Diageo’s Andrew Geoghegan: Disruption comes from ideas, not just tech

There are five key ways for brands to grow and disrupt a category, none of which begin with data or technology.

idea

When we think about brands and innovations with the power to disrupt their markets, we often think about businesses such as Uber, Airbnb, and Deliveroo.

These are great software examples, but it’s important that marketers think beyond the idea that disruption is reliant on advanced technology and disintermediation – connecting consumers and suppliers directly at scale. Marketers can be left scratching their heads about what it might mean for them beyond ecommerce.

In consumer product marketing especially, there is a real sense that our businesses are different – they are subject to the bargaining power of strong customers, and don’t have the advantage of being built on consumer data that gets to the heart of how people are buying and using brands. Understanding our consumers can feel like guesswork, let alone working out the opportunities to disrupt.

On a recent work trip to Kenya I was struck by how a different mindset from marketing can be as disruptive as some of these well-known digital firms; relying not on an app, but on an entirely different and more commercially focused set of capabilities.

The example is a Diageo beer brand called Senator. It was launched in 2004 to create a safe and affordable alternative to illicit alcohol. It was a business opportunity which tapped into a consumer insight – the motivation to drink better – with the potential to contribute positively to a societal issue, and was therefore built on a real purpose. Its success has come from a marketing organisation with a business development mindset and the ability reimagine its business model.

This brought to life five key areas necessary for brands to disrupt beyond data and technology:

Trends: Understanding changing consumer motivation is crucial. It is easy to accept the status quo and assume most consumer needs are met, missing the impact that either rapid or slow-creeping change has on consumer satisfaction.

Thinking about how forces such as health and wellbeing or the environment shift how consumers live, buy and think can often expose an insight that leads to growth. Look at how Alpro has accelerated by realising mainstream consumers also want to enjoy more sustainable lives through plant-based alternatives and in so doing has given the dairy industry something to chew on.

READ MORE: How marketing is fuelling the ‘post-milk generation’

Define your market: We often have too product-centric a view of the market in which we play, meaning inevitable decline when the category matures. There are, however, countless examples of brands who have redefined their market and avoided becoming obsolete – IBM, Nintendo and Western Union to name a few.

There is an art to doing this – be neither too broad nor too narrow and be clear what’s at your core.

Consider the possibilities for Tesla seeking to accelerate the world’s transition to sustainable energy. It’s not always essential to have such a high purpose to succeed – contrast China’s BAIC, whose core is about winning in the automobile industry with Chinese brands. In so doing its affordable electric car might end up pipping Tesla in its own stated mission, at least in the automotive sector.

Channel disruption: Disruption often comes from creating an entirely new channel and this can mean a radically different product or delivery system. This is not unique to Nespresso or Netflix and includes brands like award-winning Emma Mattresses in the UK.

In the Senator beer example, a completely new route to the consumer was created through an innovative keg system which required no other infrastructure than glassware, and a beer made entirely of local raw materials. It was an innovation born of understanding the constraint of consumer pricing and the basic environment in the bars serving it.

Know your P&L: Financially savvy marketers understand where cost is locked up in their P&L and also where value lies. Understanding how to frame these as opportunities for cross-functional teams to work on unlocks possibilities.

Stakeholder relationships: Working with external stakeholders is critical and requires resilience. Brands that understand how to work with and share value fairly with government, customers, suppliers and communities will win big. Look at the value of eradicating slavery from its supply chain to consumers choosing Tony’s Chocolonely, and how Gucci’s manufacturing policies are winning with young adults.

Maybe next time you sit down to face your brand plan, think beyond communications as a solution to brand growth and consider the constraints you face, be they cost or route to market. Think about what it might take to come up with a new business model that could reframe your whole category.

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