LONG TERM STRATEGY - Reckitt's 'Power Brands' Strategy Pays Off - interview

Brandweek: "Reckitt Benckiser has been posting consistently strong quarterly earnings, as larger rivals like Procter & Gamble and Unilever have taken a hit from the recession. What’s your strategy for growing brands—and sales—in tough times? "

Rob de Groot: "It’s a good set of results that we’re happy to give to the outside world. It is something to be glad about. It’s also confirming the strategy that we’ve had for the last 10 years. It’s a very focused strategy. We have 17 power brands that we focus on as a company. [Eleven of those 17 power brands are in North America, including Clearasil, Calgon and French’s.] And it’s very focused on those power brands and fueling those power brands with investments. It’s something we’ve done differently than other players, which is to continue to invest and focus on our [core] brands in tough times.

The Strategy is two parts

1. The first is innovation and
2. The second is investment, or money to communicate to consumers.

We’re moving away from a world where we split marketing and sales and trade. We’re talking very much about our consumers and they have different touch points with which they get their information from: There is TV, Internet and in-store, of course.

One of the things we started a few years ago is to communicate—360 degrees, as we call it—with consumers and we try to touch them at different moments of the day at different moments of their life. And so, our investment towards the consumer has been more multi than single point and the number of connections we have with consumers is much higher than before.

Why communicate during a crisis? And how to do it the smart way?

Companies very often judge Marketing investments as being costly. The issue when stopping Marketing investment during a crisis is like using a break when a car drives up a hill. Your Brand will disappear faster, people will think you are in bad shape and you won’t be part of the preferred brand when the economy will grow again. Why should you communicate during a crisis?

• Because others reduce their investments, suppliers tend to reduce their prices --> you’ll get a much better return on investment.
• While the noise of crazy communication has come down, you are still here and therefore much more visible.
• Being visible also means “I’m wealthy”, which means: trust and reassurance.
• You need to sustain your sales with more qualitative arguments than just the price.

How should you communicate during a crisis? As sales reduction reaches everybody, one has to think twice on how to optimize investments!

1. Focus on the most responsive people/target groups in order to optimize investments. The ECS-Midas Target might help you define this “ideal” target: people willing to buy your brand, but also people who are motivated by values corresponding to your brand core values
2. Leverage the values that will motivate your “ideal” target to buy. It’s not the values that most people attribute to your brand, but it’s the values that help you differentiate your brand from the competition on elements that are important for your “ideal” target.(The ECS-Midas Brand Image will deliver you this hierarchy of motivations to buy among your ideal target
3. Select the most adequate media support. Don’t be attracted by discount on media that could eventually not reach your target.
4. Go for short or medium term effect on sales. But don’t stay outside the market!