The era of No-Waste Marketing
A Smarter Approach to Growth in FMCG and CPG
No-Waste Marketing and Its Role in the Emerging Business Cycle
In an increasingly complex and uncertain business environment, marketing efficiency has become a top priority for executives. CEOs and CFOs demand greater accountability for marketing spending and question whether investments in advertising, trade promotions, and consumer activations drive business growth. Traditional marketing approaches often fail to deliver clear, measurable impact, leading to wasted budgets and misallocated resources.
However, this is not an exclusive debacle of the marketing departments: previous years’ budget allocations are often the norm within the financial community, making it challenging for CMOs to defend out-of-the-norm choices. Many commercial-driven activities are planned bottom-up, with the exclusive objective of maximizing revenue one customer at a time: seldom do we ask whether the budgets would work harder if allocated to other customers.
No-waste marketing is a strategic approach that eliminates inefficiencies in marketing spending while maximizing impact. Unlike cost-cutting measures that indiscriminately reduce marketing budgets, No-Waste Marketing ensures that every penny contributes to tangible business outcomes through increased penetration, improved purchase frequency, or better return on marketing and trade promotions.
However, it is essential to understand what No-Waste Marketing does NOT solve:
It does not define a universal marketing ROI formula. While ROI is a crucial theoretical metric, No-Waste Marketing does not offer a one-size-fits-all solution for measuring success.
It does not focus on cutting marketing budgets – Instead, it reallocates spending toward higher-impact areas.
It does not eliminate C-suite tensions – While it provides clarity, it does not automatically ease negotiations between CMOs, CFOs, and CEOs.
At its core, our approach to No-Waste Marketing relies on three key pillars:
Marketing Effectiveness – Ensuring marketing investments drive measurable business growth.
Incremental Growth – Moving beyond volume-driven trade promotions toward high-return strategic investments.
Consumer Insights – Using accurate consumer data to drive better marketing decisions and execution strategies.
This article provides a structured framework for implementing No-Waste Marketing, helping businesses reduce inefficiencies while sustaining profitable, long-term growth.
1. Marketing Effectiveness: Spending with Impact
Marketing budgets in Fast-Moving Consumer Goods are often complex, fragmented, and spread across multiple channels, regions, and initiatives. While marketing spend is essential for brand growth and market penetration, many businesses struggle with inefficiencies that dilute impact.
No-waste marketing emphasizes allocating resources efficiently to ensure every penny spent contributes to tangible business outcomes.
This section explores the challenges in marketing effectiveness, how to build a scalable and efficient marketing budget, and how to prioritize activities for maximum impact.
1.1. Challenges in Marketing Effectiveness
Despite significant investments in marketing, many CPG brands lack clarity on what truly drives incremental growth. Common challenges include:
1. Lack of Clarity on Which Investments Drive Real Impact
Many businesses invest in trade promotions, digital ads, in-store activations, and sponsorships but fail to measure their impact. The reasons are twofold: (1) they focus on sales uplift and not actual consumption (i.e., they track the wrong measure); (2) they think in terms of top-line, not bottom-line, and therefore never question the sanity and sustainability of certain promotional choices.
More than a decade ago, I was the GM of a spirits distribution company, and one of my first acts on the job was to cut a costly promotion on a large bottle we were running three times a year. The client loved it, but the promotion hurt us at 3 euro per bottle. We would lose 3 euros per bottle for every bottle sold. We convinced the client to ditch the SKU, focus on references with better promotional efficiency, and invest in more promotional windows, which grew the turnover and the business and was EBITDA positive.
Moreover, marketing teams often struggle to differentiate between spending that maintains existing demand and spending that creates new customers or increases purchase frequency. Many trade promotions fail because the marketing teams do not master the category dynamics well enough.
2. Trade Promotions That Subsidize Existing Demand
A significant portion of marketing budgets is allocated to trade promotions (discounts, price reductions, and retailer-specific deals).
However, these promotions often cannibalize existing demand rather than drive incremental consumption.
Retailers frequently demand deeper discounts instead of investing in more effective activations that create long-term growth for manufacturers and retailers.
3. Misalignment Between Trade Spend and Brand/Regional Priorities
Marketing investments should align with brand and regional growth strategies, but many companies allocate resources based on past spending patterns rather than growth potential.
Retailers often push for promotions that suit their short-term volume targets rather than helping brands grow their market share.
4. Inefficiencies Due to Duplicated Efforts Across Brands
Many FMCG companies operate multiple brands within a single category, leading to overlapping trade promotions, redundant marketing activities, and wasted spending.
Without centralized visibility, different teams may duplicate efforts, competing for the same audience without a cohesive strategy.
To overcome these challenges, businesses must adopt a structured, data-driven approach to marketing budget allocation.
1.2. Building a Scalable and Efficient Marketing Budget
Cluster Markets Based on Opportunity and Potential
To ensure resources are allocated efficiently, markets should be segmented based on growth potential rather than applying a one-size-fits-all strategy.
A three-tier market segmentation framework can help:
Tier 1 (Develop Fully)
High-growth, high-revenue markets where the brand is already established.
Requires entire investment in advertising, trade promotions, and consumer engagement.
Tier 2 (Incubate, Leverage Tier 1 Strategies)
Emerging markets with growth potential but limited brand penetration.
Investment is scaled strategically, leveraging Tier 1 best practices and assets. Little to no money is spent on production, leveraging the existing materials and assets.
Tier 3 (Utilize Available Toolboxes)
Low-priority markets where investment is minimized.
Focus on cost-effective strategies, using digital marketing and existing toolkits rather than large-scale activations.
By grouping markets this way, brands avoid spreading budgets too thinly and instead focus on high-impact opportunities.
Set Clear Investment Rules for Each Tier
Once markets are segmented, businesses should define clear investment guidelines:
Tier 1 markets receive full support, including media investment, in-store activations, and promotional strategies.
Tier 2 markets receive limited but strategic investment, ensuring growth while leveraging learnings from Tier 1.
Tier 3 markets rely on existing assets and digital toolkits to maintain a presence without requiring heavy investment.
This approach ensures that marketing budgets are aligned with business priorities rather than dictated by retailer demands or legacy spending patterns.
1.3. Prioritizing Activities for Maximum Impact
With multiple marketing initiatives competing for resources, businesses must focus on activities that generate the highest return.
Not All Activities Are Equally Urgent or Important
Some marketing activities (e.g., digital campaigns, in-store activations, product sampling) deliver high returns, while others (e.g., broad, non-targeted promotions) consume budgets without clear impact.
Businesses should classify activities based on their potential to drive incremental growth rather than just maintaining market share.
Avoiding a Short-Term-Centric View
Many companies focus on short-term volume gains from deep discounts instead of long-term brand growth.
A No-Waste Marketing approach balances short-term promotional investments with long-term brand-building efforts.
For example, brands can invest in demand-generation initiatives that increase household penetration instead of running frequent deep-discount promotions.
Implementing Clear Playbooks for Promotional Best Practices
To avoid inefficiencies, businesses should develop clear promotional guidelines:
Define which types of promotions drive actual incremental sales.
Standardize best practices for in-store activations and retailer negotiations.
Use data analytics to measure past promotional performance and refine future investments.
Maintaining Budget Flexibility to Shift Resources to High-Performing Initiatives
Marketing performance should be continuously measured to reallocate budgets in real time.
Underperforming promotions should be discontinued, with resources shifted to high-impact campaigns.
For example, if a brand sees higher ROI from digital activations than in-store discounts, budgets should be dynamically adjusted to reflect this insight.
Key Takeaways
Eliminate marketing inefficiencies by ensuring trade promotions and ad spending drive real, measurable impact.
Segment markets into three tiers (Develop, Incubate, Toolbox) to focus investments where they will have the most significant effect.
Avoid a short-term-centric view by balancing trade promotions with long-term brand-building efforts.
Use clear playbooks for trade promotions, retailer negotiations, and media investments.
Maintain budget flexibility to shift resources toward the highest-performing activities.
By implementing No-Waste Marketing principles, businesses can optimize marketing effectiveness, reduce inefficiencies, and drive sustainable growth.
2. Incremental Growth: Smarter Trade Spending & Execution
Trade promotions represent one of the most significant marketing expenditures in the FMCG/CPG industry, accounting for up to 25% of total revenue in some companies. However, despite this massive investment, research indicates that 60-70% of trade promotions fail to generate incremental growth. The challenge lies in how brands allocate, execute, and optimize trade spending to ensure that it drives new revenue rather than subsidizing existing demand.
No-waste marketing calls for a more innovative, data-driven approach to trade promotions. It focuses on high-impact investments that maximize incremental sales rather than wasteful, broad discounting. This section explores the key challenges in trade spending, how to optimize investments for growth, and how to prioritize SKUs and promotions for maximum efficiency.
2.1. Challenges in Driving Incremental Growth
Despite the billions spent on trade promotions annually, many FMCG/CPG brands struggle to generate meaningful incremental revenue due to inefficiencies, retailer-driven pressures, and poor Execution.
1. Lack of Transparency in Trade Spending Leads to Inefficiencies
Many companies lack a clear view of which trade investments drive actual incremental sales versus those that merely shift existing demand.
Trade spending often becomes a cost of doing business rather than a strategic lever for growth.
Due to complex retailer agreements and discount structures, finance teams struggle to track trade promotion effectiveness in many organizations.
2. Retailers Push for Deeper Discounts Rather Than Effective Activations
Retailers often demand deeper price cuts, positioning them as necessary to maintain shelf space and sales volume.
However, frequent discounting erodes brand equity and trains consumers to buy only on promotion, leading to diminishing returns.
Many brands fund trade promotions that benefit retailers more than the brand itself.
3. Consumption Occasions and Shopping Missions Are Underutilized
Many trade promotions are executed without considering the broader consumption context.
Brands fail to leverage high-potential consumption occasions, such as seasonal trends or specific shopping missions (e.g., impulse purchases, bulk-buying events).
Instead of blanket discounts, brands should align trade promotions with real demand drivers.
4. Weak Execution Due to Lack of Focus on Core SKUs
Trade promotions often spread resources thinly across too many SKUs instead of focusing on high-impact, high-potential products.
Low-performing SKUs often receive trade support despite weak promotional elasticity.
Many brands fail to prioritize hero SKUs that drive category growth.
2.2. Optimizing Trade Spending for Growth
Rather than distributing trade budgets evenly across retailers and products, No-Waste Marketing maximizes returns by concentrating resources where they have the most impact.
Invest in Customers Where Trade Promotions Have a Higher Return
Not all retailers and channels provide equal promotional returns.
Brands should identify customers where trade promotions drive incremental growth rather than subsidizing existing volume.
High-impact customers often include leading retailers with strong execution capabilities and channels that reach new or infrequent buyers.
Shift Resources to High-Potential Customers Rather Than Spreading Spending Too Thin
Many FMCG/CPG brands make the mistake of allocating trade funds too widely, leading to diluted effectiveness.
Instead, brands should rank customers based on trade spend efficiency and shift investment toward high-potential partners.
Retailers that provide strong in-store Execution and support marketing initiatives should receive a more significant share of trade spending.
Example: Smarter Trade Spending Strategies
A global snack brand analyzed its trade promotions and found that 80% of incremental sales came from just 20% of its retail partners. By shifting trade investments toward these high-performing retailers, they:
Reduced inefficient spending by 30%.
Increased category sales by 12%.
Improved incremental consumption on trade promotions by 20%.
By focusing trade spending on high-potential customers, brands can eliminate waste and drive sustainable growth.
2.3. Promotional Efficiency: Focusing on Incremental Sales
Prioritizing SKUs and Promotions That Drive Incremental Sales, Not Just Volume
Many brands run promotions on low-value SKUs, leading to sales that do not contribute to category growth.
Instead, brands should prioritize SKUs that drive incremental revenue and penetration.
Promotional decisions should be based on elasticity, past performance, and strategic importance.
Mastering Category Fundamentals to Drive Growth Through Penetration
The most effective promotions do not just increase purchase frequency but drive category expansion.
Penetration-led growth is more sustainable than discount-driven frequency gains.
For example, instead of promoting a category leader that consumers already buy, brands should use trade promotions to drive the trial of new products that increase overall category consumption.
Identifying and Focusing on SKUs With Better Promotional Efficiency
Not all SKUs react to promotions the same way.
Brands should use data analytics to measure past performance and identify the highest ROI SKUs.
High-efficiency SKUs tend to:
Have substantial brand equity.
Show high elasticity (i.e., respond well to price promotions).
Drive new customer acquisition rather than just shifting purchases within the portfolio.
Key Takeaways
Trade spending must shift from volume-based discounts to value-driven investments.
Retailers often push for price reductions, but brands must focus on driving demand instead of subsidizing existing sales.
FMCG brands should identify and invest in high-potential customers rather than spreading trade funds too thinly.
Promotional efficiency should be measured at the SKU level to prioritize high-promotional efficiency products.
Category growth should be the ultimate goal—focusing on penetration rather than just discount-driven sales spikes.
By implementing a No-Waste Marketing approach, brands can transform trade promotions from a cost burden into a growth engine.
3. Consumer Insights: Turning Research into Actionable Strategy
Consumer insights should be a powerful tool for strategic decision-making in marketing, product development, and trade execution. However, many FMCG brands struggle to bridge the gap between research and Execution. While companies invest millions in consumer studies, shopper behavior analytics, and trend forecasting, translating these insights into meaningful action is the real challenge.
To achieve No-Waste Marketing, consumer insights must be timely, relevant, and directly connected to executional strategies. This section highlights common pitfalls in consumer insights, how to move from research to action, and how brands can use data to drive sustainable category growth.
3.1. Common Pitfalls in Consumer Insights
Despite data collection and consumer research advancements, many brands fail to use insights effectively. Some of the most common mistakes include:
1. Research Often Remains Too Abstract to Inform Execution
Many consumer studies provide broad, high-level insights rather than clear executional guidance.
Reports may describe macro trends, such as "sustainability is growing in importance," but fail to answer how a brand should act on this insight.
2. Insights Get Stuck in Reports Rather Than Influencing Strategy
Marketing teams often conduct research, produce reports, and store them away without a clear implementation plan.
No-waste marketing requires consumer insights to input decision-making, not just a documentation exercise actively.
3. Brands Fail to Anticipate Changes in Consumer Behavior
Many companies focus on historical data rather than predictive insights.
Brands react to shifts after they happen rather than identifying early indicators of change and adapting ahead of the curve.
4. Decision-Making Still Dominated by Gut Feeling Rather Than Data-Driven Insights
Many senior leaders rely on intuition and past experience instead of allowing data to inform strategic decisions.
A gut-driven approach can lead to inefficient marketing investments, particularly when consumer preferences evolve rapidly.
5. Brands Often Overlook Younger Consumers, Who Predict Category Shifts
Younger demographics tend to adopt emerging trends before the mainstream market.
Many brands fail to study and act on the preferences of younger consumers, resulting in missed opportunities to innovate and lead category trends.
To ensure insights drive business decisions, companies must shift from static research to actionable execution strategies.
3.2. Creating Actionable Insights
For consumer research to be impactful, it must be practical, execution-ready, and aligned with business objectives.
Move from General Research to Specific Executional Strategies
Instead of vague insights (e.g., "consumers want healthier options"), companies should define specific actions, such as:
Reformulating products with cleaner ingredient labels.
Developing new portion sizes that align with consumption trends.
Launching targeted digital campaigns that educate consumers about healthier choices.
Example: Customer Co-Creation Approach
Many leading brands now collaborate directly with consumers to co-create products, packaging, and marketing strategies.
Engage Early Adopters in Idea Generation
Early adopters often signal future trends.
Brands can leverage these consumers to test new product concepts, flavors, and packaging formats.
Digital communities and social media offer real-time feedback loops, allowing brands to iterate quickly.
Validate Insights Quickly to Inform Product/Marketing Decisions
Instead of lengthy research cycles, brands should test and refine ideas rapidly.
Pilot launches, limited-edition runs, and digital A/B testing can help validate insights before full-scale rollout.
Have a Clear "So-What" from the Start—How Will This Insight Shape Execution?
Every insight should directly tie to a business action:
Does this insight impact pricing, packaging, or distribution?
Should it influence trade promotion strategies?
Does it signal a shift in consumer messaging or advertising focus?
No-waste marketing requires insights to be more than observations—they must be transformed into concrete actions.
3.3. Mastering the Category for Sustainable Growth
To ensure long-term success, brands must understand category fundamentals and use consumer insights to make data-driven decisions on product investment, SKU rationalization, and trade promotions.
Understanding Key Drivers of Growth Within a Category
Many brands focus too much on short-term sales volume rather than long-term category growth.
Actual growth comes from increasing household penetration and driving repeat purchases rather than simply shifting purchases within a category.
Using Data-Driven Insights to Bet on the Right Products
Brands must analyze which SKUs drive incremental growth versus cannibalizing sales from existing products.
Trade promotions should focus on high-potential SKUs that expand category consumption.
Example: Mastering the Category Through Data
A leading beverage brand used consumer purchase data to refine its portfolio strategy, focusing on:
Penetration Growth – Tracking how many new consumers were entering the category.
Repeat Purchase Rates – Measuring which products had the highest consumer loyalty.
SKU-Level Analysis – Identifying which pack sizes and formats aligned best with consumer shopping missions.
By leveraging these insights, the brand optimized its promotional strategy, increased household penetration by 10%, and improved overall profitability.
Optimizing Volume per SKU to Align With Consumer Demand
Many brands overcomplicate their portfolios by offering too many SKUs that do not add value.
Using consumer insights, brands can streamline product assortments, ensuring that each SKU has a clear role in driving category growth.
Case Study: Data-Driven SKU Optimization
A snack food company analyzed sales performance and found that 20% of its SKUs contributed 80% of total revenue. By discontinuing underperforming products and reinvesting in high-growth SKUs, the company:
Reduced supply chain complexity.
Improved retailer compliance by focusing on fewer, better-performing SKUs.
Increased promotional efficiency, ensuring trade investments were supporting the right products.
Key Takeaways
Consumer insights must drive Execution—not just research reports.
Brands must shift from vague, high-level trends to specific, actionable strategies.
Engaging early adopters and younger consumers can provide early signals of category shifts.
Pilot testing and fast validation are crucial for effective insight implementation.
Using data-driven insights to refine SKU strategy can eliminate waste and improve trade effectiveness.
By adopting a No-Waste Marketing approach to consumer insights, brands can translate data into meaningful action, optimize trade spending, and drive long-term category growth.
Conclusion: Driving Sustainable & Efficient Growth
In today’s competitive FMCG/CPG landscape, brands can no longer afford to waste marketing pennies on ineffective strategies. No-waste marketing offers a structured approach to balancing efficiency and growth, ensuring that every marketing investment contributes to measurable business outcomes.
At the core of No-Waste Marketing are three key pillars that drive more brilliant, more effective marketing strategies:
Marketing Effectiveness – Spending with Clarity and Impact
Brands must prioritize high-impact marketing investments and eliminate spending that does not generate real business value.
Market segmentation and tiered investment strategies ensure that budgets are allocated based on opportunity, not habit.
Incremental Growth – Smarter Trade Spending
Retailer-driven discounts often fail to drive actual incremental revenue.
Brands should focus trade promotions on high-potential customers, SKUs, and channels to ensure that spending expands market penetration rather than subsidizing existing demand.
Consumer Insights – Turning Research into Action
Insights must be execution-ready, influencing pricing, promotions, and product innovation.
Younger consumers and early adopters are key to predicting category shifts and emerging demand spaces.
The ability to stay flexible and adapt marketing strategies to changing consumer behaviors will define the success of future FMCG brands. Companies must move beyond volume-driven growth models and adopt a value-driven, data-backed approach to maximize efficiency and long-term profitability.
By embracing No-Waste Marketing, brands can achieve sustainable growth, stronger financial performance, and a more efficient marketing ecosystem.