Interview • 30.07.2010
Service at the point-of-sale (POS): How well do manufacturing and trade cooperate with each other?
Interview with Martina Sandrock, Managing Director of Iglo Germany
Martina Sandrock is one of the few female top managers in Germany. At the 11th ECR-Day in September in Hamburg, the boss of Iglo Germany will sit on the podium and discuss disputes and cooperative efforts between manufacturers and the food trade. “You cannot make it today without cooperation,“ she says in this interview. In the end, the concepts have to be “relevant to the consumer”. How can branded companies increase this relevance? And how do manufacturers support trade in sales?
In September the 11th ECR-Day is taking place in Hamburg. ECR – Efficient Customer Response – is that an eternal unfulfilled pipe dream? Is there progress?
During the past few years, ECR has more and more become an important part of strategic collaboration between manufacturing and trade. Each year, the ECR Award proves with numerous best-practice-examples how much the ECR idea has established itself in manufacturing and trade. This conference will once again show with positive examples, how the cooperation between manufacturing and trade can be improved, if the supply side and the demand side are consistently geared toward the needs of shoppers. Needless to say, the combined activities will be evaluated based on efficiency and roll-out ability.
At the ECR-Day you will discuss an old topic with other managers from manufacturing and trade on the podium: disputes and cooperative efforts. Where does the pendulum swing to at the moment?
You cannot make it today without cooperation. The fight for the consumer’s money on the one hand, the cost pressure on the other – both can only be tackled if we candidly exchange our know-how and experiences and work together in a partnership. ECR means that manufacturing and trade optimize the value-added chain together. Through cooperation, innovative, shopper-oriented products and marketing strategies can be created, which increase the loyalty to a specific store and a brand. Through joint solutions in the supply chain area, mutual cost benefits are developed and realized. There are still amazing potentials in these areas for all of us.
Branded companies like Iglo are more than just vendors with a company logo. What kind of service do you have to offer retailers to make it into their shelves, or in your case into their freezers?
First and foremost the concepts need to be relevant to the consumer. Ideally, top selling products or new product launches already had advanced sales thanks to effective communication. Retail expects quality products, high supply reliability and a relevant contribution to added value from us. In addition, demands for a sustainable production are increasing.
How do you view the increase of store brands in food retailing?
It is our job as a manufacturer of branded goods, based on understanding our consumers and shoppers, to develop innovative concepts and products respectively, which time and again give the markets new growth impulses. A strong brand with innovative products ensures the competitive edge.
Iglo has hired Verona Pooth as an advertising partner again for its spinach with the “Blubb” (meaning the sound a little bubble of fresh cream makes as it drops into the spinach). Can you also place this famous face at the freezer? After all, you cannot stack frozen foods as a special in display cardboard boxes.
The collaboration with Verona Pooth is based on an integrated approach with a sales effective radio campaign and was particularly arranged to implement point-of-sale (POS) activities. On the one hand, during the promotion period in the first and second quarter of 2010, we offered special packaging with a special children’s design which focused on Verona. On the other hand, Verona’s image was displayed on many POS materials. Particularly eye-catching and often discussed were the life-size cardboard stand-ups. They were placed next to the store’s freezers and attracted the attention of consumers. In combination with other POS activities they helped to boost the sale of our products.
Retail discovers its green conscience. Open freezers are outfitted with a cover or the merchandise is presented in chest freezers. The customer only sees the packaging. Do refrigeration units offer thus far unutilized possibilities in terms of advertising space?
The retailers have their own CI strategies where industry advertising strategies in many cases are not welcome. Special sales promotions are an exception. A great example for this is the attractive Iglo secondary display chest, which we have increasingly and very successfully used since last year. In addition to that, we have started projects in cooperation with retailers, to help shoppers find their way around in the frozen food section better and more quickly.
Cooling logistics are expensive. Do you collaborate with other competitors? Which supermarkets do you supply directly? Or does your cooling chain always end in the retailer’s central warehouses?
We are very proud to be able to independently serve retailers and distribute our products. Iglo does not offer third-party deliveries. In most instances, retailers distribute the merchandise by themselves from their own warehouses to their stores. Sometimes brokers serve as intermediaries.
Would you take over the installation, maintenance and restocking of freezers for retailers – even if they would not just exclusively contain Iglo products?
In our point of view, the daily restocking of products as well as the technical maintenance of the retailer’s freezer is one of the retailer’s jobs. In addition, we collaborate with retailers on how the entire frozen food department needs to be conceptually designed to increase customer satisfaction and business volumes. Our well trained sales representatives also support and provide advice to our trading partners when they open new stores as well as introduce new product platforms.
“Captain Iglo“ and the “Blubb“ – and in addition you launch new products each year. Does retail demand this kind of advertising pressure?
The intense speed of innovation concerning products is mainly due to the strong pressure to distinguish oneself from the other manufacturing competitors. Retailers certainly welcome this kind of differentiation competition. Retailers expect very differentiated concepts, not just on the product level, like for example our “Iglo shock-freezing procedure“ for our spinach-and herb products, but also with our fierce brand image, which our heroes – fish sticks by “Captain Iglo“ and the creamed spinach with ”Blubb“- have strengthened for many years.
How much do you spend for advertising per year? What portion of that is online? Are you relying on store radios? And what possibilities do you see in digital signage?
We are proud to have significantly expanded our advertising budget from the previous year and effectively put it to use. Online also plays a big role and is increasingly successfully integrated in Iglo’s communication. Store radios are not part of our main communication media. If we use it, it’s very selectively. POS-TV is a tool with a very promising future, which is already widely used in other industry sectors, especially entertainment electronics. We still need to research for the frozen food sector, on how we can provide an interested shopper quickly with simple and consumer friendly on-site information that is relevant to our product types and our range of products. This is an exciting ECR challenge.
Interview by René Schellbach