By Farrah Khan
In the past several years, the consumer packaging goods (CPG) manufacturing industry has seen a decline in revenue growth. Consumers are now very value conscious while they are shopping for goods. They are also not shopping in traditional brick-and-mortar stores like they used to. Online shopping is becoming more popular with the ease of shipping and turn around time. CPG manufacturing companies have seen costs grow to provide for their retailers. To combat this trend, it is recommended for both manufacturers and retailers to work closely together to successfully be able to gain long term consumers.
Co-developing strategies for both the manufacturing companies and the retailers will enhance both companies’ initiatives and streamline efforts for revenue growth. These collaborations should focus on several year plans rather than focusing on a quarter or finite budget. According to a Mckinsey study, “Winners are about 40 percent more likely to create tailored products and packaging for and with their retail partners.” This develops relationships between both companies as well as give the customer what they want.
Negotiating these partnerships come from seeing a need for the collaboration and stating the needs from both companies. The content of the negotiation will need to be stated to better the demands given. Creating partnerships can be a great help in the CPG industry and will need to be re-evaluated for best results.
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