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FEATURES

CASE STUDIES

16 FEATURE Solving the brand value equation

50 JEEP

54 ANIMALS AUSTRALIA

22 FEATURE Salary guide 32 INFOGRAPHIC The world’s top brands 16

58 BARCELONA

34 INTERVIEW Andrew Therkelsen, GfK Australia, on value types

62 CROWN GOLDEN ALE 58

38 BRAND JOURNEY Kimberly-Clark

88 MARKETER PROFILE Jana Kotatko, NRMA Motoring and Services

96 BRAIN TRUST ““What examples have you seen of businesses successfully incorporating shared value into their strategies?”

August/September 2015 THE VALUE ISSUE

BEST OF THE WEB 80 MOST READ Volvo’s changing the way cars are marketed and sold – Tom McNamara and Asha Moore-Mangin 78

82 MOST SHARED If your agency has a head of digital, you’re working with the wrong agency – Brian Vella

COLUMNS 68 MICHAEL VALOS The productivity mission

84 EDITOR’S CHOICE Google’s quandary around truth in search results – Mark Razzell 80

74 STEVE SAMMARTINO Rewiring the value equation 76 KARL TREACHER The evolution of value

CONTENT PARTNERS 30 RMIT The value revolution 46 ACCENTURE Changing perspectives of customer value in a digital world

78 SERGIO BRODSKY Humanising big data 98 WAY OUT Planning valuable education programs

Contents

66 UN LTD The marketing advantage undoing disadvantage 72 EFFECTIVE MEASURE How our customers’ values deﬁne them and their choices 86 ADOBE The value evolution 94 FORRESTER What version marketing operating system are you running?

Contributors Publisher PAUL LIDGERWOOD Editor PETER ROPER peter.roper@niche.com.au Assistant editor MICHELLE HERBISON michelle.herbison@niche.com.au Sub editor MADELEINE SWAIN Art Director KEELY ATKINS

COVER BY THANH LU Studio director, J. Walter Thompson, Sydney "What defines value? The perception of value can differ greatly between people. For me, value is something that is gathered in the creation. The process via which an object or idea is born, where fine details, both large and small, come together to produce a beautifully crafted result. I wanted to represent this visually, with the cast mould being the medium that allows elements of value to flow towards the centre, collecting in the letterforms and accumulating in the end product."

Production manager JAMUNA RAJ jamuna.raj@niche.com.au Digital pre-press MONIQUE BLAIR Advertising enquiries Business development manager LUKE HATTY Tel: +613 9948 4978 advertising@marketingmag.com.au Subscription enquiries Tel: 1800 804 160 subscriptions@niche.com.au www.marketingmag.com.au Marketing is a publication of Niche Media Pty Ltd ABN 13 064 613 529. 142 Dorcas Street, South Melbourne, VIC 3205 Tel +613 9948 4900 Fax +613 9948 4999

Chairman NICHOLAS DOWER

BRAD HECHT, Reputation Institute Page 97

ALEXANDER TYERS, Transmission Design Page 32

ASHA MOOREMANGIN Page 80

DR BERNARDO FIGUEIREDO, RMIT* Page 30

BRIDGET JAMES, Think Green Marketing Page 96

BRIAN VELLA Page 82

CAROL MORRIS, UN LTD* Page 66

CON STAVROS Page 98

GRAHAM PLANT, EFFECTIVE MEASURE* Page 72

JOHN CASSIDY, ACCENTURE* Page 46

Managing director PAUL LIDGERWOOD Commercial director JOANNE DAVIES Content director CHRIS RENNIE Financial controller SONIA JURISTA Printing UNION PRINTING CO LTD. Accounting software www.sapphireone.com Marketing ISSN 1441–7863 © 2015 Niche Media Pty Ltd. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, internet, or otherwise, without the prior written permission of the publishers. While every effort has been made to ensure the accuracy of the information in this publication, the publishers accept no responsibility or liability for any errors, omissions or resultant consequences including any loss or damage arising from reliance on information in this publication. The views expressed in this publication are not necessarily endorsed by the editor, publisher or Niche Media Pty Ltd. Niche Media Privacy Policy This issue of Marketing may contain offers, competitions, surveys, subscription offers and premiums that, if you choose to participate, require you to provide information about yourself. If you provide information about yourself to NICHE MEDIA, NICHE MEDIA will use the information to provide you with the products or services you have requested (such as subscriptions). We may also provide this information to contractors who provide the products and services on our behalf (such as mail houses and suppliers of subscriber premiums and promotional prizes). We do not sell your information to third parties under any circumstances, however the suppliers of some of these products and services may retain the information we provide for future activities of their own, including direct marketing. NICHE MEDIA will also retain your information and use it to inform you of other NICHE MEDIA promotions and publications from time to time. If you would like to know what information NICHE MEDIA holds about you please contact The Privacy Ofﬁcer, NICHE MEDIA PTY LTD, 142 Dorcas Street SOUTH MELBOURNE VIC 3205.

CONTENT PARTNER: a Marketing Content Partner is an organisation with which we’ve entered into a partnership to collaborate on content for the magazine (see page numbers listed for each), as well as exclusive content only available to Marketing Advantage Members. Learn more at marketingmag.com.au/advantage

Publisher’s Note

KARL TREACHER Page 76

MARK RAZZELL Page 84

MICHAEL STODDART, ADOBE* Page 86

MICHAEL VALOS Page 68

MICHELLE HERBISON Page 88

ROB GRANT Page 16

RHOD ELLIS-JONES, Ellis Jones Page 96

SARA HINGLE, illustrator Page 88

SERGIO BRODSKY Page 78

Value, or the perception of value, is the determining factor in the myriad decisions we make every day. From where we go for coffee, to whom we buy our goods and services from and even how long we stay in a relationship, work or otherwise. In this issue, we explore the concept of value and how it relates to our work as marketers. Graham Plant from Effective Measure explores value shopping and the importance of price versus quality, and then price versus social values. It is a great read, as is John Cassidy’s piece on facilitating a two-way value exchange between business and customer, and customer and business. Enjoy this issue and the discussion that will follow online at www.marketingmag.com.au.

Cheers, Paul Lidgerwood Niche Managing Director Marketing Publisher SHERYL PATTEK, FORRESTER* Page 94

STEVE SAMMARTINO Page 74

TOM MCNAMARA Page 80

Marketing would like to recognise and thank the members of its Editorial Advisory Board for their invaluable guidance: Michael Valos, chair; Caroline Ruddick, MYOB; Erik Zimmerman, Littil; Mike Harley, XPotential Australia New Zealand; Shannon Peachey, ANZ; Trisca Scott-Branagan, Deakin University.

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Editor's note Peter Roper Editor, Marketing

@marketingmag

alue’s a funny concept. The basic deﬁnition of marketing, of business, is that of a value exchange. Yet what constitutes value is such a subjective and ﬂuid thing. Which is exactly what we’re trying to get at with this issue. From value as in price (which every red sign proclaiming ‘best value!’ assumes to be the one and only measure of value), to those things people value dearly or otherwise, like family, health and status. Then there’s the value of what we do as marketers. Putting a ‘value’ on companies is easy. Putting a value on a brand is harder, although arguably achievable, at least for benchmark and comparison purposes, as we’ve dissected in the infographic in this issue. And what about us? Brands go on the balance sheet and so do people. It may be a bit cold a thought but, hey, at the same

time, knowing whether you’re undervalued or overvalued or invaluable to your organisation (or another!) isn’t about self worth; it’s about informed empowerment. Check out our guide to marketer salaries inside. Finally (although I’ve touched on only a few of the interpretations of ‘value’ in this issue, the rest of which I deﬁnitely encourage you to read), I’ll return to my original point about the subjectivity of value. I had a thought provoking chat with GfK’s head of qualitative research, Andrew Therkelsen, of which an edited version is presented in this issue, about the contradictory nature of humans. Ask 10 people what they value and the answers will be many and varied. Ask 100 people and patterns will emerge, so it is possible to categorise groups of people into value types (and necessary for marketers to do so).

THE VALUE ISSUE

What I ﬁnd most fascinating is that this is so while at the same time humans are notoriously contradictory. Doing one thing, while saying another. Changing views based on what others say. Changing entire personalities based on the context in which we ﬁnd ourselves. Marketers are the corporate bridge to the human condition, and the value of that shouldn’t be forgotten. As you’ll see, the conversation with Therkelsen touches on some interesting points like this, and at the very least I hope it kicks off a few conversations. The same goes for the rest of the mag. Enjoy.

Peter Roper Editor @pete_arrr

“The value in the future will be created by the data footprints our interactions make.”

“Their failure to demonstrate transparency, and their neglect of the externalities of their supply chain, ultimately undermine consumer conﬁdence and reduce brand equity.”

– Steve Sammartino on the importance and value of smart devices. Page 74.

– Bridget James, director of Think Green, on businesses successfully incorporating shared value into their strategies. Page 96.

– Robbert Rietbroek, managing director and CEO of the Kimberly-Clark Corporation. Page 38.

Noun

value /’valjuऌ/

The material or monetary worth of a thing; the amount of money, goods, etc., for which a thing can be exchanged or traded.

The worth, usefulness, or importance of a thing; relative merit or status according to the estimated desirability or utility of a thing.

Verb 1.

Estimate or appraise as being worth a speciﬁed sum or amount.

Origin: Middle English: from Old French, feminine past participle of valoir ‘be worth’, from Latin valere. The Oxford English Dictionary

“Value is an elusive concept, and probably the business world’s most misrepresented concept.” – Karl Treacher, CEO of The Brand Institute of Australia. Page 76.

MARKETING AUGUST | SEPTEMBER 2015

“All value is actually relative. All value is perceived value.” – Rory Sutherland, vicechairman at Ogilvy & Mather UK, during his speech ‘Life lessons from an ad man’ at TEDGlobal 2009.

marketingmag.com.au

“Our belief is that we shouldn’t necessarily just abide by the rules and regulations and the legislation of the market, but we should actually aim much higher and set the standard of excellence in the market.”

“People buy into ideas, shop on trends and consume philosophies through similar mental processes to those they apply when purchasing their next holiday, car or pair of shoes.” @marketingmag

– Sérgio Brodsky, OMD strategy director. Page 78.

“Do extremely difﬁcult work.” – The ‘proven way to add value’, according to author Seth Godin.

“Price is what you pay. Value is what you get.” – Warren Buffet

“Customer expectations of value are constantly evolving and this is largely being fuelled by digital technology, enabling companies to add real value to people’s lives in a way that is relevant to their context and needs.” – John Cassidy, managing director, digital strategy, Accenture talking about the value of a two-way value exchange. Read more on page 46.

“The creation of value becomes a dynamic process that cannot be linked to either consumption or production. In the process of consumption, many consumers produce value.” – Dr Bernardo Figueiredo PhD, RMIT University lecturer of marketing on the lack of a barrier between consumption and production. Page 30.

THE VALUE ISSUE

“I think between when you graduate from uni into your early 30s it’s about: be in the right place, make the opportunities. You’re learning and you’re absorbing and you’re meeting people and you’re forming your own style and you’re hopefully picking the right mentors and role models.” – Jana Kotatko, head marketer at NRMA Motoring Services. Page 88.

“Technology has dramatically changed the relationship between brands and customers, shifting the power dynamic into the hands of the consumer – who is now empowered by technology to take control of her buying journey.” – Sheryl Pattek, vice president and principal analyst at Forrester Research. Page 94.

16 FEATURE

Solving the brand value equation Brand values are a powerful yet often underappreciated tool in a marketer’s kitbag. Rob Grant draws on the theories of four branding experts, to determine how best to maximise their impact.

The panel Who we spoke to for this article The social researcher: Neer Korn, The Korn Group

The retail consultant: Jason Mahoney, Kantar Retail

Korn is one of Australia’s most respected social researchers and is regularly quoted in the media. Every week, he spends hours with consumers, investigating topical issues. He works with a range of blue chip companies and government departments.

Mahoney is managing director of Kantar Retail and consults to major FMCG and liquor companies on category strategy. He advises brands on how to be positioned for maximum effectiveness at a retail level, dependent on the channel type and occasion.

The advertising strategist: Jody Elston, AJF Partnership Elston works for one of Australia’s leading independent advertising agencies as strategy director. AJF is a regular winner of Efﬁe Awards for effective communications. Elston has previously worked in brand consultancy and client-side as an insight strategist.

The brand marketer: Rebecca Carson, Freedom Foods Carson is general manager of marketing and commercial at Freedom Foods Group, where she leads strategic thinking on a wide portfolio of cereal, snack and dairy-free milk brands. Freedom’s brands have a strong sense of purpose at their core, differentiating them from mass products.

MARKETING AUGUST | SEPTEMBER 2015

n the computer hard drives of most marketers exists a document – perhaps called a brand pyramid, light-bulb or wheel – which lists the values of the brands they manage. It may have been drafted by a predecessor, dictated by a parent company or crafted themselves. It may constantly, or almost never, be looked at. But how important is this handful of words to the target audience, what role do they play in determining the success of a brand and how best do you communicate them to the outer world?

Rise above the crowd

@marketingmag

Central to the role of any organisation, according to business college thinking, is the creation of value for the end-user. A brand able to offer something valuable can command a premium price and make proﬁts – hefty proﬁts if their offering is unique. People value brands they can trust, connect with and relate to. On an emotional level. The more a brand trades on its values, the less vulnerable it is to competitors copying its offer or beating it on price. Unless you hold a raft of unique patents, a rival will copy your features eventually. Even the most aggressive discounter will lose on price one day. Researcher Neer Korn believes brand values are critical. “I actually think they are more important than ever, because they offer something emotional that’s beyond all the rational things. They are about spending more to enjoy yourself. It’s a feeling. I feel better consuming that brand.” It is the era of the smart shopper, one who saves on necessities and splurges on luxury, treats and indulgences. By building a strong set of brand values you can position your product – even if it’s not in a traditional premium space – as something special and worth paying more for.

Create a one-brand shortlist Conventional wisdom suggests brand values are more important in the early part of a consumer decision-making journey, when they are assembling a shortlist. Then, in the retail environment, price becomes more top-of-mind. While this is true, especially as major retailers place such heavy focus on price, being part of the repertoire before the shop is vital, perhaps more so than commercially driven marketers think. Retail consultant Jason Mahoney explains why. “There are 40,000 products in the average supermarket, yet people typically only buy 40 items in a basket. Depending on the category, most purchases are pre-planned. People are doing a lot of ﬁltering and decision-making prior to even entering the store,” says Mahoney. The process of determining what to buy, from a dazzling range of choice, creates angst with consumers and they look

for shortcuts to simplify the process. This is where brand values, which are easily felt without a need for complex analysis, play a huge role. Time is the most precious commodity many consumers have today and brand values help them decide on purchases more quickly.

Create your own positive space In determining the right values to build your brand on, the ﬁrst thing to consider is if they are unique. When two or more brands espouse similar values, they are indistinguishable and often ﬁght on price. Canned soup is one of the most promoted categories in the supermarket. It’s no coincidence the two market leaders, Campbell’s and Heinz, have almost identical values. Beyond being different, it is important your values link to the product or service you provide. It seems obvious, but there is no shortage of brands connected to spurious causes. “You can’t fake this stuff. A lot of companies spend a lot of money on environmental values. But, unless you’re a dishwashing liquid, it makes no difference. It’s low down the pecking order,” Korn explains. A product connection can be simple and functional, such as the set of values around how you source ingredients and the manufacturing process. In this case, consumers can see a direct connection between what you value and what they consume.

Ten value-rich brands Lululemon – Do one thing a day that scares you. Lurpak – Open a window, let’s make the world hungry. Nike – If you have a body, you are an athlete. Ruby & Roy – It’s what is not in our yoghurt that makes it so good. GoPro – Be a hero. Johnnie Walker – Keep walking. Patagonia – Together we reimagine a world that can take only what nature can replace. Apple – Think different. Nudie – Creators of good. St George Bank – Start something.

THE VALUE ISSUE

READING LIST

Brand values in action How Customers Think – Gerald Zaltman Conscious Marketing – Carolyn Tate The Advertising Effect – Adam Ferrier Predictably Irrational – Dan Ariely Good to Great – Jim Collins The Hero and The Outlaw – Margaret Mark and Carol S Pearson

Rebecca Carson, GM of marketing and commercial at Freedom Foods Group, believes this kind of transparency is vital to her brand. She says, “Honesty is top of the tree. Across categories we see consumers value transparent brands, those that have the integrity and willingness to bare all to the consumer.” Even richer is when the brand links with a higher emotional value, it delivers. Strategist Jody Elston cites Officeworks as a brand currently elevating itself from a price-based space. “It’s interesting when you work in a category that is so rational and so price driven. For example, Officeworks has a whole new idea around the creation of big ideas. They now support people’s achievements and aspirations. It’s quite emotional,” she says. There are also brands that link themselves to the category they operate in, beyond the product they make and sell. Thank You Water makes no particular claims about the efficacy of its product. No artesian basins or quadruple ﬁltering. But it funds safe water supply in developing nations. Now it has entered body care and sponsors hygiene projects. Brands in categories with negative baggage can differentiate themselves by proactively doing something about it. Fuel, automotive, investment and energy companies have all tried this with varying degrees of success. The problem is: this approach can be copied and leaves a brand open to criticism if it messes up.

Create a community and purpose Another way to harness brand values is to connect deeply with your audience, and tap into the qualities and beliefs they value. Several brands with female audiences have done

this successfully. Dove is an obvious example, but Elston singles out the feminine hygiene brand Always. “The ‘Like a Girl’ campaign for Always is incredibly moving. It asks eight-year-old girls the question ‘what is it like to throw like a girl?’ and the girls throw with confidence. Then the same question is asked of 14-year-olds and they throw badly, in a clichéd girl throw way. They adopt a stereotype and the drop in confidence is terrible,” says Elston. Connecting with your audience is the creation of a conversation the consumer wants to be part of. No longer are they unwilling victims of mass messaging. In the era of social media, where your loyal fans can be your most effective (and cheapest) media channel, the benefit is multiplied. In an ideal world, the values a brand represents are part of the DNA of the broader company and shape its strategy across all functional areas. It’s no good being an ethical brand if your parent company cuts down the rainforests. Yet this raises huge challenges for global brands, which are invariably part of huge multinational companies. In the past, consumers may have turned a blind eye. It’s easier that way. But sooner or later people start to care. The transparency of the internet means that moment arrives sooner than before. “There are a lot of things in life you don’t want to know. If I told you a brand you liked is killing orang-utans, you’d put up a wall. It’s disappointing. It’s inconvenient. But eventually the issue tips in the public consciousness and then you have to care,” says Neer Korn. The ultimate goal for a brand is when its product qualities, audience connection and company culture fit with one over-arching purpose. This is the action you take because of the values you hold. “If you have a strong, aligned purpose behind your brand, then you have a role in your consumers’ lives and in broader culture. You can actually participate in the interests and hobbies of your consumers. Nike is all about inspiring every athlete, regardless of talent. It really gets into the lives of its audience. In the end, they are talking more about your product than you are,” says Jody Elston.

“

Support for the little guy is an Australian value in itself and there are huge brands that play to this.

MARKETING AUGUST | SEPTEMBER 2015

”

marketingmag.com.au

18 FEATURE

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20 FEATURE

To demonstrate your values to the world, it is less about what you say and more about what you do. Savvy consumers and shoppers have little time for airy platitudes. They want to see what you’ve done about it. Even better, they want to experience your values. Jody Elston explains, “You live your values through your actions, to show you genuinely believe in them. It’s harder and harder for brands to pull the wool over consumers’ eyes. It’s not good enough to think, ‘Oh, that’s a good value, it’s a market opportunity we can make money from’.” If a brand sets out to do something, especially in the charitable or environmental space, it helps to do it first. Brands that boldly attach themselves to causes before anyone else – even if not linked to their product – can achieve success. But they need to be wholehearted and in it for the long run. “The Mount Franklin pink bottle for breast cancer? That really worked. Because they were the first to do it. And they committed to it – it’s everywhere, every year,” says Neer Korn. Long-term consistency is vital in imbuing your brand with strong values. Do not change your values with every new marketer. Consumers take time to understand what you stand for, and even longer to change what they buy. Rebecca Carson acknowledges the importance of a prolonged approach. “It takes time!” she says. “Values need to be lived, not only by the brand, but also within the company. This one for me is about consistency. I don’t think you can achieve this in a single piece of activity. It’s the sum of many moving parts and all consumer touch points for the brand to deliver the same message.” One thing marketers cannot ignore is the value of different channels and the impact they have on your brand. Jason Mahoney explains, “Almost an identical product could be sold in Aldi, Woolies, David Jones and an upmarket deli. Yet the price could be 500 percent higher in the last place compared to the first. Shoppers are conditioned to

“

In an ideal world, the values a brand represents are part of the DNA of the broader company and shape its strategy across all functional areas.

”

Checklist for building a purposeful brand

1 2 3 4 5 6 7

Ensure values are deeply rooted in your product or service’s intrinsic qualities. Deeply understand your audience; start a two-way dialogue on what they believe in. Attach unique values to your brand; if a competitor could claim them, think again. Be ﬁrst to tackle the negative issues attached to your category – vocally and actively. Build the brand’s values into the culture and operating model of the wider business. Act consistently, over a long period, to establish values in your audience’s minds. Align your entire strategy around a consistent and relevant higher order purpose.

adopt a certain mindset with regard to value, depending on where they are.” Regardless of the channel, or size of your brand, it helps to act like a small company when it comes to values. It is easier for people to establish an intimate relationship with you. Jason Mahoney believes, “There’s a growing group of consumers who are rejecting mass brands, because it’s hard for them to connect to the values of those big organisations.” Support for the little guy is an Australian value in itself and there are huge brands that play to this. “In Australia, a core value is ‘the little guy’. We have this thing about the little guy winning. Just think about The Castle movie. There are lots of examples of little brands that have emerged to give the big guys a beating. Optus, Virgin, St George. Funnily enough, Aldi is one, even though it’s a huge, global company. They don’t care, as its values are appealing,” says Neer Korn. Big or small, mainstream or niche, brands with a strong purpose, rooted in relevant and consistent brand values, will be the ones that thrive. The world is unlikely to become less frenetic, less complex. So brands that relentlessly live their values make the buying decision easier and more enjoyable. Now that’s good value. Time to dig out the unloved brand pyramid and put it to work.

MARKETING AUGUST | SEPTEMBER 2015

marketingmag.com.au

Live and breathe your values

World-class manufacturing & quality that respects your world

With published Corporate Citizenship reports since 2004, Gildanâ&#x20AC;&#x2122;s Corporate Social and Environmental Responsibility commitment and leadership is well established. The Gildan Genuine Stewardship programme includes pillars such as People, Environment and Community.

PEOPLE

ENVIRONMENT

COMMUNITY

Gildan is one of the leading employers in the communities where we operate, committed to respecting our employees and their rights as well as all applicable local and international labour standards. Our labour compliance programme has been accredited by the Fair Labor Association and all of our mature sewing facilities are WRAP certiďŹ ed.

As a large-scale manufacturer, we have a responsibility to continuously seek ways to reduce our overall environmental footprint. At Gildan we have implemented innovative practices in waste water treatment, waste reduction and recycling as well as in alternative energy resources.

Gildan is a positive force for social development in the communities in which we operate. Our outreach programmes include investments in education, literacy and humanitarian aid.

For more information or to access our Annual Corporate Citizenship Reports, visit GenuineGildan.com

22 SALARY GUIDE

Marketing Salary Guide Benchmark your salary against 2610 organisations across Australia and New Zealand, representing 2,891,747 employees. With tabulated data from Hays’ 2015 survey and featuring commentary on the key trends from several recruitment specialists, it’s also a useful tool for comparing your own organisation’s recruitment policies.

“There have been developments in the ability to earn bonuses in ﬁrms based on performance and adherence to corporate values. These can range from ﬁve to 15 percent in the legal sector and up to 40 percent (and sometimes more) in accounting.” – Ampersand

“Retail category managers will be highly sought after, along with individuals who have experience of consumer insights projects, due to the success of private labels within FMCG.” – Robert Walters

MARKETING AUGUST | SEPTEMBER 2015

“Demand for Australian executives fell 10 percent in May – the ﬁrst time there has been a fall in executive job opportunities this year. But, despite the fall, the total job opportunities are still more than 20 percent higher than in December last year.” – EL Executive Demand Index

“In the past 12 months, the number of marketing professionals returning from overseas has increased by 10 to 20 percent. However, this is being measured from a relatively low base, as the past few years have seen fewer professionals returning.”

“The majority of jobs available for marketing professionals are replacement roles rather than newly created positions. Companies are looking to consolidate teams and backﬁll roles that have been vacant as a result of recent hiring freezes.”

“In 2015, hiring managers may need to revise their salary offerings as business conﬁdence grows – even for less experienced candidates.”

– Michael Page

– Robert Walters

“Over the past year we have seen two main areas of candidate demand emerge in marketing and communications: digital and customer experience.”

“You’ll need to understand, in depth, the actual value of your compensation as an employee. This means breaking down your compensation into its parts. What is your base salary? What is your superannuation rate? Do you receive a bonus as a percentage of your salary? Do you receive a car allowance or any other beneﬁts?”

– Hays

– Chorus Executive

“Respondents believed that 40 percent of senior managers of their organisations had ‘only a moderate understanding of the importance of digital skills’ while 20 percent had ‘little understanding’ at all.” – Slade Group

THE VALUE ISSUE

MARKETING NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

Marketing Assistant 60 55 - 65 50 45 - 55 45 35 - 55 50 45 - 55 45 40 - 55 50 45 - 65 50 40 - 60 45 40 - 55

Marketing Coordinator 65 65 - 70 60 55 - 65 60 45 -70 60 50 - 65 55 45 - 65 65 60 - 70 55 45 - 60 50 40 - 60

Marketing Executive 80 70 - 80 70 65 - 75 75 65 - 85 65 55 - 75 65 55 - 80 70 65 - 75 70 60- 80 70 60 - 80

Marketing Manager 130 100 - 150 100 90 - 120 95 80 - 110 80 75 - 100 90 75 - 120 95 110 100 80 - 120 85 70 - 120

Senior Marketing Manager 150 120 - 180 130 120 - 150 110 100 - 130 100 90 - 120 130 120 - 180 120 100 - 140 120 100 - 140 110 85 - 130

Marketing Director 200 180 - 230 180 150 - 200 140 120 - 170 125 100 - 140 140 130 - 190 170 150 - 200 170 150 - 200 150 130 - 180

Event Coordinator 65 55 - 70 65 55 - 70 55 45 - 65 60 55 - 75 60 50 - 70 65 60 - 70 60 50 - 75 60 50 - 70

Event Manager 90 70 - 100 100 90 - 120 75 60 - 90 85 75 - 90 85 80 - 110 90 80 - 100 80 60 - 100 80 60 - 100

Graphic Designer 90 65 - 110 85 60 - 90 65 60 - 75 55 50 - 70 55 45 - 65 65 60 - 70 65 50 - 90 60 40 - 80

Brand Manager 110 90 - 120 100 90 - 120 90 80 - 110 75 70 - 90 90 80 - 120 90 85 - 95 90 80 - 110 80 70 - 110

Campaign Manager 100 90 - 110 100 90 - 120 90 80 - 110 70 65 - 80 85 70 - 110 95 90 - 100 80 70 - 100 80 70 - 90

Product Manager 120 90 - 140 120 100 - 140 90 80 - 110 85 75 - 100 85 70 - 110 90 80 - 100 100 80 - 120 80 75 - 110

“Twelve percent of ﬁrms report recently having difficulty recruiting for junior to mid management sales and marketing roles, while only six percent report recent difficulty recruiting for senior management.”

“Emphasis in 2015 will be on those professionals with sales skills that enhance recurring revenue.”

– Hays

– Robert Walters

MARKETING AUGUST | SEPTEMBER 2015

marketingmag.com.au

24 SALARY GUIDE

“The cultural ﬁt is still critical when bringing new hires into a professional services ﬁrm. We have seen that the process to bring on new talent, particularly at more senior levels, is being extended as more stakeholders have been brought in to assess potential candidates.” – Ampersand

MARKETING NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth @marketingmag

ACT - Canberra NZ - Auckland NZ - Wellington

NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

Research Exec/ Marketing Analyst 90 70 - 100 85 75 - 95 80 75 - 100 65 55 - 70 70 65 - 90 70 60 - 80 70 60 - 80 70 60 - 80

Direct Marketing Manager 85 70 - 100 75 70 - 85 70 60 - 80 65 55 - 75 70 60 - 80 90 80 - 110 80 70 - 90 80 70 - 90

Marketing Communications Executive 85 70 - 95 75 70 - 85 75 65 - 90 70 60 - 80 70 65 - 80 100 90 - 110 70 60 - 80 80 45 - 120

Marketing Communications Manager 110 100 - 130 100 90 - 120 100 90 - 110 85 80 - 120 80 75 - 110 120 110 - 130 95 85 - 125 90 80 - 120

Direct Marketing Executive 110 100 - 130 100 90 - 120 90 80 - 100 85 75 - 90 85 80 - 120 90 80 - 100 95 85 - 110 90 80 - 110

Advertising Executive 75 70 - 90 70 65 - 75 70 60 - 80 60 55 - 75 70 60 - 80 65 60 - 70 70 60 - 80 60 50 - 70

Advertising Manager 120 100 - 130 90 80 - 110 90 80 - 100 80 75 - 90 90 80 - 120 90 70 - 90 100 80 - 120 90 80 - 120

Internal Communications 100 90 - 110 100 85 - 120 75 65 - 90 75 60 - 90 70 65 - 80 70 55 - 90 80 70 - 100 80 45 - 110

Major Gifts Manager 120 100 - 140 110 90 - 130 70 60 - 85 N/A

Direct Marketing Fundraising 80 60 - 80 75 65 - 85 70 60 - 85 N/A

Sponsorship/ Fundraising Director 150 140 - 180 145 130 - 180 105 90 - 120 N/A

75 70 - 80 100 95 - 120 70 60 - 80 N/A 40 - 75

65 60 - 75 70 65 - 85 70 60 - 80 60 60 - 90

Sponsorship/ Fundraising Manager 100 90 - 120 100 90 - 120 85 70 - 100 80 65 - 85 90 75 - 100 85 80 - 90 80 70 - 90 75 80 - 120

120 95 - 130 125 115 - 160 100 90 - 120 100

Notes: Data sourced from the 2015 Hays Salary Guide. All salaries shown exclude superannuation. Australian salaries in Australian dollars, New Zealand salaries in New Zealand dollars.

THE VALUE ISSUE

26 SALARY GUIDE

“Eighty percent of managers described staff as being weak in some or several areas of digital expertise; 70 percent thought a digital skills gap was taking a moderate or heavy toll on their business.”

DIGITAL NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

Website Manager 110 90 - 120 100 90 - 120 90 80 - 100 75 60 - 80 90 80 - 125 90 90 - 100 80 70 - 90 75 65 - 85

Digital Designer N/A 90 70 - 100 85 70 - 95 70 60 - 80 55 50 - 60 70 65 - 90 90 80 - 120 65 55 - 80

Online Marketing Manager 120 100 - 140 100 90 - 120 90 80 - 100 90 75 - 100 85 75 - 115 85 80 - 100 110 100 - 120 90 80 - 100

UX/UI Designer 120 100 - 150 110 80 - 130 65 60 - 75 65 55 - 75 60 50 - 70 90 80 - 100 85 80 - 110 85 80 - 110

UX Manager 130 120 - 160 130 110 - 150 70 60 - 80 70 60 - 75 80 75 - 110 80 70 - 100 120 100 - 140 120 100 - 140

Digital Producer 90 80 - 120 100 90 - 140 85 70 - 95 65 60 - 80 65 60 - 80 80 70 - 90 90 70 - 110 90 70 - 110

Digital Project Manager 120 100 - 140 120 100 - 140 90 85 - 105 90 85 - 105 105 90 - 120 120 100 - 140 90 80 - 100 90 80 - 100

eCommerce Manager 130 110 - 160 130 100 - 150 90 80 - 100 90 80 - 100 95 85 - 110 130 100 - 150 140 125 - 150 130 120 - 140

Online Manager 110 90 - 130 100 90 - 120 85 80 - 90 85 80 - 90 110 100 - 120 100 90 - 120 100 80 - 110 95 80 - 110

Digital Marketing Manager 140 100 - 200 140 100 - 180 100 90 - 120 100 90 - 110 120 100 - 140 140 100 - 180 110 100 - 125 100 90 - 120

Notes: Data sourced from the 2015 Hays Salary Guide. All salaries shown exclude superannuation. Australian salaries in Australian dollars, New Zealand salaries in New Zealand dollars.

MARKETING AUGUST | SEPTEMBER 2015

marketingmag.com.au

– Slade Group

DIGITAL NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

NSW - Sydney VIC - Melbourne @marketingmag

QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

Digital Strategy Man. 140 110 - 180 140 100 - 180 110 100 - 120 110 100 - 120 115 100 - 130 140 100 - 180 150 140 - 160 135 125 - 150

SEO Specialist 80 70 - 90 80 70 - 100 85 70 - 100 75 65 - 85 85 75 - 90 80 70 - 100 60 50 - 70 60 50 - 70

SEM Specialist 80 70 - 90 80 70 - 90 80 70 - 90 80 70 - 90 90 80 - 100 80 70 - 90 65 55 - 75 60 50 - 70

Content Writer 85 60 - 95 70 60 - 85 70 60 - 80 60 55 - 70 65 60 - 75 70 60 - 70 70 65 - 75 65 60 - 75

Content Editor 55 50 - 70 72 60 - 80 70 60 - 80 65 60 - 80 90 80 - 115 60 55 - 65 65 60 - 75 65 60 - 75

Web Publisher 80 70 - 90 75 65 - 85 70 60 - 80 65 60 - 80 85 70 - 100 70 60 - 80 70 65 - 80 80 70 - 90

Social Media Co. 55 50 - 60 55 50 - 60 60 55 - 65 60 55 - 65 70 65 - 75 55 50 - 60 50 40 - 55 50 40 - 55

Social Media Exec. 65 60 - 75 65 60 - 75 70 65 - 75 75 70 - 80 80 75 - 90 65 60 - 75 60 55 - 70 60 55 - 70

Social Media Man. 110 100 - 150 110 100 - 150 85 80 75 - 95 85 75 - 95 100 90 - 110 110 100 - 150 85 75 - 100 80 70 - 90

THE VALUE ISSUE

PPC Specialist 80 70 - 90 80 65 - 100 80 70 - 90 80 65 - 100 90 80 - 95 80 65 - 100 60 50 - 70 N/A

CRM Manager 100 80 - 130 100 80 - 130 70 - 90 80 70 - 90 110 100 - 120 100 80 - 130 100 90 - 110 95 90 - 110

28 SALARY GUIDE

“Although today many would expect LinkedIn to be the preferred network when applying for a job, it seems Facebook may be the sleeping giant of recruitment, and it will be interesting to see how the platform develops over time, as more people utilise the network to do their ‘research’ on potential employers and talent and to search and apply for jobs.”

PR & COMMUNICATIONS NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

NSW - Sydney VIC - Melbourne QLD - Brisbane SA - Adelaide WA - Perth ACT - Canberra NZ - Auckland NZ - Wellington

PR Coordinator 65 55 - 75 65 60 - 70 50 40 - 60 55 45 - 60 65 60 - 70 55 50 - 60 60 50 - 70 55 45 - 65

PR Executive 80 75 - 90 75 70 - 80 70 60 - 80 75 60 - 85 70 60 - 80 85 80 - 90 70 60 - 80 60 55 - 75

PR Manager 100 85 - 120 100 80 - 120 90 80 - 100 90 85 - 120 90 70 - 120 100 90 - 110 90 70 - 110 80 70 - 105

Media Relations Manager 100 90 - 120 100 90 - 120 90 80 - 110 95 80 - 110 90 70 - 120 120 110 - 130 90 80 - 110 80 70 - 110

Corporate Relations Manager 120 100 - 150 100 90 - 120 90 80 - 110 95 80 - 110 100 80 - 120 140 120 - 150 120 100 - 140 120 100 - 140

Corporate Relations Executive 80 70 - 90 75 70 - 85 75 70 - 85 75 60 - 80 70 60 - 80 85 80 - 90 75 70 - 90 75 70 - 90

MARKETING AUGUST | SEPTEMBER 2015

PR Director 150 130 - 160 140 130 - 160 120 100 - 130 125 80 - 130 130 130 - 170 130 120 - 140 120 100 - 160 120 100 - 160

marketingmag.com.au

– Randstad

Your other agency? LET’S BE BRUTALLY FRANK ABOUT THIS. Many CMOs know all too well that there are tasks to which their large agency is unsuited. So they seek fulfillment elsewhere. That’s where we come in (generally, via the tradesman’s entrance). We bring big agency strategic thinking, prolific idea generation, precise copywriting, boutique craft skills, deliver-at-all-costs production management, enthusiasm and (dare we say it?) intelligence to those projects that might be considered unglamorous by some, or are spread thinly across multiple channels, or resist simple solutions. If you’d like to have someone to turn to in times of trouble, perhaps there’s a place for us on your roster. www.vitaminx.com.au

1 S T F LO O R , 1 2 7 B O N D I R D, B O N D I. [02 ] 9 3 8 8 04 11

30 CONTENT PARTNER: RMIT UNIVERSITY

The value revolution Examining the four waves through which our understanding of value has gone makes marketers better surfers, writes Bernardo Fi ueiredo. Dr Bernardo Figueiredo PhD is a lecturer of marketing at RMIT University.

FIRST WAVE: VALUE IN PRODUCTION Value in production corresponds to the traditional idea that value is produced by companies and consumed by its customers upon acquisition of a product. When producing goods and services, companies transform raw materials into other products. This transformation is known to generate value, which is then infused into the product through the production process. This understanding places value in the product and the value is subsequently released to customers, who pay to access this value. According to this view, when a consumer buys Coca-Cola, for instance, they have access to the value contained in the product. They exchange money for the chance to access a bottle of Coke and, consequently, the value that lies inside it. Similarly, when a consumer buys a car, they gain access to the beneﬁts incorporated in the car. The beneﬁts (e.g. a nice design, a solar panel, comfortable seats, low petrol consumption) are infused in the product by the various makers and they help differentiate among existing options. This view acknowledges that value is accessed and released through consumption, but it is created entirely during the production stage. Although this approach made sense in the early era of mass-produced commodities,

markets have evolved, including more customisation and consumer participation, and the notion of value has faced signiﬁcant challenges.

SECOND WAVE: VALUE IN CO-PRODUCTION The evolution of the service sector, the intensification of competition and the need to constantly release new products into the market have made firms realise the potential of engaging customers to participate in the process of value production. The second wave is characterised by an understanding that, although value remains part of the production process and is contained in the product, both the company and its customers participate in the process of generating this value. McDonald’s, for example, relies on the work of its customers to produce its final output. Customers are required to follow a certain script and behaviours (e.g. stay in line, order, wait by the counter, eat the sandwich, dispose of leftovers in the bins) to have the full experience of eating at McDonald’s. Producers of consumer goods have long known the importance of consumers in the production process. For example, Nike and Converse consumers can participate in the process of designing and creating a new product; they can also customise their own selections. Hewlett-Packard (HP) maintains a customer advisory program where customers provide suggestions for new products and propose changes to existing ones. Hallmark encourages customers to offer ideas and suggestions for cards and new products. While this perspective includes the customer in the production process, it stills situates value on the side of production, leaving experience out of the value-creation process.

THIRD WAVE: VALUE-IN-USE The value-in-use paradigm sees value not in the production process, but as part of the consumption process. This means companies can create products and

MARKETING AUGUST | SEPTEMBER 2015

marketingmag.com.au

e are undergoing a value revolution. In the past few decades, marketers have changed their understanding of how value is created and delivered. Customer value – the beneﬁt customers obtain from using a product or service – which was once understood as produced and delivered by ﬁrms, is now understood as dynamically co-created by multiple stakeholders in the market. Marketers’ understanding of value has gone through four different waves. Understanding these waves allows marketers to ride them better and to take advantage of the current marketing landscape.

It is important for businesses to understand the evolution of these different understandings of value, because each additional task adds to the marketing role.

@marketingmag

services that may be useful to consumers, but the benefits of these products can only be determined through use. In other words, the firm can only offer a value proposition, a promise that value will be experienced by consumers once in contact with that product or service; however, the value itself is created by consumers themselves when using a product or service. The value-in-use approach ceases to see value as located inside the product and instead situates it in the experience of consumption. Consumer researchers often engage in fieldwork to try to explain the relationship consumers establish with objects and the multiple consumption practices they engage in during their everyday lives. Indeed, products can develop a ‘life’ of their own that goes far beyond the moment of acquisition and that affects value. Some moments of value creation are far removed from the firm’s control and initial intention. A car, a house, books, CDs or any possession can gain value as they become cherished, sacred or especially meaningful to consumers. Products that are initially acquired for little money, like coins and stamps, can gain much value when placed in collections.

FOURTH WAVE: VALUE CO-CREATION AS DYNAMIC PERSPECTIVE WITH MULTIPLE STAKEHOLDERS With the growth of the internet and consumer-oriented technologies, the barriers between production and consumption are disappearing. The creation of value becomes a dynamic process that cannot be linked to either consumption or production. In the process of consumption, many consumers produce value. However, the product of their consumption is channelled back to the ﬁrms and other stakeholders, who further transform the product value into an enhanced product, which then returns to consumers. In addition, other stakeholders, like media companies, governments, NGOs and associations also take part in the

process of value creation. In this systemic view of markets, all stakeholders are constantly producing and consuming value. In the gaming industry, for example, World of Warcraft, the massively multiplayer online role-playing game (MMORPG), that has grossed more than $10 billion, was created in 2004 by Blizzard Entertainment. A major part of the value consumers extract from the game is derived from the ways consumers experience the game through communities and online interactions. A player that has played the game once has a very different experience from a player that has made the game the epicentre of their social lives. These avid fans are constantly finding new ways to engage with the product and create further sociality. The company uses these experiences as platforms to generate games that are more advanced. Similarly, fans of the Twilight series (books and films) meet each other at local bookstore events, national conferences, DVD release gatherings, book and movie release parties, Twilightthemed birthdays and celebrations, and book signings. Some consumers even create alternative storylines and plots with the characters. Such fan fiction then circulates informally among fans and some even gains commercial status.

CONCLUSION It is important for businesses to understand the evolution of these different understandings of value, because each additional task adds to the marketing role. In the first wave, marketers only needed to understand the value ‘inside’ the product and to communicate it to consumers effectively. The second wave added an extra layer, demanding marketers become managers of consumer work and interaction. With the third wave, marketers had to find ways to develop further insights into consumers’ lives to understand the journey of a product long after it leaves the firm. Finally, the last wave, the one we should embrace, sees the marketers as not only performing the other three roles, but also working as managers of the overall consumer experience and catalysts for dynamic cycles of value creation among multiple actors in the marketplace. To succeed, you will need to understand the overall value-creation process. What other market actors, besides your firm, contribute to creating value for your customer? How is value being created and communicated among these actors? How can you support their value creation? These are critical questions for every marketer wanting to successfully ride the fourth wave. Have you thought about them yet?

RMIT University is a Marketing content partner – a non-ﬁnancial collaboration on content for the magazine and exclusive, money-can’t-buy beneﬁts for Marketing Advantage Members. See page 6 for more information.

THE VALUE ISSUE

INFOGRAPHIC

THE WORLD’S TOP BRANDS BRAND VALUE HAS RISEN SUBSTANTIALLY DESPITE A DECADE OF DISRUPTION STEMMING FROM THE GLOBAL FINANCIAL CRISIS, TURMOIL IN THE EUROPEAN UNION OVER GREECE AND UKRAINE, AND THE CRISIS THAT UNFOLDED IN THE MIDDLE EAST AFTER THE INITIAL HOPE OF THE ‘ARAB SPRING’. These ﬁgures use the views of current and potential buyers of a brand, alongside ﬁnancial data, to calculate brand value. Research was conducted by Milward Brown – a research specialist in advertising effectiveness, strategic communication, media and brand equity.

Technology is the fastest-growing category – up 24% in the last year, the tech brands in the Top 100 are worth more than $1 trillion, nearly a third of the value of all brands in the ranking.

HOW THE TOP BRANDS RANKED

THE BIG LOSERS…

CHANGES TO THE TOP 20 COMPANIES VALUE RANKING 2007

2015

Google GE Microsoft Coca-Cola China Mobile Marlboro Walmart Citi IBM Toyota McDonald’s Nokia Bank of America BMW HP Apple UPS Wells Fargo American Express Louis Vuitton

Apple Google Microsoft IBM Visa AT&T Verizon Coca-Cola McDonald’s Marlboro Tencent Facebook* Alibaba Amazon China Mobile Wells Fargo GE UPS Disney Mastercard

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Change

G 15 H1 None G5 NEW NEW G 27 H4 H1 H4 NEW NEW NEW G 78 H 10 G2 H 15 H1 G3 NEW

Rank

LUXURY BRANDS

A slowing Chinese economy and the impact of Chinese government restrictions on ofﬁcial gifts have resulted in a fall in value for luxury brands.

CAR MANUFACTURERS

All car manufacturers have seen a decline in their brand value, with Toyota dropping 20 places to 30 overall, and BMW dropping 20 places to 34 overall.

BIG IF WALK-IN STORES

E-commerce has taken over from traditional walk-in stores. The most valuable retail brands Alibaba (new) and Amazon (up a staggering 78 places), are now worth more than Walmart (which has dropped 19 places to a rank of 26).

*Facebook is the fastest riser, with 99% growth.

MARKETING AUGUST | SEPTEMBER 2015

marketingmag.com.au

TECH COMPANIES ARE NOW THE MOST VALUABLE BRANDS ON THE PLANET. FAST FOOD AND BEVERAGES COME SECOND, WITH RETAIL A CLOSE THIRD.

AND HOW THINGS HAVE CHANGED (OR NOT) OVER THE LAST 10 YEARS

BRAND VALUES RISE

THE No. 1

The brand value of the Top 100 stands at $3.3 trillion – a 126% growth over 10 years. VALUE OF THE TOP 10 COMPANIES ($ Millions) Rank

Company

2007 Value

2015 Value

% change

Apple Google Microsoft IBM Visa AT&T Verizon Coca-Cola McDonald’s Marlboro

24,728 66,434 54,951 33,572 — — 16,261 44,134 31,670 39,166

$246,992 $173,652 $115,500 $93,987 $91,962 $89,492 $86,009 $83,841 $81,162 $80,352

G 898% G 161% G 110% G 180% NA NA G 429% G 90% G 156% G 105%

2 3 4 5 6 7 8 9 10

GO APPLE! Apple continues to ‘own’ the technology category by innovating and leading the curve in a way that generates real beneﬁts for consumers. Apple is clear on what it stands for, and never stops refreshing its message to sustain the difference that makes it so desirable.

THE GLOBAL SHIFT AWAY FROM EUROPE Brand value growth has shifted to Asia, with 21 Asian brands comprising 17% of the 100 most valuable global brands.

AL IA

AU ST R

FR A

2015 2007

IT AL Y

SP AI N

EN ED

HE R

LA N

G EN

A DI

AU ST R

G KO G N

JA PA N

A IN CH

Australia

Europe

Asia

ST H

CA N

AD A

North America

AUSTRALIAN BRANDS PERFORMING WELL In 2007 there were NO Australian brands in the top 100. In 2015 ﬁve of our companies have cracked the top 100. Australia now has the equal third most companies represented in the top 100 with Japan, only bettered by China (14) and the USA (48).

Woolworths $11,818

Westpac $12,420 Telstra $12,701

ANZ $17,702

WPP/Millward Brown’s brand equity database BrandZ has been used to generate a list of the 100 most valuable brands since 2006. Based on quantitative consumer research and financial analysis, the database contains information from more than two million consumer interviews in 30 countries. This proprietary Optimor data is analysed with publicly available financial information from Bloomberg, Kantar Worldpanel and other sources. These valuations are used by CEOs, financial and marketing executives, security analysts, institutional investors and others. All values here are in US dollars.

THE VALUE ISSUE

CBA $20,599 Infographic created by Marketing and Transmission Design (transmissiondesign.com.au). Source: data from ‘BrandZ Top 100 Most Valuable Global Brands 2015’ and ‘BrandZ Top 100 Most Powerful Brands 2007’.

34 INTERVIEW: ANDREW THERKELSEN

To erm is human Marketing editor Peter Roper gets philosophical on consumer behaviour with GfK Australiaâ&#x20AC;&#x2122;s Andrew Therkelsen about valuesbased analysis of consumer behaviour.

MARKETING AUGUST | SEPTEMBER 2015

s humans, we like to think of ourselves as stable, as having ‘an’ identity. As marketers, it’s necessary to simplify and generalise, in order to do our jobs. But in reality, consumers are fractured, able to hold lots of seemingly incompatible points of view. GfK Australia’s head of qualitative research, Andrew Therkelsen has been talking to people for the last 15 years about what makes them tick, their interests and what they perceive to value. Bubbling away in his head lately have been behavioural economics, evolutionary psychology and authenticity, and how they relate to brands. We had the opportunity to pick Therkelsen’s brain about the contradictory enigma that is the human mind.

@marketingmag

Marketing: How can we try and label people, put them into buckets when, really, nobody’s that defined as an individual? Andrew Therkelsen: There’s this quest to try to get people down to a particular value or a particular point of view when, actually, that’s not compatible with how we are as humans. I’ve had a lot of great discussions and watched focus groups through the mirror. We try and get an answer out of people most of the time. We’re trying to go through various ways of framing up questions, so that we can try and collect data and look at things differently and get different answers. Typically, those conversations mean there is a lot of backflipping around, as people would describe what they really think. Whenever I go behind the mirror there are always a couple of clients who are keen to point out how contradictory everybody is being. Ultimately, that’s what we’re like as people. We do hold all of these different points of view and often they are rationally incompatible. That’s similar to group psychology where people have distinct personalities and play different roles depending on which group they’re in? Yes, very similar. We are very influenced by other people in that whole herding dynamic because we want to protect ourselves, ultimately. Often, as marketers, we want to assume there is a very rational decision-making process. We try to pin them down to this particular way of making that decision but ultimately it’s determined by the context in which you find yourself at that moment, the culture that you’re in, whatever state you find yourself in right at that point can really change the actual final decision that you make.

As marketers we have to generalise or we’d never get anything done. How do you then get use out of models of value types? We use them because they are accurate to a degree, but I think we have to be mindful that there’s a flexibility that we need to apply to those as well. I think it’s probably just better understanding the touch points. That’s a lot of the work that we do. When you understand the touch points better throughout a customer journey you can understand that there’s actually different people probably in different roles or mindsets at those different points. You can think about them quite flexibly in that sense and tailor your approach and your delivery and your brand message appropriately. It’s interesting that the seven Value Types (see breakout) are globally relevant given that values across cultures vary really widely. Do they change? Is it something that has to be revisited and re-validated? Yes, they do. Whenever we look at them and try and use them in Australia, there is a lens that you put over them. I think these are the Australian values that we’ve got, even though they’re globally relevant. Fundamental human needs are cross-cultural. It’s just the expression of them that I think can change slightly. What it means to be an achiever, for example, in China can be different to what it would be in Western culture. Definitely, developing markets versus developed markets have different criteria on which they would judge an achiever, for example, because that’s all about the ways that status and wealth is shown or not. Where they are on a curve of commercialism, almost, or materialism – I think the most progressive cultures have almost come full circle back through to authenticity. Whereas, if you’re further down the line, it’s probably more about overt status symbols. It’s all still about being able to show to others that you have made it and that’s all about an evolutionary level at the top of the pile, so that you’re most attractive. Do you see changes in Australia at the moment around fitness symbols and wearing brands as kinds of badges, even if your badge is that you don’t wear badges? Yes, exactly right. There’s this sort moral and spiritual quest that we are on currently that is not about overt status or wealth, but about authenticity. Which I think is a backlash against a society that has been drained of spirituality. Everybody’s sort of an individual and we’re over marketing everything.

THE VALUE ISSUE

36 INTERVIEW: ANDREW THERKELSEN

Seven globally relevant ValueTypes identified by GfK based on its extensive values analysis. ACHIEVERS are people who place a high importance on attaining and exhibiting social status. In this pursuit they may put their own interests ahead of others. They focus on money as a way to show they have succeeded. SURVIVORS try to always give their best effort while being modest and self-effacing. They are not looking for a lot of money, just enough to pay the bills. They are careful with the money they have. They want to keep their life as simple and uncluttered as possible. SOCIAL RATIONALS want to save the world, not because they are idealists, but because they feel it is sensible to do so. They view the world as a large and diverse place where differences should be respected in order to maintain order. They value being open-minded and tolerant and affording equal opportunity to all. TRADITIONALISTS believe that their inherited way of life is the best and does not need to change. They want their life to be governed by their religious beliefs and cultural traditions. In such a world, people follow prescribed rules and norms for most things. HEDONISTS need instant gratification. They are constantly searching for new stimulating experiences. They seek adventure and risk to feel that they are alive. Most of all they want to have a good time and indulge their desires, preferably with close friends. SELF-DIRECTEDS are all about being true to themselves. They value freedom of action and thought so they can choose their own goals and achieve them. They are curious about the world and what it has to offer, and think it is important to respect ethnic, religious and racial differences. NURTURERS put a high importance on maintaining long-term commitment to friends and family. It is important to them to have close supportive friends, as well as making an effort themselves to help others. They find it important to be sincere and to have integrity.

VALUE TYPES IN AUSTRALIA 100 90

24 18

13 20

80 70

18 23

Social rationals

Nurturers

18 14

9 12

Achievers

20 10

40 30

Hedonists

Self-directeds

60 50

5 4 Students

7 8 Young Singles

Tradionalists

13 15

16 Survivors

8 Young Couples

Single Older Parents & Singles/ Couples Empty with Nesters/ Children

Retired

Source: GfK, based on unweighted Australian sample of 1004.

Consumers have always been cynical and sceptical about brands and marketing, but that cynicism and scepticism is at new heights. There’s almost nothing you can really put in front of people before they tear it apart for not being authentic. So brands aren’t allowed to display the contradictions that people do. I suppose we’re almost looking for strength, in that I feel like people look for brands to be strong leaders and are much less prepared for them to be contradictory in the ways that we are. Because I think it points out our own weaknesses. When brands are unclear or they change or they don’t communicate properly what it is they believe in, it holds a mirror up to us and we want to be clear and have strong morals and strong values. I think there’s a role for brands to play in helping us have them, decide what they are. Provide us with a status. Even if ‘status’ as it has been known isn’t what people are after anymore? Absolutely, and the quest is a little bit more considered perhaps than it once was. I feel like consumers are really, really suspicious nowadays.

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Categorising value types

There’s a feeling if I’m really on this quest for the authentic self, then I need to align myself with brands that also have that in their DNA. That’s opposed to picking out whatever the latest shiny brand symbol is and wearing that. I don’t think it’s quite as simple as that for people anymore, because they’ve been burnt in the past and they’re looking for brands with that deeper longevity connection value. What about with brands trying to force that relationship, whether it’s detergent or a private jet? Most of the conversations that we’re after with consumers – whether laundry detergent or a technology company or a car – are really about how we are going to connect with you emotionally. I think it’s about knowing where the limits are, where their tolerances are for those connections, because there is a bit of a backlash at the moment. You can easily look like you’re not really in touch with real people and what they want from products and brands.

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Can you talk through your thoughts around brand relationships mirroring biological activity? The GfK standardised approach that we have for understanding brands, the Consumer Brand Relationship Model, is based on the 15 relationship types from Susan Fournier at Stanford University. We’ve got some quite sophisticated modelling tools that help us understand the different types of relationships that people have at a human level.

What we do is we can show where you’re at now, how that relationship has developed to this point and then where that relationship needs to go to in order to be most proﬁtable. We know there are certain relationship types that people have with brands that provide more return on investment. I think there’s something in thinking about brands as people because people do have very strong relationships with companies. It must be something within us that is similar [to a human relationship]. Some sort of chemistry or chemical change in us that makes us feel like it’s either a friend or an enemy. That, therefore, has to be sort of biological. Fournier takes that chain of thought all the way to its end point. The evolutionary psychologist part fully kicks in for me when you’re interacting with brands and it’s biological. Brands need to very much understand that at a very human level. That is, how we will ultimately forge that emotional connection with people, because it’s a very human thing. It’s not always just a transaction or something at a very superﬁcial level. Does that change the approach brands take? It does change the approach that they take, yes, absolutely. It changes the approach they take when they know what brand relationship they have with the bulk of their consumers or what brand relationship they have with sub-segments of their consumers. It is very possible for brands to change their strategy based on a better understanding of the human relationship that they have with their customers.

PERSONAL VALUES Top 20 values ranked by top two box importance in Australia Protecting the family Honesty Authenticity Self-reliance Stable personal relationships Freedom Working hard Material security Enjoying life Learning Friendship Fulﬁlling work Duty Open-mindedness Thrift Having fun Knowledge Curiosity Social tolerance Equality

Australia total

Students

Young singles

Young couples (no children)

Single parents and couples with children

Older singles/ empty nesters/ retired

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2 12 4 6 7 9 8 15 3 1 5 13 30 18 20 14 10 16 11 17

3 8 6 1 9 2 7 4 5 10 12 16 27 20 24 11 23 13 28 17

1 3 4 5 2 6 7 9 8 11 10 12 14 22 17 13 16 19 24 23

1 2 7 6 3 9 4 5 10 13 12 11 8 15 14 16 17 18 19 20

2 1 3 5 9 4 7 8 6 11 10 17 14 12 13 24 19 21 18 20

Source: GfK Roper Reports Worldwide 2014 Single Year, C1-2, based on unweighted Australian sample of 1004.

THE VALUE ISSUE

The green lantern It’s the global FMCG giant with an image as squeaky clean as its customers’ bench tops and behinds. We go behind the scenes, and the big claims, to ﬁnd out how sustainability is at the core of strategy at Kimberly-Clark, and learn that its Australian branch is lighting the way for the industry.

he Kimberly-Clark Corporation is more than 140 years old. One year away from its 90th anniversary in Australia, it can boast of being market leader in six of the eight categories it competes in, dominating against brands like Huggies, DryNites, Depend and Poise. With leadership shares in so many categories and segments, it’d be fair to say Kimberly-Clark has a very healthy business here, with iconic brands and multigenerational loyalty. It’s also fair to say that the company has had a long journey in regards to sustainability. One hundred and forty years ago it started planting a tree for every one that it cut down, and these days the Kimberly-Clark Corporation is ranked as the third most ethical company, according to the Ethisphere List. Earlier this year, its supply chain work in Australia earned

it recognition from the Banksia Foundation, winning the inaugural Federal Minister for a Cleaner Environment Award, awarded by Greg Hunt. It’s one of six awards the company has won over the last 18 months, making it the most awarded company for environmental practices in Australia. On the eve of World Environment Day 2015, KimberlyClark Australia and New Zealand announced updates to the performance of its modern sustainability strategy, as well as its partnership with WWF Australia. Marketing sat down with two members of the leadership team to not only dig into examples of how the company is going about its three-pronged attack – people, products, processes – but also ask the leaders of the business how they deal with scepticism, why business itself should be taking a leadership role, and whether the company is just jumping on the ‘going green’ trend while the going is good.

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38 BRAND STORY: KIMBERLY-CLARK

the manufacturer. Is it ethically sourced? Is it done in a way that they believe meets their stance? They want to be able to buy, ﬁrst and foremost, brands that they trust. That’s critical. Second, they want to buy brands that actually deliver a winning experience. In our case, our brands are functional brands. They do jobs. Kitchen towels clean kitchens. Nappies catch bowel movement and urine. Knowing that it’s a reliable brand is more and more important in this volatile world. It’s not just the consumer. Look at our key retailers. The big retailers in Australia also understand objectives around ethical sourcing and around the environmental impact of what we’re doing. That ﬁts right into the strategy of our key partners. When we think of our key partners, there are really three things that we want to do. One, we want to have the strongest leading brands. Two, we want to offer them the very best innovation. The third is we want to offer the best customer service of all the Australian manufacturers.

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Robbert Rietbroek, managing director and chief executive, and Jacqueline Fegent-McGeachie, head of corporate affairs and sustainability, spoke to Marketing editor Peter Roper. Marketing: There’s a long history of sustainability in Kimberly-Clark. Robbert, you pointed out in a presentation that going green has gone from the margins to the mainstream. If it’s been part of the company forever, why is it important now that going green has suddenly become a top trend with consumers? Robbert Rietbrock: That’s a great question. We looked at various sources here. The GfK Roper [Personal Values report; no relation to Marketing’s editor] does trends analysis. They have, in the most recent survey, discovered that ‘going green’ is the number one stated consumer need in the world. In Australia, it’s the number two need. The number one need here is ‘experience’. What that means… it probably means more ﬂavours, more innovation in general in the consumer products industry. Going green is the second biggest trend. If you’re aligned with one of the top three trends, there’s deﬁnitely growth. We also know that the green marketplace is already worth about $12 billion in Australia alone. Just for a reference, the entire Australian food and grocery industry is worth about $108 billion, $110 billion. So that’s sizeable, very sizeable. We see that consumers are making statements. They now are demanding to know more about

“

With having a higher purpose, we believe that brands also should have a voice. Brands should take a point of view.

The result of that is we’re now known as th best FMCG supplier to retailers, which is a massive accomplishment. We have moved from number three to number 15 in the Advantage survey, which is an independent global survey of suppliers. Part of that, believe it or not, if you go back and you drill down to the diagnostics of that, is that we are recognised by the likes of Coles, Costco, the independents and the other retailers like the pharmacies, we are recognised as the most sustainable. Inside the company, we have started to recruit quite a few people from Gen Y over recent years. What’s interesting about that generation is they care less about what they earn than being part of a team, of an organisation, of a corporation that has a purpose, that has higher standards. If you think about recruiting and think about the employee brand that we’re trying to establish, that is as important as it is with our consumer, as it is with our customer and our stakeholders and our shareholders.

THE VALUE ISSUE

The devil’s advocate would say that trends can and do end. Does that mean sustainability performance among businesses could go backwards? Jacqueline Fegent-McGeachie: The fact is that, yes, green has gone from the margin to the mainstream, but it’s increasingly becoming core to the brand trust equation. So it’s not a ﬂeeting fad. And we’re seeing the outcomes for organisations who do promote themselves as ‘green’, but don’t have substantiation and don’t have the robust strategy. There are organisations, different brands, still on that journey, but… this is only going to become more of an issue and more of a challenge. Well before sustainability was the done thing to do, over 20 years, we’ve been proactively setting up goals focused on minimising our operations that impact on the environment. We’re still among the ﬁrst multinational companies globally to start proactively measuring and challenging ourselves. Since then, we have expanded those calls to cover our three areas of sustainability, which are people, planet and product. One of the ways that’s been really key for us in [establishing] sustainability, and [fostering] a sustainability mindset in our organisation, is the fact that we link our sustainability strategies – which we call Our Essential World – directly to our company’s core purpose, which is around leading the world for essentials and a better life. A key insight that we’ve learned is that sustainability needs to be at the heart of your business, which is what we’ve done at Kimberly-Clark. I think that’s helped put us on the path for more success.

RR: Sustainability sits in the core of our strategy. With the fact that we’re such a large player comes a big responsibility as well. Our belief is that we shouldn’t necessarily just abide by the rules and regulations and the legislation of the market, but we should actually aim much higher and set the standard of excellence in the market. That raises a good point on whether it’s carbon emissions or forestry or something else, the community often looks to government ﬁrst. And independent groups often make the most noise. Why should business – which is often seen as the bad guy – drive change? JFM: I think it’s a combination of all three: there is absolutely a role for government, but there’s also a role for business and there’s also a role for the NGOs (non-government organisations). I think people do look to government for leadership, which is their elected role; however, what we see is that in addition to government providing leadership, as organisations, we also have a responsibility to minimise our own operational impact. But then more to that is how do we further engage and inspire more change through the reach that we have through our well-known and trusted brands that extend into the homes of Australians to help them to understand and to inspire more change? Tell us how the partnership with the WWF came about. RR: In 2011, we started a partnership with the WWF. It’s essentially built on the fact that we only use Forest

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40 BRAND STORY: KIMBERLY-CLARK

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Stewardship Council (FSC) certified paper pulp. FSC is the highest standard of certification of sustainable forestry, sustainable wood fibres. They’re a very well-run organisation. They’re extremely strict. They do surprise audits, for instance, of forestries and manufacturing facilities to verify that people are actually complying with their standards. We support them. We think that they’re excellent. We pay more for premium wood fibre that we know is ethically sourced. It does not affect the natural habitat of Indigenous people or animals that live in these forests, because they’re sustainably forested. That sits at the core of our belief system. We’ve been doing that for many, many years. That led to a partnership with the WWF around the Love Your Forest brand that we jointly created. It was created in Australia between Kimberly-Clark and the WWF. We started campaigning together for the awareness of the FSC as the standard of excellence. At that time about, I would say, four to six percent of Australian consumers would have had awareness of the FSC certification as a world standard of sustainable forestry. After working with them now for four years, we’ve raised that to one in five Australians. One in five Australians now very actively has knowledge of the FSC certification of sustainably sourced paper. A threefold increase. Obviously we want that to be much higher – four out of five consumers still don’t know. That’s why, when the WWF approached us this year to help in their mission and campaign to save the ‘Heart of Borneo’,which is a fantastic nature reserve where orangutans

“

We’ve been around for 140 years and we want to be around for at least another 140 years. That’s the starting point. If you think about that, that means that we will have to be increasingly conscious of the fact that we are working with scarce resources.

”

and other beautiful animals live – we don’t source from the heart of Borneo – [but] we felt compelled to participate. You hear a lot about brands with a purpose nowadays. With having a higher purpose, we believe that brands also should have a voice. Brands should take a point of view. We think of that as what we refer to as brand activism. We decided that we would take Kleenex Cottonelle and actively start campaigning for the protection of forests. What that means right now is, in this quarter, we will be donating a minimum of $150,000 to this program. It comes on the back of a million dollars that Kimberly-Clark has donated to the WWF for the ‘Heart of Borneo’. This is not a one-off. The last four years, we’ve been investing in this program. We decided that we shouldn’t just invest in it because we believe in it, but we want to actively campaign for it. That’s where the Heart of Borneo campaign with Kleenex Cottonelle has started. It’s amazing, we already have over half a million consumers participate on social media. They participate with comments, with likes, with forwarding. People are getting behind it. The overall objective is to heighten the awareness of forest certification – [show] that there are alternatives. It is a matter of choice. You can choose to buy a product that is FSC certified. You can choose to buy a product that is endorsed by the WWF, because it doesn’t affect the natural habitat of Indigenous people and animals and is sustainably harvested. We want to campaign for that. We believe that we have a responsibility to drive that message. How does a business make sustainability work financially? Can doing good for the world and for people also mean making more money? RR: That’s probably the question, right? The answer to that is that we’ve been around for 140 years and we want to be around for at least another 140 years. That’s the starting point. If you think about that, this means that we will have to be increasingly conscious of the fact that we are working with scarce resources. Initially, if you go and buy FSC certified paper pulp, it costs more. That’s a fact. You can easily go and buy hard rolls and paper pulp on the open market. It is a commodity market that’s coming from forests that are not sustainably forested. It’s a choice. That’s a choice that has permeated all the way from our headquarters in Dallas, from CEO, Tom Falk, all the way to our operating unit. We’ve made a choice that we want to be doing this in a sustainable fashion, because we want to be around for another 140 years. We also believe that, maybe not initially, but over the long run, consumers will choose us because of this, because

THE VALUE ISSUE

we will have a long track record of doing the right thing. We also believe that our customers are going to be demanding this of suppliers in the next five to 10 years. We’re ahead of the curve on that. There’s a correlation between our success and the way that we are perceived by the stakeholders, the consumer, the customer, shareholder, the NGOs, the government. That’s why this is about putting sustainability at the core of strategy. In fact, later this year, I’ll be speaking with the Chief Strategy Officer Forum in Sydney to talk about putting sustainability at the heart of your strategy. If you do that, and yes, there may be some initial start-up costs, but if you do that, you also have to embed this in your innovation program. Can you give some examples of that? RR: I’ll give you two examples of how we did that and how we’re doing it. Last year, we were the first in the world to launch Kleenex Cottonelle bamboo and Viva Kitchen Towel with bamboo, FSC certified. We’re the first in Kimberly-

Clark worldwide to launch these very innovative solutions with bamboo, which is a highly renewable fibre. In the US right now, our Kimberly-Clark professional division has done work to launch the new product that is branded ‘Green Harvest’, a trademark that’s made with wheat straw, which is a bi-product of agriculture. Let me dream big for a second: my big dream would be for us to move our entire sourcing of fibres to agricultural bi-product, but we set ourselves a goal to do 50 percent. In 2022, seven years, we want to have at least 50 percent of our wood fibres replaced by other natural fibres. Most importantly, by agricultural bi-product. Think about Australia: Australia has incredible amount of agriculture and grain production and corn

production and all of those wonderful vegetables. All the bi-product, all those fibres today are basically used for composting or sometimes they’re burned. We believe that in our future, we can actually use those in our manufacturing process to make Kleenex Facial Tissues, Viva Kitchen Towels, Kleenex Cottonelle Bath Tissue and, with the same quality, the same consumer properties: very soft, very absorbent, thick, so the consumer doesn’t have to make any compromises. Think about that potentially being a much cheaper raw material than wood fibres that are not sustainably forested. In Kimberly-Clark, we don’t just have sustainability as a core strategy, but also at the core of our innovation program. We like to dream big, because when you dream big, you make big leapfrogs into new territories. Let me give you another example. Australia has some of the highest energy costs in the world and some of the highest gas prices and electricity costs in the world. We were able to reduce our carbon footprint of our South Australian mill, which makes Kleenex Cottonelle, Viva, Kleenex Facial… by 50 percent over the last five years. It’s partially driven by the fact that we created what’s called a ‘cogeneration’ facility. The way we’ve done it is, we built a jet engine that you would typically find on an aeroplane, inside a sort of steel box. We bring Australian natural gas into it. We convert that into electricity. It takes care of about 100 percent of our steam that we use for our manufacturing process, 92 percent of electricity and 85 percent of our heat. This has significantly impacted the reduction in electricity consumption in South Australia, with the perspective that that cogeneration unit produces about 20 megawatts of electricity, which is enough to power 36,000 homes for a year. We’re exporting that back to the grid in the days that we have overproduction of electricity. Electricity is scarce in South Australia. It’s largely dependent upon wind energy and other sources. Some days, we’re a net contributor to the electricity availability. The other cool story is about water consumption. We’ve significantly reduced the water consumption in Millicent to the point that South Australian ground water levels are rising again. They were being depleted for many years. What’s even better is the waste water that comes out of our facility is actually now Australian drinking water quality. We can actually say that the water that comes out of our factory is now drinkable, potable.

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44 BRAND STORY: KIMBERLY-CLARK

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Have you tried it? RR: I haven’t tried it. It’s actually being used for agricultural purposes. JFM: Sometimes, in our ponds at our manufacturing sites, there’s a quite a lot of bird life on them, so while the waste water reached Australian drinking water standards, because of the bird life that they attracted back to area, there’s quite a lot of poo in them. RR: Yeah, but it’s a bonus to have the birds around. Large bird populations around a big manufacturing site, that’s something that you could only dream of 20, 30 years ago. Have you ever been to Mount Gambier by any chance, or Millicent? I’ve been to Mount Gambier. RR: You know they have the Blue Lake and there’s another lake called Lake Bonney. It’s not as well-known as the Blue Lake, but Lake Bonney, 20 years ago there was a bush ﬁre and we had these tree logs dropped into the lake. There had been some pollution historically. We worked with the Environmental Protection Agency in South Australia to clean that lake up. We took all the wood out. We cleaned the water of the lake. We have now fully restored natural wildlife in that lake. Lake Bonney has now reopened for recreation for people

On that point, with environmental messaging there’s always scepticism – how do you address that? RR: I think the term you’re referring to is ‘green washing’, right? That’s what people call it. The key here for us is that we started this journey a long time ago. We’ve been working on this diligently and quietly. We’ve never necessarily advertised this up to the point that the WWF approached us to partner with us on this Love Your Forest Program. This is a recent development, but we’ve been doing this work for a couple of decades. Now that we feel that we are ready to reveal ourselves, we are revealing ourselves. We probably would not have done this without the credentials of the partnership with the WWF. As a manufacturer, you can make all types of claims. The point here is if a third party such as the WWF, which is a very, very, very highly regarded organisation in the world, with the strictest standards, doesn’t partner with just anyone. They’re extremely selective. Setting up a partnership with the WWF is an investment that takes months and years. They are our ally here. They are our partner. They also hold the mirror. We work with them very closely, which we continally improve and even get more sustainable on a year-to-year basis. They, in turn, use us as, I call it, a lighthouse. [Via] the lighthouse, you lift up the standards in our entire sector. We are part of a very large sector of paper production. They use us as a role model in their storytelling and their benchmarking. That’s an even bigger goal for them, which is to not just work with Kimberly-Clark on the FSC certification, but to actually raise the game of all of the manufacturers, so we can all enjoy the forests for decades and for generations to come. JFM: I guess that’s the objective. As Robbert said earlier, we don’t source any of our fibre from Borneo. We never have. However, because of the challenges that Borneo is facing around unsustainable forestry and issues around biodiversity, they’ve approached us to partner with them to help try and drive change and to drive FSC certification in forestry companies that we have nothing to do with. We want to see changes in the industry and we’re happy to partner and collaborate with NGOs, like we do with the WWF, but also other stakeholders and community groups, like they helped us develop our forestry policy. We’re willing and happy to partner with other organisations and companies and brands to help drive change.

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With the fact that we’re such a large player comes a big responsibility as well. Our belief is that we shouldn’t necessarily just abide by the rules and regulations and the legislation of the market, but we should actually aim much higher and set the standard of excellence in the market.

like you and me, so we can go and take our family swimming or maybe canoeing and interact with nature. This is not just marketing. My whole point here is it’s not just about the front end. For me, it’s throughout the entire supply chain.

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46 CONTENT PARTNER: ACCENTURE

Changing perspectives of customer value in a digital world As the voice of the customer and the business, marketing has a more important role than ever in facilitating a two-way value exchange, writes John Cassidy.

Digital strategy lead at Accenture Australia.

CUSTOMER: GROWING PERCEIVED VALUE Traditionally, a customer’s purchasing decision has been largely based on the value they perceive to obtain by buying the product or service. It is a subjective construct as each customer may have a different reaction to the marketing message. This poses questions such as: Do they believe it? Does it meet their needs and wants? Do the perceived benefits equal or outweigh the price? Today’s digital world supports and enhances customers’ subjective evaluation of benefits and costs. Customers have more access to information, expert opinions, reviews, low-cost digital channels and greater transparency than ever before. Reputation and the absence of friction in the purchase process are now becoming as important as absolute price. It follows that it is not enough to simply rely on marketing messages to convey customer value. Instead, marketers need to consider ways to grow perceived value by creating and delivering value for customers beyond the limits of what’s being sold. Take, for instance, disruptive on-demand entertainment offerings like Netflix, Chromecast and Stan. Their customers have been trained for 20 years by free-to-air and pay TV providers to expect a curated range of content for them to discover. To improve the perceived value for customers these newer companies have focused on using digital tools to change the discovery and selection process by recommending content, but also to create content (such as House of Cards) that fit untapped needs in the customer base, based on these same analytical tools. Digital creates value by reducing friction and enhancing the customer’s use and enjoyment of the product.

BUSINESS: VALUING THE CUSTOMER BASE In terms of understanding the metrics of value, different audience types often require different approaches and

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t used to be so simple. We had a product targeted to a customer at a particular price point and, all being well, we sold that product once, maybe multiple times to that customer. If we had the opportunity, we presented different products and services, and some of our customers bought those too. So, for every customer relationship, we could allocate a dollar sign revolving over their heads that was commensurate with the value they would assign to our relationship. ‘Customer Lifetime Value’ and other measures soon became part of the lexicon of terms we used to communicate and make investment decisions. Those were happy days. Two things have changed the dynamics of how we understand customer value. First, have changes in the value placed on customers come about due to the differences between traditional businesses and disruptive digital businesses, in particular their cost base and associated business models? For example, for a telco $20 to $50 per customer per year represents the return needed to run a business that invests billions of dollars in capital expenditure every year in owning and running a network that employs tens of thousands of people. Second, with more options and transparency than ever before, customers do not have much reason to stay loyal. Over the last 10 years we have tracked a downward trend in customer loyalty across all sectors and geographies. We have now entered an era where no single product, service, business model or company is so essential that it is impervious to change. As marketers, it is important we understand the meaning of customer value in today’s digital world. The concept of customer value will be explored through three lenses – from the viewpoint of the customer, the business and of untapped possibilities.

John Cassidy

are innovative and successful approaches – when executed correctly – to create, deliver and extract value from customers, without compromising commercial viability.

Companies should no longer expect to directly extract revenue from customers after creating value for them.

UNTAPPED POSSIBILITIES: CREATING NEW SOURCES OF CUSTOMER VALUE

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it is no secret that data and analytics are central to understanding and segmenting customer bases. Customer Lifetime Value is a great tool to help. It emphasises the existing and future relationship with customers and predicts the future returns of focusing on different consumer types. From this perspective, marketers can identify the following types of questions: What is each customer segment worth? Which marketing channels deliver the most valuable customers? What is the long-term health of our highly valued customer relationships? For the high-end coffee retailer Nespresso, creating and delivering customer value is not the final destination, but a continual journey spanning the entire customer life cycle. The retailer personalises its communication and online experience for customers based on their life stage and interests. This is not just about personalisation and content optimisation, but about demonstrating value to customers and seizing opportunities to deepen customer relationships. Digital interventions in this journey around ordering and top-ups create new sources of value. Furthermore, the distinction between the creation of customer value from the creation of company revenue is an important one to make. Companies should no longer expect to directly extract revenue from customers after creating value for them. This approach is changing, however, with the value of a customer base also having value to others and companies are finding increasingly innovative ways to create and deliver compelling value for parties on both sides of the transaction. For instance LinkedIn’s transparent freemium model and extended loyalty programs like Qantas’ Frequent Flyer, which reaches beyond air miles and into restaurant and credit card partnerships, yield benefits for all parties involved. Although customers appear to increasingly be expecting elements of value that on the surface can potentially damage the revenue streams of companies, there

Innovative and disruptive companies are also rethinking the way their business model creates, delivers and captures value. How customers think, behave, transact and go about their day-to-day lives is being constantly challenged, as businesses are increasingly able to get a holistic view of the interplay between different components such as value proposition, customer segments and relationships, channels, revenue streams and cost structures. This allows a precise focus on delivering value to customers through multiple means and models, such as disintermediation (e.g. Oscar Wylee and Shoes of Prey), shipping and channel strategies (e.g. Zappos and Amazon Prime), innovating new products and customer experiences (e.g. Sonos and Philips Hue lighting) or even the creation of entirely new market opportunities (e.g. TaskRabbit and Shyp). With this in mind, there’s no silver bullet to achieving immediate success, as it depends on various contextual factors. However, one of the key attributes to move towards unlocking the opportunities digital technology brings is by examining the end-to-end customer journey and identifying where the best possible value can be delivered for each individual commercial instance.

THINKING DIFFERENTLY ABOUT VALUE Understanding how customers and the wider ecosystem think about the value equation is no academic exercise. A deeper understanding of this leads to better investment decisions, avoiding leaving money on the table and protection against competition. Marketers can help their business reimagine how to create, deliver and grow value over their customers’ lifetime. This involves rethinking the business and operation models and capitalising on the wealth of possibilities that digital presents. More than ever, marketing has an important role in facilitating a two-way value exchange – being both the voice of the customer to the business, and the voice of the business to the customer.

Accenture Australia is a Marketing content partner – a non-ﬁnancial collaboration on content for the magazine and exclusive beneﬁts for Marketing Advantage Members. See page 6 for more information.

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50 CASE STUDY

Campaign I Bought a Jeep Client Jeep Agency Cummins & Partners

Background: Jeep had always been a niche brand in Australia that was lacking relevance for most Australians, and in this cutthroat, highly competitive Australian car market, it had been fighting to hold ground, let alone grow market share. Between 1999 and 2009, Jeep sales remained flat, averaging 4600 unit sales per year, with little deviation. Interestingly, at the same time, the SUV segment in Australia was growing at an average of more than nine percent from 2000. Jeep, however, was not profiting from this growth. Its cars were perceived as 4WD American army vehicles – an image not very attractive for the ‘footy mums’ of Australia. They didn’t want to drive a US army vehicle; they wanted something that fitted their needs and lifestyles. In fact, vehicles from the US have never succeeded in Australia, with Hummer trying in vain to crack the SUV market with only 12 Hummers registered as sold in November of 2009. Therefore, in 2011, Jeep embarked on a new strategic journey to achieve growth. It stopped referring to the US origins of the car, and instead spoke directly to its ‘can do’ attitude, and the ‘Don’t Hold Back’ brand platform was developed. This

Between 1999 and 2009, Jeep sales remained ﬂat, averaging 4600 unit sales per year, with little deviation. Interestingly, at the same time, the SUV segment in Australia was growing at an average of more than nine percent from 2000. original campaign, commencing in January 2011, prompted a moderate change in fortune for the brand. In a market driven by discounts and special offers, however, the brand platform was only part of the resurrection. A strong and memorable actionorientated campaign was needed.

Objectives: With a strong brand platform in place, Jeep set highly aggressive sales metrics in place for the action-based component of the campaign: - Objective 1. Increase sales from 8648 units in 2011 to 12,000 units in 2012. This represented an increase of 39 percent.

MARKETING AUGUST | SEPTEMBER 2015

Jeep felt such an ambitious percentage lift was attainable due to the strong foundation already laid by the ‘Don’t Hold Back’ brand campaign. Objective 2. Drive active consideration of Jeep. Active consideration is measured by website inquiries – which we wanted to increase by 50 percent in 2012 Objective 3. Make Jeep relevant to SUV, sedan and wagon buyers. At that point in time, Jeep was only relevant to 4WD enthusiasts. This would be measured by social media engagement with the broader Australian population. Strategy: We knew the new brand message and campaign ‘Don’t Hold Back’ resonated with the Australian consumer as vehicle sales increased in 2011 from 5975 to 8648. However, we also knew that something was still holding us, and the consumer, back. Buying a Jeep was still considered an extraordinary purchase and certainly not as socially acceptable as buying any other SUV. We conducted qualitative research with current Jeep owners, and found one of the most interesting insights was that other people were

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I bought a ___

GUESS WHO BOUGHT A JEEP?

â&#x20AC;&#x153;I BOUGHT A JEE

HT 2011 JEEP WRANGLER SPORT

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s $OOR , MANUAL s 3UNRIDER EASY FOLDING SOFT TOP s %LECTRONIC STABILITY CONTROL s !VAILABLE IN DOOR AND DIESEL VARIANTS

s , -ANUAL 7$ s !LLOY WHEELS

34,000 DRIVE AWAY

*Includes premium paint shown. Prices for a limited time. See your Jeep Dealer for details.

s !LL SPEED TRACTION CONTROL s ,EATHER WRAPPED STEERING WHEEL WITH AUDIO CONTROLS

25,000 DRIVE AWAY

*Includes premium paint shown. Prices for a limited time. See your Jeep Dealer for details.

“I BOUGHT A JEEP.”

JEEP GRAND CHEROKEE LARED DO Jeep® is a registered trademark of Chrysler Group LLC.

53 CASE STUDY always ‘incredulous’ when the Jeep owner told them they had purchased a Jeep. They would often respond with words to the effect of, “You bought a what?” We needed to increase the social acceptance of purchasing a Jeep, by demonstrating social proof. We wanted people to feel good about buying a Jeep; we wanted it to be ordinary yet aspirational. Often a brand’s strength will lie in its weakness. As a result, we decided to dramatise these reactions of people hearing someone had bought a Jeep – and turning the reactions into a positive.

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Execution: We dramatised the ‘incredulous approval’ people receive when they tell others that they have bought a Jeep. “I bought a Jeep.” “You bought a Jeep?” The idea was brought to life in a range of executions, all with the aim of ‘normalising’ buying a Jeep – that is putting it in an Australian ‘everyday’ context. Each one enacted a different ‘I bought a Jeep’ situation – from a schoolyard, to a child’s birthday party, to a golf course. This was to truly reﬂect Jeep being a mainstream brand for mainstream Australia. All executions signed off with interchangeable Jeep models and their recommended retail price.

We dramatised the ‘incredulous approval’ people receive when they tell others that they have bought a Jeep. “I bought a Jeep.” “You bought a Jeep?” Australia ever. The long-term ﬂat yearly sales pattern was completely and dramatically shattered, moving from approximately 4600 sales per year for the previous decade, to 18,014 in 2012, 22,170 in 2013, and over 30,000 sales in 2014. This sales growth is even more remarkable when you consider that the auto market was only growing at 12.7 percent. The brand platform campaign (‘Don’t Hold Back’) had a relatively small impact, until we built the retail message on top of it. From 2010 to 2011 sales increased from 5975 to 8648, an increase of 45 percent. Only once the ‘I bought a Jeep’ idea was executed did Jeep show phenomenal sales growth. In its ﬁrst year, the 2012 sales objective was 3352 additional units. We achieved 9366 additional units, over delivering on the target by almost 180 percent. This exceptional growth was continued in 2013 with an additional 4000 vehicles sold and an overall target growth of 85 percent in two years.

Results: Objective 1: Increase sales from 8648 units in 2011 to 18,014 units in 2012, an increase of 108 percent. By the end of 2014, Jeep had sold 30,408 units, proving the longevity achieved by this campaign, giving an increase of sales of 252 percent from the original ﬁgure in 2012. ’I bought a Jeep’ delivered the most signiﬁcant uplift of Jeep in

Objective 2: Drive active consideration. Increase web traffic by at least 50 percent. The increased consideration for Jeep due to the campaign was also reflected in the website traffic. Website visitors to www.jeep.com.au increased by 400 percent between January 2011 and November 2013. Not only did more people visit jeep.com.au in the case period,

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more visitors arrived at jeep.com.au from organic search, meaning more people were actively searching for ‘Jeep’ than they ever had before. In addition to generally higher traffic, ‘I bought a Jeep’ also increased conversion. Objective 3: Brand relevance. Encourage a talkability shift from 4WD enthusiasts to general population. Web traffic didn’t just increase for the brand; people started to search the exact phrase, ‘I bought a Jeep’. ‘I bought a Jeep’ has quickly entered the Australian vernacular. In the case period, the phrase ‘I bought a Jeep’ was mentioned over 3600 times in blogs and on Twitter alone. Over 9300 spoof/parody videos were uploaded onto YouTube, some of them clocking up to over 55,000 views. And while the campaign has now been running for over two years, there is no sign of the conversation slowing down. Its cultural relevance and talkability actually continued to grow in 2013. In 2013, social mentions stayed above 200 every month, in some months even going up to over 600. Recently, AFL star Buddy Franklin crashed his girlfriend’s car – a Jeep. Many of the news headlines were not ‘Buddy in crash’; they were ‘I crashed a Jeep’. The brand is truly embedded into Australian culture. Over the first three years of the campaign, both the SUV segment and the total auto segment experienced growth. However, Jeep significantly outgrew the market and its competitors in the campaign period. Jeep outperformed both the total market growth and the category growth by more than four times, with the total Australian automotive market growing by 12.7 percent, and the SUV segment by 36.6 percent in 2011 to 2013.

54 CASE STUDY

Background: Animals Australia is one of Australia’s foremost national animal protection organisations, representing some 40 member societies and thousands of individual supporters. Animals Australia has a track record of investigating and exposing animal cruelty. In the last three years, Animals Australia has focused on putting a stop to animal cruelty affecting pigs, egg-laying hens and chickens in factory farms. In doing so, Animals Australia faced three huge challenges: 1. Australia’s love affair with meat Australia has the second highest consumption of meat per capita globally, consuming an average of 111.5 kilograms of meat each year. Concentrated Animal Feeding Operations (CAFOs or ‘factory farming’) have become increasingly prominent in order to meet a rising demand for meat. 2. Australia’s consumers were green-washed and blissfully unaware of the cruelty that is factory farming The chicken and pork industries were worth a combined $7.6 billion during the life of the campaign. From 2012 to 2014, Australian Pork Limited spent an average of $7.4 million to ‘build consumer demand’ for pork alone. Additionally, chicken brands such as Lilydale and Steggles also promoted their products with big budgets. Having such signiﬁcant resources at their disposal enabled these industry bodies, organisations and brands to green-wash themselves, thus appearing more natural and compassionate as they actually were.

Campaign ‘Make It Possible’ Client Animals Australia Agency Loud 3. Australia’s hunger to save on living expenses Australia’s two major retailers, Coles and Woolworths, have a market share of 72.5 percent of the $82 billion grocery sector. Both have been spending millions on blasting retail campaigns such as ‘Down Down’ or ‘Cheap Cheap’ ads on the airwaves for the last few years. Both have vested interests to discount everyday shopping items on the shopping list, which in turn creates a fertile ground for cruel animal farming techniques and practices.

Objectives: To sum up the challenge, we had to galvanise green-washed and blissfully unaware Australians to step up against a multibillion-dollar industry by pledging to stop farm animal cruelty while spending their hard-earned cash on premium priced, more ethical products during economic tough times. Our objectives for ‘Make It Possible’ were: Campaign: - increase awareness of factory farming in Australia, and - establish the ‘Make It Possible’ brand (MIP).

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Commercial: - build ﬁnancial self-sustainability of Animals Australia through the acquisition of 5000 new monthly donors. Change in consumer behaviour: - reduce consumer demand for factory-farmed products - increase demand for higher welfare products, and - pledge and share commitment socially. Change in supply chain: - gain support of leading supermarket retailers, brands, fast food chains and restaurants.

Strategy: Three crucial insights informed our strategy. 1. CEOs, boards, politicians and lawyers don’t change businesses; people do In the past, Animals Australia focused more heavily on influencing legislative change, while convincing industries and governments of the need to move on animal welfare issues. While in theory it’s reasonable to expect that laws to protect animals would then influence industry practices, which would go on to influence businesses to meet community expectations, sadly, the opposite is true. 2. Australians love animals Australia has one of the highest rates of pet ownership in the world. About 63 percent of Australian households own pets. There are an estimated 33 million pets in Australia. That means 10 million more pets than there are Australians. Needless to say, we are

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Pigs can ﬂy

57 CASE STUDY opposed to animal cruelty, and don’t like seeing animals suffer.

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3. Australians have a happy-go lucky attitude Australians are among the most optimistic people in the world, research reveals. Being optimistic means we inherently believe that we can change lives for the better. The above three insights led to the creative task at hand: - to galvanise animal loving Australians to change their purchasing habits, so that organisational and legislative change will follow - to give our farmed animals a voice and feelings to humanise the issue, to better connect with our audience, and - to give people hope that they can change an entire industry if they come together and empower them to do so. And so the ‘Make It Possible’ campaign was born.

Execution: The ‘Make It Possible’ campaign heroes a hopeful pig supported by other pigs and chickens. Together they are singing ‘Somewhere’, a song from West Side Story – the quintessential ode for a better, brighter, less harmful future. To juxtapose the lyrics of hope, we see covert, heart breaking and 100 percent real footage from factory farms that demonstrate the cruel conditions our beloved pigs and chickens are experiencing. At the end, our hopeful pig grows wings and escapes its cruel environment. The super on screen says, “Imagine a world without factory farming”. The call to action is a website: Makeitpossible.com. The donation-funded ﬁlm directed people to the campaign website, which acted as a hub for social change. On the website, people could

watch the ﬁlm in long-format, pledge their allegiance by signing a petition, share their pledge with their social network and donate to our cause. Being on television enabled us to reach people when they were at home eating dinner in front of the television, giving the issue relevance and cultural potency. Social media played an important, cost-effective, role in helping Animals Australia to stay in touch with consumers on a broad scale and continue the dialogue with fresh and relevant content. Outdoor, radio and print media, donated by key media owners, extended our reach and frequency while driving trafﬁc to the ‘Make It Possible’ website, where people could commit to changing their purchasing behaviour.

Results: Paid TV media activity in the ﬁve major cities reached approximately 50 percent of Australians. That’s 11.8 million people, out of 23 million Australians. 1,354,936 people visited the ‘Make It Possible’ website. 264,527 people went out of their way to take the ‘Make It Possible’ pledge on the website by refusing factory farmed products. That’s a 20 percent conversion rate per visit. Roy Morgan research reveals a signiﬁcant shift in buying habits: fewer people are today purchasing factory-farmed products than they were in 2012, before the campaign was launched. The consumer research shows a shift of 24,000 people per month avoiding factoryfarmed products. In 2013 Woolworths recorded a 30.8 percent increase in sales of free-range chicken, accounting for 8.5 percent of total chicken sales. In 2014, there was a further 23 percent increase, with free-range chicken accounting for 9.7 percent of all sales.

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Following the launch of ‘Make It Possible’, in 2013 Woolworths committed to phase out its use of caged eggs completely in response to “growing consumer demand to address animal welfare”. As a part of the shift, caged eggs would no longer be used in the entire Woolworths Private Label ‘Select’ range. Coles has developed a partnership with the RSPCA (Royal Society for the Prevention of Cruelty to Animals) to produce products that ensure animals a better standard of living as a direct result of the consumer backlash engineered by the ‘Make It Possible’ campaign. Across Australia, 42 IGA stores ceased to stock cage eggs. The drop in demand did not only apply to factory-farmed eggs and chicken products. In 2011, only 61 percent of Woolworths stores stocked free-range pork. By the end of 2014, it had extended these options to all of its stores. This shift did not only apply to supermarkets. McDonald’s Australia committed to phasing out cage eggs by the end of 2017, following sustained pressure from the community led by Animals Australia. Food producers, Primo Smallgoods and KR Castlemaine both introduced sow stall free pork product options following the campaign. KR Castlemaine also added a free-range chicken product line. Simplot, the brands of which include Lean Cuisine, Birds Eye, Edgell and Leggos also committed to using free-range eggs in their products. And people matter to the Government, too. In 2014, the ACT became the ﬁrst Australian state or territory to legislate a ban on factory farming. The Tasmanian Parliament has foreshadowed similar sentiments. These legislative changes reﬂect the ultimate success that one hopeful soul can change everything. Even if it is a singing pig.

58 CASE STUDY

Background: Barcelona is a city exceeding 1.6 million inhabitants and, as capital of Catalonia (Spain), it is the centre of a metropolitan area with a total population of about five million. Barcelona is one of the main economic engines of the Mediterranean, establishing itself as a centre for attracting foreign investment (€4 billion). This has led to the creation of a favourable environment for the proliferation of companies and start-ups, resulting in a city cluster of more than 7000 businesses, as well as a local population entrepreneurial activity rate (EAR) of 6.7 percent, ranking above figures in Germany, France and Finland. Starting point Several marketing studies of the city were commissioned in collaboration with businesses and institutions. These identified a gap in the perception of the city’s image between its own citizens and the outside public, as well as a gap in the international perception of the city as a business and investment centre. During this process, the need to develop a new brand management strategy and present the world with the image that reflects the city of Barcelona’s true identity became clear.

The main objective was to project not only the vibrant and festive aspects of Barcelona, but also its creative and entrepreneurial potential. The Barcelona brand management model In order to meet these goals, the Barcelona City Council chose a singular public management model for the city brand in coordination with city agents. This model reduces the risk of leaving the brand under the control of private lobbies.

Objectives: In 2012, the Communications Department of the City of Barcelona began developing a new storytelling and positioning for the city. Thus, the City Council identiﬁed the following as main objectives: - create a new brand management model for Barcelona in response to the current competitive situation and the new challenges of attracting international investment and talent, in collaboration with organisations, companies and other entities the city. - deﬁne, build and manage a new story that can add value to the Barcelona brand, which is aligned with the image perceived and understood by the citizens. - position Barcelona as an open,

MARKETING AUGUST | SEPTEMBER 2015

Project Repositioning Barcelona Organisation Barcelona City Council

creative and vibrant city, that is capable of reaching top positions in the various areas of activity. generate pride of belonging among citizens and strengthen their involvement in the construction and consolidation of the brand.

Strategy: New positioning The deﬁnition of Barcelona’s new brand positioning parted from the existence of historical and cultural assets that have brought the city allure and recognition. But the new challenges of the international market demanded other assets to be part of the new positioning. The new comprehensive positioning had to project the vibrant character of the city and its people. New strategic sectors Barcelona’s new positioning responds to the city’s main strategic sectors: - innovation: Barcelona is the world’s mobile phone capital and an international leader in the use of technology as a means for developing intelligent city management. - business: thanks to a long tradition of business and trade, Barcelona is one of the most important cities for business in Europe today.

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Barcelona’s positioning journey

61 CASE STUDY

- creativity: with a history of

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over 2000 years and a unique identity, Barcelona is known worldwide as a city that exudes culture and creativity, in constant ﬂux in all disciplines. research and knowledge: as a leading city in clinical research and human health, Barcelona is home to 90 research centres, in areas such as oncology, bio-nano-medicine and cardiovascular disease. quality of life and sports: Barcelona is one of the European cities with best life expectancy in the world and the ﬁrst European city with the best quality of life for its employees, according to the European Cities Monitor 2011. responsible and sustainable tourism: Barcelona promotes a model based on respect for citizens and city resources in economic, social, environmental and cultural terms.

Execution: New graphic identity Creating a graphic image of the new positioning of Barcelona was needed in order to synthesise it visually. The new graphic represents a container that collects everything that happens in the city: an ambitious city in motion and, at the same time, a city that serves the people living in it. New brand assets The brand assets are the human resources and the tangible and intangible assets we rely on to build and communicate the city’s new positioning. The new ambassadors of the city are human resources that help reinforce the messages and brand values through their own work. Among others, this is the case of chef Ferran Adrià in creativity and innovation sectors through his work in cuisine. His restaurant El Bulli

has placed the city as a benchmark for creativity and innovation in the world. Another example is Anna Veiga in the field of biomedicine; she is known for being a pioneer in the study of embryonic stem cells. Creation of a new storytelling framework With the aim of explaining the new positioning and brand values of the Barcelona city brand, a new city narrative was developed aimed at an international audience, visitors and external public as well as local citizens. The main tools are: - communication campaigns: creation of a communications campaign to explain to citizens, visitors and the international public the city’s new storytelling. - branded content: the creation of a city storytelling associated with the new ‘Barcelona Inspires’ values (culture of innovation and quality of life) in major magazines and in daily and financial press (Financial Times, The New York Times, The Wall Street Journal, The Economist etc). - new website: the creation of a virtual space to present the city’s allure and character, as well as the strategic sectors that make it an ideal city for investment, education or travel. - social media: defining a new narrative associated with the new values and positioning of Barcelona on social networks linked to the city. - new story audiovisual narrative: explanation of the new Barcelona brand storytelling by means of audiovisuals aimed at the city’s different strategic targets. - new tools available for visitors: the creation of the Barcelovers magazine, with the aim providing a brief overview of the new strategic brand positioning and story for all visitors to the city. It

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is published in Catalan, Spanish and English. Collaboration with third-party projects City associations, companies and strategic partners are involved in the new positioning of the Barcelona brand, in collaboration with the Barcelona City Council. These partners, associated with the values and the ‘Barcelona Inspires’ positioning, support the construction of the city’s storytelling with tangibles.

Results: The work for Barcelona’s brand management in the last two years has resulted in an improved positioning of the city in major international ranking, and it has also been recognised worldwide with several awards. Barcelona ranks as top sixth brand image in the study compiled by the Guardian-Saffron, 34th smartest city in the world according to IESE Cities in Motion (ICIM2015), best project of the Mayor’s Challenge by Bloomberg Philanthropies in 2014, seventh best European city in the globe, ﬁrst and ﬁfth best city in southern Europe, and best European city infrastructure according to European Cities Monitor 2014 and regions of the future, 11th most popular city according to the Global Destination City Index 2014, fourth city in the world for the organisation of international meetings according to the World Country and City Rankings 2013, and fourth smart city in Europe in 2013 according to Europe’s 10 Smartest Cities in 2013. Due to space constraints, this case study has been edited. An extended version is available to Marketing Advantage Pro Members. Visit Marketingmag.com.au/advantage to join.

62 CASE STUDY

Sponsoring the royal baby of the sporting world held tradition of wetting the baby’s head, to applauding Australia’s finest sporting achievements, since 1954 Crown Lager has traditionally been the beer most closely associated with celebrating ‘Australia’s Finest’ moments and people. While the reasons to celebrate remain constant, a younger generation of Australians had started to move away from this drinking tradition. Crown was beginning to lose sales to more sophisticated, more modern celebratory beverages. To address this change in tastes, Carlton United Breweries (CUB) set out to develop Crown Golden Ale – a more premium, contemporary offering with a subtle nod to the very ‘on-trend’ floral/citrus aromas, due to the inclusion of ‘galaxy hops’. The result is balanced perfectly against the soft, caramel notes of the crystal and roasted malts. CUB has gone to great lengths to make sure Crown Lager has Australia’s finest ingredients. The backbone of this brand extension is very similar. It still has the highestgrade malt and it has the first choice of Pride of Ringwood hops, which is part of the brand’s genetic make-up. The campaign needed to reinforce Crown’s master brand positioning of ‘Australia’s Finest’ – and, at the same time, ensure

Campaign Australia’s Finest – Crown Golden Ale Client Carlton United Breweries Agency Mediacom the next generation also grows up celebrating with an ice-cold Crown. The intention was always to complement rather than cannibalise its existing Crown Lager.

Objectives: The core objective was to successfully launch Crown Golden Ale – reaching 76,000 slab sales in just three months. The key challenge was to cement Crown Golden Ale in the next generation’s celebratory moments – with a budget 10 times smaller than most beer launches. A digital approach would be an obvious solution to talk to younger drinkers, but with more alcohol advertising restrictions being introduced almost on a daily basis,

MARKETING AUGUST | SEPTEMBER 2015

the opportunities to get the message out there online were beginning to dwindle. The Crown Golden Ale campaign needed a unique way to outsmart rather than outspend.

Brand insight: The ‘newly crowned’ Golden Ale already had the heritage, but not yet the credibility to prove itself as the next generation of ‘Australia’s Finest’. With a degree of uncertainty about the success of the variant, CUB set aside a conservative test budget of $350,000, in a category that normally launches with multimillion-dollar budgets, and heavyweight TV and out-of-home support. For people of all ages and backgrounds, there’s nothing that brings Australians together for a celebration quite like horse racing. We’re probably the only country in the world with a public holiday purely dedicated to celebrating a horseracing event. ‘The race that stops a nation’ as it is also known, Melbourne Cup Day is the ‘carnivale’ centrepiece of Australia’s racing calendar. In order to integrate Crown Golden Ale into a racing story, it needed to communicate in a way that spoke uniquely to this emerging generation, unmistakably shouting ‘Newly Crowned’.

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Introduction: From the long

65 CASE STUDY MediaCom found that the younger audience’s interest in sport extended far beyond what happens at the track. Everything from the emotional back-stories of professional athletes to the details of gruelling training regimes seemed to fascinate them. Culturally they love a ‘battler’: individuals who persevere through their commitments despite adversity.

Consumer insight: Australians believe that the story of how you succeed is as important as the success itself. The real challenge was to ﬁnd a communication solution tied to horse racing that brought together Australia’s love of winning with a compelling and emotive story. @marketingmag

Communications strategy: The communications strategy needed to weave Crown Golden Ale into the story of the next generation of Australia’s racing finest. But what or who is Australia’s racing finest? Black Caviar, of course – officially the world’s best racehorse and widely called the Queen of Australian Turf. The highest-rated sprinter in history and winner of all her 25 starts, Black Caviar just so happened to be preparing to conceive her first foal. If Black Caviar represented ‘Australia’s Finest’, then surely nothing would talk to a new generation of racing fans and this idea of ‘Newly Crowned’ more than the impending birth of Black Caviar’s foal. The main idea was to sponsor the sporting world’s version of a royal baby: Black Caviar’s unborn foal. They would follow the progress from the very beginning: following the pregnancy, reflecting on Black Caviar’s victories (and the promise of what might come next from her foal),

right through to the birth, which the nation would celebrate with a Crown Golden Ale. By sponsoring Black Caviar’s unborn foal, MediaCom could ensure that CUB’s conservative budget generated significant earned media. Typically, commercial brands don’t receive editorial coverage in news broadcasts and, due to alcohol restrictions, beer brands cannot be placed into program segments. Given the significance of this story, however, MediaCom was able to circumvent these constraints and ensured Crown Golden Ale was part of racing’s biggest story since Black Caviar broke every record going. Integrated content covering the journey of the pregnancy and the pre-birth of the foal aired live in primetime news, with Black Caviar herself draped in the soon-to-be characteristic black and gold colours of Crown Golden Ale. Vignettes and montages showed Black Caviar’s most famous victories, with continual references to the impending birth and Crown Golden Ale’s support of the next generation of Australia’s racing finest. Alongside the sponsorship of the foal, Crown Golden Ale was already the naming rights sponsor of the Caulfield Cup – one of Australia’s most prestigious races and one in which Black Caviar never competed. Around the event, Crown spoke of the promise of the ‘next generation’ completing the mother’s unfinished business. Racing fans quickly picked up on the sponsorship, as blogs and forums filled with chatter around the birth. When the big moment finally came, moving coverage was awash with Crown’s black and gold colours. Sponsorship banners surrounded the birthing paddock and scenes of revellers toasting

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the occasion – all of course drinking Crown Golden Ale.

Results: The explosion of media and public interest around the story meant the initial $350,000 budget stretched to a whopping $2.7 million in value across media, PR and bonus spots – including access to what is normally alcohol-restricted airtime. The purchase response to the campaign took both MediaCom and CUB by surprise – delivering double the sales volume initially predicted over that period (up by 103 percent), selling an impressive 153,356 slabs. Crown Golden Ale jumped to number 15 premium beer, taking an astonishing 2.6 percent chunk of the market, leapfrogging competitive giants such as Asahi, Carlsberg and even Guinness. Golden Ale was also the only top 20 premium SKU with an average case price above $50. Only 11 percent of Crown Lager drinkers also drank Crown Golden Ale across this period, meaning it absolutely avoided the cannibalisation of the parent brand and drove incremental growth from a younger demographic. In so doing, they ensured future generations would grow up celebrating at life’s winning post as their forbears had – with a premium Crown beer. What was the biggest and best result of all? The birth in mid-September in the New South Wales Hunter Valley of a beautiful thoroughbred foal – fittingly a filly, set for future stardom. The baby foal has a small white marking on her forehead and two white socks on her front feet. The owners have confirmed that she will not be sold, and said it will be a long and patient road from birth to racetrack, but they are still revelling in the excitement of being proud parents.

66 CONTENT PARTNER: UN LTD

The marketing advantage undoing disadvantage Carol Morris from industry foundation UnLtd looks at the marketing challenges being faced by Australian charities – and the true value of donated media and skilled mentoring.

SMALL TEAMS, LEAN BUDGETS UnLtd’s charity partners tend to be smaller operations that run highly effective programs, but operate with small teams and very lean budgets. Of the 43 charities we currently support, only six have an in-house marketing resource. And of those, none have an allocated media budget. These charities provide programs across a range of youth-based services including: expressive art and music therapies, mental health services, counselling and mentoring, education and career development, Indigenous programs, heath related support, accommodation, essential needs and crisis care. We intentionally seek out the ‘off Broadway’ charities that provide powerful programs, often at a local community level, to provide much needed services to young people. We want these organisations to continue to do what they do best – changing young lives and giving them hope. And we want to help these charities by doing what our industry does best – building and amplifying brands.

General manager at UnLtd.

THE VALUE OF MEDIA When Bronwyn Sheehan started the Pyjama Foundation in 2004, she never dreamed that a decade on she’d be the official charity partner of one of Australia’s largest publishing companies receiving over $700,000 in free media placements a year. But that’s what happened. Alarmed at the poor literacy and numeracy statistics surrounding children in foster care, and how this contributes to a lifetime of disadvantage, Sheehan founded the Pyjama Foundation. It screens, recruits and trains volunteer ‘Pyjama Angels’ and matches them with foster kids. The volunteer ‘Angels’ visit their child each week and read books aloud, play educational games and help with their homework. In 2013, when the Pyjama Foundation joined UnLtd, we introduced them to Ali Krzyszton at Bauer Media. “It was a natural ﬁt for the Bauer Media Group to align with the Pyjama Foundation as our chosen charity. We are a publishing company, so we are all about spreading the written word. Magazines create social norms, so Bauer’s proposition to our readers focuses on attaching consumers to the things they really care about, the things they involve themselves in,” Krzyszton says. To date, Bauer has created close to $1 million worth of value through donated time and media placements across: The Australian Women’s Weekly, Woman’s Day, OK!, NW, Good Health magazine, Dolly, Cleo and Cosmopolitan. The Bauer team’s donated time includes producing videos and creative assets, event planning and media planning, as well as helping to support and activate fundraising activities. But Krzyszton says these are hours the team is more than willing to invest in a cause they, and their readers, really care about. Equally as rewarding are the results we are seeing as a result of Bauer Media’s investment in this charity. Over

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o matter what type of business you’re in, your marketing budget always needs to be justified. Though, in the not-for-profit sector, a marketing budget is more often than not a ‘nice to have’. Justifying the expense of advertising or promotion – over delivering core programs to disadvantaged young people – is an ongoing challenge. It’s not that these charities don’t see the value in marketing. They absolutely do, and their struggle with brand awareness and lack of profile in turn makes it difficult for them to seek funding and build scale. It’s because of this catch-22 that having access to the goodwill of the media, marketing and advertising industry is invaluable.

Carol Morris

Over the past 12 months volunteer recruitment has skyrocketed. Training of Pyjama Angels has risen from around 35 per year to around 35 per month. That’s huge. And getting back to justifying the value of marketing: 90 percent of donations received via the Pyjama Foundation website say they are via the awareness generated by magazines.

Mentees really appreciate that highly skilled and experienced people are willing to give their time freely. According to the UK study, every participant apart from one felt better equipped to deal with issues as a result of the mentoring relationship. One thing we don’t yet measure is the value back to the mentors and how fulfilling the experience is. The UK study found that the ones doing the mentoring said again and again, that the experience gave them more confidence to be better leaders back in their day jobs. The requests we receive for skilled mentoring often include: digital planning, marketing strategies, creative, production, social media activations and amplification, financial planning, business planning and even simple administrative tasks that are time consuming. We currently have around 25 mentors placed with UnLtd charity partners, with another 50 lined up waiting for the UnLtd matchmaking team to weave their magic and help cultivate meaningful partnerships. Last financial year, we valued our mentors’ collective support at $900,000 – this figure captures the time, skills and expertise of individuals across our industry providing pro bono advice and project delivery for our charities. In the next 12 months we anticipate this will increase to around $3 million.

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The marketing profession houses a set of skills that are highly valuable to the not-for-proﬁt sector. Our corporate mentoring program is testament to that. We ﬁrst introduced Peter Ostick, managing director at programmatic video platform TVN, to the Pyjama Foundation in October 2013 as TVN was one of the Beta partners for the payroll giving app. Ostick’s experience as founder of a fast growing business in an ever-changing competitive industry has been used to help mentor the Foundation through the national roll-out of its ‘Love of Learning’ program. As a result of this relationship, Ostick joined the Pyjama Foundation board in October 2014 and continues to be involved in identifying revenue generating income for them, as well as weekly check-ins with the CEO around key sales and marketing initiatives. A recent study in the UK by Oxford University (‘Charity Mentors Impact Assessment Study’, August 2014, by Professor Ann Buchanan, senior research associate in the Department of Social Policy and Intervention at the University of Oxford) looked at the value of corporate mentors matched with charities. Many charity leaders said that they often feel a sense of isolation, and that if they had not had a mentor they would have had to cope somehow, using phrases such as ‘struggled on’ or ‘bumbled on’ or ‘carried on blindly’. These sentiments are entirely consistent with the conversations we are having with our UnLtd charities currently.

UnLtd was born when a group of marketing and media professionals decided that, as an industry, we had the power to tackle a large scale social issue – the plight of over 680,000 young Australians who are signiﬁcantly disadvantaged due to circumstances beyond their control. Every one of us in the media, marketing and advertising industries can play a valuable part in giving disadvantaged young people the support, opportunity, belief and hope they deserve. We have the power to give little known charities access to media exposure they never fathomed. We can provide access to talent and skill sets they would never usually be able to afford. We are directly helping these remarkable organisations build effectiveness, scale and make a positive impact on more young lives. The value of what we have to offer with the entire industry united behind our movement is unlimited.

It’s because of this catch-22 that having access to the goodwill of the media, marketing and advertising industry is invaluable.

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Marketing is proud to welcome UnLtd as its not-for-profit content partner. UnLtd is the only not-for-profit philanthropic foundation representing the media, marketing and advertising community, and aims to harness the wealth, talent and influence of the industry, and channel this to support the most creative and innovative organisations that work with at risk young people. Visit unltd.org.au to get involved.

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The productivity mission

Michael Valos

“The challenges modern marketing teams face are coming in faster and hitting harder than ever before” – Jason Shen. While the MIT (Massachusetts Institute of Technology) study to which Shen refers addresses components of a marketing team that increase productivity, the purpose of my article is broader than team characteristics. As discussed in previous articles, my focus is to address a series of issues at a

strategic level in order to enhance the role and relationship of the CMO within the C-suite. This is because some research has shown the CMO to be losing authority, causing the senior marketer’s responsibility to be increasingly narrowed to marketing communications. Ongoing comments to me made by senior marketers reﬂect their desire to ensure their organisations take a long-term view rather than short-term one, and develop a better appreciation of

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As organisations attempt to use technology for competitive advantage, it’s an opportunity to rethink internal and external relationships.

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the subtleties and complexities of marketing. This series of articles is an attempt to highlight issues marketers need to address to achieve more inﬂuence in the C-suite.

What systems, processes and actions do you use within your marketing team to productively engage and satisfy consumers? Customer and employee innovation aligned with segmentation Peter Zaﬁris, manager of sales and marketing at BlueScope, believes segmentation is an overlooked opportunity to efﬁciently and effectively engage and satisfy consumers. Segmentation has always been about productivity. “Operating in a B2B market, we segment our customers based

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Michael Valos asks three big questions to improve marketing productivity – and extracts some answers from top marketers.

Dr Michael Valos is senior lecturer at Deakin University and chair of Marketing’s industry advisory board. Email: michael.valos@ deakin.edu.au

on their activity, market segment, products and services they purchase,” he says. “Segmentation allows for tailored marketing communications and campaigns to engage our customers in a meaningful way. Always attempting to produce something new and exceptional is the challenge for our marketing team. We continually look for new and creative ways to excite our sales force and customers.” With this continual improvement mindset, the sales and marketing team operates in a culture that seeks out and delivers new opportunities to achieve efﬁciency and effectiveness.

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Executive coaches and external trainers It is unlikely that an organisation with employees who don’t communicate clearly and effectively can be productive. Productivity assumes clear communications. In a period of digital disruption and organisational change, communication has never been more important. Chris Khor, managing director of Chorus Executive, says, “Over the last 12 months we have seen significant growth in the use of executive coaches at both a team and individual level, with one of the main objectives being to improve communication and achieve more productive interactions at all levels. “Companies are investing significant time and financial resources to improve communications and, therefore, better outcomes. In addition to using external coaches and trainers, they are utilising psychometric testing tools such as Myers Briggs, LSI and DiSC to bring common language into the businesses and teams.” The multi-pronged approach proposed by Khor addresses the barriers to communication, which are not always structural. These barriers can be psychological as well.

What systems, processes and actions do you use to achieve productive interactions with other internal functional areas? Linking sales and marketing The perennial battle of organisations is to deal with silos in managing processes that span organisational departments. Unfortunately, these structures can create barriers and hinder productive interactions between functional areas. One example of overcoming internal barriers in achieving productivity is put forward by Scott Gunther, national manager, customer and partner experience, at CGU. “Marketing is now becoming a key part of a sales rep’s function. “The best organisations have entwined marketing operations and sales enablement together with the same underlying technology. As a result, we are now seeing marketing tools being put in the hands of frontline staff, who engage customers more frequently. “In the future, marketing will be measured as a critical ingredient within your customer advocacy scores. Those who are getting it right are leaping ahead of their competition.” From my observation of the CGU culture it is both innovative and accepting of the need to harness technological opportunity. In general, however, without the right skills and employee ‘buy-in’ these initiatives can’t work. The beneﬁts of customer and brand lead organisations Mike Harley, managing director of XPotential, sees productivity related to organisational alignment. The following comment also addresses culture but, rather than highlight the potential of technology

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We are seeing more companies aligning their KPIs across the management group to ensure all have the same goals, language and rewards.

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to integrate and to facilitate productivity, it highlights a need for processes that link functional areas as well as the short-term and the long-term. “In customer and brand-led organisations, marketing needs to engage at a strategic and operational level using core cross-functional business processes,” Harley says. “Like strategic planning/budgeting, sales and operations planning and new product development, in addition to marketing-speciﬁc processes such as marketing communications and consumer insights.” Implied in Harley’s quote is the need for employees within functional areas to think beyond the purpose and needs of their immediate department in the interests of delivering marketing outcomes. In other words, this comment highlights the range of functional areas that need to be connected with efﬁcient processes.

KPI alignment The mismatch between responsibility and accountability is a perennial source of dissatisfaction and inefﬁciencies. Khor suggests KPI alignment as a potential solution to this problem and a means of facilitating successful cross-functional processes and relationships. “If KPIs are not aligned, this can add to disharmony,” she says. “For example, if sales are rewarded or measured on sales revenue and marketing by margin, this could lead to a lot of frustration if sales sell a higher volume at a lower price. We are seeing more companies aligning their KPIs across the management group to

ensure all have the same goals, language and rewards.” One area KPIs need to address is the balance between short-term versus long-term outcomes. This is a frequent comment made to me by marketers – organisations are torn between a short-term ﬁnancial metric and investment in the future that is both uncertain and represents a time they (or other senior executives) may well have moved on from. Stakeholder workshops Giving employees the ability to speak openly and share ideas is a way of achieving ‘buy-in’ as well as releasing creative and innovative solutions to problems being raised. By not giving

Take homes: building a marketing team for the future The future is dazzling, but as marketing leads we need to build structures to meet its omni-channel, data driven immediacy, says Peter Little, general manager – member marketing and communications at Cbus. Anyone who ‘knows’ the solution is a charlatan or software salesperson, or an unholy combination of both. Some questions to consider: Where is the organisation headed? The answer will be in business and strategy documents, but also living in your gut. A key issue for many organisations relates to the evolution of their distribution model.

Examine your existing team. One technique is to map your team through a modiﬁed BCG growth matrix. Who are your cash cows, problem children, stars and dogs?

An interrelated area requiring capability is marketing technology and what skills are needed to make it work. This requires consultation with IT and the operational areas of your organisation.

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The gaps are deﬁned – who in the team can be retrained or up-skilled and on what timescale? Who do you need to recruit and how are you going to get them? Solutions include outsourcing, part-timers and contractors. Develop a plan of execution, follow it, but also take stock, adjust and even replan when required.

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due consideration to the needs of other functional areas, marketing is hindered in its ability to lead the organisation in being customer driven. Says Zaﬁris, “Workshops work well in our business to allow key stakeholders to be part of the creative process. Allowing other internal functional areas to voice their opinions, ideas and concerns produces a holistic point of view. “The job is then for marketing to heavily inﬂuence these stakeholders towards a direction that will be effective and successful.” It goes without saying that while marketing needs to listen to the concerns and ideas of other functional areas, it is also an opportunity to sell the value of marketing to other functional areas, which often have misconceptions about the nature and role of marketing.

What systems, processes and actions do you use to achieve productive interactions with external suppliers? Clarifying objectives for external as well as internal partners Increasingly marketers are outsourcing functions and processes, particularly in the area of social media and digital marketing. This means a diverse range of specialist agencies need to be managed. Harley identiﬁes a need to consider external partners in order to achieve alignment and productivity. “In addition to the delivery of the speciﬁc process objectives, marketing must align internal functions and external partners behind a clear strategy and execution plan for their brand,” he says. An inclusive mindset for marketing processes in achieving marketing productivity The need to consider external partners in a similar way to how

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70 C-SUITE AGENDA

Further reading https://blog.percolate.com/2015/01/ findings-from-mit-can-make-yourmarketing-team-more-effective Assuming effectiveness and efficiency start with you and your marketing team, this article by Jason Shen highlights the determinants of efficient and effective marketing teams. These include team EQ, positive group dynamics, equal participation of group members and substantial female membership. http://www.fastcompany.com/1671619/marketing-efficiency-onlyhalf-equation This article reminds us that organisations with an overwhelming focus on efficiency can lose sight of the big picture and become ineffective and unproductive through their very search for efficiency.

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http://www.brandmaker.com/us A marketing resource management vendor regularly rated positively by Gartner comparisons. BrandMaker argues that just because marketing is a creative discipline it frequently plays down the importance of discipline regarding process, and therefore it loses productivity. http://www.adnews.com.au/news/nestle-top-marketer-davidmorgan-resigns The issue of agency relationships hindering productivity is explored by the highly respected CMO of Nestlé. David Morgan believes that, with agency management becoming increasingly cumbersome and requiring so much coordination, marketers are missing strategic opportunities.

you consider internal partners is noted by Gunther. “Businesses have workﬂow for manufacturing, product support, operations, IT. Leading organisations have recognised that marketing and technology are two sides of the same coin, but they also know there is marketing and tech activity taking place outside of the main functional areas. Implementing a marketing orchestration platform (i.e. a marketing workﬂow tool) connects each marketing initiative with every internal department and

all your external suppliers,” says Gunther. “Improvements are very noticeable in speed to market, quality and ROI of all marketing efforts.” As organisations attempt to use technology for competitive advantage, it’s an opportunity to rethink internal and external relationships. Technology implementation can be a stimulus to developing an inclusive mindset in identifying opportunities for productivity.

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Map your team through a modiﬁed BCG growth matrix. Who are your cash cows, problem children, stars and dogs?”

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Leveraging fresh ideas from the integration of external suppliers within processes Encouraging involvement of external partners in the process provides another beneﬁt. Zaﬁris discusses how BlueScope’s external suppliers provide strategic insight and fresh ideas. “We have found one on one meetings or focus groups have been the most effective process to engage external suppliers,” he says. “The key is to get a perspective you would never have thought of. Difference in views allows for better ideas and the generation of new concepts. “External suppliers will drag you out of the internal world some marketers operate in and provide a more balanced view.” In summary, marketing productivity is really about the relationships you and your marketing team have with the strategic direction of the organisation in addition to your interactions with internal stakeholders and external partners. Marketing productivity is a function of culture, structure and process. As usual, this article has not been about marketing tactics, it has been about the bigger picture.

72 CONTENT PARTNER: EFFECTIVE MEASURE

How our customers’ values define them and their choices Graham Plant investigates to what extent the values that define people actually influence their shopping behaviour. Graham Plant

alues – as marketers they sit at the core of everything we do, although sometimes we don’t recognise how important they are in deﬁning our success. One of the modern day marketing geniuses, the late Steve Jobs, said, “Marketing is about values.” And it is… = creating value propositions that will appeal to our target markets = developing products that deliver value to our customers, and = understanding the difference in value between our offer and that of a competitor. We all know Jobs as a visionary when it comes to marketing, and Apple can claim it has produced some of the most innovative and successful campaigns and products in recent history. There are very few brands that have been able to capture the imagination and devotion of their customers. Could it be that Apple’s success as a company is because of its values and the alignment with its customers? I think so. But when we say ‘values’, what do we really mean? For the purposes of this article, we’re looking at the values of consumers – our customers. Values are the things that we believe are important in the way we live and work. They’re what make us cringe when we see someone behaving badly in a public place. They’re what make us angry when we see an injustice. They’re what inspire us to donate to charity. They’re what make us happy and content with the world. They’re what inﬂuence us to choose one brand over another for exactly the same product. As marketers, I accept that we can sometimes fall into the trap of thinking that our values are shared equally by

our customers, and not appreciate the diversity that is the human race – but we shouldn’t. Now I can hear you saying, “My customers are all segmented and profiled by demographics and information from their account – so I know who they are.” And that information is extremely important, but values are not just demographic attributes, they are behavioural insights linked to our core DNA – they are what define us. Whether they are ignored because they don’t fit into nicely formatted metrics on a report or not, values exist and play a big part in how successful you will be as a marketer. I love a saying by sales guru Jeffrey Gitomer: “All things being equal, people want to do business with their friends. All things being not quite equal, people still want to do business with their friends.” And that’s what values mean to business. According to a global study by GfK about ethical shopping, half of Australian shoppers only buy products that appeal to their beliefs, values or ideals. The reports also suggests, however, that Australians place less importance on companies’ values than do people in other countries. In fact, we fall a long way behind in comparison to other countries. Feeling mildly offended? Or looking across the office at that weird creepy guy from accounts and thinking he’d probably choose price over being environmentally friendly? As I read through the study, I found it insightful, but also a challenge to my own views on what is important to consumers. I thought automatically that values would trump most considerations for purchases. Obviously not. So when I saw the theme for this issue of Marketing magazine I figured this subject could do with some more analysis. I started to wonder, ‘At what point would a consumer compromise their values for a price benefit?’

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CEO, Effective Measure

“Values are not just demographic attributes, they are behavioural insights linked to our core DNA – they are what deﬁne us.”

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To determine this, we kicked off a small study while also reviewing the work of GfK on the influence of values on buying behaviours. In the GfK study it was also reported that, of the 23 countries surveyed, Australia ranked third last for the need for environmental responsibility, fifth last for guilt, and also fifth last for shopping according to beliefs and ideals. In addition, Australian shoppers’ need for companies to be environmentally responsible was not being evidenced by what they did with their wallets. There was an 18 percent gap between the need for corporate environmental responsibility versus those actually buying according to their beliefs and ideals – oh, the shame! Now armed with these findings about an apparent propensity to compromise values, we decided to tackle the values question from a slightly different perspective. Our study was designed to identify if price was a factor in purchasing decisions over quality and then ascertain whether social values could change a consumer’s preference. First we asked: “Would you prefer to buy a sofa that was made in Italy or China (assuming they are both the same price)?” It was no great surprise that the Italian made sofa was the higher preference, but that it was 99 percent was surprising. The perception that Italian made is better (or maybe it was that ‘Made in China’ means lower quality) was a clear driver in consumer selection preferences. Then we asked: “If the sofa from Italy was $1000 because it was better quality and the sofa from China was $500, which would you prefer to buy?” A 50 percent saving is a pretty good incentive, and sufficient enough to see 20 percent of the survey base change their mind and select the sofa made in China, with 79 percent selecting Italian made and 21 percent choosing China made.

Obviously, economics come into play in this situation and the ﬁnancial situation and available discretionary spend each consumer can accommodate may be a greater driver in this response. In this situation, demographics could be a very good indicator. We then asked: “If China were paying its workers less than what is needed to survive and Italy workers were paid sufficient to live comfortably, which country would you prefer to buy from?” Through this question, we were aiming to get to the core values of the consumer and determine whether concerns about the exploitation of employees or if poor corporate behaviour would inﬂuence behaviours. What we found was that six percent of the survey base shifted their choice back to the Italian made sofa and elected to pay more, with 85 percent now choosing Italian made and 15 percent China made sofas. So, clearly, the values of some of the survey group were not prepared to support a business that appears to be exploiting its employees. Others were totally ambivalent to the poor underpaid overworked employee. Interesting, huh? Regardless of what any statistics say, we are all consumers and, as consumers, we know that we respond better to people or companies that show us they know us. And in knowing us, are like us, or at least share our values. Understanding a consumer’s personal beliefs and values creates greater opportunities for personal engagement and can uncover amazing insights. Respecting them is even more important. Alignment with values won’t guarantee a sale, as it is but one piece of the consumer’s DNA, but it will certainly improve your chances. Understanding your customer’s values will also enable you to deliver a more rewarding experience for them and improve campaign performance. Groucho Marx is reported to have said that, “Sincerity is the key to success. Once you can fake that, you’ve got it made.” Maybe so, but – and it’s a big but – pretending your values are the same as your customer is a dangerous game. If you are found not to be genuine, you will damage your brand and, more importantly, lose the relationship with your customer – the most valuable thing of all.

Effective Measure is a Marketing content partner – non-commercial collaborations with leading organisations on content for the magazine (like this article) as well as exclusive beneﬁts for Marketing Advantage Members. See page 6 for more information.

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Rewiring the value equation The Internet of Things (IoT) is the greatest value-add opportunity a marketer could ever wish for, writes Steve Sammartino.

Steve Sammartino Steve has been involved in the marketing and communications arena for over 15 years. His entrepreneurial ventures include Rentoid.com, an air-powered car made of Lego, and Aussie automotive start-up Tomcar. His blog startupblog.wordpress. com is one of Australia’s most followed business blogs. His book The Great Fragmentation: And Why the Future of All Business is Small is out now through Wiley.

The value equation is a simple idea in the world of marketing: Value = Utility ÷ Price. We refer to it as a tool of eternal importance, but we so often fail to be masters of the equation itself. Instead, we modify the price to improve value once a product or service is established. And recently, the direction of that change is almost always down, as it’s the simplest and quickest way to improve the value equation and respond to the market. But it wasn’t always this way. Once upon a time, the traditional big brands had some significant things to their advantage in the value equation. Mostly, they had big barriers to entry for anyone who might arrive. This enabled powerful brands to keep their prices artificially high in Australia. Our market was too small for multinationals to really care about, while local brands rarely had the scale to really be price competitive globally and remain profitable. Add to this our history of trade tariff protection and it was a very cosy existence indeed – one that favoured small incremental improvements in products and stable pricing. Then one day, without notice, the world changed.

Consumers behind the curtain The job of marketing brands went from an opaque process to a very transparent one. The consumers’ lack of knowledge worked very much in the brand owners’ favour. The process

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of the buyer finding out the best price, the closest place to buy it, a broader range of options and product comparison information were all very sketchy processes. There were only so many phone calls a person could make, only so much shopping around we could do and very little information to assist in informed decision-making. The deck was stacked heavily in favour of the brands, until it wasn’t. As if overnight, everything changed. Once we had access to real market knowledge, we could demand full distribution and get access to a brand’s global range whether they liked it or not. We could guarantee ourselves the best price and find fair reviews of the product options written by us, not some magazine review from the brand’s personal advertised client list. The market knowledge options opened up and the power flipped. Once the transparency barriers got removed, the world went from a sellers’ to a buyers’ market.

Fear and loathing in brand land As a result, many established brands panicked. Marketers didn’t know how to react when the curtain was removed. In the end, they responded in the way most marketers would – by improving the value equation. But they did it the quick and dirty way: they dropped the price. Value problem solved. Short-term sales boost achieved. Happy management and shareholders ensue. The temptation of the price drop death spiral is easy to understand: = mobile marketing will get a shortterm market share increase = sales will love the discount – it inﬂates sales and it’s easier to make budget = research and development get the pressure taken off them for new product launches, and = ﬁnance will say yes, because they always say yes to the highest proposed revenue option.

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74 SHIFT HAPPENS

But it goes even deeper than that. The supply chain likes it too. They get increased demand for their inputs at not extra cost. And the retailer (if there is one) gets the sales increase at the cost of the brand owner. Add to this the unexpected delight for loyal end users and it’s happy days all round. The problem is this is where the rot sets into brands. It not only cheapens the brand, but it cheapens the mindset of those who manage them. It’s an easy option when what brands need to do right now is really hard stuff.

When price is our answer – product is our problem

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In an age of global and transparent competition, there is no hiding from our need to be making better products, smarter services and more connected brands. What we need today is serious innovation in the realms of product design and distribution. It’s funny how when these two elements are right in the mix, price is less important and the audience spreads the word on our behalf. The type of thinking brands need, regardless of what they are is how to create more value by becoming more connected with the end user. And I’m not talking about pointless and banal conversation in social media forums. No, I don’t want to be friends with my cereal brand. We need to turn dumb, highly substitutable products and services into smart brands.

Smart devices to smart everything We are currently circling the edge of an all-product, all-service revolution which, while driven by the internet, will very quickly become bigger than it in terms of connections: the Internet of Things, or IoT. The shortest deﬁnition of this revolution is exactly as it sounds. Things in our world will

become connection points to the internet – everything from runners to fridges to pens to clothes to notebooks to milk to cereal packets. The reason this is possible is because many of the technologies underpinning the internet are now at disposable price points. Riding on the coat tails of the almost two billion smartphones already manufactured, all manner of memory chips, sensors and identifiers now cost mere cents in the dollar. This is the greatest value-add opportunity a marketer could ever have wished for. While there is little else we can do to improve the quality of the toothpaste in a tube or a general life insurance policy, there is a lot we can do to the packaging it comes in and the transactions around it. A consumer product that knows who bought it, how often they buy, where it is and what other products are near it, can create no limit of potential value sources. And it is very likely that the value we create will live outside of the actual thing we sell, and be more about what it happens to be connected to. If we take the example of insurance and toothpaste in an IoT world, a new value equation could quickly emerge. An oral care brand adds various sensors to its products. Frequency of brushing and flossing is linked to gum and dental health. A dental insurance provider gets data of customers with lower risk profiles, while the insurer provides free dental healthcare products from a savvy dental healthcare brand and lowers the cost to the insured. The oral care brand gets a new customer set and brand loyalty purchasing through data enabled products and it could even circumvent the retail requirement. The question we must ask to make it happen is a simple, yet grandiose sounding one: How do you turn your product into a computer?

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Our IT and R&D departments are no longer in separate worlds. The beneﬁt of adding technology to improve the value equation won’t just make the product better; it will also invent a new product innovation layer for any brand. We put ourselves into the world of the related revenue realm.

Welcome to the related revenue realm If we have a look around us, there is a clear shift to second-tier revenue models. These are business models where the product is low priced, freemium and even given away. The information around it is where the new revenue streams reside. Just look at Google. The search product is free, and your intention is sold to advertisers on the sideline. It’s the connection point of the data that creates the value, not the search transaction in and of itself. And, as we make more transactions over time, the value of that data compounds. It compounds in the brand bank the same way interest does.

Data value doesn’t just happen The move from dumb to smart things requires the opposite approach of what most established companies reward. It’s most likely that we need to increase our short-term cost in traditional products if we want to make the transition needed to avoid price competition. It requires a lack of fear. It requires value to be created outside of discounting and a belief that creating more value is rewarded even if the new revenue can’t be quantiﬁed in the early stages of the evolution. One thing for sure is that value is increasingly being created in integrated systems thinking, and no longer about a singular transaction between producer and end user where price is the focus.

76 BRAND TALK

n 1991 I borrowed $2000 from my parents for my first computer. It was a secondhand Mac. After removing the screen, that very same Mac now hangs from a tree in my backyard – as a birdhouse. Its value has changed. Once valuable to a university student, it now provides value to a family of Indian mynas in the form of shelter. I’d have more chance selling that Mac as a birdhouse than as a computer. Value is an elusive concept. It’s probably the idea most often misrepresented in marketing, business and, well, the world. The go-to metric is dollars, pounds or whatever currency people are paid in. But even by using ‘money’ to understand value, we can see how fluid value actually is – something is only worth a specific amount for a point in time. In the days, weeks and months before and after, inflation or deflation will have altered its worth. This is all too apparent for most

Value is an elusive notion, writes Karl Treacher, and probably the business world’s most misrepresented concept.

marketers reading this with their products and services purchased across markets. With value such a changeable concept, marketers of all different functions have reﬁned the idea into value propositions: customer, employee, investor etc. This is useful as it helps focus and articulate strategy. But how did we get here? And does the use of value propositions risk creating something

that is less than the sum of its parts? Let’s take a short wander through the modern history of value… In its Neanderthal stage, marketing considered value to be a function of product beneﬁt and price. It assumed consumers were very logical, buying the best for their purposes at the best price. These were the glory decades for billboards, print and radio. In its next Homo erectus stage, the idea

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Social capital is the perception your customer believes your product will create about them. This is when your customers and their peers authentically accept the invisible layer of meaning around your brand.

MARKETING AUGUST | SEPTEMBER 2015

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Karl Treacher Chief executive of The Brand Institute of Australia, a behavioural analyst with more than 15 years of brand consultancy experience and a pioneer of organisational branding and culture alignment. Tweet at him using @treacher.

The evolution of value

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of value didn’t change greatly, but the delivery media did. Now came the glory decades for TVCs, where they stalked the earth. Cowering beneath them were the sleeping giants of marketing: brands. Sorry to mix metaphors, but this was the dark age for brands. The function of ‘brand’ was to be a convenient visual recall mechanism, but brands apparently didn’t have value in and of themselves. And so marketers went, prominently positioning price and benefit in front of consumers, heading off to the mythical threemartini lunch and then somehow driving home to the suburbs… in a red Mazda MX5. As markets swelled with competitors who first differentiated on product benefit and invested in brands, the concept of value expanded. Instead of value being the best benefit at the least cost, ‘value evolved’ encapsulated convenience and social capital. Today your brand has to be the best, the most desirable, the easiest to use/access, a combination of those… or you have your work cut out for you. Social capital is the perception your customer believes your product will create about them. This is when your customers and their peers authentically accept the invisible layer of meaning around your brand. If your customers are purchasing from your brand because of the social capital it offers them, you have a strong brand likely outperforming its competitors in your target market. We all understand the value of convenience on a personal level. You expect to pay the $1 extra for a litre of milk at the corner store. But, outside service industries, the value of convenience for consumers is frequently overlooked. This is especially true for industries disintermediated by digital technology. Travel agencies

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Thirty-eight percent of customers would pay more for a simpler experience.

fell to price and convenience – primarily convenience. Music stores to the convenience of mp3 players combined with iTunes… and then mp3 players and iTunes to smartphones and Spotify. Taxi services globally are investing heavily in lobbying and legal costs to ﬁght Uber and Lyft, ignoring that consumers have a low involvement with their product and their new competitors have come along and built a brand through improving the product’s convenience to both the customer and the provider (driver). What convenience often means in such a networked world is simplicity. Complicated brands, services and goods cost their organisations more because their customers are forced into highcost service and sales channels. Simpliﬁed brands earn – The Global Brand Simplicity Index 2014 found 38 percent of customers would pay more for a simpler experience. And those experiences are so out-of-thenorm, the same report found 70 percent of customers are more likely to recommend a brand just because it’s simple. And some value offerings aren’t evolving, but are in fact a product of evolution. Homo sapiens are naturally social animals. If your brand offers them personalised interactions or brings convenience to their social desires, your brand is valuable. In service brands, we’re seeing the rise of branded behaviours and in retail the impact of branded experiences and of the concierge-led store. Oh, and on the last point… all social

THE VALUE ISSUE

media brands and, to a slightly extent, all B2C tech brands. But things have seemingly sped up. We moved rapidly from a single concept of value to many concepts of value, but the transfer was always binary in the B2C world. Customers used money to purchase goods and services. Brands valued information about their customers, but wouldn’t purchase that from them. That’s changed. Although still disproportionately following the traditional route, customers have become savvier about the value of their data and networks. They’re now selling that data to brands through intermediaries. Brands are now bartering with customers for access to their networks. On launch, social shopping brand/fashion e-tailer, Everlane, only admitted customers after they’d invited a certain number of their friends through social networks and then offered tiers of benefits after that. Today, it issues $25 credits when friends make their first purchase. It’s the inverse of traditional added value: offering your goods or services in exchange for the data and/or networks of your customers. This is the Wild West of value currently. There are big rewards left on the table by iconic brands here. But the horizon is also rapidly receding and opening up new territory for the exchange and redefinition of value… and I’m not talking about the sort of redefinition of value that now houses a family of Indian mynas.

78 AGENT PROVOCATEUR

Humanising big data

he statement ‘information is power’ has never been so relevant, especially in these days of data-driven competitive advantage. Just like 15th century Florence, however, today’s Silicon Valley has also become the epicentre of our era, partly because of the contributions made by a few ‘corporate-humanists’. That is because determining a standard deviation, mean or frequency distribution will have little to no value if it cannot be interpreted beyond mathematical terms and translated in human terms. This is because the crunching of numbers may quantify but not necessarily improve our lives. Thus, qualitative practices and mindsets is what can unlock the eventual analysis-paralysis that terabytes of data has brought to the workplace. According to Kaj Lofgren, managing director of The School of Life, Melbourne: “As technological advances accelerate all around us, it is increasingly essential for our values, ethics and identity to become more conscious rather than less, in

order to adapt technology to who we really are, rather than the other way around. It is fundamentally a question of self. We need to determine our genuine human needs before we can build technology or interpret data in a way that truly serves us.” Google, for example, has its own in-house philosopher (Damon Horowitz), global brand consultancy Wolff Olins has recently hired prominent novelist Mohsin Hamid to be its chief storytelling officer and Apple’s founder, Steve Jobs, famously influenced his company’s brand from the elegance and simplicity of one of his greatest passions, calligraphy. When it comes to marketing departments, this means encyclopaedic cultural knowledge and in-depth human behaviour understanding. Why? Simply because data does not exist in isolation, but in relation to an existing cultural and social zeitgeist. Marketing, as the most encompassing of all social sciences, is uniquely positioned to drive the technologies, scientific advancements and business models

MARKETING AUGUST | SEPTEMBER 2015

Sérgio Brodsky Strategy director at OMD, an internationally experienced professional (Brazil, Israel, the UK and Australia), proﬁcient in six languages and holds a BA in IP law and an MBA in global brand strategy and innovation.

that will then actualise different people’s desired lifestyles. People buy into ideas, shop on trends and consume philosophies through similar mental processes to those they apply when purchasing their next holiday, car or pair of shoes. Those in science who are aware of this, or marketers with an interest in life sciences, are already making waves. A fruit of this dataculture convergence is 23andMe, a privately held personal genomics and biotechnology company that uses social networking as its USP (unique selling point) to attract consumers interested in connecting with people sharing similar DNA, which will then fund genetic research. The biggest participatory movements of the 21st century were brand-funded (i.e. Pink Ribbon), sustained by mass media tools (i.e. the Arab Spring through Twitter) and greatly served the purpose of statistically organising public opinion. As a consequence, businesses become the true non-governmental organisations driving broader agendas, and the best barometers of our society.

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Sérgio Brodsky writes on the dataculture convergence that’s seen Google hire an in-house philosopher and more ‘chief growth hackers’ pop up than you can poke a stick at.

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As written by Sze Tsung Leong, co-author of The Harvard Design School Guide to Shopping: “Not only is shopping melting into everything, but everything is melting into shopping.” This assertion does not mean we are evolving as a civilisation, but provides good indications of our modus operandi. And this is where more ‘enlightened’ marketers can make a difference by designing campaigns and strategies that both generate profits to their companies and clients, as well as create shared value to society. Wouldn’t it be something to see cosmetic brands producing educational content on gender inequality, partnering with vloggers to not only sell their products, but also empower those with physical disabilities, or even sponsoring missions to deliver food to African conflict zones? And all that generated from data-led deeper insights that recognised certain consumer behaviours across an overall value chain? Consumers, not companies, build brands. This is a fundamental marketing truth that cannot be denied. Consumers, through media platforms, give brands value by developing perceptions and expectations for those brands. But this is not a surprise since human experience has always been mediatised, first by organising and then delivering us the world. Therefore, medienphilosophie (German for the discipline of philosophy of media) should also inspire social listeners to act as social commentators, data analysts to voice the headlines of their concerns through more data journalism and digital strategists to free themselves from shackles of screens and instead rejoice with less obtrusive technology (like the smart jewellery made by Kovert Design) and re-learn how to live in the moment once again.

Such an attempt to evolve the role of media in human perception and thinking could ensure the brands we buy from will indeed deliver on specific wants and needs, but also consider related moral quandaries. Amazon, for example, has already filed a patent for what it calls ‘anticipatory shipping’ and, if the system is perfect, your next browse will consist of one product only, the one Amazon and you jointly decided you’ll buy. Does it make life easier? Yes. Does it make life better? Not so sure… This type of technology certainly addresses our burning desire for instant gratification by giving us more of what we know we already like before even asking for it. It also decreases opportunities for

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Sounds ﬂuffy? Then you may just be ignoring the fact that marketing has become the most dominant force in our civilisation.

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discoveries, however, entrenching our tastes and gradually decreasing the very factor that has made us so innovative and raised our civilisation’s proﬁle, our cultural biodiversity. But it’s not all doom and gloom; data has also facilitated brands to embrace and re-energise the ancient idea of mindfulness. With consumers

THE VALUE ISSUE

increasingly interested in a more focused approach to life, marketers across categories can provide new ways to look at familiar things – encouraging people to engage differently and more attentively – detoxing us from distractions and enabling more contemplation. This is gently changing marketing metrics from quantity to quality, nurturing more responsible consumption and having powered movements like slow-food or practices such as upcycling. UK retailer Selfridges, for instance, has created storewide ‘no noise’ spaces described as an initiative that goes beyond retail, inviting individuals to celebrate the power of quiet, see the beauty in function and find calm among the crowds. The above are just a few examples of this sweet spot where data harnesses its value by untapping humanity’s consciousness. According to Lisa Nirell, author of The Mindful Marketer: How to Stay Present and Profitable in a DataDriven World, marketers have to step back and, “Stay in the present moment to deal with the complex tasks in front of us.” Da Vinci used to be self-defined as a painter-philosopher, a somewhat contemporary equivalent to designthinkers. All of the painting, drawing and mathematical techniques he created were responsible for fuelling scientific advances. It was his endless intellectual curiosity about life’s multiple facets, however, that fuelled a better society. Even though the programmatic automation of marketing is nigh, the nuanced nature of our decisions still requires the fuzzy logic of input and judgement that can only come from people. If the foremost Renaissance man stated that humanity precedes and enables utility, why would we reverse the logic that enlightened our very own history?

80 BEST OF THE WEB: MOST READ

Tom McNamara and Asha Moore-Man in, of the ESC Rennes School of Business, look at how Volvo is transforming its global marketing strategy by tapping into its Scandinavian roots, following its acquisition by a Chinese ﬁrm.

olvo, the 87-year-old Swedish car company, is in a delicate situation. In 2010 it was bought by the Chinese company Zhejiang Geely Holding Group, normally referred to just as Geely (previously, Volvo was owned by the US carmaker Ford). Since then, the company dhas been walking a ﬁne line, trying to stay true to its Scandinavian values of safety, environmental concern and classic understated design, while at the same time trying to appeal to afﬂuent Chinese buyers who demand more luxury and performance from their cars. In August of 2014, Volvo launched a stylish new sport utility vehicle (SUV), the XC90, in an effort to bring these two worlds together. The XC90 is Volvo’s attempt to break into the premium automobile market, an area normally dominated by its much bigger German rivals. The company said that prices will

be similar to what one would expect to pay for an Audi. In 2015 Volvo plans on releasing a sedan version, tentatively labelled the S90 sedan, which will be primarily aimed at the US and Chinese markets. Volvo needs to make some radical changes to its marketing strategy because, although it is a market leader in Sweden, it has had stagnant sales for years in the rest of Europe and the US. Encouragingly, at the moment it is experiencing signiﬁcant growth and increased market share in China.

Tom McNamara is an assistant professor at the ESC Rennes School of Business, France, and a former visiting lecturer at the French National Military Academy at Saint-Cyr, Coëtquidan, France.

Asha Moore-Mangin is a senior lecturer at the ESC Rennes School of Business, France, where she teaches law and human resources management. She has also done consulting and coaching work for international companies.

REDEFINING AUTOMOBILE MARKETING In addition to its attempts to blend Scandinavian sensibilities with Chinese demands for luxury, while at the same time trying to move upmarket, Volvo recently made another announcement: it would like to completely change the way cars are marketed and sold, and redeﬁne the concept of customer

MARKETING AUGUST | SEPTEMBER 2015

Comment, or read more by Tom McNamara and Asha Moore-Mangin, at marketingmag.com.au

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Volvo’s changing the way cars are marketed and sold

The company also announced that it will improve its digital platform in an effort to better engage and serve customers.

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service and customer relations. Not bad for a company that used to be mocked for making money by ‘selling schoolteachers’ cars shaped like bricks’. Volvo’s new strategy is called the ‘Volvo Way to Market,’ and it is nothing if not ambitious. “For decades, car marketing has been following a certain pattern,” which has been too conservative and lacking in imagination, says Alain Visser, senior vice president of marketing at Volvo. He believes that this new plan will finally allow the Swedish company to “implement a strategy that is geared towards its own needs”. It immediately calls for a doubling of the amount of money that the company will spend on marketing over the next five years (but even with this, the company’s marketing budget still can’t match its largest rivals). The company plans on highlighting its Scandinavian roots in all of its marketing and communication efforts, and will focus more on developing its brand. As part of its new marketing initiative, the company also announced that it will be extensively renovating its dealerships to give them a true Scandinavian ‘feel’. This means that all waiting areas will be fitted out with Swedish furnishings, as well as offering Swedish refreshments and snacks. It will be curious to see how this will play out with Li Shufu, the chairman of Geely and the ultimate owner of Volvo. He is known for making

regular trips to Sweden to visit the local headquarters. In the past he has complained about how the interiors and design of the cars were “too Scandinavian” and offered advice about what he thought his rich Chinese friends were looking for in a car.

CUTTING BACK ON CORPORATE SPONSORSHIP In a radical departure from traditional marketing strategy, Volvo also announced that instead of following the annual car show circuit, it plans to focus on just one auto show in each major region once a year, namely Detroit in the US, Geneva in Europe and Shanghai/ Beijing in China. These reduced events will then be complemented and supported by additional communication and branding activities in other important markets. Also apparently on the chopping block is Volvo’s participation in auto racing, with Visser insisting, “Motorsport does not conform with our brand.” Oddly enough, fans of yachting need not worry. The company still plans on sponsoring the Volvo Ocean Race. The strategy behind limiting the number of corporate events, but focusing more intensely on the ones that remain, is to differentiate Volvo from other car companies and allow it to get its message out more clearly.

IMPROVING SERVICE The company also announced that it will improve its digital platform in an effort to better engage and serve customers. Volvo believes that 80 percent to 90 percent of car buyers ﬁrst shop online before going to a showroom. The company is upgrading its online platform in order to better integrate the online brand experience with the in-showroom brand experience. Customers who go

THE VALUE ISSUE

online will be given a standard choice model that they then can personalise and upgrade, designing the eventual car they would like to buy. They will even receive a short video showing what the car will look like when ﬁnally delivered. Volvo does not see online purchasing as a replacement for car dealerships, but rather as a complement, since cars bought online will still have to “pass through the dealer network,” says Visser. Even more innovative is how the company says it will focus on customer service and developing personal customer relations. Volvo’s new marketing strategy calls for every customer who buys a new car to be assigned their very own service technician. This representative will personally deliver their car to them and thereafter will be on call seven days a week for as long as they own the car. The service has already been introduced in Sweden, with plans of rolling it out worldwide by 2018. Volvo wants to build a personal relationship with its customers, and believes that providing a personal technician is the best way to do it.

BOOSTING DIGITAL ADVERTISING According to Visser, the company is looking beyond the traditional ways of marketing cars through print, TV, billboards and corporate sponsorship events, and plans on increasing the amount of money it spends on digital advertising. It will tailor the types of media that it uses, and how it will use them, according to the nature of the local markets that it operates in. “TV is best for some markets, but in southern Europe, for example, billboards are very efﬁcient,” says Visser. It is hoped that through these innovative changes in the way Volvo markets its cars, sales will double in the next ﬁve years.

82 BEST OF THE WEB: MOST SHARED

Brian Vella, CEO of DT, tries out his hypothesis around what certain job titles say about an organisation.

s an industry, we’ve seen for some time senior digital leadership appointments. At ﬁrst this would feel natural given acceleration in technology and changes in consumer behaviour; however, it raises some bigger questions. Questions because we’re in the middle of the most dynamic era of marketing yet and the value agencies bring has never been more important.

I have a hypothesis. If your agency has a head of digital, chief digital ofﬁcer, head of innovation or anything of the nature, that agency (and your business) is in dangerous territory. Digital today is ubiquitous. It runs through every aspect of consumer/customer behaviour. So it equally has to run seamlessly through your agency. It can’t be one person’s responsibility, or even

MARKETING AUGUST | SEPTEMBER 2015

Brian Vella is CEO of digital agency DT, where he leads a team of diverse specialists, designing customer experiences for many of Australia’s most famous brands, including Tourism Australia, Bunnings, NAB, Myer and Ofﬁceworks. He is passionate about marketing and commerce in the digital age, and the role it plays in business transformation.

one department’s responsibility. Agencies that appoint such roles need to remind themselves to not forget about digital. It’s the difference between thinking digital and being digital. And in today’s world you wholly need to be digital to move the needle on brands and business. Tom Goodwin from Havas Media recently wrote, “Digital transformation is not about a

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If your agency has a head of digital, you’re working with the wrong agency

“Critically, digital interactions run through every part of the customer journey. It’s therefore everyone’s responsibility.”

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digital department… it is not the role of any additional unit to take your company from irrelevance to leadership. It’s a philosophy that all must adopt.” He went on to say, “You don’t need a head of digital or a digital department. In fact you should banish the word digital as an entirely redundant word.” While there are many other variables (perhaps another post) the agencies that have a higher chance of delivering relevant and impactful work to their clients have an entire workforce who appreciate and understand the modern consumer. And that means living and breathing digital behaviour. By having a head of digital, you’re essentially saying to the rest of the agency it’s not their responsibility. At its worst this department will also be relatively small, so the majority of the agency isn’t thinking this way first. And this is a huge barrier to getting the right type of outcomes. No doubt many will challenge this though – unless deep digital experience can be credibly presented as baked into an agency, it should be questioned. For broader evidence of this, take

a look at the 2015 list of Most Innovative Companies. Seventy percent of the top 10 companies have digital in their DNA. They were born that way. Agencies exist to be innovative. Fast Company recently described six rules to unleash the innovative potential of people. The key word here is ‘people’ and it is plural. Everyone has the opportunity to think digitally and indeed everyone should be doing so. Systems, symbols and signals should all support this. In essence, what I’m suggesting is to fervently avoid traditional versus online marketing. While many will scoff and assert, ‘Of course we don’t do that!’, in reality it’s still very common. Head of digital roles are Exhibit A. It also comes through in the press releases that archetypally follow agencies’ work. “The campaign was supported by digital, social….” This is Exhibit B. It’s channel thinking at its best and you don’t have to read marketing news for long to witness it today. While the risk is high now, fastforward a few years as the Internet of Things takes shape. Having a partner that intuitively understands this world and how to leverage it will be incredibly important. You should be able to talk to anyone in your agency and have a strong, digitally literate conversation. We believe that to truly connect with consumers, the modern CMO thinks equally in terms of reaching customers,

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At time of press this article had been shared: Twitter: 32 Facebook: 22 LinkedIn: 475 Google Plus: 2

building relationships and meaningful experiences (reach, relationships and depth). Critically, digital interactions run through every part of the customer journey. It’s therefore everyone’s responsibility. Of course, it’s equally not just about digital or technology; the timeless skill in understanding human behaviour and creativity will always be important. But what’s more important is having both. So, when next evaluating your agency question whether a head of digital or CDO role exists. If it does, think carefully about what it suggests about their culture, what they value and believe in, and their ability to do work that truly connects. If they do exist, perhaps ask them if they sit next to the head of print or head of TV.

Read more of Brian Vella’s writing at marketingmag.com.au

84 BEST OF THE WEB: EDITOR’S CHOICE ecently, I’ve been doing a lot of work understanding new advancements in the online space and how it might change our world, because that’s my job. While perusing the matter, one thing has become more and more evident: how Google operates in the world and how that’s going to change. The way I see it, Google must be finding itself at a bit of a philosophical crossroads at the moment, and I’m not sure what I would do if I were in its position. Moreover, it could have a significant impact on all of us. Allow me to explain myself… Last year, the world economic forum identified ‘digital misinformation’ as one of the main threats to the world, alongside terrorism and environmental catastrophe. A recent study has also highlighted how this happens, with people susceptible to believing things that aren’t true, specifically conspiracy theories like chemtrails and reptilian overlords (I know, right?), having a tendency to lock themselves in an online echo chamber. We already see the impacts of this in the real world. For example, the anti-vaccine movement incredibly gaining traction and people, mostly children, literally dying as a result.

With misinformation rife across the internet, Mark Razzell suggests how Google could become a gatekeeper to the truth, and what the implications of that may be.

Google’s quandary around truth in search results

ON TRUTH

Mark Razzell Strategic planner at Zuni

MARKETING AUGUST | SEPTEMBER 2015

Recently, Google announced that it could, in theory, populate and rank search results by how ‘true’ they are. The theory is based on techniques behind artiﬁcial intelligence and it got a lot of people’s attention. Is it ethical that Google, effectively, be put in charge of truth? On the other hand, not doing this could also be detrimental, as the anti-vax movement demonstrates. Google could, technically, put a stop to the spread of misinformation. Or at least seriously hinder those who

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would look to spread information that is downright incorrect. I just Googled ‘vaccines’ (incognito). The second and third results were anti-vax sites. The first was a .gov site and nobody likes them because the government lies (allegedly – don’t put me on a list). So, that’s why this is a big deal. The problem is: where do you draw the line? There are many thriving brands that, while not necessarily causing harm, are based on misinformation. Cosmetics, naturopathy and a whole host of other related industries are based on, at best, half-truths. Reckitt Benckiser’s Nurofen has recently landed in a lot of trouble for telling porky-pies, which might harm sales. V’s ‘The massive hit that improves you a bit’ is a claim that’s largely met with a shrug and ‘I dunno – maybe’ in the scientific community, so that’s another claim that would be relegated below a competing message of ‘caffeine-based drink that tastes nice and may/may not make you a little more alert’. If Google punished these guys with a ‘truth’ rank, they’d get hammered. That kills a thriving industry, which harms the economy. It flies in the face of modern, opportunistic capitalism, for which governments’ general consensus is ‘if it ain’t killing anybody, we’re all for it’.

stand (green = good, red = lies) = introduce a ‘truth’ ﬁlter for individuals as part of advanced search = set by truth, but have brands and companies get around it by paying to do so, and = have it as another weighted rule in its algorithms. These scenarios all carry signiﬁcant problems. Namely and respectively, people ignoring ‘false’ links, inability to guarantee anything to clients, and a complete lack of integrity (x2). Is there any way Google can do this without compromising itself? Seriously, I’m asking the question genuinely… I’m not positing something to then answer myself as a smug attempt to appear smart. It’s counterintuitive. There is no

ON PROFITS

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Also, let’s have a look at how Google makes its money. Ninetyseven percent of how Google makes its money is from advertising. If it ranks by truth, how is it supposed to justify having contradictory links in the ‘paid’ part of search? Here are a few hypotheticals for how it could change things: Include a colour code system next to the search results as they

OK, so why don’t they… just… not do it? Well, the problem is, Google has now proven it can be done – if it can be done, someone will do it. Techniques sitting behind artiﬁcial intelligence are responsible for ‘truth ranking’, and Google doesn’t own scientiﬁc methodologies. ‘Ah,’ I’m pretending I hear you say, ‘But it does own the data that needs to

The problem is: where do you draw the line? There are many thriving brands that, while not necessarily causing harm, are based on misinformation. way that I can see of Google implementing the ‘truth’ model without hurting brands, economies and itself.

THE VALUE ISSUE

be crawled in order to determine truth.’ Yes, but let’s not forget that Microsoft also has a search engine that, while nowhere near as popular, is still pretty damn comprehensive. It has access to a lot of data too, and Microsoft may be eyeing this opportunity as a way to steal market share from Google… Google doesn’t have a complete monopoly on global web trafﬁc. Sure, it’s close, but it’s not invincible (yet). By doing this, it has created a bit of a rod for its own back. It’s damned if it does, damned if it doesn’t. Since the advent of the internet, ‘truth’ has become a little fuzzy – people tend to think of objectivity and subjectivity as some sort of Venn diagram, which, if the anti-vax movement is anything to go by, is problematic. Automatically assessing the quality of content by how ‘true’ it is would eliminate that part of the problem, but it also means that brands like yours may suffer. How many people reading this can honestly say they’ve never seen brands stretch the truth (at the very least)?

THE WRAP So that, from the way I see it, is Google’s quandary. Does it adhere to the pressing need of civilisation to stamp out nonsense? Or does it just keep quiet and hope this all blows over? Knowing Google, I’m sure it has got a fantastic strategy in place, but from where I’m standing I suspect this may be causing more headaches than would initially be suspected.

Read more of Mark Razzell’s writings at marketingmag.com.au

86 CONTENT PARTNER: ADOBE

The value evolution Michael Stoddart discusses the changing nature of value in today’s technological landscape. Michael Stoddart

alue, like beauty, is a concept that lies in the eye of the beholder, subject equally to trends and fashion. Our perception and deﬁnition of what comprises value has gone through a rapid evolution over the past few years and is set to shift even more as technological advances bring new ways for value to be delivered and interpreted. While value was once seen as the price on the box – and lower price meant better value – the shift is now towards the value generated by long-term relationships between consumers, suppliers, stakeholders and brands.

VALUE VERSUS COST Cost is a paramount consideration in the eyes of many administrators and, in its purest form, value only increases as the worth of the output surpasses the cost of production. Even if the content created remains the same, as cost reduces, value should always increase – it is a simple equation that forms the foundation of value. At Adobe, for instance, we always work to increase the value of return from software investment, and to reduce

“Where once the ‘look’ of content was integral to its value, and inseparable from that value, modern value is now perceived more from the content than the presentation.”

the cost of ownership. At one level, you see this in the shift from selling $1000 editing tools in Creative Suite licences to the introduction of $20 per month Creative Cloud subscriptions – Adobe was the first major software company to move to subscriptions, and the market response confirmed it was the right move. At another level, delivering value as a software vendor is about increasing the sophistication of image creation, while simplifying processes and enabling people to have a seamless workflow across devices – from mobile to desktop. Value also comes from allowing more people within an enterprise to express themselves creatively, by removing friction from the process. Publishing is one sector where the changing nature of value is demonstrated daily. The rise of boutique publishing has been based on reducing the cost of production, with value delivered to publishers through the availability of more sophisticated tools. In turn, magazines such as Frankie, Smith Journal and Wallpaper* are delivering new levels of value to their audiences through their unique content. From quality paper stock to incisive journalism and breathtaking photography, the value chain is extended through the process that began as desktop publishing. That value is also extended through an online presence, once seen as a costly but not necessarily valuable investment by old-school publishers, who wondered why they would ever need a website. Beneath their feet the ground shifted, and an online presence grew to be much more than just a website, but an absolutely necessary business tool and engagement platform. A publisher’s online presence is now a prime supporter of the brand experience, including its customer support, sales and purchasing. And what was once called ‘community’, but has now evolved into the ‘social universe’, has become a fundamental space where the perception of value now lives.

MARKETING AUGUST | SEPTEMBER 2015

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Director, digital publishing solutions, Adobe

“What was once called ‘community’, but has now evolved into the ‘social universe’, has become a fundamental space where the perception of value now lives.”

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The notion of value is also being challenged by the rise of sophisticated bespoke processes with high cost and an often unknown value. Once again, we hear businesses say that they need a new channel – previously this would have been a website, but today, they mean, ‘we need an app’. The question many of them fail to answer is, why? A recent study by Econsultancy and Adobe revealed that apps are an increasingly vital conduit to customers, offering value at both ends of the spectrum: enterprises create a value chain for consumers in an environment they can monitor and control, and consumers gain value from the information they need in an intuitive, easy to use and, perhaps most importantly, mobile format. The Econsultancy and Adobe Quarterly Business Intelligence Briefing reported businesses in the Asia Pacific (APAC) are leading the way with 38 percent of survey respondents saying they have a defined mobile strategy that goes out at least 12 months – a higher response than in the US and Europe. The study also found that many enterprises saw apps as a vital way to interact with their customers. APAC countries are again leading the way, with 67 percent saying they were using apps for customer interaction.

THE PARADIGM SHIFT There is a paradigm shift happening in the publishing, web content creation and app creation markets where content is being separated even more from its presentation. Where once the ‘look’ of content was integral to its value, and inseparable from that value (for instance, a newspaper set in Comic Sans or a website with pixelated animated GIFs would be a visual signal of poor content), modern value is now perceived more from the content than the presentation. Proof of this is the aggregator model of content value. Facebook Instant Articles, Flipboard and the recently announced Apple News are prime examples of how content is being increasingly set apart from unique

presentation layers. Yes, these solutions pay lip service to layout and design, but the main value is the content, rather than unique and differentiated publisher presentation. Value is also being created through the sheer speed with which content can be accessed. As content loads swiftly it improves the experience and sense of value that consumers are seeing in places where they seek content. Facebook’s Instant Articles is an example of how removing the delay in the content delivery cycle can immediately create value.

VALUE VERSUS DATA Sometimes you need to go with your instincts. Creativity can be data driven, but real out of the box creativity that has high value sometimes needs to ﬂy in the face of what the data is telling you. As enterprise becomes even more data driven, it is the ability to synthesise data with gut feel that leads to insights that will help develop breakout creative – value that cannot be matched. The almost overwhelming availability of data will continue to have major impact on the value that organisations see in content, but danger lies in the interpretation of data being used to reduce the idea of value to a commodity. However, the human element that can’t be replicated by an algorithm will be the key to making the future of value enhance the data, not become a slave to it.

VALUE TO THE ORGANISATION In the current highly competitive business climate, organisations are looking for incremental value wherever they can – even a two to three percent difference can provide an edge. In such a climate, value as a business differentiator has even greater meaning. Such business value can lie in the intangibles – why does one company break out as the leader in their ﬁeld when essentially it and its competitors offer increasingly similar services or products? The value evolution will become the differentiator for businesses – the value of relationship, of design or of customer experience will set a company apart. Value is not a ﬁxed construct. Value will mean different things, to different people, at different times. And the concept of value will continue to evolve, perhaps initiated by cost reduction, but greatly expanded by the improvements gained in marrying gut instincts and data and the intangibles that set one organisation apart from another.

Adobe is a Marketing content partner – non-commercial collaborations with leading organisations on content for the magazine (like this article) as well as exclusive beneﬁts for Marketing Advantage Members. Visit marketingmag.com.au/advantage.

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89 MARKETER PROFILE

An inside-out transformer @marketingmag

Jana Kotatko likes a challenge. After two decades marketing telcos, including thriving on leading teams through a merger, a brand crisis and a total business turnaround at Vodafone, she has switched sectors entirely to centralise and transform marketing at NSW’s NRMA Motoring and Services as its chief marketer. By Michelle Herbison.

fter 20 years in telcos, most recently Vodafone, as well as 3 Mobile, Optus, and Cable and Wireless in the UK, Kotatko brings a fresh perspective to her role at NRMA, as general manager, brand, acquisition and marketing,. “My remit is to basically centralise the marketing function, which was quite decentralised, and to think about brand strategy, because up until now brand has been considered a logo. I was given acquisition as well, which is really exciting, because that actually is what shapes our target segment and the whole plan for growth,” she explains. “That’s actually what excited me about the role.” Over the last two and a half years, Kotatko has driven a complete turnaround in net promoter scores (NPSs) among Vodafone employees and customers. She played key roles in the merger of 3 Mobile and Vodafone in 2009, Vodafone’s brand crisis in 2010 and its subsequent turnaround in the years following. “I thought, ‘I’ve learned so much in the last few years. I really want to go and apply that to a parallel industry’, and I

set about looking for brands that I felt needed to go through some sort of transformation,” she says. NRMA Motoring and Services attracted her as an Australian brand with an “incredible heritage and positive disposition” that needed to recognise the necessity of transforming and continuing to innovate in order to retain its position as leader brand. “I was asked the question in the interview: ‘How do you reckon you’ll go? You’ve got no experience in this sector’, and I focused my attention on my ability to transform a business, not just marketing a brand, but actually having been a part of a business transformation and a business turnaround – all the change management that goes with that, thinking outside your own functional area, cross-business. That was hugely interesting for them. “I struggle to think of many businesses out there that aren’t going through some sort of challenge to their business model right now, whether it’s because of the digital revolution or mobile disruption or something else that might be happening in your industry. So it doesn’t take

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much convincing to sell it to someone that you need some fresh eyes on the problem or you need a fresh dynamic.”

Big changes at NRMA Motoring and Services

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Car manufacturers themselves are another potential threat, as many look to go up the value chain to maintain an ongoing relationship with customers between purchases. “Then there’s probably a third competitor, which is actually the growing uninsured market,” she adds. “Knowing this coming from Vodafone, mobile phones make people feel pretty much invincible. That whole notion of, ‘Well if something goes wrong I’m only ever a phone call away’ means that younger people are less inclined than the previous generation to sign up for some sort of motoring insurance. That’s another emerging trend that we’ve got our eye on.” With the organisation set to face these increased risks to its market position, Kotatko is plotting a transformation from the inside out. “[So far] I’ve absolutely loved it. It’s been stimulating and I’ve learned so much new stuff about a new industry, but at the same time have been able to feel like I’m adding value and immediately starting to change some of the things we do for the better,” Kotatko says. Prior to her arrival, NRMA Motoring and Services’ internal studio and agency partner, The Works, was working project-by-project, receiving briefs from various departments that focused on tactical, short-term campaign executions without ﬁtting into any overarching brand strategy or strategic c latform. “You can imagine the overheads, you can imagine the time just to spin the plates, and actually – are each of these plates that are spinning delivering to a bigger brand message or outcome? Arguably not.” Kotatko enlisted Y&R to assist in creating an overarching brand platform that will shape all of NRMA’s campaigns for the “foreseeable future” – at least 18 months, she plans. The new creative platform will shape all of the organisation’s communications, allowing it to become more agile, with shorter lead times and fewer projects, each containing more meaning. “We can start to move to templated smart approaches. We’ll save a lot more money because we’re not creating

I struggle to think of many businesses out there that aren’t going through some sort of challenge to their business model right now, whether it’s because of the digital revolution or mobile disruption or something else that might be happening in your industry.

Kotatko has spent the ﬁrst few months in her new role getting to know NRMA Motoring Service’s products and services, and planning a brand refresh towards a more customercentric position to serve its 2.4 million members and customers. “If there’s one thing we have a wealth of, its knowledge and data and insights about our customers, across all of our products and services, so I’ve been immersing myself in that. “The one thing that is pretty clear is that the trust that people place in the NRMA brand – it has incredible equity, and I’d imagine this is the same for RACV as well. “When you get stranded, you give the NRMA a call for help. There’s such incredible trust that comes with being that person who is there to help and assist, that that ﬂows through to incredible NPS scores. It is counterintuitive when you think about it; people are broken down, they’re upset, their car’s bust and they need to outlay some money,” she laughs. “But actually when you can wrap a service around it and deliver it with the humility that our guys on the frontline do, we generate these incredible NPS results.” Kotatko’s challenge is to translate that brand equity from the roadside assistance product to NRMA’s other products and services, such as emergency home assist, travel, car loans and safer driving school. “Up until recently we have been pretty much a leader brand and had a virtual monopoly on roadside assistance, which is a core product offering. But in the last few years we’ve seen a couple of new entrants into the market,” says Kotatko. Insurance brands such as Allianz, Youi, AAMI and Coles Insurance have started offering roadside assistance as part of their bundles. “In the last few months we’ve seen a mushrooming of these products and services being positioned as part of the proposition,” Kotatko says.

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90 MARKETER PROFILE

Two biggest inﬂuences: 1. Greg Bourke, former HR director at 3 and Vodafone. “He taught me so many things about leadership with humility and the idea of ‘the subservient leader’. In his words, ‘There’s no room for dickheads.’ He was such an inspiration, and having the privilege of working within the business and culture that he created at both 3 and Vodafone, they are life lessons.”

2. Bill Morrow, former Vodafone CEO.

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“He’s inspiring and he’s fabulous and he makes everyone feel like they’re the most important person in the room, but actually what was impressive about him was his operational rigour. He used to say, ‘If you can’t describe what you do as a process, you don’t know what you’re doing.’ I really learned from him the difference between managing and leading, and you need to have both to be successful.”

campaigns from scratch and, most importantly, all of those campaigns are laddering up to a bigger brand position for us for the future,” Kotatko explains. “It’s a fundamentally different approach, which leads to a far more efficient marketing operation, which ultimately should show up through better comms cut-through and better brand scores.”

Two decades of changes in telcos Kotatko says she never set out to become a telco specialist, but she just kept hanging onto the “incredibly exciting journey” through the mobile revolutions of the last two decades. “I was lucky enough to go through the dotcom boom when I was in London between 1998 and 2005. Then I came back and worked at 3 Mobile and was lucky enough to go through the 3G/4G revolution, then went through the Vodafone merger.” She was in the industry for every iPhone launch up until last year’s iPhone 6, right from the ﬁrst in June 2007.

Two of her key learnings from telcos include running a “fit marketing operation” that’s agile, responsive and accountable to ROI, as well as having a deep understanding of the mobile landscape: “Because mobile is such a powerful medium irrespective of what industry you’re in.” Following the merger with 3 Mobile in 2009, Vodafone’s next challenge lay in its brand identity, inside and out. During 2010 and 2011 Vodafone experienced what Kotatko describes as “a very, very publicised brand crisis” after a series of network meltdowns – dropped calls, reception issues and poor data performance. Negative media coverage and customer backlash, including a website, ‘Vodafail’, set up by angry customers to complain about the company, led to a huge decline in customers – 1,231,000 fled the company during 2013. It has since stabilised to about 5.3 million, and during the second half of 2014 Vodafone again started gaining customers for the first time since 2010. “It was a really tough environment to work in for our people and our frontline staff. We had some very unhappy customers who were voting with their feet,” Kotatko recalls. She speaks highly of Bill Morrow, the ‘turnaround king’, who joined the company as CEO at that low point in March 2012, and ‘steered the ship’ with a three-year turnaround plan. “When you’re standing at the bottom of that, looking up at those charts and thinking, ‘How are we going to go from where we are today to where we need to get to in a year and two years, three years...’ you’re thinking, ‘My God, this is not possible’. “But then it shows, under the leadership of someone like Bill, the importance of process excellence: having a really solid plan that you think through and do the due diligence on, and then getting the entire company behind that plan.”

“

Your people are everything, right? You can’t overcommunicate. I don’t think you can spend too much time with your team when it comes to managing them through change.

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”

Three learnings from managing people: ► pick your team – pick people who push you ► suspend judgement – let people surprise you, and ► communicate – there is no such thing as spending too much time with your team. “Set clear objectives, be clear on expectations, provide context, track performance, celebrate the milestones, but, ultimately, let the team get on with it. You are there to enable and empower your team.”

Three tips for managing stakeholders: ► take people on the journey ► understand their key inﬂuences, and ► have the courage of your convictions, especially when the decision is your responsibility. “Leaders, CEOs, boards want to hear what their senior team is going to commit to, and you can have an opinion, but actually, are you going to step up and commit to it and hold yourself to account?”

The team took Vodafone through a total transformation, from “terrible” NPS scores to “a complete 180” on those, as well as other key metrics including complaint numbers, churn rates, and customer and acquisition numbers. “It was about being really clear on: ‘do we know what’s broken in our business, how to ﬁx it, and how to measure that we’ve ﬁxed it?’ and everything was about the brand and the customer. It was extraordinary.” Kotatko’s greatest takeaway from the Vodafone turnaround was the importance of taking people along for the journey. “Your people are everything, right? You can’t overcommunicate. I don’t think you can spend too much time with your team when it comes to managing them through change.”

Despite the tough environment, Kotatko thrived: “Loved it,” she says matter-of-factly. “I don’t think it’s for everyone; you’ve got to be persistent, you’ve got to be resilient, you’ve got to have a pretty thick skin about you, you’ve got to be able to celebrate the milestones and you’ve got to be able to take time out because it’s a hard slog.” When prompted, Kotatko mentions an interesting observation from the Vodafone turnaround, as well as from her previous business transformation experience with Cable and Wireless in the UK. “I was invariably the only female in the room, and one under the age of 35. “At Vodafone, when they were going through serious restructure after restructure, a lot of women chose to just get out of that environment. Probably because they can, I guess. I don’t know.” She is quick to point out that being a ‘woman in the workforce’ has never been something to hold her back, or even take note of, throughout her career. “I just don’t think about it. It does not enter my psyche – which is great. Maybe I’m lucky, maybe it’s the choice of industry, maybe the people I’ve been fortunate enough to work with…” Kotatko is in a fairly unusual position herself, in that she has two sons, seven and ﬁve, which her female partner carried, leaving her own career undisrupted. “She’s now back to work full-time and it’s busy and crazy and fabulous and that’s life,” Kotatko says. “There’s no question it’s hard and balancing work and family and all those things is hard, and the ones who choose to do that, good on them. “I think women make incredible leaders. They have the ability to bring all of their experience and savviness and commercial understanding – or whatever skills they bring to the role, and there’s an element there that makes them naturally empathetic – I know this is generalist, but they’re invariably the ones who can put people ﬁrst and think about the people impact. And at the end of the day, your people are any business’ biggest asset.”

Starting out saying ‘yes’ It was in her university days studying a Bachelor of Business Administration at UTS (University of Technology Sydney) that Kotatko developed a sense that she would get into marketing. “I did a couple of advertising and communications subjects and was immediately drawn to the creative process and just had a curiosity about the consumer. So I knew very early on that I wanted to do something that generated good commercial outcomes, and I wanted to be on the demandgenerating side of that,” she recalls.

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92 MARKETER PROFILE

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A theme during her early career was taking on opportunities for the sake of being immersed in organisations and situations to learn from, rather than worrying about the exact job she was doing, or fixating on salary or title. “I think between when you graduate from uni into your early 30s it’s about: be in the right place, make the opportunities. You’re learning and you’re absorbing and you’re meeting people and you’re forming your own style and you’re hopefully picking the right mentors and role models.” Straight out of uni, Kotatko gravitated towards Optus because she liked its ads and its company culture – and she hated Telstra. In her first week on the job in the Optus call centre, she was amazed to find the company’s CEO Bob Mansfield personally visiting her desk to welcome her to the company. “I remember he came down, sat on my desk, and said, ‘Hi Jana, welcome to Optus’. I almost fell over. There was just this incredible energy in the place because we were doing new stuff, and it wasn’t hierarchical.” From the call centre, Kotatko graduated into business sales, which she excelled at for about two years before applying on a whim, and being accepted, into a management exchange to London with Cable and Wireless. In 1998 it had just bought a 52.5 percent stake in Optus.

“

I think between when you graduate from uni into your early 30s it’s about: be in the right place, make the opportunities. You’re learning and you’re absorbing and you’re meeting people and you’re forming your own style and you’re hopefully picking the right mentors and role models.”

”

Two businesses to recommend: Jeff Estok, Navigare – for advice on agency relationships. Brett Dawson, Bohemia – for advice on handling a media budget.

Caught with a bit of a travel bug, she had just returned from a month in the Greek islands with a friend who was off to work a stint in London. “I got back to Sydney and went, ‘Oh, I think I might be missing out on something here’, then literally two days later this opportunity came up and I grabbed it with both hands,” she recalls. Within a month, 25-year-old Kotatko was living and working in London, picking up skills and experiences and working hard for what would become seven years. “I basically just was open to learning and rolling up my sleeves. I’ve never worked so hard in my life. I wasn’t paid a lot of money and I didn’t care. “As the opportunities came up, my role grew and by the time I left London I was running the whole data and IP portfolio, had about 20 people reporting to me, had about a billion dollars’ worth of revenue in the P and L, and it was incredible,” she says. She still counts the big move as one of her proudest career moments – being open-minded enough to put everything on the line in a “seemingly spontaneous decision” that turned out to be “absolutely right”. “If you’re just starting out in your career, roll your sleeves up – get involved in everything,” Kotatko advises, sharing her ideas with passion. “The answer’s ‘yes’, to anything – just ‘yes’. “And for people who are looking to take a step up, it’s about the importance of connecting with people, not burning bridges, building relationships, and having a couple of people that you trust to give you good feedback. Surround yourself with some of those people and listen to them.” As for her own future, Kotatko is bracing herself for some big challenges with NRMA Motoring and Services. “It’s going to be very, very full on. I reckon we’ve got a couple of years of craziness ahead of us,” she grins. “Can’t wait. It’s going to be a ball.”

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94 CONTENT PARTNER: FORRESTER

What version marketing operating system are you running?

echnology has dramatically changed the relationship between brands and customers, shifting the power dynamic into the hands of the consumer – who is now empowered by technology to take control of her buying journey. As a result, Forrester contends we are operating in the age of the customer, where the only sustainable competitive advantage for ﬁrms is knowledge of and engagement with these empowered customers. To succeed in the age of the customer, two elements are essential: = a customer-obsessed approach to deﬁning the business and marketing strategy, and = an in-depth understanding of customers’ behaviours and needs. But an emphasis on responding to changing customer needs isn’t just a way to engage new customers in new

In the MOS, a customer’s vision of her needs and the enterprise’s view fuse together, aligning all marketing actions to satisfy the needs with a singular purpose – winning, serving, and retaining customers.

Sheryl Pattek, vice president and principal analyst at Forrester Research.

ways. It’s an opportunity to rethink how marketing is done from scratch, examine the way marketing does its work, and redefine traditional marketing roles and responsibilities. Where does this journey begin? The onus is now on CMOs to move beyond the hierarchical product silos or channel-obsessed marketing organisational structures put in place decades ago. To thrive in this customer-controlled era, CMOs must build a new organisation model with a customer-first foundation – a model that obsesses about the customers the business serves, and only serves those over whom they can obsess. Old rigid organisation structures must give way to a fluid marketing operating system (MOS) framework. The MOS approach does more than just move labels around an organisation chart – it creates an adaptable design with more collaboration across marketing channel silos to execute strategy faster, with more flexibility. The MOS provides the foundation that ties marketing systems, processes and outcomes together, nimbly moving a marketing organisation toward customer obsession. In the MOS, a customer’s vision of her needs and the enterprise’s view fuse together, aligning all marketing actions to satisfy the needs with a singular purpose – winning, serving, and retaining customers. Now is the time to reboot existing marketing organisation structures with an MOS-based approach because: = Customers demand consistency. In our digitally connected world, empowered consumers expect to move seamlessly between marketing channels, devices, and experiences. And marketing organisations must make sure they meet these expectations with an agile and fluid experience.

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Sheryl Pattek discusses the MOS framework, where a ﬂuid marketing operating system framework takes the place of rigid structures.

Effectively manage the transformation process and your organisation will thrive, executing strategy faster, with more ﬂexibility and adaptability to win. = Marketing efficiency requires coordinated efforts.

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Silos and channel-based structures inhibit efficient and flexible interactions with customers. Marketing organisation structures must now prioritise customer relationships over marketing channel performance. A coordinated and agile organisational design will enhance marketing effectiveness and customer engagement. Analytics offer a competitive edge. The connected world offers the potential for rich data analytics on every customer action. To keep pace with peers, marketers must be able to act on deep customer insight using marketing technology in a consistent way across the organisation. While the MOS provides the structure for marketing teams to prosper in the age of the customer, it also requires new roles at both the leadership and the facilitator levels to make the organisation function at its best. Tune the MOS-based organisation structure for customer obsession by adding: Five new roles to power the MOS. CMOs will execute strategy faster, with more flexibility and adaptability, by adding five new marketing roles to their team: customer segment owners, marketing technologists, a content chief, process managers and operations managers. Each one helps fill a void that exists in traditional organisation structures. Customer segment owners to lead the customer engagement charge. Appoint customer segment owners whose job is to match customers’ needs to your products, services and go-to-market tactics. These segment owners will prioritise contextually relevant customer experiences ahead of marketing channel optimisation. A strong marketing technology partner to thrive. Proactively embrace and wield technology

and associated processes as a native capability in marketing strategy and tactics to fuel the MOS. Unite the leadership of processes, technical capabilities, and digital platforms under a single umbrella – a marketing technology office (MTO). The MTO will bridge marketing needs and internal technology management capabilities. Many of the CMOs and marketing leaders I talk with are looking for better ways to organise their team, to enhance customer engagement and improve marketing efficiency. Moving boxes around existing marketing structures just won’t get you there any longer. Implementing a MOS is hard work, however, as the organisation must adopt new attitudes and paradigms. The CMO’s leadership will make all the difference in how the marketing team accepts and excels in the new MOS environment. Effectively manage the transformation process and your organisation will thrive, executing strategy faster, with more ﬂexibility and adaptability to win, serve and retain your customers.

Forrester is a Marketing content partner – non-commercial collaborations with leading organisations on content for the magazine (like this article) as well as exclusive beneﬁts for Marketing Advantage Members. See page 6 for more information.

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96 BRAIN TRUST

Brain trust Bridget James

THE BAD

Rhod Ellis-Jones

director, Think Green Marketing

Despite their ads presenting happy and satisﬁed customers, the big banks continue to focus narrowly on short-term proﬁts, at the expense of ethical or environmental concerns. Consumer satisfaction and shared value are not their strengths. The ABC’s Four Corners exposed supermarkets and fast food outlets for selling chicken products that had been produced with exploited immigrant labour (‘Slaving Away’, 6 May 2015). The recruitment company, engaged by Baiada, is responsible for processing chickens that are branded Steggles and Lilydale, as they appear on the shelves of Coles, Woolworths and Aldi. This company is also responsible for the chicken sold by KFC and Red Rooster. The question of success with shared value, like green marketing, lies in companies’ ability to understand the ethical and environmental impacts of their business on society and the economy.

principal of Ellis Jones and founder of the Shared Value Project

FROM MY PERSPECTIVE, green marketing and shared value strategies have the same fundamental basis in that they are both strategies aimed at building brand equity by aligning with core consumer values. The aim is to reinforce a society’s ability to manage challenges while bolstering economic resilience, building a stronger market and community. Many businesses, however, myopically view shared value as an accessory to business as usual.

THE GOOD Tesla: as a clear indicator of adding economic and social value, it rebranded and recycled one of GM and Toyota’s old production sites, employing 11,000 people to manufacture the Tesla S. The Powerwall home battery allows homes and businesses, with solar-arrays, to stockpile energy during the day and can be used night and morning, without having to draw more energy from the grid. The batteries

WE ARE IN THE MIDST OF A GLOBAL MEGATREND Consumers, informed by government and action groups, and

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empowered by social media, use their voice and their wallets to express their values. Corporations are moving beyond the premise of ‘giving back’ to seek ways of creating ‘shared value’: measurable returns for the business and society. Studies by major academic institutions Harvard Business School and research giant Nielsen define the opportunity: new markets, product and service innovation, value chain re-engineering and price premiums. Australian companies are among the world’s leaders in creating shared value. Most people who get into debt would rather find a way to get out of it. Working with charitable sector partners, NAB reengineered its debt collection business from the traditional model of force and foreclosure to support and assistance. NAB Care sees staff, trained by Lifeline, identify and help customers experiencing financial

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also provide risk management for emergencies. Bankmecu: practises responsible banking and invests four percent of after tax proﬁt into a community investment program, which focuses on making a positive and sustainable difference to the environment and society.

“What examples have you seen of businesses successfully incorporating shared value into their strategies?”

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hardship. More than 100,000 Australians have received support and NAB has enjoyed $7.2 million in cost savings as a result. About 70 percent of Australians are overweight or obese. Australian biotechnology firm, Probiotec, collaborated with the CSIRO (Commonwealth Scientific and Industrial Research Organisation) to develop a weight loss program that links weight and health metrics, making a departure from traditional programs that focus on body image. In just six months, Impromy has become the most successful program in its category in terms of average weight loss. It is also the number one selling product in Chemmart pharmacies. It has a serious chance of remedying Australia’s obesity condition. AAMI (a Suncorp Group motor insurance brand) launched its Skilled Drivers program to raise awareness among young drivers of the consequences of decisions made behind the wheel. More than 100,000 new drivers aged 18 to 24 have attended the course; AAMI claims analysis shows that accident frequency and severity is lower in those who have been through the course than those who haven’t. Fewer claims means greater profits, but also lower premiums for drivers. The roads we all travel are safer. With our relentless focus on understanding and measuring human behaviour, shared value is the natural domain of marketers.

Brad Hecht chief research ofﬁcer, Reputation Institute

AS THE GLOBAL ECONOMY recovers from financial crisis, stakeholders are becoming more and more conscious of not only the quality and cost of products they buy, but also the values and social relevance of the firm that stands behind them. Reputation Institute’s 2015 Global RepTrak survey has found that corporate attributes such as governance, citizenship, leadership and workplace drive over 60 percent of corporate reputation, which directly correlates to stakeholder behaviours like willingness to buy or willingness to recommend the product to others. In 2015, the essence of a company, and the benefit the company provides to society, is far more important to its stakeholders than the quality or cost of its product. To gain, maintain and grow stakeholder support, all firms, regardless of industry, need to

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consistently and authentically communicate their shared values and societal relevance. What is the ultimate mission of the firm? How does its existence benefit more than just its shareholders? What larger value does the firm deliver to society? Our research shows that stakeholders are more emotionally attached to, and more willing to buy from, a firm that successfully balances financial return with societal return. One firm that has successfully implemented a shared value strategy is Danone, the stated mission of which is ‘Bringing health through food to as many people as possible’. The firm has specifically targeted four business lines, each of which is tasked to provide locally tailored products, developed to be the healthiest in their category, within each local region. Each product is developed and delivered through a sustainable food chain and promoted through responsible marketing campaigns. Additional examples include DuPont, ‘Applying science to global challenges’, ING Bank, ‘Empowering people to stay ahead in life and business’ and Shire Pharmaceuticals, ‘To be as brave as the people we help’. Each has clearly articulated shared values that aspire to deliver broader societal benefits, while staying relevant to their direct shareholders. Our research shows these firms will be disproportionately rewarded for it.

98 WAY OUT

Dr Con Stavros

The right code Producing the epitome of the modern marketer is an increasingly complex challenge for educators. The pace of change within the practices of business means that the planning of study programs is fraught with the danger that current concepts may become irrelevant artifacts by the time graduates get into action. For educational institutions, there is a danger of chasing trends. Some fundamentals apply. Critical thinking and strategic planning have long been requisites for marketers and that is unlikely to ever change. In recent years quantitative skills have risen in prominence and there has been a push for more innovation and creativity.

Associate professor of marketing in the School of Economics, Finance and Marketing at RMIT University.

My personal view is that marketing programs, both at an undergraduate and postgraduate level, need more psychology, more qualitative methodological approaches to research and more leadership. Most importantly, I think new students need a fundamental understanding of computer coding. Basic coding knowledge is being considered for secondary school curriculums across the globe, so it is likely that university entrants of the future will come in with some fundamental knowledge that can then be built upon with discipline speciﬁc requirements. For marketers that means competence in HTML, web architecture, application

The values of value From my perspective it is unfortunate that many marketers, with the tacit encouragement of consumers, have aligned value with the lowest common denominator of cost. The inherently simple focus on promoting ‘cheap’ as a synonym for value has negated the intricate nature the term should embrace in integrated marketing communication activities. The term of values is far more layered and contextually communicated – as value itself should be in the relationship between business and customer. It deserves a new approach, but it may be too late to salvage now in many categories.

MARKETING AUGUST | SEPTEMBER 2015

Leading edge One of the best job titles I have come across is that of the leading flight attendant on Swiss International Air Lines flights. They are presented to passengers as the ‘Maître de Cabine’, which translates roughly to boss of the cabin. The demanding role is amplified by the fact that on every rotation the ‘Maître de Cabine’ (known internally as the M/C) is usually working with a new crew. In the airline industry, the choice of leader can be a life or death decision, so the motivation and effort to get it right is strong. In other service organisations the choice may not be so dramatic, but adopting an M/C approach and treating leadership decisions with such gravity can be beneficial. A skilled leader working on the frontline is a powerful motivator, teacher, problem-solver and brand ambassador. With the authority to enact common sense, prioritise positive experiences and develop ongoing relationships with key clients, the performance of this person can be the difference between the failure and survival of a business.

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Way Out

linkages and possibly even simple coding approaches in JavaScript or similar. While marketers can entrust the ‘back-end’ of data systems to the specialist programmers, it is increasingly imperative that customer interfaces at the ‘front-end’ be suitable in terms of design, innovation, functionality, data management and ﬂexibility. While marketers may not need to be on exactly the same page as the programmers to make this happen, it will surely help to have them in the vicinity of that page, so that discussions, expectations and rudimentary adjustments can be made with a minimum of fuss.

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