±±¾©Èü³µpk10

For as many years as I can remember, the AIDA marketing model (attention, interest, desire, action) has been the accepted product marketing method and one that has delivered excellent results, but now the world has changed.

We live in an era where brands are squeezed: by retailers, shoppers, own-label products and by media saturation.

Not long ago, all you had to do to launch a new product was to produce a big TV campaign, present your plans to stores and wait to be listed.

Retailer concentration means those days are long gone. Standard supermarkets carry about 40,000 SKUs (stock-keeping units), but an average family only needs 150 to satisfy 85 per cent of its needs. Even if shops are positive about your brand, it's difficult to fit them in.

We live in the age of the retailer, where between three and four retailers in each country control more than 75 per cent of FMCG markets. The extreme example is Finland where just three stores control a staggering 91 per cent of FMCG. After Gillette, P&G is the world's largest brand manufacturer, with forecasted turnover of $60 billion (£32.2 billion), but even it pales next to Wal-Mart's annual figures of $325 billion (£174.6 billion). With the rise of the retailers, the rules are changing dramatically.

Clear communication

Within this environment, shoppers are becoming less and less brand loyal.

A recent report by POPAI in the US estimated that 75 per cent of brand decisions were made in-store. As Christopher Robert, worldwide vice-president of retail marketing at Coca-Cola, puts it: "When the consumer becomes a shopper, there is a moment of consideration no matter what portfolio they are looking at.

And that is a very quick pseudo-intellectual interaction made in three-to-six seconds."

This does not mean that out-of-store brand building is a waste of time, but it does mean that we must communicate in an extremely clear and direct way. Reports in the UK have shown that 43 per cent of shoppers claim that POP can sway purchase decisions. Scott Garrett, former brand director for Heinz in Britain and Ireland, says: "I have to get people predisposed to the Heinz brand and then hope that the wavering hand on the shelf veers toward the turquoise can rather than another one."

The third squeeze on brands comes from own-label products. While marketers know the power of own brands goods is growing, most of us thought that big brands remained safe. But this is not the case. In 2004, the Co-op in Scandinavia had a major dispute with Kellogg and, as a result, its products were immediately de-listed from Scandinavian stores: Kellogg lost a third of its sales. Subsequently, a Scandinavian research company examined the impact of the de-listing and found that two thirds of shoppers weren't bothered by the lack of Kellogg's products and said they would just buy whatever was available. These attitudes are being fast-tracked by the fact that the quality of own-label products has improved so much in recent years. For our Retailization study, we asked 3,000 shoppers around the world if they felt that own-brand beer was of the same quality as branded drinks. A surprising 70 per cent answered yes, and the same was true of every category we investigated.

The final squeeze comes from the new communication world. The stats speak for themselves: in 1960 typical US households had fewer than six TV channels.

In 2003 it was 100-plus. Meanwhile, average US consumer TV ad recall dropped from 35 per cent in 1965 to 10 per cent in 2000. Even more starkly, in 1995 it took three TV spots to reach 80 per cent of American women, but by 2000 it took 97 and it couldn't be done in one night.

"Now that the days of mass marketing are over, we might have to change AIDA to ADIA if we want to survive," says McDonald's head of global marketing Larry Light. "If we don't bring some action into the forefront of our marketing and don't start building brands from the shelf, we might not survive."

So, brand owners can either give up and die, or redefine the way they approach marketing. The answer is to think retail and optimise every phase of the marketing process. This "retailization" process starts by examining the retail arena, assessing brand competitors within it and establishing exactly who our shoppers are and how they are purchasing. The next phase is to rethink product concepts and then how we can drive sales.

Optimising assets

Only if we manage to optimise all the phases of the Retailization model can we expect the optimal result. It might be difficult for ad people to accept, but promotion and product development are just as important as the TV commercial. Why spend millions on driving footfall if you do not invest in making your products stand out in-store?

Our study found that you can get the loyalty and disposable income of your shoppers if you keep the ideas fresh, create campaigns with clarity and involvement and ultimately merge the first and second moments of truth.

Good examples are everywhere: H&M showed with its special Karl Lagerfeld and Stella McCartney editions that not only can it sell a lot of products, but it can also use the promotion to brand and revitalise the whole store.

Another company that has taken trying and buying to a new level is Apple.

It started to lose its distribution in the US and could not afford to keep up its awareness in mass media. Instead of giving up, Apple invented its own retail format that totally changed the shopping experience. It's a fantastic way of promoting a brand - there are lots and lots of MP3 players on the market that all deliver perfect music quality, but there is only one iPod.

A final great example is Heineken. Traditionally known for high-impact ad campaigns, nowadays there is more promotion, packaging development and events. The latest example is a special edition aluminium bottle served only in selected bars, hotels and nightclubs. You can admire it in cool places, but you cannot buy this special product at retail.

The classic price promotions do, of course, still work. But as with traditional advertising, only the truly creative, the truly original, promotion stands out. Sure, the retailers are more powerful than ever before. But if you accept the changed environment and adapt your strategy and optimise all phases of the marketing process, there is still a bright future ahead.

- Lars Thomassen is co-author, alongside Keith Lincoln and Anthony Aconis, of Retailization: Brand Survival in the Age of Retailer Power, which is published by Kogan Page.