Personal careThis year, it's all about volume growth while holding or raising pricing. Last year saw a major step up in marketing support as many players attempted to build growth that lagged behind the modest economic recovery. But consumers kept a tight hold on their wallets. Volume across the industry was largely flat as sales rose an anemic 1% through the first 11 months of the year, according to SymphonyIRI data from Deutsche Bank.
Ad Age has rubbed its crystal ball and predicted industry moves in:
Another potential positive is a changing of the guard at Walmart to U.S. CEO Bill Simon, who appears to have shifted the emphasis from margin improvement through assortment streamlining to top-line growth through wider assortment, new products and less restrictive in-store marketing. The caveat: Mr. Simon's shift hasn't ended Walmart's string of six consecutive quarterly declines in same-store sales yet.
To Sanford C. Bernstein analyst Ali Dibadj, it increasingly looks like such factors as high long-term unemployment and the end of middle-class consumers' ability to use their homes like ATMs is creating permanent, more frugal behavior among most consumers.
It all ads up in his mind to the sort of lower-growth expectations for CPG that drove waves of consolidation among pharmaceutical players over the last decade. So he, like other industry analysts, is on the lookout for merger activity.
Among major factors to watch on the marketing front, said former P&G Global Marketing Officer and now consultant/professor Jim Stengel, is the explosive growth of tablet computers and how they'll change media strategy, consumption and advertising "more than any new technology yet."
Tablets are already helping drive a fundamental shift in how marketers think about digital marketing, said Kelly Mooney, CEO of Resource Interactive, Columbus, Ohio. Mobile used to be the last thing considered in digital campaigns, often tacked on after all else was complete, she said. Now, it's usually the first thing.
Packaged foodPackaged-food companies experimented with heavy discounting in 2010, which often hurt their bottom line. In many cases marketers failed to lure enough business to boost profits, so now executives are trying to figure out how to raise prices.
BeveragesIn the beverage space, John Sicher, editor and publisher of Beverage Digest, said: "Probably the biggest challenge continues to be concerns around soft-drink taxes and the health advocates' concerns about sweetened beverages. But there is huge potential opportunity if and when the beverage companies can make progress on new sweetener technologies." New sweeteners such as Coca-Cola's Truvia and PepsiCo's PureVia represent potential for the beverage giants as they look to cut calories but maintain taste to appeal to increasingly health-conscious consumers. At a conference hosted by Beverage Digest in December, Indra Nooyi, PepsiCo's CEO, said the company is "very close" to launching new products that use a mix of sweeteners.
Bill Pecoriello, CEO-Consumer Edge Research, cites potential taxes on beverages, particularly at the state and local level, given continued budget deficits, as a key concern.