Mia Fileman 0:05
Life’s too short for crap marketing.
The “Got Marketing?” Podcast is for marketers, business owners, and entrepreneurs who want marketing that’s fun, accessible, and meaningful.
Join me, Mia Fileman, for inspired chats with my favourite marketing insiders about marketing that works; campaigns that inspire; and the fads, fakery, and false prophets to avoid.
Welcome to Part 2 of my chat with brand-centred strategic – Melissa Packham.
We are discussing fast-moving consumer goods marketing.
Now, sustainability and sustainable packaging is a really great trend. I know that this is your zone of genius. What are you seeing? What are you liking? What are you not liking?
Melissa Packham 0:53
I am seeing a lot of 50-percent plant-based material or 70-percent recycled or so close. Biodegradable. It’s that whole space. Cling wraps. There is a whole bunch of brands – your classics – who are all moving into biodegradable or compostable options. All great stuff!
This is stuff that sits on the shelf, so we are talking about sustainability that the consumer sees. What I am not liking is a lack of action on the systemic front and the operational front. I think that a lot of FMCGs are way behind in terms of actually delivering meaningful action on sustainability.
It goes beyond just environmental. Sustainability reaches out to supply chain, where we are sourcing our ingredients, and how we are shipping our products between locations and all that kind of stuff. Brands have a lot of power and influence – just like the retailers do.
I think the retailers are doing some action on this – or at least wanting to be seen to be. Mandates will be put in place. Brands will have to follow suit, but it’s the brands that are ahead of that curve that I think will actually do well. First-mover advantage, anyone? There’s not a lot of that happening.
Mia Fileman 2:25
I am seeing a bit of greenwashing, of course.
Melissa Packham 2:27
A lot. There is a lot.
Mia Fileman 2:29
An example that comes to mind, I love Zero Co. I love their business model. It is insanely thought out. Completely circular down to the refillable pouches you send back to Zero Co. They wash them, sanitise them, and then they send them back out.
Morning Fresh has decided to jump on the refillable pouch bandwagon, but their pouches are not reusable. They just go into the bin.
Melissa Packham 3:05
“Oh. The soft plastics that we can’t recycle anymore. That’s great.”
Mia Fileman 3:11
It doesn’t refill a full bottle. You’ve now got this plastic pouch. You might as well buy a whole other litre bottle because the pouch doesn’t fill a litre, but now you’ve got to throw away the pouch.
Melissa Packham 3:28
We know the conversations that would have happened behind the scenes to lead to that. It would have been “we can sell two units for each one, and we can sell it at a higher price which gets a greater margin, and we can reduce our shipping cost and distribution cost because they are smaller packages.”
You can see that that would have been a very easy business case to build, but whether it was in the good of the environment or the consumer is probably left to be questioned.
Mia Fileman 3:53
Totally. Absolutely.
Let’s talk channels and tactics for marketing an FMCG brand.
What’s important? Online? Social media? What’s the right mix?
Melissa Packham 4:07
It depends on the product. It depends on where the person is. There is always a great tendency for the CEO to tap you on the shoulder and say, “What’s this Twitter I hear about?” or “What’s the Book of Face? I have heard about it. There is a mention of it.”
The desire to be seen on all the channels and omnipresence throughout everything is a problem for FMCG because that’s the way it has always been. We have always been seen everywhere because we have the ability to have that presence. We have got the budget for it. That is not necessarily the case anymore. With all the channels that are available, that personalisation and really hypertargeting is an option that simply wasn’t available to us ten years ago – only ten years ago.
In terms of the channels, it always starts with the consumer. Where are they? Where are their eyeballs? Or the shopper – who is going to buy the product off the shelf? If they are the gatekeeper to the purchase, then where are they looking? What are they doing?
Always consider that path to purchase and a day in the life of that consumer or shopper. It’s thinking about what their day looks like and really empathising with them. That goes back again to what we were saying about appreciating observing people on the ground and really absorbing what’s happening or sitting across in the focus groups – getting that dinner and watching focus groups happening behind the mirror – but really empathising and understanding what’s going on in their world to understand where you can possibly interject.
Then, thinking about ways to disrupt the attention. They’re seeing so many messages from all sorts of brands. How can you use channels creatively or unexpectedly to gain attention? It used to be so much more simple. I don’t know how brand managers do it now with all the channels available.
Mia Fileman 6:00
Yes, and which one to prioritise. There are so many considerations.
The first thing is that you’ve got the physical space. We’re talking about supermarkets. Consumer goods can also be outside of supermarkets, but let’s use that as an example. You’ve got shopping trolleys. You’ve got floor media. You’ve got wobblers. Do you know how many wobblers I have designed in my life?
Melissa Packham 6:28
I’d forgotten about them until you said it!
Mia Fileman 6:32
Yes!
You’ve got the Woolworths magazine and the Coles magazine. I freaking love that. I get all my recipes from there. I know I can get the ingredients from Woolworths.
You’ve also got the carpark leading into the supermarket. You’ve got the billboards on the road on the way to the supermarket. All of this – as you said, path to purchase – is really important because what you want is that, when they are standing in front of the shelves and they see three facing Swan Dips, they are like, “What are Swan Dips? Why am I called to buy Swan Dips?” They don’t even know that subliminally in the carpark 20 minutes ago, they actually saw a corn chip being dipped.
That’s something that online businesses never have to think about, really – that physical environment. We’re talking about stores. We’re talking about 850 stores. We’re not talking about one store. You need to buy a lot of wobblers.
Melissa Packham 7:38
A lot of wobblers. A lot of media. A lot of that marketing budget goes on the production side before it even leaves the door and you just hope that it gets the cut through and builds that 360-degree campaign so that you are planting those seeds, but it goes to that theory around mental availability and physical availability. You have got to have the balance of both. That’s Byron Sharp – How Brands Grow. That’s certainly the case for FMCG more than any other mantra. You have got to plant the seeds on the way.
The path to purchase – I haven’t done one quite like it since FMCG because it doesn’t apply to a service-based business, and it doesn’t apply necessarily in an online space. It is a tool that is quite unique.
Mia Fileman 8:30
Then, it’s brand advertising. FMCG brands are some of the biggest advertisers in the country. You’re watching The Block and Cadbury are having a commercial then Coke have got commercials during the FIFA Women’s World Cup. It’s big dollars.
It’s about planting that seed while you’re at home, watching television, and creating that nice warm fuzzy feeling and affinity with that brand so that, when you get to the store, you are prepared to pay more for that brand. You’re like, “Yes, I’m going to get Cadbury chocolate as opposed to a cheaper brand of chocolate.”
Melissa Packham 9:17
Yes, absolutely.
That’s a really great point. It’s the psychology. You’re creating a psychological affiliation with the brand. You’re tapping into neuroscience in terms of where they’re seeing the brand and all the other things that are built around it. I know something that’s close to your heart is sound as part of a brand identity is equally as powerful – if not one of the most powerful – triggers of remembering a brand and connecting that. It’s the whole gamut across that path to purchase.
Mia Fileman 9:47
Yes, it is.
For new brands in grocery, they think that they have won the lottery. “Oh! I have just been ranged in Woolsworths! I’m going to be in 720 stores. This is it. Game over!” You don’t know how quicky you’re going to get thrown off those shelves if you don’t move product and move product quickly.
If you’re a new brand, you probably don’t have the above-the-line dollars to spend on massive advertising campaigns. You have to get scrappy, and you have to get really creative, and you have to get really clever. The best way to do that is with packaging.
Melissa Packham 10:24
Yes, packaging design!
It is a specialty. It is a special area of design. I love packaging design.
Mia Fileman 10:34
Same!
Melissa Packham 10:35
Photography.
Mia Fileman 10:36
Yes!
Melissa Packham 10:38
Different elements and creating brand strips that block a whole shelf. It’s not just the individual pack but what all of them look like together. It’s a science.
Mia Fileman 10:51
This is where my love of grocery comes from. Supermarkets – I love landing in a new city and walking through and seeing their packaging – the shape, the size, the colour, how big is the font, the materials that they use.
When Carmens launched in Australia, that packaging design was so innovative. No one was doing anything like that in cereal. It all looked like American sugary massive boxes, bright pop colours, starbursts everywhere.
All of a sudden, Carmen came with this really gourmet-looking muesli. Great product photography. Black in cereal? What? Dark green? Black? It flew off the shelves because people were like, “This gives me market vibes! Like I’m buying my cereal at the Farmers Market.” That definitely inspired us at Black Swan to create more deli-type packaging for our dips as opposed to big ugly tubs.
Melissa Packham 12:10
Yes, big placcy tubs with a big placcy lid on it. Not super sexy!
You’re right – that whole disruption. That’s a key strategic play. Activating that P of the marketing P’s – packaging – and then trying to cram everything that you want to cram into it, all the benefits on the side and making sure you’ve got the nutritional panel and all of that.
How do you use that as a key marketing tool, especially if you are a brand that doesn’t have the media budget to support above the line or even below the line – even an in-store point of sale or activation? It costs a bucketload of money that is not accessible to a lot of brands.
Yes, it definitely has to be both – a two-pronged approach. Getting on the shelf is not a guarantee of success. It’s a brutally quick window if you don’t succeed. If you’re not getting the rungs on the board, then you’re out in the next planogram.
Mia Fileman 13:10
Yes.
Now, when you go and pitch to be on the shelves, they want to know how much money you’re going to spend to support the brand. You can’t be like, “Yes I’m hoping that with cool packaging and an innovative product to begin with – like a vegan cheese – that it’s going to get the job done.”
They’re like, “No, because we’ve got to Kraft launching a vegan cheese, and they’re going to spend millions on television and radio advertising, product sampling, competitions, discounts, so we’re not going to go with a little scrappy startup vegan cheese company.”
Melissa Packham 13:50
Unless it benefits them, unless it benefits the retailer to use that small as leverage and to play against the big incumbent brands, but certainly those little brands get used as pawns sometimes in the game which sucks, but they want to know how you are driving shoppers into their stores explicitly.
It brings a whole question about the concept of rented space. We talk about social media as being borrowed platforms, but there is nothing more borrowed than a retailer shelf. You are buying a spot for a little bit of time. Yes, that’s short-lived if you’re not showing the rungs on the board, but brands have very little sway, especially if they’re not big brands.
Mia Fileman 14:35
The margins are really tight.
Melissa Packham 14:37
So bad.
Mia Fileman 14:38
It’s crazy margins. You get squeezed for every dollar, but then you are also expected to go and invest huge on brand. It’s a volume game. If you can sell a lot of that product, it’s profitable, but you need to sell a lot to make it back.
You mentioned social media. What do you think the role of social media is with FMCG?
Melissa Packham 15:02
I think it supports the brand marketing side, but it also supports campaigns.
You only have to look to the big ones to know how that all plays out.
The recent Coke campaign – the Y3000 limited edition – is an example of a limited-edition product that’s here for a short time to generate brand love and get low-category buyers back into the category to buy again and give it a try. What they’ve done really cleverly is to activate user-generated content by having a mystery flavour that you have to taste.
Every influencer on social media on every platform is doing the big reveal of what the flavour tastes like. They didn’t have to pay for that. That’s brilliant! How cool is that? Get your consumers to do it for you – leverage the brand, the intrigue factor, and get them to push it for you. That’s how brands are using social organically. They’re certainly paying.
They’re paying lots of money. Again, it just outs smaller brands where they – potentially in the early days of paid social – probably have the upper hand over big brands who are still very slow. I know the brands I worked on were very slow to social media and to warrant the support and ongoing consistent support.
It’s a challenge for big brands because it’s not just a consumer thing like a small business would engage on social media. We need customer service. We need product quality. We need input from all of these people. That’s just not viable for a lot of brands to give that support, especially for smaller brands.
Mia Fileman 16:43
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I reckon, if I was a brand manager today and I was looking at having to prioritise, I would not make social media as big a priority. Hang on! I’m going to caveat by saying my own social media accounts. I would pay a shit ton to influencers to evangelise on my behalf and every month run TikTok challenges to see how they can Ocean Spray my brand and give it that kind of glow up because that was amazing. What that incredible skateboarder did for Ocean Spray is textbook how you should use social media marketing in 2023. But I wouldn’t overinvest in my own social media account because people are going to follow those accounts anyway. If you see me pop up on Instagram, you’re going to be like, “Yes, I’m going to follow Maybelline,” but then I’m not really going to engage with Maybelline’s owned branded channel as much because it has got to be so broad.
It has got to be appealing to all target audiences and all locations and all of that. I wouldn’t be relentlessly posting five times a week on my organic social media accounts. I would have the accounts there. I would have them active, but I would be big in influencer collaborations.
Melissa Packham 18:53
100 percent.
Mia Fileman 18:54
No one’s hiring me.
Melissa Packham 18:57
Not yet!
But, yes, at that level where it’s so bland, it’s for no one. It’s trying to be for everyone. In doing so, it’s for no one. It does make it feel – ugh – corporate, but it always intrigued me the people that follow big brands like that. Even when I was working for the big brands, I was like, “Why? Why are you here? What do you want? What are you looking for?” 19:21
Mia Fileman 19:21
However, Zero Co, Oatly, and Who Gives a Crap social media accounts are freaking epic, but they are taking a very different approach.
Melissa Packham 19:32
Yes, cult approach – getting people in on the ground level. It’s not a mass thing. We support the cause. We support what you are doing. It’s now going to the masses as a result. That following is different. It’s personality-led, values-led.
Who Gives a Crap and Oatly – what a great couple of examples of personality-driven content that goes across every single touchpoint. That’s another big word that’s used in FMCG. What are the touchpoints? Where will we reach our people through that path to purchase? They both have incredible engaging consistent content that gets people following and sharing and talking about it.
Mia Fileman 20:24
Do you know what it is though? It’s how the sausage is made. It’s building in public.
Mike Smith from Zero Co has taken us on this journey. We have ridden the highs and we have ridden the lows. I feel like I have been part of watching this brand evolve from Kickstarter campaign in 2011 to now getting ranging in major grocery. I’m like, “Wow!” It’s almost voyeurism, right?
Melissa Packham 20:55
Yes, and supporting the underdog.
Aussies love to support underdogs. It’s seeing the trials and tribulations.
The goliath in this scenario are the big brands – the multinationals. We might have a connection with those big brands because they have always been in our lives. There’s the nostalgia factor. These little brands can cut through because they’re sharing their personal story. They’re putting a human face on who’s behind the brand and what the mission is. Of course, we want to support that.
The next level is supporting it with our dollars consistently.
Mia Fileman 21:28
Yes, that’s exactly right.
Now, you mentioned Byron Sharp earlier. One thing that we haven’t really spoken about yet is the level of discounting that is required in fast-moving consumer goods – 20 percent off; buy one, get one free. Byron Sharp has some really strong views about how discounting doesn’t actually work.
I’d love to hear your opinion on it and what you think.
Melissa Packham 21:54
He is the thought leader in the space that challenges everything that you think you know as a marketer, especially in FMCG. Sometimes, discounting is ticket to the game. You have to discount. That’s part of a support package with a retailer. It is a leverage point.
It’s a quick and easy way for everyone to grasp that a consumer is going to buy something because it’s incentivising them in a way that we don’t have to part with. There are no more things that we need to build into this. We don’t have to host anything else on the shelf. There’s no giveaway. It’s straight up – you buy it for this price. You don’t have to reduce your margin necessarily for the retailer because that’s mandated. It’s just a cost of doing business with those big players.
While there might be academic support for not needing to discount, I don’t think that’s true in real life in all cases.
Mia Fileman 22:55
Yes, I don’t think you get a choice. We certainly didn’t.
It was like you had to run three or four – I can’t remember the number – five 20-percent off sales every year – no matter what. That’s just what you had to do. Otherwise, again, you lose your ranging which actually brings us to the point about how fast-moving consumer goods you have two very distinct customer segments – the retailer which is completely B2B; then the end user which is B2C.
Having to play to both of those customers is really a lot for brand managers.
Melissa Packham 23:34
It is a lot.
Brand teams – the extended team involving the sales team and the trade marketing team which help manage whole other areas, but pricing is a big part of that. I think that it’s hurtful to watch your brand be discounted on a frequent basis because it erodes. For a premium brand, are you trying to create a positioning and a perception around a brand being worth paying more for? And then, you’ve got the retailers enforcing constant discounting. That hurts!
Mia Fileman 24:07
Yes.
Melissa Packham 24:06
It hurts to watch because you teach your shoppers to buy on discount and they know that they can wait. They know Tim Tams are going to be on special next week. Just wait. Or buy something else. Or they won’t buy until they buy something else. So, it hurts.
Mia Fileman 24:23
Yes, Bryan Sharp’s point is that people will delay the purchase, or you are conditioning them to just buy on sale. Also, a key point is the fact that people would have bought at full price because they are loyal to that brand.
I don’t know about you, but I am always going to buy my favourite products at the supermarket. It doesn’t matter what the price is. You giving me a 20 percent off is just giving me a discount that I didn’t need.
Melissa Packham 24:53
Exactly.
Mia Fileman 24:54
I was going to buy it.
Melissa Packham 24:55
Yes, but that’s the drug that the retailers are on in a way. A lot of that in that middle space where they are negotiating price, that’s the thing that the know – the lever that they can pull that makes it look like they are doing good for their customers to pass on some savings – create savings. They come off as the hero. They can pop it in the catalogue that we have to pay for. They might make a little plastic mini if we pay for it and they can be collectibles.
But I agree that the academic argument doesn’t stack up in reality. It’s just not happening because it has to be across the board or it doesn’t happen.
Mia Fileman 25:39
I don’t know about you, but we were doing massive cost-benefit analysis where we are like, “Is it better to do frequent 10-percent or 15-percent discounts? Or is it better to just rip the Band-Aid off and just do two big 50-percent off and get it done?”
There’s so much science that goes into what level of discount and at what point is it diminishing returns. As long as you give them 20 percent off, you are going to get them – no matter what. You don’t have to go to 40 percent off. I think it’s fascinating.
Melissa Packham 26:14
It’s a fascinating space. For some of the smartest people I ever met in FMCG, that is their role – to model what that pricing and discounting model looks like for brands to maintain that profitability. Very clever.
Mia Fileman 26:28
All right. Let’s talk about the explosion of e-commerce and the implications on FMCG.
Melissa Packham 26:36
Yes, I was thinking about this in the context of AI.
If you are a digital native and that is your retail space, then you are going to be able to leverage the benefits of AI a lot easier than other brands who are not native to the online space. I think that is an interesting watch-out. Obviously, there are risks with every opportunity, but that certainly seems like an interesting one to me.
But, yes, smaller brands have greater ability to play in this space, and that’s potentially where they can get their first run on the board, so to speak, before looking at a major for retailing.
Mia Fileman 27:15
The thing that people need to know is that fast-moving consumer goods are not ideal for e-commerce because the margins are tight, huge sale volume, shipping becomes a big issue, tight profit margins, not to mention perishable products. If we go back to Black Swan and Parmalat, no one’s sending fresh dips across the country.
I really loved what you said about how, if you are a new brand and you want to make a case that you should be in grocery, a nice way to start is by building an e-commerce platform and demonstrating demand and making a case to then take to a major retailer and say, “Look! We bootstrapped this! Now, give us some shelf space.”
Melissa Packham 28:05
Yes, and if you can tap into a subscription model or a repeat purchase model, that demonstrates that ongoing shopability, then that’s a big case. I know that retail is tapping into Uber and other delivery models, but that could potentially be a way in if you have established that occasion and purchase model4, then that could be the easy step into that as an exclusive for either of those retailers, I guess.
Mia Fileman 28:37
The thing to know is that customers are lazy. Yes, I could buy a more sustainable toothpaste brand online and it can ship to me, but at the end of the day, am I really going to do that? Or am I just going to go to Woolies and pick up a tube of toothpaste? Because I don’t care that much about that purchase.
If you are an FMCG brand and you are e-commerce, then – again, no one’s hiring me – I think what you need to do is convince me it’s worth going the extra step – just like Zero Co have done. It’s worth making this a little bit more difficult to get cleaning products into my house because it’s better for all of us.
It’s better for the environment. It’s better for the future. It’s better for the planet. Yes, I have to go to a bit more effort because I have to order the refills. I have to remember to order the toilet paper. Then, I have to send back the refills. But they have convinced me that it is worth it. But I have yet to be convinced that I should be ordering toothpaste or sugar online.
Melissa Packham 29:42
Yes, brands like that have to over-index on the emotional benefit and the values and purpose alignment, for sure, and to create the occasion. Create an occasion. Reframe in the consumer’s mind what that occasion looks like – what that purchase behaviour looks like. These are important things that need to happen.
This is happening now and it’s a brand benefit to those brands that have established that, but it’s actually going to need to happen to create a sustainable economy – full stop. Consumer behaviour will need to change.
We will need to drop the convenience that will be the brands that will succeed are the ones that have a sustainable model that still feels convenient. Or that teaches consumers that it is worth that. Like you were saying, I am flipping the benefit now from convenience now to a values alignment or a different model that I haven’t been used to before.
Mia Fileman 30:38
Yes, that leads us in perfectly to how you can work with brands – how you help them.
Do you want to speak to that for a second?
Melissa Packham 30:46
Sure! A little cheeky plug!
My approach starts with brand first – getting that purpose and values really clear. Once you have got that, you have got a roadmap then with the guardrails to follow for everything else – every other decision.
I am inviting small to medium-sized businesses – and big ones too, if they are ready to play – to have a look at what brand does at a systems level across their organisation and how it then dictates who we buy from, what we actually buy, what claims we make, what we say about our sustainability and ethical purchasing, what our pricing structure looks like, what is the business model, how we make it, how we take responsibility for the waste that is created.
If it’s not circular, then what could it be? If it’s not relying on third-party suppliers who are not going to be around, I can’t rely on those businesses to solve my waste problems for me, and I cannot rely on consumers to solve my waste problems for me. If that’s a challenge, then how do we look at this as whole system? That’s why my approach is you start with the brand and the values and let that answer that for you.
You figure it out and work across the whole thing to get to that end point where you are now talking about it with consumers and helping change their behaviour and changing their minds and having them buy into your cause which might be toothpaste, or it might be cleaning products. Who would have ever thought that you would have been emotionally connected to cleaning products? This is the world we need to shift to. That’s how it falls out for me in the way that I help businesses.
Mia Fileman 32:31
Yes, and you are brilliant. You are my go-to brand strategist for the objectivity that I need in my business. I know that you can help much bigger brands create much bigger impact than my little business.
Melissa Packham 32:45
Thank you! My gosh! Such an ego boost when I come on here! Thank you, Mia!
Mia Fileman 32:52
Thank you so much! That was another incredible episode with you!
I think we’re going to have to split it into a two-part banger. I really loved that chat.
Thank you so much, Melissa!
Melissa Packham 33:03
Thank you! That was therapeutic and felt really great to dive back into the archives there. Thank you!
Mia Fileman 33:10
Thank you!
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