What is CPG Marketing: The Complete Guide

If you’re one of countless retailers selling “consumable” products, like food, beverages, household cleaners and toiletries, you may have encountered this term before. CPG Marketing focuses on the activities and methodologies consumer packaged goods companies use to raise brand awareness, influence customer behavior, and increase sales.

CPG companies use many of the same strategies as other organizations selling “durable” products like computers, or cars to promote their goods. However, marketing in the CPG industry comes with its own unique challenges to consider. The market for “CPGs” is highly competitive, and brand loyalty is often very low among consumers.

Rather than sticking consistently to the same brands, customers change their purchasing habits frequently, based on the price of products, availability, and other factors. That’s why an effective CPG marketing strategy is often essential to any company’ success.

What is CPG Marketing?

There’s no one-size-fits-all method for marketing CPG products. Companies use online marketing efforts, such as paid ads, content marketing (and SEO), social media and email advertising. They also use offline marketing efforts, such as experiential campaigns and store displays.

Additionally, CPG marketing can involve “always on” programs, such as marketing campaigns that constantly draw attention to CPG products, boosting brand awareness and loyalty, and specific standalone marketing campaigns, such as those used to draw attention to a new product or promotion.

The Importance of CPG Marketing

As mentioned above, demand for consumer packaged goods has remained relatively consistent for decades. Although there are dips and changes in consumer trends, the value of the CPG industry is still set to reach $3.61 trillion by 2028.

Unfortunately, while demand for CPG products is high, the competition these companies face is also significant. Effective CPG marketing efforts which use insights into customer data, knowledge of marketing trends, and intuitive marketing tactics, help CPG companies overcome a range of challenges preventing growth, such as:

Limited Access to First-Party Data

New products and initiatives can cost companies hundreds of millions of dollars to implement. Before launching a solution, companies need to gather and analyze information to ensure items will actually sell. CPG marketing strategies often involved collecting as much information as possible to not only drive more effective marketing campaigns, but validate new products.

For instance, companies can use social media monitoring tools to track consumer trends, audience intelligence tools to uncover DTC (Direct-to-consumer) sales strategies, and behavioral intelligence tools to uncover insights into the customer buyer journey.

Weak Brand Loyalty

Previous generations of customers used to stick routinely to buying products from the same company. However, today’s consumers are far less loyal to DTG brands. Consumers can easily switch to a different vendor with minimal effort or cost. As a result, only 8% of consumers say that a brand name encourages them to make a purchase.

Marketing strategies, ranging from social media marketing to brand partnerships and customer loyalty campaigns help to increase repeat sales for CPG brands. They assist businesses in building relationships with consumers, through carefully branded messaging. Plus, they help businesses to ensure they retain a place in their consumer’s mind when they’re shopping for certain goods.

Changing Consumer Behavior

Historically, brick and mortar stores drove the majority of the revenue in the CPG market. Customers bought products based on what was available to them in a local store. Companies also used specific packaging, placement, and pricing strategies to increase their chances of conversions.

Now, however, a greater percentage of consumers are buying CPG products online, both from DTC companies and larger marketplaces like Amazon. This shift in consumer behavior means CPG companies and marketing teams now need to use a broader range of marketing channels to connect with their customers. Savvy digital advertising efforts are now crucial to retaining revenue.

What are the Best Strategies for CPG Marketing?

Selecting the best marketing strategies and channels for a CPG company can be complex. There’s no specific strategy that’s guaranteed to drive results. For instance, a company like Starbucks could increase its revenue and conversions using loyalty programs to encourage repeat sales.

However, other brands like Coca-Cola and PepsiCo rely more heavily on channels that help them position themselves as leaders in their industry. Today, CPG marketing campaigns generally involve the use of numerous different strategies, tailored to a company’s target audience.

Some of the most common options include:

• SEO and content marketing: Content marketing, combined with search engine optimization is one of the best ways for companies to connect with their target audience in the digital world. It’s a way for companies to connect with their customers, demonstrate value, and guide buyers through their purchasing journey, while boosting thought leadership and credibility.
• Paid media advertising: Paid media advertising is common in the CPG environment. It offers a quick way for businesses to position their products in front of their target audience. Options range from display advertising and paid search, to sponsored content promotion, TV and radio advertising, and celebrity endorsements (or influencer marketing).
• Social media: Social media marketing is another excellent way for companies to reach their target audience in the CPG landscape. Companies can use both paid and organic campaigns, created with consumer insights to target specific groups with advertising copy. Social media even allows companies to serve ads to customers based on demographic information, such as their age, location, or gender.
• Offline retail media: Even in a world where more consumers are shopping online, in-store promotions are still effective in a CPG marketing plan. For instance, paying for an endcap display in a store or more shelf space can help your products to stand out among a sea of competitors. You can also consider sending coupon codes or discounts to customers.
• SMS and email marketing: Through SMS and email marketing, companies can nurture customers throughout their purchasing journey, and stay connected to potential buyers for longer. Teams can use automated messages to keep customers up to date on new promotions, products and offers, and even turn consumers into loyal brand advocates.
• Collaborative marketing: Collaborative marketing strategies or “co-marketing” efforts involve brands with similar audiences working together to improve their exposure. For instance, GoPro teamed up with Red Bull to help draw attention to both of their products in durable goods and CPG landscapes.

How CPG Marketing Has Evolved

Changes in consumer behavior and purchasing patterns have significantly influenced CPG marketing efforts in recent years. Factors like the pandemic, economic issues, and even supply chain problems have made it harder than ever for companies to earn and retain consumer loyalty.

As a result, many CPG companies are investing more heavily in omnichannel marketing campaigns, strategies to improve their brand reputation, and ways of improving the customer experience.

Some of the major trends influencing CPG marketing include:

• User-generated content: Though customers spend less time comparing CPG products than durable goods, they still conduct research. User-generated content like reviews and testimonials can help companies earn the trust of potential customers.
• Omnichannel sales: CPG brands now need to make their products available across a range of channels, from popular marketplaces to ecommerce platforms, and even social media platforms to encourage sales.
• Subscriptions: The rising popularity of subscriptions offers exceptional opportunities to CPG brands. It gives businesses a chance to capture more market share, and retain the loyalty of their customers, especially if they offer “subscribe and save” deals.
• Sustainability: To attract customer loyalty, CPG brands now need to show that the share the same values as their target audience. With many consumers focusing on sustainability, an environmentally friendly approach to production and sales can be valuable.
• Data collection: Since marketers can no longer rely on cookies to track consumer activity online, companies need to take a new approach to capturing consumer data. This can include sending out surveys, interviewing customers, and running polls or quizzes.
• Influencer marketing: CPG brands are quickly recognizing the benefits of the creator economy. Leading businesses enhance their digital marketing efforts with recommendations and references from leading influencers.

The Future of CPG Marketing

The last few years have had a significant impact on the CPG industry, and the marketing strategies companies use to connect with consumers. The past, the CPG landscape relied heavily on the offline space. Now, however, these companies need to adapt to the age of digital transformation.

CPG marketing remains essential to the growth of modern vendors, but the strategies companies use now need to be more multi-faceted, unique, and comprehensive.