CPGmatters: Philip Morris USA Thrives with Unique Retail Program
By Al Heller
Through a special arrangement, presented here for discussion is an excerpt of a current article from the monthly e-zine, CPGmatters.
One of the boldest and broadest efforts around category management is Insights C3M, a multi-pronged program from Altria’s Philip Morris USA – the category’s unit share leader at 51 percent – to communicate directly with 250,000 domestic retailers that sell its tobacco brands to adult consumers.
The primary component of Insights C3M is an interactive, retailer-accessible, password-protected website. The site, www.insightsc3m.com, gives merchants near-real-time data on category performance in their individual stores, promotional allowances due to them, shopper insights and other essential business details that enable quick, accurate fact-based decisions about what to stock in each store. In addition, PM USA issues a quarterly eight-page newsletter to its retailers and wholesalers, filled with content meant to refine their skills in consumer-centered category management.
Some of the flavor of articles from recent issues of the newsletter: Unlocking the Potential of the High-Growth Cigar Category; Attracting and Retaining Good People; Preventing Under-Age Tobacco Use; Inventory Management and Product Promotion Best Practices; Do Brands Really Matter; plus guest columns by consultants and futurists.
“Insights C3M replicates the way our sales force works to foster a culture of retailer success,” said Altria spokesman Greg Mathe. “They educate, merchandise and help retailers to better manage the category and connect with adult tobacco users.”
Tobacco sales occur through distributors – yet largely through the PM USA sales force and Insights C3M, retailers gain a deeper understanding of shoppers, their purchase behaviors and consumption habits, product and display preferences and demand levels.
Though retailers can’t buy products on the website, all the information they can assimilate at the site “creates more efficient communications with the PM USA sales force,” explained Rich Trimarco, manager of sales communications, PM USA.
Mr. Trimarco noted further that the website has allowed PM USA to transition to a paperless communications system with its retailers, some of whom have raved anecdotally by voicing such comments as “the site saves me a couple of hours per week” and “all details are right at my fingertips.”
He placed the category management effort within the context of the total store, noting: “There’s more at stake with adult cigarette consumers than many merchants realize. Usually when smokers come to the store, they buy other products as well. They’re so brand-loyal, that most of the time a store is out of stock of a preferred brand, they’ll leave the store.”
Discussion Questions: What do you think of Philip Morris USA’s Insights C3M program and the extent that they’re working with retailers around category management? Are other brands and categories sharing category performance data, shopper insights and selling tips with their retail customers to this level?
Philip Morris USA’s Insights C3M program is innovative, albeit probably self serving, but I’m not yet convinced that most of the category managers will dig in and use it the way the planners have in mind. We’ll have to wait and see.
David makes a good point on probable usage–but that’s not to fault PM’s program. PM has a strong history in this area. From the very early days of what I believe they called “Profitology,” PM has been involved in Catman in channels like c-stores before others had programs in grocery.
I am very impressed with their program and the tools that they are making available. The only way I could be more excited is if it wasn’t designed to sell tobacco products that are so hazardous to our health. Hopefully similar programs will eventually be available for other grocery categories.
Has anybody seen the office location of the tobacco buyer in a retailer’s HQ? While most are in cubicles, not offices, they are invariably found at the back of the building on a lower floor. These folks are pariahs, albeit profitable pariahs, who often are not tobacco users themselves. Stuck with selling products in which they do not believe, they are rarely part of the cloud of cloud-seekers who gather just outside the fire door during breaks. But, like Brett Favre, some of them suck, chew, and spit with interoffice impunity. Ugh! My condolences to any woman invited to kiss a professional athlete, especially baseball players. Have you witnessed their highly-choreographed spitting techniques on TV? Reggie Jackson used to brag that he could chew tobacco in one side of his mouth, chew bubblegum in the other side of his mouth, and process unshelled sunflower seeds in the middle of his mouth – SIMULTANEOUSLY AND AT THE SAME TIME! (A Monty Python reference.) Truly astounding and rife with Freudian innuendo. Children missing their binkies.
All that aside, I thought that the tobacco rack jobbers were the eyes and ears best serving their employers and customers. It’s a superbly personalized system, and I wonder what a computer reporting program can add to that. Is this a double-check on the rack jobbers? Is Big Brother now monitoring them more closely than ever?