Expensive but probably a better use of marketing money than television ads. Another suggestion for more efficient use of marketing money: the full page FSI ads with a coupon. I suspect 90%+ of the target audience just cuts out the coupon and pays no attention to the ad copy. One would probably get more bang for the marketing buck by buying a smaller ad or filling the entire page with coupons.

A smart strategy on Kraft’s part, as long as they have the systems (you have to assume they do) and the in-store personnel focusing on Kraft business only to maximize ROI with this strategy. This wall to wall positioning of retail people started with national brokers like Advantage, Crossmark, etc. The people working specific stores become very engaged with department and store managers driving many in-store display decisions. With the advent of hand held computers by retail reps, keeping up with the brand priorities is not overwhelming to handle, so working across the store on brand goals and priorities is simple to do. That stated, the watch out by Kraft should be ensuring the retail Kraft reps remember who pays them. It is easy to “attach to” the store team and feel more a part of the retailer you are working with than the Kraft organization. The store manager could view this person as “free labor” and have them working on things that do not progress Kraft’s business. All in all though, a smart move… Read more »

It is not the total resources of Kraft that make a difference. Rather it is the resources at the point of attack. In this case the point of attack is at the shelf. In my opinion, this represents a well conceived strategy of concentrating resources where they can make a difference.

I would expect other food manufacturers, regardless of size, to emulate the Kraft model.

Interestingly enough, whether or not this effort succeeds will be largely up to retailers. In the push/crush to gain control over stores and increase efficiencies over the past twenty years, many retailers effectively eliminated the opportunity for manufacturer’s retail reps to have much impact at store level. Most of the major chains moved in this direction to degrees, leaving the smaller independents as the only fertile ground for retail reps. Labor that did occur in-store was largely retailer directed and controlled (i.e. reset crews). So manufacturers did the logical thing, pulling back on retail and outsourcing what they did do to third parties. But a funny thing happened on the way to HQ driven execution perfection–it didn’t happen. At least, not all the time in all the stores with all the prescribed product cut-ins, price changes, authorized displays, etc. Without people in the stores who’s vested interest is to make sure that stuff happens–every time–some things just slip through the cracks. The other thing that happened is smart retailers began to realize there truly is… Read more »

Perspective from the field: I don’t know any store manager that would refuse help from a vendor in managing their SKU portfolio. I would love to see more of this type of cooperation between vendors and retailers. Most of Kraft’s SKUs are high velocity and helping the retailer manage them relieves some labor pressure off the store. Product knowledge also increases as staff are more aware when there is a stronger vendor presence.

Kraft?

Smart, smart, and smart.

Anyone who has ever worked in retail knows that implementation and compliance is a huge challenge. When I worked in corporate marketing for a large retailer it was an openly acknowledged fact that 70% of stores never implemented what we sent out.

Kraft is doing a great bit of brand ambassadorship with the trade while driving higher sale. The win-win-win is the customer now finds the product they’re looking for in stock where it should be, the retailer has an extra pair of hands and the brand keeps the sale in soft economic times. While I’m curious to see the full ROI, I think the investment is worth it for establishing Kraft as a preeminent supplier in the minds of retail store managers.

Talk to almost every grocery store manager in the country and they will tell you that their biggest problem is adequate staffing with quality employees. Now, what Kraft has done is given that manager a resource that he does not have to pay for directly and one that understands the market and is trying to help him improve his business. Maybe he’ll even get some creative for marketing that he can not even get out from his own organization.

Kraft is winning by increased sales and the store manager is winning by having someone on his team who is helping him deliver his bottom line.

Retailers have been focusing on the ultimate decision maker for years and often, it is not the person who controls the purse strings. Example: Why do parents go to McDonald’s? Because that is what the kids want. Same principal here.

I recently wrote about Follett Higher Education Group, who assigns merchandisers not by category but by store, even sending them to the stores they cover every year to get to know the store manager, the campus vibe, and the peculiarities of the store layout. The trend for more localized assortments has not lost any steam. Orienting people by store (or customer groups), rather than by product category, seems to be a growing trend for managing the complexity that localized assortments introduces. I had been thinking about that in terms of fashion, but not grocery–so Kraft’s initiative is very interesting. My only question is, if all of the major CPG companies (and maybe even some of the more regional ones) decide to emulate this program, what is that going to look like from the store’s perspective? Ten-plus people, all in their respective logo’d shirts hanging around in the store? Fighting store-level turf wars for the prime display space? If they don’t come up with some codes of conduct or something, they may find themselves kicked out… Read more »

This is the next best thing to DSD, and maybe even better because of the retailers continuing necessary participation on the stock replenishment side (ordering, receiving, stocking.) This leverages the IN-STORE partnership. To me, the question here is not on lift–that should be a no-brainer–but rather on ROI, which I hope works out for Kraft. The fact is that far to many manufacturer/suppliers still have way too vague ideas about what happens on the ground at retail. When it comes to anyone’s categories and brands, those vague ideas probably extend right on through the office management at the retailer. And store managers just simply do not have time to know or care a lot about any given category or brand. So this is a case of John Alden needing to speak for himself: that is, Kraft needs to do for their brands in-the-store what no one else will or can do. Hence the allusion to DSD. Soft drinks and salty snacks already have this opportunity, albeit probably inadequately leveraged. This is why I said this… Read more »

As Jim Flury, the Kraft rep who called on the store that I managed in the early ’80s, would likely say if he heard about Wall-to-Wall, “This is deja vu all over again.”

Back to the future, Marty.

Most sales people waste huge amounts of time in transit. It’s wasteful to send 2 different folks to the same location, specialized by category. If you send one, 50% of the transit time is saved, and those hours can be reinvested in the store. If a DSD bakery sends 1 driver for cookies and another driver for breads, they’re wasting half their transit time, too.

Admirable stuff from Kraft’s perspective, and perhaps also for the retailer to a degree. However, it gives me pause for a couple of concerns:

1. Will the actions give Kraft an unbalanced advantage over smaller more innovative companies and niche brands that cannot perform the same level of retail service?

2. Will the actions start a new trend that will result in only the large mega-giants being able to do business with the mass markets?

With that said, if I were Kraft, I would try exactly the same approach, provided it works for my business model and budget.

I like the idea, and wonder if their dedicating resources to in-store activities like the ones cited is coming at the expense of online and other direct demand creation activities. Perhaps Kraft figured at that at least in the short-term the most effective way to go to market is to go to the market.

As category leader, advantage will continue to accrue to Kraft–as long as execution is consistent. The opportunity to construct the best shelf set at store level is significant. Optimizing package placement increases shelf impact. An in-store presence can lead to retailer partnerships that enhance Kraft positioning. However, in the longer term, competitive in–store efforts will step up and retailers will want greater control of shelf placement.

It’s a necessity. The fight for the consumer’s attention doesn’t end until the purchase is complete. With the increased importance of Walmart during these economic times, it makes sense for a manufacturer to focus merchandising resources behind the product at the grocer’s shelves.

Smaller vendors will not have the resources to implement a Wall-to-Wall sales strategy, but modified versions of it can be developed.

Kudos to Kraft for an innovative solution to better management of their in-store presence, although I agree with others here that the true test of this will be ROI rather than sales alone.

There’s no question that an increased store presence and focus on the shelf yields benefits, but even a company of Kraft’s size has limited resources it can deploy to the field. Also, once inside the store, the reps have a limited amount of time to get things done.

Kraft’s ROI on this initiative will really take off if they can determine on a daily basis which stores and which products have the greatest opportunity for sales lift and then prioritize in-store actions that have the highest impact on sales.

This initiative by Kraft and the initial results are truly encouraging for other companies to emulate. However, the success will depend largely on

1.The entire portfolio the company carries, as in Kraft’s case they can afford to allocate a resource by outlet.

2. On the sector the companies operate in for eg. it might be a better option for food companies with a larger presence in the impulse purchase to replenish the stocks faster, rather than a category where the pre-purchase involvement of the customer is high in making the purchase decision.

Another major benefit Kraft will reap from this initiative is the closeness to the customer and the consumer which will help them make well-informed decisions and customize the offering in the Wall to Wall stores. As woody Allen said ” 80% of success is in showing up”.

Am I being naive or isn’t this the sine qua non of the CPG business?