There’s an old saying in business that when sales are good, it’s because operations is doing its thing, but when sales are bad, it’s because the marketing department is screwing up.
For many natural foods manufacturers, the emphasis is on product characteristics—taste, nutrition, functionality—and marketing is an afterthought. So, too, for natural foods retailers, where price, service and selection reign supreme, while PR or marketing go along for the ride. Indeed, when the sailing gets rough, marketing is often the first thing thrown overboard.
Why is that? Is there any true science to marketing—any proof that it really works at all, or doesn’t work when times are bad? Is packaging marketing? Where do customer research and big data fit into it?
These and other questions will be featured topics at the new Food Industry Executive Leadership Development (FIELD) four-day immersion program taking place this July in partnership between New Hope, Naturally Boulder, MBArk and the University of Colorado’s Leeds School of Business.
Once upon a time, marketing theory was simple: you had a product or service, and you got it in front of as many eyeballs as possible. For many years this meant undifferentiated advertising in mass-market vehicles such as newspapers, TV or billboards. (Remember, as late as 1990 the Big Three networks commanded more than 70 percent audience share during prime time, and 62 percent of American adults read a daily newspaper.) Everyone saw the same advertising message, but some were bound to get taken in. In 1994, the natural foods retailer Fresh Fields conducted a study that showed that of the 391,729 subscribers to the Philadelphia Inquirer, only 31,100 (7 percent) actually saw its ads in the food section. It didn’t matter. That was enough.
Then along came cable TV, special interest periodicals, the internet, email and social media. Channels proliferated, markets fragmented, viewing audiences and circulations plummeted, and everyone had a printing press. Seminal marketing theories such as the “4 Ps of Marketing” (product, price, place, promotion), which had been taught to generations of marketing students through the 60+ textbooks of Philip Kotler at Northwestern’s Kellogg School of Management, gradually give way to newfangled concepts like customer-specific marketing, permission marketing, cause-related marketing, content marketing, big data marketing and influencer marketing.
Now we have many practitioners saying that marketing as we knew it is dead. “We need to go from ‘marketing to customers’ to ‘mattering to people,’” Unilever CMO Keith Weed has said.
Complicating matters further, the wall that used to separate natural and conventional channels has come crashing down, meaning that the natural products companies, with their typically limited marketing budgets, data and expertise, must compete mano a mano with Big Food’s MBA-trained marketers and deep pockets.
So what is a natural products company to do? Go back to old-fashioned undifferentiated mass-market advertising, like Sprouts Farmers Market does with its millions of weekly circulars? Comb through reams of SPINS data in the hopes of finding insights? Try to strike gold with influencers, like Thrive Market has with “Wellness Mama,” the Kentucky mommy blogger? Or maybe just keep the marketing expenditures to a minimum and rely on operations to do its thing?
The answers will differ, of course, but the one consistent theme that will be presented at the FIELD program is a renewed emphasis on strategy, informed by research and data.
“Too many natural food companies focus on executing tactics, such as social media and in-store signage, without establishing a strong strategy,” said Heather Kennedy of the Leeds School of Business, formerly with both Kraft and Whole Foods Market. “These tactics are important but are much more effective when rooted in strategy. How are you positioning your company, de-positioning competitors and communicating a brand narrative that differentiates you?”
Doug Radi, CEO of Good Karma Foods and another instructor in the FIELD program, concurs. “The way we market has changed, but the need for smart strategy has not.” He notes that sales data and market research helped Good Karma decide to expand into single-serve, shelf-stable flax milk packages earlier this year, and that move has opened up the direct-to-consumer channel. “DTC itself is promising, but we have to figure out the right strategy for it. If we are smart in how we market it to consumers, then it will help build our brand at retail, too.”
As none other than Philip Kotler himself (now 87) wrote, in order to make better marketing decisions in today’s world we need to “analyze markets and competition in systems terms, explicating the forces at work and their various interdependencies”—in other words, be more strategic. “No company in its right mind tries to sell to everyone.”
Joe Dobrow, founder of MBArk, is the former head of marketing for Whole Foods and Sprouts and the author of Natural Prophets, a history of the natural foods industry. The topic of 21st century marketing is one of the many he is incorporating into the new executive education program mentioned in the article. For more details, visit www.MBArk.com/FIELD.