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Friday - September 8, 2000
Internet Will Force Brand Management to
Evolve
Today's grocery shoppers know what Mikey likes
and which paper towel is the "quicker picker upper" thanks
to adept brand marketing. But according to a new Netquity™ Report
from Forrester Research, Inc. and Information Resources,
Inc., the Net will reshape old brand management practices
and create a new marketing approach called cohort management,
which is focused on consumer relationship management using
shared behavioral data from traditional retailers and e-retailers.
"The days of reaching large audiences
with generic messages and promotions will give way to a new
era in which individuals will be targeted and measured based
on their behavior," said Robert Rubin, director of Netquity
at Forrester Research. "To compete, consumer packaged
goods (CPG) manufacturers will abandon brand and category
management and discover new marketing efficiencies as they
learn to use Internet technology to focus on cohorts of consumers."
"For this report, Netquity interviewed
50 senior executives from 44 CPG manufacturers and analyzed
the offline purchase behavior of 10,000 randomly selected
households from Information Resources, Inc.'s (IRI) Shoppers'
Hotline® Consumer Panel," said Daniel Sherr, director
of Netquity at IRI.
While the executive interviews found that brand
managers continue to emphasize demographics in placing online
media, the offline purchase data proves that past purchases
are better indicators of future intentions than are demographics. "In
the next five years, access and use of consumer purchase
history from traditional and online retailers will be the
catalyst that drives CPG manufacturers to shift from brand
management to cohort management," continued Sherr.
Behavior-based marketing will increase the
marketing efficiency of CPG manufacturers by reducing the
number of consumers they need to reach and maximizing the
time they have with each consumer. Marketers will target
individuals with acquisition or retention ads and promotions
that will generate the highest possible return rates.
A new breed of marketing professional will
emerge as CPG manufacturers begin to identify and segment
consumers into cohorts -- groups of individuals that share
similar needs, abilities to purchase, and attitudes. Cohort
managers will possess the analytical capabilities and skills
to master behavior-based marketing.
"Cohort managers operating across brands
will decide which ads and promotions to present to consumers
based on continuous consumer information. Brand managers
will focus on detailed operational issues like inventory
and product formulation," continued Rubin.
The same technological capabilities that will
enable cohort managers to market to consumers based on their
past behavior will also enable them to measure consumer return
on investment (ROI) -- measuring the value of marketing dollars
invested and the money each consumer spends as a result.
"The real value of each brand to CPG manufacturers
will become evident once they're able to identify and measure
their most profitable consumers across all their brands," said
Rubin. "The ability to link specific marketing activities
to product purchases at an individual level will form the
basis of lifetime value analysis and will enhance today's
analysis based on raw sales volume metrics."
CPG manufacturers that decide to wait until
the technological capabilities have arrived before changing
their approach to marketing will find themselves gobbled
up by those who are more adept. The move toward cohort management
will evolve over the next five years, and the outcome will
be a better understanding of consumer behavior and the development
of in-house skills and tools needed to act on this knowledge.
"Customer relationship management (CRM)
will become mission-critical," added Rubin. "By
2005, CPG manufacturers will need to build cohort teams to
establish direct relationships with those consumers whose
behavior is best-suited to their product mix."
Click and Sniff Computers Due Soon
According to MSNBC:
"Welcome to the era of click and sniff.
The nose may know what the computer can only guess at but
virtual aromas may soon be wafting to a keyboard near you.
DigiScents Inc., a highly touted U.S. start-up
seeking to give computers a sense of smell, says it has agreed
to acquire SenseIT, Israeli-based developers of a rival scent-sensing
technology...
'We want to restore the physical world's tangibility,
flavor and nuance to computers, and eventually — with the
convergence of electronics — to television and telephones,'
Bellenson said..."
Click here for the full
story
(link disabled - story no longer exists on MSNBC)
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2000 News Archive
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