Strategies for achieving an optimal product blend
In today's dynamic market environment, aligning finance, sales, and merchandising teams is a formidable challenge for many retailers and Consumer Packaged Goods (CPG) companies. This is especially true as manufacturers grapple with higher borrowing costs and increased costs of goods and materials, while retailers navigate the unpredictable see-saw of consumer buying behaviors.
One company that has managed to weather these storms is The Coca-Cola Company. The key to their success lies in their adoption of an integrated, collaborative, and data-driven product mix strategy. This approach, rooted in real-time data and insight, provides the flexibility needed to adapt as the market changes.
At the helm of this strategy is Alex Durham, The Coca-Cola Company's Director of RGM System Enablement. Durham's focus is on finding the right products, getting them to the right consumers, and at the right price point. This adaptable strategy is crucial in a landscape where inflation remains persistent, and there is a possibility of additional rate hikes.
This strategy unites siloed functions, optimizes budget and inventory allocation, and improves responsiveness to market volatility through advanced analytics and cross-functional collaboration tools. Key benefits include data-driven decisions across teams, cross-departmental collaboration, integrated marketing and sales messaging, optimized resource allocation, and enhanced agility.
Real-time data and constant collaboration are crucial for The Coca-Cola Company's RGM process, as it involves input from dozens of geographically dispersed contributors. Last year, a surplus of inventory led retailers and CPGs to scramble to save their margins. However, The Coca-Cola Company has successfully optimized its product mix in recent years using Anaplan for Revenue Growth Management (RGM).
This integrated strategy fosters transparency, reduces guesswork, and aligns strategic priorities, helping retailers and CPGs to manage complexity and capitalize on emerging opportunities even in volatile and unpredictable markets. It is a competitive differentiator in the highly saturated retail and CPG landscape, where consumers have numerous options.
In 2023, retailers and CPGs can expect change, disruption, and more change, making an adaptable product mix strategy a necessity. Retailers and CPGs must deliver innovative products at attractive price points while protecting margins, driving down excess costs, and growing revenue. An integrated, collaborative, and data-driven product mix strategy is the key to success in this challenging environment.
- In the volatile and unpredictable retail and Consumer Packaged Goods (CPG) markets where inflation persists, an adaptable product mix strategy is crucial for companies to manage complexity, capitalize on emerging opportunities, and protect margins.
- The continual emphasis on finding the right products, getting them to the right consumers, and at the right price point, as exemplified by The Coca-Cola Company, can help retailers and CPGs navigate higher borrowing costs, increased costs of goods and materials, and unpredictable consumer buying behaviors.
- For retailers and CPGs, an integrated, data-driven, and collaborative approach that encompasses sales, finance, and merchandising teams is beneficial for optimizing budget and inventory allocation, improving responsiveness to market volatility, and reducing guesswork.
- Innovative technologies, such as Anaplan for Revenue Growth Management (RGM), play a role in helping companies like The Coca-Cola Company optimize their product mix, reduce excess costs, and grow revenue in an environment characterized by change, disruption, and volatility.
- The convergence of diverse industries like finance, retail, and environmentally-conscious AI opens doors for eco-friendly products and practices to become more integral in companies' product mix strategies, providing opportunities for businesses to remain competitive while addressing consumer and industry demand for sustainability.
