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How Do Top Consumer Packaged Goods Companies Use Process Improvement?

by Michael Webb | * Comments (1)
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Jason Buschlen of Lexmark asked me this interesting question:

I wonder how top tier CPG sales organizations are benefiting from process improvement.

The following companies (and probably more) have presented cases at the Six Sigma conferences, Jason:

  • Black and Decker (reducing cost of literature distribution to stores, reducing cost of returned items at the stores)
  • Best Buy (or someone like that) on increasing effectiveness of ads and pricing
  • Motorola where they used multi-vary statistical techniques to analyze combinations of offers, pricing, and messages for cell phone displays in stores.

I used the Motorola example in Chapter 7 of "Sales and Marketing the Six Sigma Way." You are right that the environment of Consumer Packaged Goods (CPG or B2C) is different from that of industrial or commercial sales. In fact, it is interesting to compare the techniques across industries:

In Consumer Package Goods you could be trying to get prospects to read a headline, call a number, come into a store, buy something, or upgrade their purchase somehow. Most of the communicating is done via the media and the packaging.

By contrast, in business to business sales, the communication is done via ads, trade shows, direct mail, and sales people's activities aimed at creating and maintaining relationships.

  • In industrial sales, you could be trying to get prospects to opt in to a newsletter or a whitepaper, attend a teleconference or lunch-n-learn, take your salesperson's call, and perhaps try your samples.
  • In engineering service industries, you could be trying to get prospects to ask you for a quote so you can interact with them. You want to build a relationship that gets them to want to take your proposals seriously.
  • In dealer sales, you could be trying to get dealer managers to commit to a line, get their salespeople trained and excited about the line, and then support their selling activities to produce end user orders.
  • Likewise, if you are selling to the construction industry, you might be trying to get architects to specify your line, and then get contractors to try it out on their jobs.

These are all different industries where the communication tactics vary pretty dramatically, yet where the same cause and effect principles apply. The goal is to implement the actions or techniques (causes) that will get prospects to do what you want them to do (effects).

As far as specific written down case studies, I'm afraid there aren't many. A lot of that is due to companies being squeamish about getting their stuff publicized. But there are a bunch of cases in my book, including more than one that are B2C, or applicable to it.

If you know of some other interesting examples, please go ahead and post a comment here!

Michael Webb
July 19, 2006

One Response to “How Do Top Consumer Packaged Goods Companies Use Process Improvement?”

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