Is Coca-Cola cutting innovation?
News earlier this year that Coca-Cola was culling half its brands has led to questions over its recent emphasis on innovation. Coke has prioritised new products over the past few years, taking a ‘fail fast approach’ that enables it to try things out and move on quickly if they don’t work.
But a reduction in brand numbers would seem to suggest a similar reduction in new products.
Nothing could be further from the truth, according to CEO James Quincey. He expects the smaller brand portfolio to lead to more innovation because it will lead to better allocation of resources. Already, he claims, revenue per innovation is increasing.
As with its reduced brand range, the aim here is to increase effectiveness and pour resources into categories and brands that can really make a difference rather than spreading itself too thin. And with that the company is showing how it can come out of this pandemic stronger than it went in.
A brilliant proposition is better than a £1m marketing budget, says Premier Foods
Achieving 12 consecutive quarters of growth is no mean feat, but Premier Foods CMO Yilmaz Erceyes puts his company’s growth trajectory down to honing the product proposition.
He uses the example of pot-style noodle brand Soba, which over the past three years has gone from one of the smallest brands in the category to the clear market leader thanks to a strong product proposition. For this reason, Erceyes insists he would rather have a brilliantly designed proposition than a multi-million pound marketing budget.
Beyond nailing the product proposition, Premier Foods puts its success down to continued innovation and a balanced communications strategy, mixing the mass reach of TV for established mainstream brands like Bisto with a digital-focused approach for new products, such as plant-based snack Plantastic.
Lastly, Premier Foods credits the culture of the business with helping drive sustained growth. The marketers are encouraged to develop “winning plans” which if they come to fruition will deliver “breakthrough results” ahead of the competitor set. In addition, the team take ownership of their brands from development phase to pushing the product out to market.
To mark the success of its turnaround strategy, Premier Foods elevated marketing to the leadership team last year, promoting Erceyes to the position of CMO with responsibility for all marketing, R&D, consumer insights and analytics. This is a business which clearly recognises the role of marketing at the heart of its continued success.
Unilever invests in digital skills
One of the prevailing arguments in marketing is that digital is cheaper than the so-called traditional mediums. More automation, it is argued, means running campaigns is less resource intensive.
Well, that isn’t what Unilever thinks. The company returned to growth in the second quarter, benefitting from an uptick in demand for cleaning and personal care products such as hand sanitiser.
It is also increasing marketing spend. But much of this investment is going into hiring and training marketers in digital skills, with CEO Alan Jope arguing it requires more, not less, “manpower” to run the digital campaigns that now make up half of its budget.
Jope said: “The balance between BMI that we spend in traditional media behind our brands versus the investment we have to make in people for a more manpower-intensive marketing world, where digital programmes take more resources, is larger.”
IPA Bellwether paints pessimistic picture across the industry
The latest IPA Bellwether report makes for some rather gloomy reading for an already hard-pushed marketing industry, with budget cuts being carried out across all sectors and employment prospects looking increasingly bleak.
The Bellwether report found that the net balance of companies cutting their marketing budget fell to 41.% during the third quarter, which is actually an improvement on the previous quarter. Although, given the absolute horror show of those lockdown stats (-50.7%) it would be hard to come up with anything worse this time around.
Just 11.6% of respondents enjoyed the luxury of an increase in marketing budgets, while cuts of varying degrees were reported in each of the seven monitored marketing categories. Only online showed any significant signs of life.
If all that wasn’t depressing enough, nearly half of marketers (43.8% of respondents) expect to see job cuts over the next quarter, compared to 16.5% during the same period last year.
The end of the government’s furlough scheme and continued changes in working conditions amid extensions to social distancing restrictions are seen as the main concerns behind another set of such downbeat figures.
Greenpeace takes on the meat industry
Consuming meat is an integral part of many people’s lives, but there is a growing understanding of the impact it has on the environment. This is something Greenpeace is trying to tap into with its new campaign, a follow-up to its at times controversial ‘Rang-tan’ campaign from two years ago.
The campaign has a dual aim. To shift consumer perceptions by showing them the consequence eating meat is having on deforestation, particularly in South America. But it also hopes to pile the pressure on businesses, which Greenpeace says also need to shift away from meat to halt deforestation.
Rang-tan might have been controversial but it benefitted from the media noise and its tie-up with Iceland. It’s unclear without the media coverage of a Christmas ad ban whether this campaign will garner the same attention.
This is also a big shift in consumer behaviour. Greenpeace says people need to cut meat consumption by 70%. Veganism and vegetarianism might be on the rise but for the vast majority cutting out meat is a huge step. Raising awareness of the problem is the first step, the behaviour change needed might take a while to follow.