As an FMCG brand owner with £10bn in revenues, Reckitt Benckiser (RB) always has a lot going on, and for its marketers 2017 will be no different. The household and personal care company has new campaigns in the works for brands such as Durex and Scholl, organisational shifts towards zero-based budgeting and new innovation methods, and challenges to overcome in the shape of pressure from retailers.
UK marketing director Becky Verano-Luri gave Marketing Week a run-down of RB’s major activity for the year.
Durex’s new ‘orgasm’ range
It is more than six years since RB repositioned Durex with its ‘Love sex’ strapline following the acquisition of owner SSL, emphasising fun and intimacy rather than solely sexual health. The brand is now taking another step in the same direction with the launch of a range to “create a new orgasm category on shelf”.
The products, including gels, condoms and toys, are being launched to support a wider brand purpose of “closing the orgasm gap” between men and women, she adds.
“Two out of three women do not orgasm regularly during sex. We’ve got the answers now with this range that is coming out in March. It is super cool stuff and also enables us to go for this very clear purpose to bridge a gap out there – a very clear consumer need,” she explains
This follows last year’s moves to create associations with the emotional as well as physical aspects of sex for Durex.
While Verano-Luri says the marketing team at RB had “a lot of fun” developing the new creative for the products, she says “it has got to still ladder up to a very serious purpose, which is what the brand is all about”.
We’ve had a lot of fun on those creatives but it has got to still ladder up to a very serious purpose, which is what the brand is all about.
Becky Verano-Luri, Reckitt Benckiser
The other brand receiving major attention with new launches this year is Scholl. RB is taking advantage of the footcare brand’s “rich heritage”, which Verano-Luri says has enabled it to constantly branch out.
Scholl has introduced a new range of tights aimed at women aged over 40, which “hit the sweet spot between fashion tights and medicinal compression hosiery that you would only wear if you’ve got a problem”.
Verano-Luri credits Scholl’s “strong equity that is high-order enough not to be fixed into one segment, that allows you to take that equity into other segments”.
RB has become the latest FMCG company to move towards zero-based budgeting (ZBB) – an approach adopted by Unilever last year that means marketing budgets are set by assessing how effective the spend will be, rather than by simply replicating the previous year’s figure or applying a set multiplier to revenues.
Rather than starting at zero and forcing brand managers to present a business case for their spend, which would be time-consuming, RB is basing its calculations on econometric modelling.
“For me it’s a very empowering moment. Especially when you’ve got such a massive spread of media that you could be spending your money on, ZBB brings a bit of science,” says Verano-Luri.
“It pumps out some very clear recommendations about how best to optimise your budgets across the media mix. It has been eye-opening about what we should be doing differently.”
Among these recommendations are that RB should direct more spend towards TV sponsorship, radio and digital, although TV advertising will remain its brands’ main focus.
RB conducted in-market testing of ZBB last year, and this year will move to an “always on” system, where “econometric results come in and we plug them into the zero-based budgeting model”, says Verano-Luri.
This will open up more media channels, she adds, but as these expand it will also present new challenges in changing the business model to develop creative that is “relevant and authentic”.
New retail pressures
“The biggest challenge for us in the UK right now is around the retail environment,” Verano-Luri argues. “It’s getting a lot tougher for us. The space for our sectors is being squeezed versus food.”
That includes both space on shelves and the prized ‘gondola end’ promotional positions that make certain products stand out.
The UK’s major supermarkets have been engaged in price wars for a number of years, with intense competition for each to prove it has the best value proposition on food for shoppers. Lower-priced challengers Aldi and Lidl have been constantly eroding the market share of the ‘big four’ – Tesco, Asda, Sainsbury’s and Morrisons.
This means FMCG brands such as RB’s must adopt a ‘store-back’ approach to their strategies for branding and new product development. They need both to earn shelf space and also to make the most of it when they get it.
“The four Ps [product, price, place and promotion] need to be considered way up front in the brand strategies that we put together, and from an innovation point of view we have to go from the store back to make sure that we eventually get the idea to market with this ever evolving retail structure,” says Verano-Luri.
This pressure is likely to continue in 2017 as supermarkets battle the threat of inflation.
Becky Verano-Luri on…
…viewability and ad fraud
More and more money is going to be spent on digital all the time, so obviously we want to get the assurances that it is being spent in the right place and that we’re getting viewability. We’re doing three things.
We’re using a verification partner, where we look at pre- and post-bids. With the right metrics in place we can identify if we’re getting non-human traffic, and obviously that helps us to improve viewable impressions.
The second thing we’re doing is working with our agency partners and puling up a black list of certain sites that improves over time, and in some cases we’re creating a white list, cherry picking the suppliers we know we want to work with that offer those efficiencies and viewability.
The third thing is we’re prioritising a bit more of our spend towards the premium partners, because they tend to offer better targeting as they have logged in viewers and we see stronger viewability.
…marketing careers at RB
Having worked in other FMCG companies, where RB is different is we change and we’re very fast. On top of that it is very much focused on hard business facts so you get training on the commercial side very quickly.
We try to build marketers a career that complements itself, so every time you move, for example, we would try and make it from a household brand to a healthcare brand because that’s a different skill set that you need to adapt to. We also have roles that are just focused on brand equity or just focused on innovation. We try to complement each move so you build a really nice broad skillset.
On top of that we also offer geographical moves, because there’s nothing more interesting than going out of your comfort zone from a cultural point of view. It forces you to go back to the marketing theory.
I think innovation is becoming more and more tough so we’ve been trying some different approaches recently. Over the past two years we have been working with Lions Health, part of the Cannes Lions festival, and we have done some hackathons called RB Innovation Hacks, where we got the R&D teams, marketers and external creatives to work up a single topic. That has been a different approach to coming up with the ideas in the first place.
We are also experimenting with connected health ideas. That comes with a whole host of challenges because you have to work with technical startup companies where everything is evolving and before you launch you already need to be thinking about the third or fourth version of the app.
It’s a very different model for an FMCG company to be doing that, but super interesting because on brands like Nurofen it is unlocking some new ideas. How much it ends up giving us we have to wait and see.