CPG is an acronym that stands for "consumer packaged goods." The retail and distribution industries differentiate CPGs from other consumer items, such as produce or clothing, due to the fact that they come prepackaged. Grocery stores, department stores and other retail outlets carry thousands of CPGs. Marketing firms take on CPG manufacturers as clients to help them manage the branding, packaging and presentation aspects of their products.
The CPG industry brings in billions of dollars in revenue each year. Although the industry is dominated by some of the biggest brands in the world, including Proctor and Gamble, Coca Cola, Pepsi, Kellogg's, Unilever and Kraft, it is also home to smaller local and regional manufacturers. With so many companies of varying sizes offering wide arrays of products, the challenges that face marketing companies that cater to CPG clients can be both immense and varied.
One of the challenges of CPG clients is the nature of their products. These products fall somewhere between perishable items, such as fresh meat and produce, and durable goods, such as tools and equipment. The shelf life on these products can range from a few weeks to a year or more. The client must find ways to attract new customers while retaining its appeal to its existing customer base to maintain and improve its sales performance.
CPG clients face complex issues in the processes that control logistics and distribution. CPG products must often pass through several stages before they reach consumers. A distribution network of suppliers, distributors, brokers, warehouses and retailers must handle the products at different stages before customers can access them. Some products are time-sensitive, while others require strict temperature controls. Each type of product carries its own distribution challenge, so companies with CPG clients must help them manage these challenges and bring the products to market.
Marketing efforts are among the major concerns of CPG clients. Companies are constantly analyzing the effects of their pricing, presentation and product ingredients to improve their standing in a highly competitive marketplace. Some of these efforts, like changing the logo or improving the design of the package, reap tremendous benefits. Other attempts, like "New Coke" or "Crystal Pepsi" become synonymous with failure. CPG clients must balance their need to innovate in an ever-changing marketplace with their tried-and-true marketing strategies.