CPG marketing is a specific advertising strategy for consumer packaged goods (CPG) companies. CPG goods are perishable goods that consumers regularly purchase or replace, such as household cleaning supplies, cosmetics, food, drink, and clothing. The most well-known brands include Kraft Heinz, Coca-Cola, Pepsi, Unilever, Proctor and Gamble, and Modelez International. In addition, many DTC (direct-to-consumer) brands are also taking their share of the market, such as Plated, Glossier, Fabletics, Birchbox, Butcher Box, and more.
The CPG market saw sales of over US$1.56 trillion in 2021. It’s a very competitive market, with ad spending expected to grow to $36 billion in 2022, up from $30.5 billion in 2021.
The Challenges for CPG Marketing
One of the biggest challenges for the CPG market is weak brand loyalty. There is such as low-cost to switching brands and almost unlimited choice that many consumers will simply go with a cheaper alternative.
The pandemic has also caused significant challenges. When the world went into lockdown, many consumers scrambled to purchase CPG goods to stock up. When stocks ran low, consumers switched to an alternative brand. Consumers also started buying goods online during COVID, and many CPG brands didn’t have a way to meet these demands. As a result, DTC CPG brands quickly started gaining market share.
Online ratings and reviews of products have impacted some CPG brands. Consumers can quickly put up a bad review of a product and have it seen by millions of other consumers on social media and review sites, and the brand cannot stop it from happening. Consumers also trust their friends, family, and influencers to help them with purchase decisions more than they trust the brands themselves.
Consumer Insights are Key
Part of CPG marketing strategy is understanding consumer needs and behaviors. But because most CPG brands sell through distributors and other intermediaries, they do not have access to the first-party consumer data that provides these insights.
However, it’s critical to understand how customers are behaving and reacting to brand messaging. There are some tools CPG marketers can leverage to give them the data they need, including:
- Audience intelligence tools such as Brandwatch and Audiense monitor social and other online sources to help CPG marketers understand how consumers feel about their brands, products, and industry trends and topics.
- CPG marketers can also monitor brand social media accounts to see how consumers engage with the brand and its messaging.
CPG brands that sell their products through retail media networks can also access first-party customer data that helps inform their advertising programs.
CPG Marketing Strategies
Traditional approaches to CPG marketing saw brands use one or two channels to market to consumers, but with the growth of digital, there are now many additional channels where these brands must have a presence, including streaming services, YouTube, social media, websites, and mobile applications.
Today, CPG marketers have many tactics in their arsenal that helps generate awareness and brand affinity and grow loyalty. Marketers need to develop a multichannel, multi-action marketing plan to be effective. Some of the strategies marketers can employ include:
- Paid Media: Online ads, paid search, billboard ads, paid social
- Influencer marketing: Marketers look for influencers on social media platforms such as Instagram, TikTok, and Facebook and create partnerships that help promote the brand and its products.
- Content Marketing: Sponsored content published on media sites or through resource areas on ecommerce sites engages consumers.
- Social Media Marketing: Brands can create their own social media accounts, develop strategies to generate brand awareness, and get consumers to try their products.
- Email Marketing: CPG brands can send emails promoting product deals available through retailers and offer coupons and rebates.
- Marketing on Retail Media Networks: CPG brands that sell through retail media networks can advertise on these sites, bringing their products to the top of search results and similar product sections.
- Product Trials and Free samples: Offering consumers a way to try a product and then giving them coupons or rebates when they make a purchase are strategies that work very well in stores like Costco.
- Limited editions and special packaging: Consumers are still attracted by limited editions and special packaging.
- Shelf locations and in-store advertising: CPG brands can negotiate prime shelf space and in-store advertising to ensure their products are top of mind.
- Loyalty programs: CPG brands can create and promote CPG loyalty programs that incentivize consumers to stay loyal to their brand.
