what marketers had hoped because volume is flat to negative nearly across the board.”
 
The bottom line is that ineffective merchandising programs are leaving substantial sums of money on the table across CPG aisles. CPG marketers that take a more comprehensive approach to price and promotion — beginning with the creation of a solid price-pack architecture — will deliver surgically executed competitive strategies and win big, Viamari suggested.
 
PPA is influenced by the following four elements:
 
  1. Portfolio strategy: It isn’t necessary to promote all brands. Instead, assess the role of different brands and identify those that are likely to benefit from promotional activity;
  2. Brand strategy: Having a simple and clear value proposition is absolutely critical. If it’s premium, it’s vital to maintain premium price positioning and apply those same principles for a value brand;
  3. Channel dynamics: Marketers must focus on emerging channels and segment their customer base to determine which channels and which customers are most important to each of their brands; and
  4. Consumer needs: Marketers must understand which brand attributes are most valuable to their key consumers and reflect these attributes in all promotional materials.
 
“With a clearly defined PPA in place, marketers can turn their focus to striking a balance between everyday pricing and trade pricing,” Viamari said. “It’s imperative to know the objective of any pricing action and how it fits into your larger strategic goals. It’s time for manufacturers and retailers to walk away from their old pricing strategies and turn toward a more sustainable financial future.”
 
 

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Revlon challenge raises $2.75 million for women’s health orgs

BY David Salazar

NEW YORK — Revlon announced the results of its LOVE IS ON Million Dollar Challenge this week, noting that charities on the crowdfunding platform raised $2.75 million for various women’s health causes since the challenge launched in September. The company donated $1.425 million over the course of the challenge, bringing the total distribution to $4.18 million. 
 
“We are extremely proud of the success of our LOVE IS ON Million Dollar Challenge. By using competition to incentivize women’s health organizations to raise funds, we greatly increased the impact of our charitable giving, which was always our primary goal. It was particularly heartwarming to watch charities of all sizes embrace the spirit of the Challenge by creatively activating and engaging their supporter networks.”
 
The charity that raised the most money — more than $950,000 — was Cycle for Survival of Memorial Sloan Kettering Cancer Center. As a result, it won the grand prize donation of $1 million from Revlon. 
 
“All of us at Memorial Sloan Kettering are delighted that Cycle for Survival has won Revlon’s “LOVE IS ON” Million Dollar Challenge, and we are grateful to Revlon and to our many supporters who worked together to put Cycle for Survival on top,” said Dr. Craig B. Thompson, Memorial Sloan Kettering’s president and CEO. “The entire million dollar prize will be used to fund research into rare gynecologic cancers here at the Center, supporting innovative studies that have the potential to make a meaningful difference in women’s lives.”
 
The Cancer Research Institute will receive $250,000 from Revlon for raising the second-largest amount of money — $700,000. Revlon will also be hosting a finale celebration in New York for Cycle for the challenge winner, CRI, and the other organizations in the top 10 for the challenge.

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Argan oil attracts beauty consumers

BY DSN STAFF

AZUSA, Calif. — Argan oil has been a huge ingredient story in hair and skin care over the past few years. Inspired by that success, Physicians Formula decided to add the coveted oil to its facial products. The result: Argan Wear, a collection of makeup infused with Argan Oil encompassing everything from a BB Cream to Argan Oil Blush. Retail prices range from $12.95 for Ultra-Nourishing Argan Oil Blush to $14.94 for Argan Oil Bronzer.

(To view the full Category Review, click here.)

“Argan Wear has been a consistent performer,” said a chain drug executive. “It helped us get higher pricepoints out of the business and brought some new shoppers into the category.”

Within six months of the launch, Physicians Formula’s Argan Wear Bronzer is already selling on par with its well-established mineral wear bronzer.

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