Optimizing Brand Value: How Multidomain MDM Helps CPG Manufacturers Compete in the Aisle and Hearts of Consumers

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Optimizing Brand Value: How Multidomain MDM Helps CPG Manufacturers Compete in the Aisle and Hearts of Consumers

09/09/2013
By Dan Power, Founder and President & Julie Hunt, Research Editor, Hub Designs, and Mikael Lyngs, CEO, Stibo Systems
 
All brands want to achieve the instant recognition of Coca-Cola, Starbucks or Gillette as customers respond instantly to these brands, reliving everything that is special about them. But a brand is more than a recognizable logo or specially designed symbol. It’s a mirror of how customers perceive a company, and those perceptions reflect the value customers place on the products or services that company provides.
 
Yet for consumer package goods (CPG) companies, it’s tough to keep the brand strong and consistent, largely because of the inherent complexity of the industry. CPG companies work mainly through third parties to get their products to the end consumer. And today, they’re selling more categories of products, through a wider variety of channels, to a broader range of customers, across a wider geography.
 
To meet these challenges, CPG manufacturers need consistent and accurate information about their products and customers in order to better promote and sell through their value chain of distributors and retailers. Consumers today have many new avenues available for finding products; however the information they seek is often on websites that the CPG company doesn’t even control. As a result, these sites often provide inaccurate information copied or scraped from yet another website or third party app.
 
Segmented brand management among different business units and too many siloed information systems are other challenges that create a fragmented approach to brand and product information management and may be damaging to a company’s outward facing appearance with customers.
 
So while manufacturers are working hard to project a strong brand, their customers may form negative opinions of their company or brand because of problems they encounter when considering or using their products including:
  • Persistent out-of-stock problems
  • Poor local translations of product information
  • Missing or inaccurate ingredients on product labels
  • Highly publicized and costly recalls
Taking charge of critical information assets across the enterprise ensures that nothing gets in the way of consumers buying the products. As such, many CPG manufacturers are turning to multidomain master data management (MDM) platforms to control the widespread information needed to promote their brand throughout the value chain.  After all, a company’s systems and processes depend on accurate data for customers, products, partners and channels, to prevent issues that may ultimately drive customers to the competition.
 
Winning in the Aisle Starts With Mastering the Information Obstacle Course
Getting greater value from an organization's information assets is essential to elevating brands and to helping fuel improved growth and competitiveness. Building brand value results in more customers repeatedly purchasing products and services – which as we all know leads to the ultimate prize: brand loyalty. For example, after years of acquisitions, a global food manufacturer had too many redundant systems and data sources across its business units around the world. The enterprise was drowning in data and requirements from manufacturing, suppliers, distributors, retailers, worldwide regulatory compliance, and consumers alike. Making things worse: product information had to be localized in many languages.
 
This is an all too common problem, as a staggering amount of data and content comes into play for those who manufacture and/or sell food products. Storing and tracking data for raw ingredients alone presents a significant challenge, especially since accuracy is critical. A single ingredient can come from many sources, each of which may have a different origin and composition. Typically, it’s part of an overall “Bill of Materials” or recipe for making the end product. Now visualize taking that ingredient through the entire manufacturing process at all production sites, and then taking the end product through the value chain of distributors and retailers, onto store shelves and into the hands of consumers. 
 
Case in point — recently, more than 70 companies and over 3,900 specific products were involved in a single recall due to a peanut-related Salmonella outbreak at a Georgia manufacturing plant. The economic impact of this outbreak is estimated to be more than $1 Billion USD and the human cost could be even greater. However, the potential long-term impact on the brand and consumer confidence is Immeasurable.
 
Another information obstacle course happened to a company when some of its well-known pizza brands (and over 2 tons of products) were recalled for labeling errors. Realizing its infrastructure was incapable of handling the enormity of the situation, this food manufacturer knew that it needed to set up a master data solution to be able to publish accurate information for its brand managers, business units and value chain partners. A comprehensive multidomain master data (MDM) platform was implemented to eliminate errors and redundancies. Now business units and corporate functions can access integrated views of customers and products and performance evaluations can be accurately generated for value chain partners, retail promotions and product launches. Portfolio complexity was also reduced, resulting in inventory reductions. And more importantly, this global manufacturer can now ensure that all of the information it shares and publishes anywhere is accurate and up-to-date, no matter the location or language.
 
Brand Value Put to the Test
CPG companies looking to expand globally face the most complex and difficult brand and product data management environments of any industry. Each day, they have to work with an ever-increasing array of local regulations, market demands and customer expectations. Reliable and consistent information is critical for product labeling, safety standards, regulatory compliance, product promotions and value chain data lineage. Yet often, it’s difficult to maintain accurate, consistent information across worldwide markets.
 
Not only do they have to make sure that the right products go through the right channels, they also face the daunting challenge of reaching the right markets and consumers, at the right time, and for the right price. The value chain of suppliers, distributors and trading partners has their own information requirements that can also impact a brand.  And as if this wasn't enough, retailers and customers alike want more customized offers and promotions, as well as the ability to “co-create” products through engagement, interaction and collaboration.
 
It’s no wonder that keeping up with demands and the unique requirements has proven to be problematic for many. This is because most CPG companies often lack accurate, up-to-date product information because product data is isolated in different brand management functions (with separate systems and data definitions). This fragmentation reflects both the complex, competitive marketplace for CPG companies and the impact of mergers and acquisitions. The results are decreased brand vitality and incomplete brand value creation, with very real “hard dollar” costs due to lost revenue and increased expenses.
 
But consistency in both brand and product identity doesn’t just happen on its own, especially without centralized data and content management. Accurate, up-to-date information is essential for building strong brand equity across all value chains. And let's face it, consistent, rich product information and messaging for the entire value chain goes a long way towards improving the customer experience while elevating your brand. 
 
One large food manufacturer — who works with a global network of agencies, each of which was responsible for a particular brand and the related websites that promote them — tackled the problem this way. They ensured that each agency had access to the their master data management (MDM) system and therefore was able to perform certain hands-on functions, such as metadata modifications for their assigned products.
 
Under the direction of brand managers, these agencies manage the assortment and categorization of products, recipes, trade promotions and FAQs on their own sites through individual agency portals that feed into the MDM system. Centralized management of product data through a single platform ensures consistent, localized product data on other sites with different brand identities.
 
This approach capitalizes on agency relationships to help manage brand sites while guaranteeing that the manufacturer maintains control of accurate product information.
 
Centrally Managed Information Fuels a Powerful Customer Experience
While high quality products and services are still very important, consumers have expanded their expectations to include exceptional customer experiences every time they interact with a product. Accurate product, partner and customer information must be gathered and reviewed to understand individual customer journeys for buying and using a particular product. The challenge for brand management is less about how to find and collect data and more about knowing how to put it to work.
 
Master data uniquely defines entities like Product and Customer to be shared as trusted data throughout the company and the value chain. Poor data quality is not just an internal issue anymore; inaccurate data may have damaging consequences for everyone in the value chain and it can lead to bad press and negatively affect your customers’ perception of your brand. More importantly, incorrect product information can potentially harm one or more of your customers, which is a risk that no CPG manufacturer wants to take.
 
 
About the Authors
IMAGE1.jpgMikael Lyngs, CEO, has been with Stibo Systems since December 1995 where he joined as Head of Development.  In 2006 he was appointed to his current position.  From 1990 until joining Stibo Systems Mr. Lyngs served as Software Developer for CCI Europe, one of the world’s leading developers and suppliers of editing and advertisement solutions for the newspaper industry.  From 1995 until today Mr. Lyngs is one of the architects behind Stibo Systems STEP Master Data Management concepts.  During his tenure, Stibo Systems has experienced a significant growth and has become the leading independent solution provider within Master Data Management and multi-channel publishing.  Mr. Lyngs received a Bachelor of Science degree in Software Engineering from Aarhus Teknikum, Denmark in 1989 and a GMP from INSEAD 2008.  For more information contact him at [email protected] or visit www.stibosystems.com 

DanPower.jpgDan Power is the founder of Hub Designs, a global consulting firm specializing in developing and delivering high impact master data management (MDM) and data governance strategies.  His role at Hub Designs is a combination of best practice expert, industry analyst, client advisor, and thought leader. He’s responsible for client strategy and delivery in the areas of MDM, data governance, content marketing and social media.  Dan is the author of more than 30 articles and white papers on MDM and data governance, and is a featured speaker at industry conferences, webinars and vendor events.  Dan is the publisher of Hub Designs Magazine, a widely read blog on MDM and data governance.  For more information contact him at [email protected] or visit http://hubdesigns.com/index.html