The slow death of the FMCG marketer

Originally published on Harvard Business Review Turkey Blog.

It was one of the coolest jobs out of university in the 90’s. Thousands of people applied for a handful of marketing positions in the top FMCG companies. ”Do you want to run a multi-million dollar business?” was the slogan to attract the best talent for brand management positions. These were the gold days of FMCG marketing in late 90’s. And why wouldn’t they be? FMCG companies were concurring the world continent after continent by innovating high performing everyday products, demonstrating their superiorities via side by side demos dominating the TV media. This model created enormous consumer demand which was supplied via enriching local distributors. In the nucleus of this model, sat Brand Manager, a twenty-something year old leader, dedicated to the brand who was ambitious, well-educated and brain-washed by the company culture running a breakthrough matrix system made of multi-functional resources designed to follow his/her lead.

Today, the party is over. We are witnessing the slow death of the FMCG marketer with one thousand cuts due to ever creeping trends playing against the once strong hand of the FMCG marketers. The landscape shifted enormously and FMCG marketers find it hard to adapt. First hit came from retailers, who started to consolidate their power in the beginning of the 2000’s, which shifted power away from the manufacturers to retailers.

Second, media inflation decreased the effectiveness of the once proven TV driven media model as more and more emerging industries such as tele-communications and big pharma discovered the power of brand building through mass media which inflated the advertising costs. Third, by 2010, the digital and mobile revolution made the once sought-after Brand Manager less relevant as traditional brand building framework was disrupted with the emergence of highly measured digital marketing which led to disruption in the brand experience. Brand Managers weren’t prepared for such disruption.

”What now?” are asking FMCG marketers. The profit margins are lost to the retailers, the market share is lost to private labels and the talent is lost to new digital economy. Despite enormous brain power and multi-billion dollar R&D facilities, the biggest innovation is still the 3in1 shampoo/conditioner/something-else bottle with some sort of re-cooked vitamins that is borderline effective. The talent started to flock away from FMCG because of the slow decisions, buried under layers and layers of bureaucracy created by so called tax-efficient global matrix structures. This is a tough spot.

Some FMCG marketers are trying to get out while it’s not too late. But the transition is painful. One exit route is retail, which is facing its own demons with e-commerce disruption and margin erosions. FMCG marketers are recruited to save the day in retailers, but with which experience? The omni-channel leadership requires e-commerce know how to compete against pure play e-commerce competitors which is non-existent in FMCG, because consumers are not really involved in FMCG purchases and when they do, they don’t really buy it on-line. The omni-channel requires another skillset: 360 degree experience design focused on customer satisfaction which is another weak spot for ex-brand managers. While they are brilliant at creating a brand DNA on paper and communicating that through packaging and traditional media, they find it very hard to design experience through on-line journey, CRM, call-center services and digital products such as apps. It’s like learning a foreign language for years and then being asked to present in your second foreign language which you can barely pronounce. Another exit route is to jump to other growing sectors who copied FMCG playbook to build their brands such as pharma over the counter or telecom who are all going through similar disruptions. As a result, once promising marketing career paths flatten out, compensations go to median and talent becomes a little more mediocre in these industries.

But, not everything is so gloomy. One of the best exit strategies for FMCG marketing is to move to pure play e-commerce companies and learn hard core performance marketing, CRM and data management with the addition of artificial intelligence to the mix. While this move frightens many people, actually, the survivors end up extremely successful because of the market demand. Why? Because while FMCG marketers suffer due to lack of innovation and slow adoption of digital, the e-commerce companies have very little clue about how to build a brand with strategic deliberation. They also badly lack leadership skills that well trained brand managers have. That’s why one of their best hiring grounds is junior marketers from FMCG who have learned the fundamentals of brand building but not yet shaped with the taboos of old school. At more senior levels, the courageous leaders in FMCG are making bolder moves, capitalizing on their strong leadership, business and political skills coming from FMCG school and applying them to e-commerce driven companies who disrupt some sort of traditional industries such as taxi, banking, retail, car sharing or food delivery etc.. This is definitely not easy and requires some level of career re-invention, but the demand in the market is overwelming. Do you want proof? Just check the latest CMO postings: ”Proven marketing leader from one of the marketing schools, who has experience in digital marketing and CRM capabilities to lead the delivery of omni-channel marketing strategies.” Really? Good luck finding that person, because FMCG marketers did not fully wake up to their potential yet. The ones who did wake up, are already taken and they are digital miles ahead.

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