News that Facebook employees are angered by Mark Zuckerberg’s obsession with the metaverse has sparked interest. She was a leak within a tech company.
Likewise, Elon Musk’s playful tweet that after buying Twitter his next step would be to buy Coca-Cola, and the drug would come back into the recipe for the drink.
Then I buy Coca-Cola to put the cocaine back in
– Elon Musk (@elonmusk) April 28, 2022
Statements by tech giant bosses are being closely watched
Almost everyone uses their company’s products and they themselves are global icons. Sometimes, however, it is also worth paying attention to less effective information from the marketing world. For example, those relating to changes in global FMCG companies. These are boring undertakings compared to those of Musk and Zuckerberg. They sell products that do not arouse many emotions. Nevertheless, they have set trends in marketing communication.
As of April 2022, Unilever has no CMO
Until recently, Conny Braams served as the company’s Chief Marketing and Digital Officer (CMDO). From now on, she will be Chief Digital and Commercial Officerem, which means that the word marketing disappears from the name of her position.
“That doesn’t mean we’re giving up on marketing. That means we’re adding sales, Braams told Adweek. Of course, the change can be considered a minor formal change in the structure of the giant, owner of brands such as Lipton, Dove and Persil. However, this is part of a larger phenomenon. This reflects the blurring of the differences between internet marketing and commerce. It points to new tools that allow you to build a brand and increase sales at the same time.
Beverage giant AB InBev retains the position of CMO, but at the lower level is the position of Chief Growth Officer (CGO). It will cover marketing, B2B sales, and direct-to-consumer (DTC) – the latter area will primarily cover rapidly developing e-commerce platforms with beer like Beerhawk. This shows that predictions about the end of FMCG giants and their replacement by direct-to-consumer brands have not come true.
Brand management started with a McElroy memo
FMCG companies like Unilever or AB InBev are not efficient. Likewise, Procter & Gamble, because as Malcolm Gladwell remarked, the greatest American talents always graduate from prestigious universities, instead of going to Cincinnati to study detergents, they go to Silicon Valley or Wall Street. There they can earn three times as much. And yet, these are the companies that constantly set the trends in marketing.
It was P&G that created the first brand manager positions before World War II. Neil Hosler McElroy, a young corporate marketing employee was working on a Camay soap campaign at the time. He realized that the brand would struggle to compete not only with soaps from other companies, such as Lever and Palmolive, but even with Ivory, another brand in the Procter & Gamble portfolio.
He wrote a three-page memo to company management, in which he proposed creating special teams to manage individual brands. Each of them should be treated as if it were a separate company with its own target group and its own positioning.
This helped minimize internal brand cannibalization, and a short note from a young employee initiated a modern way of managing brands. McElroy himself later became chairman of P&G, and later secretary of defense in President Eisenhower’s administration.
After the Second World War, the commercial model of the giants of mass consumption takes hold, driven by globalization
It was based on three pillars:
- Colossal advertising expenditure, which ensured a great mental availability of brands.
- Equally large outlay for a place on a store shelf, which ensured wide distribution.
- Global scale of operations.
The combination of these three factors resulted in dozens blocking competitors who wanted to compete for the top spots in a given category. Even if they launched a big campaign to introduce a new product – Unilever or P&G responded with a bigger one. Time passed, and a decade ago it seemed that this long-term dominance would end with Dollar Shave Club and other DTC brands, i.e. direct selling via the Internet (direct to consume).
When Harry Met Wal-Mart
Many probably remember the internet virus released in 2012 by Dollar Shave Club. CEO Michael Dubin explained how the sales model for razors in the subscription model differs from razors from well-known brands. The name is not explicit, but we know that it is Gillette. Despite the low quality, they are expensive, as they finance the salary of Roger Federer and other brand ambassadors. Only in the 48 hours following the broadcast of the spot, 12,000 people registered on the site. people.
First, Dollar Shave Club or a similar German start-up by Harry they were selling razors in a new advertising model. Instead of investing in traditional media advertising, they did it in-house. They focused on influencers, content marketing, and social media, cutting costs. They had their own consumer behavior data, so they didn’t need the intermediation of retail chains.
Harry’s was founded in 2012 and quickly became a favorite with overseas investors. It got $375 million from it, but in its first few years it only amassed a few percent of the razor market share. It only got better when it hit the shelves of traditional retailers like Wal-Mart and Target, as well as Tesco in the UK. The same ones he was supposed to have trouble with the subscription model.
Today you can see that traditional FMCG giants have also risen to the challenge
They adapted to the new competition, introduced changes, later accelerated by the pandemic. In retrospect, one can also see that the initial success of Dollar Shave Club or Harry’s was not just due to the new sales model or the line of fun internet viruses.
DTC Brands: We’re Joining the Cultural Revolution, But We’re Not Inventing It
In 2007, during the Youth Marketing conference in Warsaw, one of the conferences of the research company IQS was about the behavioral changes of young men at that time. She described the similarity in consumption behaviors of both genders, which, in the case of men, resulted in greater attention to themselves. Even if they didn’t show it, they started to value style and brands.
The mainstream of the 90s, plaid flannel shirts and beige sweatshirts replaced thoughtful ensembles. Moisturizers, designer perfumes and razors are popping up on bathroom shelves. The changes resulted not only from the enrichment of society, but above all from the entry into the global circulation of information.
Young men all over the world have started behaving the same way. Only a few years later, Dollar Shave Club and Harry’s were created. Both societies joined the Cultural Revolution but did not invent it.
That, plus star status in the new subscription economy, didn’t automatically mean a marketing revolution. FMCG giants have defended their operating model. Unilever reduced the number of branded product variants by almost 30%, started spending more on online advertising, and eventually bought Dollar Shave Club for $1 billion.
Later, due to the pandemic, he increased his online sales by almost half. It currently stands at 13 percent. total sales of $57 billion per year. Procter & Gamble liquidated dozens of smaller brands, focusing on leaders such as Pampers and Tide.
All in all, Connie Braams’ new roles at Unilever are a small deal in themselves. But at the same time, it shows how the role of communication is changing in global businesses at the interface between technology, commerce and culture.