The Sales Situation

Herbert Baum, of Campbell USA, made the following observation about the changing nature of marketing:

The battlefield will move to the retail store. We will be fighting the battle for consumer sales (and loyalty) at point-of-sale, much more so than in media. Media as we know it today will decline as a marketing tool.

Some firms clearly recognize this problem and are restructuring to meet the challenge. Two recent announcements point to this trend. Procter & Gamble has re-organized its sales force into key account teams, which allows Proctor &Gamble to design and execute account specific programs. R.J. Reynolds Tobacco company is moving to a "brand team" approach that will integrate MIS and marketing research professionals into the brand groups. These changes are just the latest in a continuing round of reorganizations caused by the changing nature of retailing. Firms are finding ways to meet the increasing need for an account focus in their trade relations.

Focusing on accounts is difficult because most firms have been designed and structured around the concept of mass marketing in which a few centralized marketing managers control vast marketing resources. Today, firms are trying new structures and changing the ways that sales and marketing work together. The goal is to find a way to build brand equity and deal with the changes occurring in the retail world. But change is coming slowly, as reported by one observer: While retailers have organized to advance their new agenda aggressively, manufacturers' marketing and sales departments have been slow to respond with coherent sales and marketing strategies designed to work with retailers to build brand equity.

Manufacturers' problems are even more difficult because the retailer is a moving target; most retailers are evolving their own strategic thinking and approaches. For instance, leading retailers are moving from mass merchandising to the idea of "micro marketing": chains like Lucky are developing systems to target specific shoppers in specific neighborhoods as the mass market is dying. As retail firms make these types of changes, it becomes both harder and more important for manufacturers to keep up; to understand and respond to the new retail perspectives.

Further discussion: