Sunday, February 11, 2007

What IS Foodservice Marketing Anyway?

If you haven't discovered Franklin Foodservice Solutions, Dave DeWalt is an expert at maximizing the manufacturer/distributor value exchange and his writings are incisive.

In his January newsletter, he asks the question "What IS Foodservice Marketing, Anyway?" and prompts a debate of the two tradtional approaches:

"There are Foodservice Marketing people at large, national branded, retail-driven companies who go about their business very much like their Retail counterparts. They think big thoughts about the big picture, focusing on building their brands. They spend a lot more time with operator research and even consumer research, looking for that magic that will pull their products through distributors. They steadfastly refuse to get sucked into the day-to-day haggling and dealmaking that keeps a lot of our distributor business working at the transactional level.

And there are Foodservice Marketing people, often at smaller, foodservice focused companies, who know how the foodservice game is played. They behave as if their brand has little power, focusing on countless pricing and promotion spending schemes to seize whatever volume becomes available that day. These Foodservice Marketing people function, for better or worse, in the realm of Sales Support, which some would argue is not Marketing at all."

At Foodservice Rewards, we'd argue that both approaches miss the point. The most important function of foodservice marketing, in our view, is to help management to think of their company not as a group of products or services or functions or territories, but rather as a portfolio of customers. This requires a fresh mindset that:

1) Recognizes that customers are the only source of profits

2) Understands that each customer's profitability or unprofitability - and the reasons for it - are critically important to creating winning value propositions

3) Realizes that obtaining and analyzing this information (which used to be overwhelmingly difficult) is now practical

4) Champions a marketing and sales approach that organizes around customers and customer segments

Today powerful computing systems can track customer purchase behavior segment by segment (even operator by operator) fairly straightforwardly. E-mail and print-on-demand are bringing personalized communications to the foodservice industry. The result is tremendous pull through, especially when paired with a local distributor's brand (see Ginsberg's or E.G. Forrest examples).

We believe the coming revolution in foodservice marketing will occur as technology empowers manufacturers to transform into customer centric organizations delivering anticipated, relevant and personal benefits to their most valuable customers/customer segments.

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