Direct marketing is highly tactical, it is a one on one communication from the marketer to the consumer. Within the boundaries of some limitations, the outcome of direct marketing can be quantified with a considerable level of confidence.
You either got a response, or you did not. It is tactical, short term, and transactional.
Because it is so responsive to short term quantification, and our digital lives are all about quantification, these tactical elements are now predominant. However, there is no evidence that tactical activity alone will build a brand, and plenty that an overuse of tactical stuff will actually destroy a brand.
By contrast, building a brand takes time, investment, a great strategy, and the nerve to continue in the face of debatable real time data, and short term expediency.
Just look at what has happened to proprietary brands in supermarkets. They have been destroyed by the power of the retailers demanding tactical promotional dollars, which is code for retailer margin protection. This has been given by suppliers, usually reluctantly, at the expense of brand building, simply because it is easier and expedient in the short term to comply.
Consider Meadow Lea. At its height, Meadow Lea had a 23% market share at premium prices in a crowded and growing margarine market. The great advertising supported by a range of customer focussed promotional activity that had built the brand, was stopped in favour of tactical retailer price promotions. Now, 20 years later, Meadow Lea is just a label on a few Sku’s in the chiller cabinet.
Imagine you are the marketing manager of a branded product, you have a finite marketing budget. You need to convince the CEO, who is an engineer or an accountant, that it is better to keep advertising for the long term health of the brand, than give in to powerful retailer demands for various forms of retailer margin supplementation, which will retain distribution in the short term. This has been a very hard argument to win for all but a very few FMCG marketers. With the benefit of hindsight, it has been a vital one that was lost.
Had the argument been won, and a balance between the two been found, what would have been the difference to the revenue and margins of both retailers and Meadow Lea Foods?? Most probably in the hundreds of millions of dollars, and consumers would have benefitted by continued value innovation in the spreads category, which has been stagnant for years.
