Advertise with

Jaco Saunders, Unit Lead at MACMobile.
Jaco Saunders, Unit Lead at MACMobile.

Addressing the entire supply chain is key to driving consumer behaviour and creating loyalty


By Jaco Saunders, Unit Lead at MACMobile - Jul 3rd, 08:33

Changing consumer behaviour and creating loyalty throughout the supply chain are areas every FMCG manufacturer is trying to achieve. 

However, these are the last links and typically the most difficult elements to manipulate. This is due to challenges around validating sales – you can only reward loyalty if you can verify the purchase. In order to drive consumer behaviour and reward loyalty both on route to market and at the end consumer, you need to address the entire supply chain. Visibility and line of sight from start to finish are critical to gathering the required data necessary to achieve these goals.

When it comes to loyalty, sales is always the primary Key Performance Indicator (KPI) and the measure of success is return on investment in sales figures. In the consumer space, brand loyalty and recall are both valuable, but a loyalty program that does not result in additional sales it is not effective. The reality is that you cannot create customer loyalty and drive increased customer sales without first having an effective route to market.

In-store promotions, prizes, discounts and so on can help to develop certain brand awareness, but without ongoing effort, this will fade. Loyalty programs are not a short-term endeavor but a long-term commitment. Manufacturers should, therefore, look at rewarding behavioural change not simply to create a pull from consumers, but also a push from route to market. It is important to have your products in the right place at the right time in the right condition so that customers are able and want to purchase them.

Unfortunately, for all the marketing campaigns and initiatives, brand loyalty within the consumer goods space is highly volatile. More often than not, with such slight feature variations and ‘me-too’ products, the decision to purchase boils down to price. Ensuring that the product is correctly priced (at each step on the value chain) is imperative. Using a loyalty programme to ensure a “price it right” strategy could be the differentiator that maintains your market share.

Route to market parties such as distributors and retailers are often incentivized based on stock volumes. However, there are also many soft elements that are instrumental in creating loyalty, including the way products are displayed, the correct placement of point of sale material, the condition of the products in store and much more. These too should be incentivized. The rewards themselves should also speak to two levels, specifically for the distributor or retailer business, and for individual people in those organizations. For example, a bar could be rewarded with promotional materials and stock, while managers and even service staff can be given tangible, personal rewards like airtime or even financial incentive. These individuals will then be more motivated to promote product to customers making it a win-win outcome for all parties involved.

Each person in the value chain can be seen as an integral link, and they can all be rewarded to help drive sales and loyalty – but only if sales can be verified and audited. This requires real-time visibility into the entire supply chain, which ensures that all data is always available and can be leveraged for the insight required. Without data, manufacturers are effectively blind, with no baseline or point of comparison. With no insight, it is not possible to allocate rewards, drive behaviour or even see if there is a change. Data is at the heart of improving the supply chain and rewarding the relevant parties throughout, which in turn will help drive loyalty as well as maximizing sales.


Related News

Manufacturing production shrinks for second month in July
11/09/2019 - 13:01
Manufacturing production recorded its second consecutive contraction in July, in line with analysts’ expectations.

AB InBev rolls out blockchain solution to assist farmers
01/08/2019 - 14:16
Multinational brewing company AB InBev Africa is rolling out a blockchain solution to assist smallholder farmers in its supply chain.

As cyber threats increase, manufacturers should seek OT-IT convergence
01/08/2019 - 10:55
Cyber threats were traditionally perceived to largely target organisations in the financial services sector or companies whose data could be monetised by cybercriminals. Of late, we have seen that businesses in other industry sectors are becoming increasingly vulnerable to attacks.

Hasbro to start making toys in Vietnam and India as US-China trade war goes on
25/07/2019 - 10:35
Hasbro CFO Deborah Thomas says some retailers briefly paused direct import orders from manufacturing locations in the second quarter as they watched the trade situation.

JIT is key to optimising the FMCG supply chain
23/07/2019 - 19:12
The ability to manufacture ‘just enough’ stock to cover orders and deliver ‘just enough’ product to every retailer is the optimal supply chain scenario in the Fast-Moving Consumer Goods (FMCG) industry. This is known as Just in Time (JIT) manufacturing and delivery.