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When it comes to marketing, every multi-national corporate has its own mantra. And typically, it's a textbook-ish one-liner that doesn't exactly make a journalist grab her pen and jot it down. At Nestlé, they call it 'Brand building the Nestlé way'.
But during the course of an hour-long interview at his Gurgaon office, Chandrasekar Radhakrishnan, head of communications and eCommerce, Nestlé India, brought this seemingly bland line to life by explaining what it means to market products the Nestlé way.
For one it means experimenting with interesting agency-client models. Two teams - one comprising GroupM employees and another comprising talent from WPP's design consultancy Fitch - work on Nestlé's online consumer engagement and product packaging, respectively. Both teams work out of the Nestlé office.
It also means adapting the basics of marketing to new realities, not classifying content by platform, and keeping one's eye firmly on the only prize that really counts - sales.
Over to Chandru, as he is fondly known.
Edited Excerpts.
Edited Excerpts
What does the 'eCommerce' part of your designation mean? E-commerce is not something one readily associates with the F&B segment...
For us e-commerce is not a channel; it's a business. That means e-commerce has an impact on sales, market share and on the online and offline behaviour of consumers. If you treat e-commerce as a channel it will be just a sales-oriented effort but if you treat it as a business, then it has marketing at its core.
A Google-Bain study (2014) talks about how almost 35 per cent of FMCG sales is going to be directly linked to a ROPO (Research Online-Purchase Offline) Effect. FMCG is actually a destination centre for e-commerce players. When FMCG becomes an integral part of e-commerce, the consumer comes back again and again, as it's a repetitive purchase, unlike consumer durables where a purchase is made once across years.
So, the FMCG consumer is captive audience for e-commerce players. There will be a lot of back end investment and new delivery models in this area; e-commerce players in India are trying to crack this. That's why Amazon Pantry and the Bigbaskets of the world have started becoming very big. Most of the purchases on e-commerce today are fresh vegetables and fruits. People have started associating grocery shopping with e-commerce.
We see e-commerce as a marketing proposition, not a sales channel. That's why it's part of my role.
How has the quantity and quality of your engagement with your consumers changed in the recent past?
We've moved from 2,500 annual contacts in 2012 to over half a million annual contacts in 2016. What used to be a high percentage of complaints has become a high percentage of queries. Complaints have not gone away, but queries have gone up. This change has been propelled by digital media and technology.
Just like consumers punish you on Twitter, etc. when you're not doing the right thing, the propensity to give you positive feedback is very high today.
When consumers ask tough questions or show tough love, they are doing us a favour. At Nestlé India, the Consumer Engagement Services (CES) front is a 24-by-7, toll free, online, omni-channel effort.
In a 2013 interview, Nestlé's global digital head Pete Blackshaw expressed his reluctance to completely outsource consumer engagement duties. To what extent do you think this power should lie with agency partners?
For us, digital is an operating principle, not just a communication medium for reach and engagement. The business principles, policies, and tone and manner of Nestlé have to be respected when we respond to consumers. You will respond very differently to a query than I will. A brand will respond very differently to a query...
... than an agency partner will? Is your in-house Digital Acceleration Team - comprising GroupM employees that work out of Nestlé- a way of capping the agency's power?
We are not in the business of digital responses. Our Digital Acceleration Team (DAT) is a purposive, digitalised, team that's modelled to respond to consumers online. It is an 'outsourced-insourced' team. Technically, the service is 'outsourced' because this team is run by Group M's Gain Theory (GroupM's Bengaluru-based marketing consultancy). It is 'insourced' because they sit in the Nestlé office. They're given the freedom to listen to and engage with consumers online.
While GroupM employees handle your consumer engagement front, they don't do your media planning and buying...
GroupM does not do media planning and buying for us. That is done through Publicis' Zenith. We have kept this separate. This is specifically about listening and engaging. It's a different model.
While reading about the origins of DAT, words that jumped out at me are 'VC model', 'entrepreneurial setup', 'hackathon' and 'mobile solutions in emerging markets'. Startups are in a rush to scale up and mammoths want to retain a boutique-like feeling. Do you struggle to balance the two cultures?
I think that's an important question.
We follow a test-and-learn approach, which includes entrepreneurism. For complex structures like ours and other multi-national organisations, you need to test, pilot, learn and scale, very quickly. And for that you need to have smaller teams.
Few years back Mahindra re-did an ad film after netizens reacted negatively to it. Have you taken any tangible ad-marketing decisions basis feedback received online?
When Maggi went off the shelves, a set of consumers kicked up unrest online because they were missing it. We reciprocated with our 'We miss you too' campaign.
YouTube and social media showed us that consumers across the world are viewing videos of things being unboxed. So when we launched HotHeads, we made special gift packs and went to Snapdeal to market these packs. We sent them to TV celebrities, caught them opening these packs on camera and made a film. This pulled up awareness and consideration scores for the product, which was very new at the time.
When people shop online, they use a shopping cart. We wanted to get consumers to associate our Milkmaid with ice cream. So we partnered with an online marketplace and made an exclusive ice cream kit for them, which included Milkmaid.
A marketing executive at HUL recently told me how hard it is for him to stop looking at content 'the TVC-way'. Historically, Nestlé too has been a TV-led brand. Does embracing online video involve suppressing instinct?
We're not running an entertainment business here. We make our money selling noodles, coffee and milk. Content has to drive brand metrics and sales. Media is a platform for distribution. Digital has somehow blurred the difference between content and media.
When our stand-up comedian film for Nescafé was first released, we put it only on digital. It wasn't on TV at all. Was it a TVC? Was it branded content? Was it online video?
The online video-TVC discussion is at the tail of what we do. And what do we do? We create content that drives sales. Packaging, for instance, can be a great communication tool. As part of our 'Educate The Girl Child' initiative, we changed our packaging - 'Maggi 2-Minute Noodles' became 'Maggi 2 Minutes for education', 'It all starts with a Nescafé' became 'It all starts with education', 'Have a break, have a KitKat' became 'No break from education'. We changed 100 million packs. Would you be able to get that number of views on digital?
How much ever you talk about change, the fundamental principles of marketing remain intact. We need to stay calm and understand this. If you do not obey the fundamentals of marketing, you'll become an entertainment company.
Isn't TV still the biggest conduit through which products move from the supermarket shelf to the kitchen shelf? Does online video, then, have a purpose of its own, say, community building or something else, perhaps?
Let me make this clear - Whether we call it content, advertising or online video, the sole purpose of media and information used for marketing purposes is to positively affect business metrics and sales.
The only difference between content and advertising is - Thanks to digital and social media, content can attract consumers on its own merit, whereas traditional advertising can only gain your attention in an ad break.
There's a lot we can learn from TV. When we used to make TV ads, we used to make people feel something... we used to drive emotions. If we apply the same principles - and not focus on metrics like 'I have to make people click' - to online as well, it will positively affect business. It's about adapting the basic principles of marketing to new realities.
Message quality matters more than the platform. Of course, the platform, the spending level, GRPs, likes, engagement, etc. also matter. But discussing YouTube versus Facebook versus Twitter versus Snapchat is missing the point.
Is there room for formal research in the era of social listening?
Social listening cannot replace formal research. Research can compliment your judgment and give it nuances, not replace it.
How is the consumer in this market different from her Western counterpart?
For young people in India, the idea of a break is very different from what it is in Western countries. In the West, a break is a break - a complete hiatus. But in India, youngsters don't want to take a break; when they do so, they make sure they develop some other part of their personality. So while taking a break is universal, the cultural manifestation varies. That was the starting point of our KitKat film in which the announcer (at the airport) does a rap.
In some parts of the world coffee is all about social bonding and camaraderie. In India, given the huge startup culture, the way people are struggling to make it big, and the feeling of optimism and hope all around, Nescafé decided to become a 'cup of resolve' for youngsters (with its ads about the comedian, cartoonist and RJ).
Keeping in mind such socio-cultural realities, Nestlé believes in decentralising when it comes to creating marketing campaigns for different markets.
(This interview first appeared in our magazine afaqs! Reporter on January 1, 2017)
A Note From the Editor |
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Nestlé’s Chandru is friendly and approachable. Not half as intimidating as the room I interviewed him in: A brightly lit cabin in the middle of the marketing floor at Nestlé House at Gurgaon, with constantly moving screens instead of walls. Screens that displayed, among other things, live tweets, graphs, stats... and a Skype-like window with a team of people looking at us from an office not far from the one we sat in. This is the room in which Nestlé receives and responds to consumer feedback. Here’s the most fascinating part – the folks who’re wired into these screens are not employees of Nestlé; they belong to a firm called Gain Theory, which is part of GroupM. They’re trained to listen to and engage with Nestlé’s consumers in real time. On the same floor is another such room where a bunch of professionals from WPP’s design firm Fitch work on Nestlé’s product packaging. Interesting agency-client models, both. Here’s an interesting snippet of information all this 24-by-7 consumer engagement has tossed up: Previously, the primary reason a consumer reached out to a brand in the space Nestlé operates in was to complain about something. Today, however, things have changed. While grievances are still very much around, the propensity of a happy consumer to give a brand positive feedback is higher today than it ever was. As Chandru points out in this interview, just like consumers punish a brand on platforms like Twitter when they’re offended, they also reach out through the same channels to positively reinforce something – a product, an ad, an initiative – that rubs them the right way. Product related queries are on the rise too. Such trends will fizzle out unless the brand keeps responding quickly and consistently. My biggest take-away from this interview was the fact that Chandru’s marketing fundas are crystal clear: Regardless of the message and the medium it’s on, the only prize that counts is – Sales. ASHWINI GANGAL |