CPG, or, consumer packaged goods, and FMCG, or fast-moving consumer goods, are often terms that are used interchangeably. Whilst there’s a difference between the two, it’s a fine distinction which can often be confusing. In this article we’ll also explore brand pressures for ever faster, tactical, and lower cost brand activations.
Consumer packaged goods (CPG) covers a sweeping range of goods under public consumption. According to Investopedia, “The CPG sector is valued at approximately 2 trillion USD” in just the United States alone, “and is led by well-established companies like Coca-Cola, Procter & Gamble, and L'Oréal.”
CPGs are goods bought and used frequently, such as household essentials, apparel, and cosmetics. The industry appeals to the mass market and is highly competitive, with such high consumer demand, there are several competing suppliers for brands in CPG. So whilst there’s a possibility of high revenue and market share, there are dozens of other brands competing, with such a dynamic market, CPG brands need to remain agile to retain their position, promote their brand, and continue growing.
According to the Competitions and Markets Authority, it was stated in an investigation into Unilever (the 400+ brand portfolio owner), that the FMCG sector was worth over £134 billion per annum as of 2023. But what is FMCG and what does FMCG mean in actuality?
Fast-moving consumer goods (FMCG) are products that are sold fast and at a low cost to disposable income. They’re often perishable or have a very high demand which means there’s a high turnover rate. Goods fitting under this label of ‘FMCG’ includes confectionary, food, usually processed, and drinks. In a way, you could see FMCG as a subset of CPGs that are ‘faster’ in that they’re sold, consumed, and perish at a quicker rate than the average CPG.
So whilst there’s a slight distinction that separates FMCG brands and CPG brands, it’s important to know that they both belong to the same product category and a majority of its marketing principles and ideas for these goods remain similar, if not, the same in many circumstances.
As with any type of marketing, understanding the audience's behaviour is a core aspect of running successful campaigns and marketing effectively.
Understanding audiences means that brands within CPG and FMCG can better tailor messaging, experiences, and promotions towards their audiences. Having a keen understanding of who your audience is in a market where every other brand is also competing for the same consumers, means you can create more targeted and attention-grabbing promotions that resonate with audiences, leading to more conversions and overall engagement.
Although CPG and FMCG are largely mass-market products, understanding your target audiences, even in a broader sense, can create leeways and opportunities to improve products and develop campaigns, promotions, and packaging that create pleasant and satisfactory customer experiences, allowing brands to stay ahead of competitors and cultivates a sense of trust with customers.
A considerable part of being a brand within mass-market goods is differentiating yourself from competitors. Since several mass market goods remain similar enough to not be a big enough caveat in audiences’ decision-making, brands should take great consideration in its identity, using marketing and design to cultivate a branding that will connect and make a lasting impression on consumers which, will ultimately be the differentiating factor for the market.
When brands make that effort to differentiate themselves, they reap the benefit of being more recognisable and hence, encouraging consumers to choose one brand over others due to a feeling of familiarity.
By cultivating a strong identity, customers can develop an emotional connection to the brand because of it, this is how a brand can foster loyalty in the long term.
Differentiating well will give brands advantages in a crowded market. This can later be used to increase market share, increase prices – of course, with caution and reasonably so, and remain profitable over time. When a brand offers something another can’t easily replicate, it can establish itself as a leader within its industry.
Apple's iPhone has consistently differentiated itself from competitors in the smartphone market through a combination of design, innovation, and branding. Apple emphasises sleek aesthetics, user-friendly interfaces, brilliant picture and camera quality, and seamless integration with its ecosystem of products and services.
The company's focus on premium quality, cutting-edge technology, and minimalist design has helped the iPhone maintain a strong position in the mass market despite intense competition from Android devices.
This is how Apple iPhones manage to be priced at premium prices despite often having features and capabilities that are not as competitive as other phone brands in the mass market. The perceived prestige and quality of iPhones is what makes the brand so successful.
FMCG and CPG brands can build recognition and awareness through activities such as advertising and promotions to build brand awareness among consumers. Especially since the industry is so crowded, it’s essential to not only be known but to be different. Consistent messaging and visibility all contribute to the strengthening of consumer’s brand recall and familiarity over time.
When awareness is built for a brand, retailers and distributors are more likely to stock and promote those products as they have more consumer awareness and therefore, usually more demand vs others in the category. Stocking well-known brands benefits distributors and retailers too and means more visibility in-store and online for these brands.
Excitement and intrigue surrounding a brand, via a campaign, promotion, or advert can be the contributing factor which leads to consumers considering and then trying a product. This is what leads to potential repeat purchases and the cultivation of brand loyalty.
Building loyalty is crucial for goods in CPG and FMCG, with it being a fast-moving and competitive market, garnering loyalty means that brands within the market can maintain growth and sustain their brand.
Brands with loyal customer bases are less vulnerable to competitive offers and pricing pressures. When consumers are emotionally connected to a brand and its products, they are less likely to switch to competitors offering similar products or promotions.
Faced with uncertainty such as recessions or supply chain issues, loyal customers often remains a stability for CPG and FMCG brands. Brands with loyal customer bases are better equipped to maintain momentum, provided that they have a loyal audience that can sustain them in the long term.
Acquiring new customers can be more costly than retaining existing ones. Loyalty can be gained through activations such as loyalty programs, personalised offers, and targeted communications to keep customers engaged and satisfied by providing an incentive to be a repeat buyer. Ivy’s Reserve successfully utilises an ‘always-on promotion’ platform, maintaining customer loyalty, and front-of-mind, each and every month through rinse & repeat prize promotions.
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A case study for this kind of brand loyalty can be seen in soft drinks brands like Coca-Cola and Pepsi which cultivates brand loyalty and enforces it through their often tongue-in-cheek rivalry. It could even be argued that this rivalry is mutually beneficial, fostering more loyal and dedicated fans and marketing buzz. There’s no better way to get people to care, who would otherwise be indifferent than to create a debate and get them to ‘pick a team’.
Marketing tactics like this can also be seen in the ‘Crisp In Or Crisp Out’ campaign by Walkers which returned in 2022, involving celebrities like Gordon Ramsay in the debate, partnering with Subway to launch a crisp sandwich, and creating an on-pack promotion. Overall, this campaign reached audiences nationwide, generating a lot of conversation and buzz around Walkers.
People will always have their favourite things and brands, and so people will always share these likes and interests. Consumers love being able to express themselves and share what they love, to speak and share things about themselves with the world and this is a way for brands to capitalise and get customers to share brands with word-of-mouth, especially with how random and easy it can be to get viral, there’s no telling how far one video of a loyal customer advocating a brand will get.
A soft drink brand that has reaped massive benefits from this is Dr Pepper. On social media, particularly on TikTok, many users joke about the level of dedication and loyalty Dr Pepper fans have to their favourite fizzy beverage with skits, often the self-proclaimed Dr Pepper fans will also respond to these skits, continuing the joke by delving even further into why they love the drink. The official Dr Pepper account on TikTok has even responded to enthusiastic commenters with skits and jokes of their own.
By leveraging data-driven segmentation for personalised campaigns, utilising social media advertising and influencer partnerships for precise audience targeting, optimising their online presence for search engines and e-commerce platforms, making use of targeted ads and first-party data, and implementing omnichannel marketing strategies – CPG brands, in particular, can expand their reach and enhance their targeting.
By continuously testing and optimising different approaches, whether through a-b testing or reviewing past analytics, brands can effectively connect with a broader audience while tailoring their messages to resonate with specific segments, ultimately driving growth and success in a competitive consumer goods market.
Digital platforms provide a dynamic experience in contrast to the rigidity and static nature that traditional marketing methods often supply. This gives brands and marketers the space to get creative with their medium, offering gamified experiences, interactive ads and promotions, and the chance to enhance and transform traditional marketing mediums with omnichannel experiences through connected packaging such as QR and NFCs as gateways to digital activations.
By creating engaging digital content that resonates with consumers' interests and lifestyles on social media and other digital platforms, these brands can build genuine connections and start a dialogue, inviting interaction and feedback.
Implementing interactive campaigns, such as user-generated content contests and brand promotions encourages active participation, further encouraging engagement and loyalty.
Embracing e-commerce platforms enables CPG and FMCG brands to create seamless and convenient shopping experiences, catering to consumers who want to instantly access products. By integrating these approaches, CPG and FMCG brands can maximise their online presence to attract and retain customers while staying relevant in a competitive market.
By improving user experience while maintaining a consistent brand presence across digital channels interactively and intuitively, CPG and FMCG brands can engage consumers, driving both online sales and brand advocacy in a competitive digital landscape and market.
Through various digital channels such as social media, email marketing, and e-commerce platforms, data on consumer behaviour, preferences, and purchasing patterns can be collected to better understand and provide customers with what they want and need.
By analysing metrics such as website traffic, engagement rates, and conversion rates, brands can understand what resonates with their audience and optimise their marketing efforts accordingly. With digital marketing, it becomes easier to track and understand consumers’ reactions to campaigns and content. Although the idea of a ‘rational’ customer is false and in actuality, consumers and their behaviours are largely unpredictable – having first-party data can help improve a brand’s understanding, allowing for better marketing and promotional efforts.
FMCG and CPG brands can leverage point-of-sale (POS) displays as a powerful in-store shopper marketing tactic to influence consumer purchasing decisions and drive sales. These displays, strategically placed near checkout counters or other high-traffic areas within retail stores, grab the attention of shoppers and effectively showcase products and promotions.
Using these spaces to portray a brand in a certain fashion, with brand colours, brand messaging, and imagery, and then integrating it to contribute to the overall shopper experience can create something memorable and immersive. It’s also a great way to bring attention to and quickly highlight products and promotions, focusing on using shoppers’ impulse and spontaneous buying decisions.
By utilising POS displays as part of their shopper marketing strategy, FMCG and CPG brands can increase brand visibility, drive product trials, and ultimately boost sales in the competitive retail environment.
Experiential marketing is an excellent and dynamic method of shopper marketing. Offering shoppers an opportunity to actively engage with a brand, most commonly through sampling.
Interactive elements like product demos, sampling or pop-up shops allow the shopper to experience the brands’ product offerings first-hand and in real-time. It’s a chance for consumers to try a brand’s product they otherwise might not, creating a memorable and immersive experience with the brand. Compliment this tactic with a ‘try-me free’ campaign, also known as ‘love me, or I’m free’, or a formal ‘money-back guarantee’, much like https://moneybackguarantee.bodyform.co.uk/, - either on-pack or off-pack - in the eye’s of consumers this all helps to take the risk out of trial; and is crucial for start-up brands, or new product innovations, such as new flavours.
Incorporating experiential marketing such as interactive displays, events, or installations becomes a meaningful and impactful way to connect with consumers, ultimately driving engagement and sales. Display a QR code to trigger engagement, capture marketing opt-ins, and more.
Although traditional marketing media such as billboards and TV ads are unlikely to go anywhere anytime soon, the accessibility and push for digital marketing means that CPG and FMCG need to make efforts to sync their campaigns and promotions over multiple channels. Brands will likely be putting more effort into creating campaigns with elements and aspects that enhance and interweave with each other to create holistic and cyclical experiences for consumers.
As consumers become more aware of what they buy and the processes the goods go through to get into their fridges and cupboards, they will demand and currently are demanding more from businesses – consumer packaged goods and fast-moving consumer goods is a significant sector in which consumers are expecting more.
Moreover, the general public is becoming more cautious and researching who brands work with and how they operate. This is the caveat of humanising brands, they’re expected to extend more empathy and they’re held to higher standards on political and social issues. It’s likely that in the coming years, each generation will push for more and more corporate responsibility as information and news become increasingly more accessible.
For a long time in the fast-moving consumer goods industry, especially regarding marketing and promotional efforts, brands have lent the power to agencies to help manage those aspects instead of opting to build a significant in-house team. Whilst brands will have marketing teams, for specialised campaigns such as brand promotions like prize draws, instant wins, and other promotional mechanics – a popular marketing tactic for brands, they will seek out agencies, and promotional platforms such as PromoNow, that are well-connected and experienced to help create and run them.
However, as brands begin to realise they need more control (particularly in terms of data), and flexibility, such as speed, and cost savings, working with agencies alone begins to need more. Brands are placing a lot of trust and control on a single third party without a standardised, organised, and reliable way to communicate and share everything pertaining to these promotions.
Brands and agencies need a way to share and collaborate on promotions that ensure trust, empowerment, and control for both parties. As a result, brand owners will likely be pushing to rely on platforms and services which will help facilitate ever faster, tactical, and cheaper promotional campaigns in the long term, whilst relying on agencies to play to their strengths and expertise in strategy, creative, project consultancy and the like.
Curious about how PromoNow’s promotional platform software can enhance and deliver promotions for brands in CPG and FMCG? Get in touch with one of PromoNow Experts through the form below.
To run your promotions with best practices built in from the beginning, consider using the PromoNow platform. Speak with a platform consultant at +44 (0) 20 380 555 38 or email [email protected] to learn more.
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