As the U.S. economy continues to improve, consumer confidence has been on the rise, which would typically indicate growth for consumer packaged goods manufacturers as well. However, according to a new Hot Topic Report from Acosta, a sales and marketing agency in the CPG industry, unit sales are flat across most categories, and trade promotions continue to decline as a key factor in driving incremental volume. This decline leads to more unprofitable sales for manufacturers. Despite this, CPG manufacturers continue to allocate an average of 15 percent to 20 percent of gross sales to trade promotion.
Once a new technology tool becomes embedded in the business world, one tends to forget the doubt and confusion that marked its debut. As anyone over the age of 30 will recall, companies once debated the value of having websites. Early users of the internet were actively hostile to the notion of a network that was created for the defense and academic communities being co-opted by the commercial sector. Now, of course, any business that isn't on the internet is either utterly clueless or not serious about being a success. Yet we seem to be having the same debate all over again, this time centering on the proper role of social media.