FRiCH

Levi’s® Turns Shopper Mannequin Inside Out

Forget Category Captains. We need Category Lieutenants: The retailer is interested in the consumers' behaviour in each of the two or three hundred categories it offers, but owing to a lack of critical mass in each category, the retailer does not have the budget or the personnel to discover the information. However, for a manufacturer, concentrating on a small set of categories, it is worthwhile. Another approach is to become category lieutenants. This is where a smaller supplier looks to complement the category captain by providing niche brands where the captain is weak or absent, and perhaps offering me-toos to reduce the dominance of the Category Captain

But is trade spend paying back? The evidence suggests not. One AC Nielsen study suggested that 90% of trade-marketing initiatives do not produce a positive ROI. While a staggering 40% of items sold in US supermarkets were on promotion.

Total global trade spend is now estimated to be over $125 billion, well above the total profits of the major retailers, and McKinsey estimate it to be typically 30% of an FMCG manufacturer's cost base, second only to the cost of goods at 40%. Most manufacturers now spend more on trade marketing than brand/ consumer marketing

3,200 Members in the Private Label Manufacturers Association. The market to supply private label is competitive - private label sales were more than US$60 billion in 2011 and no manufacturer can expect to succeed if their approach is half-hearted.