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Notes from IRI's Reinventing CPG Summit 2004

An excellent presentation yesterday by J. Walker Smith, president of Yankelovich Partners, highlighted one of the great conundrums of the consumer marketing industry - declining productivity, despite the fact that there are more marketing messages out there than ever before.

"Consumers," Smith said, "are less interested than ever before," and there has been a "socialization of marketing resistance." He illustrated the hostility that even marketing executives hold toward marketing messages with a simple poll - two third of the audience said that they had added their phone numbers to the national "do not call" list. The fact is, Smith said, "we are spending more and more money pursuing a declining marketing response."

Another telling statistic: asked what things needed more government regulation, "advertising" ranked fourth - just behind "water pollution," "toxic waste," and "air pollution," and just ahead of "nuclear safety." Great company to be in.

Part of the problem, according to Yankelovich research, is that consumers are beginning to feel a "claustrophobia of abundance," preferring fewer options from which to make choices. Smith said that in one test, Yankelovich set up two tables, one with six jars of jam, the other with 24 jars. While 60 percent of consumers stopped at the table with the greater number of samples, as opposed to 40 percent who stopped at the lesser selection, 30 percent of consumers actually bought one of the six jams…while just three percent bought from the broader selection.

Part of the problem, Smith said, is that "consumers don't buy products, they buy solutions to problems" - but they are being faced with fewer and fewer "eureka moments" that offer both epiphany and solution.

Furthermore, he said, marketers need to start addressing the "hiving" of the modern consumer. This is different from the "cocooning" that was heralded after 9/11; "hiving" is not a retreat, but a desire to reconnect with family and friends, to focus on values and intangibles.
KC's View:
We've heard Smith speak before and have reported on his work here on MNB, but we never cease to be impressed with the insights he is bringing to the table.

Too often, marketers - whether manufacturers or retailers - continue to focus on stuffing the pipeline, as if overwhelming the consumer is the best strategy for success. What they don't do, at least not often enough, is think like a consumer, to focus on issues that affect them and their families when addressing new products and services.

When was the last time you had a "eureka moment"? That's not just a rhetorical question…it is a serious one. We're trying to think of the last one we had…and it's tough.