Joint Value Creation: A Recipe for Success in FMCG

Time and again as consultants, the conversations we have with FMCG clients boil down to a consistent theme: Suppliers and Retailer customers trying to work together, while on different sides of the table and often feeling at cross-purposes.

Conceptually their goals are similar. Both are looking for greater return on their collective investment, through better meeting the needs of their shared stakeholders, consumers and shoppers. When this clicks, we call it the “triple-win” and the outcome is known as Joint Value Creation.

So how do we help it to click more often? What are the ingredients needed for Joint Value Creation? Let’s find out…

At Real World Marketing, we see Joint Value Creation truly realised with the coming together of 4 powerful forces: Growth, Integration, Execution & Efficiency.

The Joint Value Creation Cycle

Growth: meet consumer and shopper needs better.

It all starts with knowing where growth will come from. Sustainable, immediate and longer-term 3-5 year opportunities. This should be delivered via a deep knowledge of the consumer demand landscape, identifying how the category meets the needs of consumers and shoppers today and as they are evolving, leading us to identify future Drivers of Category Growth (how consumer or shopper behaviour can be positively affected to stimulate growth).

Integration: align strategy and deepen collaboration.

Different retailers have different strengths and priorities. Being choiceful about which opportunities are right to partner with each of our customers – vs trying to force-fit our whole activity set into all customers - demonstrates listening and allows retailers to differentiate from one another. A deep understanding of all critical stakeholders (FMCG Supplier, Retailer Customer and Category consumers/shoppers) enables true integration. Finding and drawing together the common threads between stakeholders’ needs, strategies and objectives, allows us to select the opportunities that leverage and unlock these sweet spots of connection.

Execution: doing things differently and change behaviour.

This is where the rubber hits the road, with both supplier and retailer focusing resources on the implementation of agreed initiatives which drive demand by compelling shoppers to change their behaviour at the point of purchase - instore or online. Pooled resource = more resource. Co-operative, end-to-end planning works that resource harder for greater return in investment. Aligned understanding and purpose can unlock better use of customer platforms and willingness on both sides to track and course correct initiatives where appropriate to ensure value is being created - to mutual benefit.

Efficiency: extract more value and share the benefits.

Working together builds even better knowledge, understanding and shared learning. Winning together builds trust. It becomes easier and faster to work together; a form of competitive advantage.

Shared learning and mutual trust opens doors to look more broadly within business-to-business operations (eg. collaborative forecasting, supply & procurement) and across different levers (eg. Digital and physical shelf or communication trials, Revenue Growth Management) for future initiatives and workstreams to realise further opportunity. Efficiencies foudn together may be reinvested further fuelling future growth…and so the cycle begins again!

 Shape the Future, Don't be Shaped by It

In order to shape the future, rather than be shaped by others in the FMCG world, having a Joint Value Creation mindset is a vital ingredient. If you think a Joint Value Creation mindset could unlock greater potential in your business, please reach-out to the team at Real World Marketing for a chat on how this could work for you.