A guide to brand survival

Above: Brand consistency, yet a need to act fast and flexibly to local needs, are indentified as key to future marketing success. Coca-Cola promotes such behaviour by using a ’networked’ marketing model, where responsibility is devolved to local teams and best work is rolled out globally.

More than any other profession, marketers need to have an uncanny ability to predict 
the future. To perform their roles effectively, 
they must grasp how the world is changing 
and anticipate how their brands and businesses should adapt so they can continue to be relevant.

However, major new research reveals that while 70 per cent of marketers rate their skills as very good or excellent for the job requirements of today, that figure drops to 56 per cent for five years’ time. It also finds that 37 per cent of UK marketers receive no formal training compared 
to 33 per cent globally.

The Marketing 2020 study, of which Marketing Week is a UK partner, considers the future role 
of marketing and asks how brands can continue 
to deliver on consumers’ expectations in the 
next decade. The study surveys more than 
10,000 respondents globally and interviews 250 
top marketing chiefs from many of the world’s 
biggest brands (see methodology, below^[1]). 

Teresa Octavio, managing partner at consultancy EffectiveBrands, which led the study, says that business structures have remained quite static despite huge changes in the marketing landscape. “Marketing organisation has not changed in the past 20 years, but will need to in the next five,” she argues. “The challenge for brands is how to ready their marketing organisation to drive growth in a rapidly changing environment.”

The research divides respondents into overperformers and underperformers. People scored their organisation’s current performance in terms of revenue growth compared to their competitors. Those that scored it higher have been placed in the overperformer category while those that rated it worse are labelled as underperformers.

Using the findings, Marketing Week has identified five rules to guide marketers seeking to position their brands for growth and success in the year 2020 and beyond.

1. Decide the purpose of your brand

For all the modern trappings of technology, whether it’s mobile, social media or ‘big data’, marketers must not lose sight of the reason that the brand exists. Overperformers have a much stronger sense of why their brand exists compared to underperformers – 84 per cent of overperformers say they are proud of their brand’s purpose versus 72 per cent of underperformers.

Unilever’s chief marketing and communication officer Keith Weed argues that marketing is no longer about communicating functional benefits. Instead, it must encompass a broader concept of a brand’s role in the world. “We need to move beyond seeing people as a head of hair in search of benefits or a pair of armpits to be deodorised, to real people with real lives, and focus on how we serve them.”

Finding the best in class in each area and creating a commonwealth or multidisciplinary team is the model that is emerging

The study identifies a split between brands with a functional purpose and those that also have a ‘societal purpose’. There is a sense that it is becoming more important for brands to show how they provide wider benefits to society, rather than simply how their products or services work. The study shows that more overperformers (56 per cent) believe their organisation is ‘societally purposeful’ than underperformers (51 per cent).

AkzoNobel’s paint brand Dulux has also taken 
a societal approach with its Let’s Colour initiative. Volunteers from its workforce use donated paint from the brand to improve run-down public spaces. Dulux has donated more than 500,000 litres of paint through the scheme, which has been used in projects such as brightening up favelas in Brazil and more than 300 community projects in the UK.

Senior brand manager Renet Colaco says the scheme has helped to project Dulux as a socially valuable brand. Although it is difficult to track the effect of the project on sales, she says there is clear evidence it has helped to foster deeper engagement with customers and staff.

“You don’t just transform your home with colour – there’s a social side where you can transform your community too,” she says. “The project is about the transformational impact of colour and our role as the ‘colour authority’.”

2. Be consistent

There is evidence that a strong sense of purpose can help a brand to be consistent in its presentation across different channels. For example, 72 per cent of respondents who believe their brand has a societal purpose also feel they are able to maintain consistency in a digital context. This drops to 61 per cent among those who feel their brand lacks societal purpose.

Coffee machine brand Nespresso has sought to establish brand consistency with its commitment to providing the best coffee experience, regardless of the channel people use. UK managing director Brema Drohan explains that the company has three ways to serve customers – its retail boutiques, online and a telephone service – but that it seeks to align them by having a clear set of key performance indicators (KPIs) across the business.

“We’re a global brand and are very connected globally,” she says. “We work just as closely with our global marketing function as with our local marketing teams. We continually review the channels and use NPS (net promoter score) and other metrics to make sure there is a consistency at each channel.”

According to the Marketing 2020 research, a higher proportion of overperformers (67 per cent) say their brand KPIs are clearly linked to overall business performance than underperformers (46 per cent). It also shows that more overperformers (42 per cent) feel they are able to leverage all data and analytics to improve their marketing effectiveness than underperformers (33 per cent).

Drohan explains that Nespresso aims to provide a personalised service to its customers by using data and customer insight. It gathers information about its customers, including the type of coffee machines they own and their coffee preferences, before sending targeted emails and messages through its Nespresso Club scheme.

“We don’t just look at what people like – we look at what they want to explore in coffee too,” she says. “It’s about having a conversation with the consumer to help them reach that understanding. That enables us to build our picture of them.”

3. Get friendly with HR and IT

The more that a marketer is in command of data, consumer insight and brand purpose, the more they can play a vital role in determining the overall direction of their company. This strategic role is most obviously seen where marketing is allocated a place on a company’s executive board or where the marketing function works closely with other divisions, such as HR and IT, to 
spread brand values and develop technologies and systems across the company.

There is a clear correlation between the ‘networked’ side of marketing and overall business success. When presented with the statement ‘marketing is regarded as a strategic partner for driving business growth’ within their organisation, a significantly higher proportion of overperformers (52 per cent) select ‘always’ compared to underperformers (38 per cent).

There are clear differences between different business sectors in this regard. For example, 
while 64 per cent of respondents in the FMCG sector agree that ‘marketing works closely with the chief executive to establish the company’s strategic growth agenda’, that figure drops to 
34 per cent in the energy and utilities sector. This suggests that marketing plays a more prominent role in markets where there is greater consumer choice and empowerment.

Marketing is a vital integrative function. It should connect everything a business does with its consumers

Nigel Pocklington, chief marketing officer at hotel booking service Hotels.com, confirms that marketing plays a huge role in determining the overall direction of his business. He notes that in common with many online companies, marketing is the single biggest expenditure at Hotels.com: “There’s an element here that the company lives and dies by its marketing spend.”

This was demonstrated by Hotel.com’s huge rebranding process in 2011 to ensure that its brand was consistent across the 80-plus global territories in which it operates.

Pocklington notes that CMOs have a vital role to play in communicating who their customers are across their business, as well as defining their brand purpose. In the case of the latter, he says that Hotels.com exists to be a “travel ally” to consumers, rather than just a booking service.

“Marketing is a vital integrative function,” he says. “A strong marketing team should connect everything a business does with its consumers.”

4. Train people

Despite the need for marketers to work together across their organisations, many are struggling to do so. When asked about the current role of marketing, only 33 per cent of respondents agree that marketing always works closely with IT on the strategy for CRM and big data.

Meanwhile, only 18 per cent say marketing always works closely with HR on recruitment, retention and development plans. By contrast, more traditional marketing functions have greater prominence – 77 per cent of respondents agree that marketing always leads major advertising, promotion and PR campaign decisions.

However, given that only 56 per cent of marketers rate their skills as good or very good in terms of job requirements in the next five years, there is a great degree of nervousness about whether they are fit for the future.

This could be linked to the level of internal training offered to marketers – 33 per cent of respondents say they receive no formal marketing training while only 24 per cent say they receive more than three days of training a year. That rises to 35 per cent among overperformers and falls to 19 per cent among underperformers.

Peter Hope, marketing director at Vauxhall Motors, suggests that companies that focus on developing the right expertise can reap impressive results. “The increasing complexity 
in marketing is demanding more from our teams: tracking lead generation, mining social and digital data and managing highly targeted campaigns,” he says. “But we are also increasingly able to understand the return on investment of each of these activities.”

In addition to pressures around training and skills, marketing chiefs are rethinking how they deal with agencies. Many of the CMOs interviewed for the study conveyed the importance of selecting agencies for the best projects, rather than relying on existing relationships. Indeed, overperforming organisations are more likely to have five or more agency partners than underperformers. 

“The one-size-fits-all concept is becoming obsolete,” says Gannon Jones, chief marketing officer at PepsiCo’s Global Nutrition Group. “The idea of finding the best in class in each area and creating a commonwealth or multidisciplinary team is the model that is emerging.”

5. Let local teams get on with it

Flexibility is crucial in a digital context, particularly as brands seek to respond quickly to consumers at localised levels. This poses a huge challenge to marketing leaders who must also ensure their brands are presented consistently around the world.

There are clear discrepancies in the level of commitment to a company strategy at different management levels. While 83 per cent of global marketing chiefs say they support the strategy of their brand, the figure falls to 72 per cent among regional heads and 66 per cent at the local level.

To combat this problem and ensure all local outposts support its strategy, Coca-Cola devolves responsibility for projects away from its central headquarters. This includes setting up digital platforms where teams can collaborate on projects in different territories or share materials across the business. For example, Coca-Cola Germany was given responsibility to develop content for Christmas following previous success in this area. The Christmas strategy and executions were then rolled out globally.

“Global used to be the highest on the food chain,” says Joe Tripodi, executive vice-president and chief marketing and commercial officer. “But now the real opportunity is the  networked entity – finding where the people are who do the best work, 
let them do it and let it get socialised globally.”

This philosophy of employee empowerment is present at online clothing retailer Zappos.com.

Its innovations include substituting basic performance reviews with ‘culture reviews’ that require employees to rate each other based on their behaviours or actions. The company also offers all new hires $2,000 to quit the company within the first two weeks of joining – an incentive designed to ensure that all new members of staff are fully committed.

Zappos ‘culture evangelist’ Jon Wolske says that by clearly establishing the values and expectations of the company, there is less need 
for micro-managing staff. This plays a vital role in driving growth.

“By focusing first on the internal culture and the brand itself, the world knows what to expect from you,” says Wolske. “Great internal experiences make it easier to focus on making great external experiences, which ultimately drive a high number of returning customers.”

References

1. ^{^} see methodology, below (www.marketingweek.co.uk)
2. ^{^} Back to the top (www.marketingweek.co.uk)
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4. ^{^} Back to the top (www.marketingweek.co.uk)