Questions by Joji George, Business and Marketing Director at Global Brand Forum in Singapore
P&G chairman and chief executive A.G. Lafley has said that you were responsible for reinvigorating P&G's marketing function and strengthening its capability as one of the world's leading brand builders, as well as changing the way P&G markets its brands by challenging traditional marketing models and setting new standards for P&G marketing rooted in deep consumer understanding. Can you comment on those accolades and how you went about achieving them?
First, I was honored to have worked with A.G. Lafley and his leadership team for seven years. I could not have done what I did as global marketing officer without his complete support.
I would highlight four things that I did with my team that were foundational to the turnaround. First, we absolutely put the consumer first in all we did. We reinvigorated our consumer-driven culture. How we spent our time changed, how we measured our success changed; we really dialed up our culture of serving consumers. Second, we codified the way we think about marketing. We developed the framework. It enabled us to teach and transfer knowledge about brand-building across the world, across categories. It became a competitive advantage for us. Third, we simply became more innovative in all we do. Our definition of innovation expanded into not just product innovation, but also commercial innovation, and we even innovated in how we innovate! Fourth, we chose very specifically where we wanted to achieve competitive advantage, and we resourced it, and we measured it.
Why have you said P&G is the best brand-building company in the world?
I have said that P&G is the best brand-building company in the world because of our results. P&G has 24 brands that are over $1 billion in sales, and it has 18 brands that are between $500 million and $1 billion. P&G is also highly innovative in all areas of marketing, and has been a leader in most changes in marketing across the past few decades.
What are the attributes of the P&G brands, which have made them such a success?
P&G brands are successful because they stand for something highly important and relevant in the consumer's mind. Successful brands are superior brands in areas that matter to the customer, and they engender great trust from their customers. They also aspire to improve life in some way, which uplifts their employees as well as the consumers. P&G brands that are successful also set the innovation agenda in their categories.
How important is advertising to brand-building? How important is it in the marketing mix?
In many categories, advertising is important to brand-building. Depending on the category and the country, how important advertising is will vary. To me, the most significant thing about advertising is it does help define what the brand stands for, its enduring equity, its positioning. Advertising that is successful over time is very clear in what the brand stands for, and provides a reason for consumers to be attracted to the brand.
Are huge advertising budgets, like the one you were able to tap into at Procter & Gamble, crucial to the success of a brand? Is an overwhelming presence in the share of voice enough?
Huge advertising budgets are not crucial to the success of any brand. What is crucial is to create awareness of what you stand for, to create trial among the consumers who are important to the brand, to build loyalty over time and to resonate emotionally in areas that are relevant to the category. Advertising and budgets are simply a means to this end; we all want leadership brands that are highly attractive to consumers. Consumers want to buy into brands that share values with them.
What are your criteria when evaluating the success of a brand?
My criteria for evaluating the success of a brand are very simple. I look for market share, which is the ultimate measure of preference from your consumers. I look at how committed consumers are to the brand, because committed consumers are the core of every successful franchise. I also look for a brand that is prepared for success into the future, and has a positioning and innovation pipeline that is relevant going forward. And of course, all of this needs to provide an attractive return for those who invest in the brand: individual investors or shareholders.
What about the other aspects of marketing, like public relations and CRM — how much of a role do they play when it comes to building a brand?
Public relations and CRMs can be important. In fact, the return on investment from both of these areas is very high when they are executed well. The role they play will vary, but at the end of the day, what we all want to create are brands that are talked about. Catalyzing word of mouth about your brand is marketing at its best. When others are selling the benefits of your brand, that is always more credible, more authentic and more honest.
Is it easier to build some brands than others, and why so?
I believe that it's possible to build great brands in any category. I've seen some of the best brand-building in categories where one would think it is most difficult to grow a brand: categories like kitchen towels and toilet tissue. People who think they are selling a commodity category should get out of marketing.
You're seen as the architect behind P&G's drive to lift the standards of its advertising by pushing agencies to strive for awards at the Cannes International Advertising Festival. What were the areas that you needed to see improvement in?
When we decided to go to the Cannes Festival, we wanted to improve the following areas: 1) We wanted to elevate our standards for creativity and effectiveness. We wanted to get better by benchmarking against the best. 2) We wanted to create marketing that had more engagement and attraction in an on-demand world. 3) We wanted to become more of a magnet client for the best agencies in the world. And we wanted to attract the best talent within those best agencies. 4) We wanted to be more innovative. And again, we wanted to learn from the innovation happening across all areas of the marketing world.
Are marketing budgets that focus on short-term tactics rather than long-term results detrimental to a brand? What are some of the other things that brand managers are doing wrong in pursuit of their sales targets?
Great brand managers look at both the short and the long term. They ensure that what they are doing in the short term does build long-term equity. We live in a world where you must build the short-term sales of your brand and the longer-term measures of brand health. It is possible to do both, and great brands do that.
Most brand managers seem to focus on meeting their sales targets rather than nurturing the brand. Is there something wrong with the business model or is there something missing in the equation?
The issue here is that too many brand managers are only measured for short-term results. Marketing leaders need to measure their people on both the short-term business results — the key measures of brand health that drive preference — and their ability to create a world-class organization internally and externally. Award systems and measurement are very important, and are too often not given the attention they deserve.
You've said the marketing industry is in dire need of a transformation, a transformation that begins with "purpose." Can you elaborate on that concept?
I believe that brands who understand why they exist, what purpose they have in improving the lives of the consumers they serve and who operationalize this in their activity system are the brands that grow in a sustainable way. Ideals-driven brands, or purpose-driven brands, inspire their consumers, inspire their employees and consistently over time outperform their competitors. I've studied this, I've seen it, I've experienced it and I believe it's the only way forward if you want to grow your brand sustainably. A higher-order purpose yields higher performance and higher returns.
