November 5, 2015
When we think of the word “marketing” in relation to goods that we purchase, we often tend to think of advertising. Although advertising is indeed one of the elements of marketing, it is not the sole factor that goes into a marketing campaign. Brands in the consumer packaged goods (CPG) market have been expanding their efforts to reach consumers in a more effective way. With 92% of CPG execs rating a form of personalized marketing as being somewhat or very important to their brand activation plans over the next 2-3 years, the experiential market in the CPG industry is bound to keep growing.
In 2014 Path to Purchase Institute (P2PI) conducted a study in collaboration with CROSSMARK and Marketing Werks, that asked consumers to rank the importance of certain factors that had an affect on their image of a brand: word-of-mouth; personalized offers and messages; ads; package/logo design; and personal experience. This study showed that 64% of shoppers said that personal experience was their most important factor affecting their image of a brand.
There have been surprisingly high statistics showing how much consumers actually value an experience that generates a valuable relationship with a brand. Consumers today want to be interacted with, so just any generic method of advertising will probably not work as effectively as it once did. In today’s CPG market, 80% of consumers either strongly agreed or agreed that they liked it when brands did more to interact with them instead of sticking to their generic advertising plans.
When it comes to sales, this consumer mindset shows up again. 88% of consumers either strongly agree or agree that if they’ve had an enjoyable experience with a product brand away from the place in which they can buy it, they’ll usually remember to tack it on to their shopping lists.
With this evidently strong demand for experiences in the CPG market, brands are setting themselves up for failure (or at least loss of opportunity to increase sales) if they don’t start implementing experiential marketing into their campaigns.
Retail activation is most likely the most common forms of experiential marketing in the CPG industry. Brands will usually set up a footprint in a heavy traffic area and staff a team of excellent brand ambassadors that will display the product for any consumer that walks by. The footprints are generally creative and encompass the concept of the brand’s essential message to consumers. Intriguing concepts and outgoing brand ambassadors that are well informed on the product will take care of bringing in consumers and creating the positive experience that’ll send consumers looking for the product on shelves next time they’re at the store.
Another very common example of experiential marketing in the CPG market is sampling. This can be as simple as setting an enthusiastic brand ambassador with a tray for samples in the supermarket to as extensive as setting up a small, intriguing footprint staffed by a few brand ambassadors inside of the store. Regardless of how easy or difficult each campaign is, the concept behind sampling remains the same: to get the consumer to try something they haven’t before and win them over based on both the quality of the product at hand and the positive experience they’ve just had with the brand ambassador.
Not to mention that sampling also adds a little bit of excitement into the rather boring weekly trip to the grocery store. Leveraging the consumers’ attention with the excitement can in turn lead to word-of-mouth advertising where consumers will not only talk about the genuinely different experience but will also by nature mention the product that they sampled.
Leaving the realm of the familiar, brands can start getting a little more creative. Certain brands will create partnerships to deliver the experience to their consumers in a context that matters for the packaged good at hand. An example of this is IKEA Hotels. The Swedish furniture giant created hotels furnished entirely with IKEA furniture that allowed guests to experience what it would be like to live in an IKEA made house. This is a win-win for both the hotel, which gets a complete makeover with new furniture, and for IKEA, who drastically increases the ways in which consumers can experience their products outside of their regular retail stores.
With so many products on the shelves and consumers’ well-established heuristics, it can be hard for CPG brands to enter the market, or even remain on top. The best way to establish a new heuristic for consumers is by creating a positive relationship between the brand and the consumer. This relationship, which stems from positive associations created by good experiences, allows brands to extract the most value from consumers. So now when we look back and think of the word marketing in relation to packaged products, we really should consider more than just the word “advertising”.