Marketeers challenges, role and trends 2010

Marketing in a post-crisis world Consumer Goods marketers’ role, trends and challenges June 2009

Marketers must balance and manage various pressures Marketers’ role from 2010 Consumer engagement and experience Deliver customer value Differentiate and promote through retailers Develop innovative and sustainable offerings Leverage all information and analysis Demonstrate performance and impact

Consumers keep evolving and engaging

Online integration, marketing analytics and customer value on the marketer’s agenda

Marketers need to be measurable, innovative and sustainable

Agenda

Consumers are getting even more personal, disloyal and sophisticated The Brand Called You 2.0 Tom Peters, 2009 “ It’s all about being an interesting and desirable brand to other individuals. To peers. To friends of friends.” Source: Trendwatching.com

Companies need to highlight the added value of their products/services more Customers become far more price sensitive and postpone purchases due to the economic crisis % of respondents How do you expect your customers to react to the economic crisis? N= 720 Source: The House of Marketing; Yearly Marketing Survey 2009

Agenda

Marketers are aware of the need to improve customer experience, intelligence and “be green” How do you expect the following buzzwords to evolve in terms of importance for the coming year? % of respondents who expect an increase Note: decrease or remain stable represent the remaining percentages B2B C’ies only (N=246) B2C C’ies only (N=98) % of respondents who expect an increase Source: The House of Marketing; Yearly Marketing Survey 2009 In survey 2008 Legend: New to the survey

Position of challenges among answers Evolution of challenges’ importance, perceived by marketers N= 598 Branding and customer loyalty remain solid top-of-mind challenge for marketers Innovation & ROMI see strong decline compared to 2008 Source: The House of Marketing; Yearly Marketing Survey 2009

54% of marketers in consumer goods expect further budget reviews This goes against the need to protect/grow existing revenue base by increasing marketing expenditures Source: The House of Marketing; Yearly Marketing Survey 2009

The 2009 media mix has clear winners and losers Direct marketing Email marketing Traditional TV Overall media budget # of companies planning to use the selected medium more Evolution of share in total media budget of the selected medium Conclusion More buyers, less spend per buyer Large increase TV market not heavily down POS Print (Press/ Mag.) Event marketing Probable ex-aequo Serious cut Serious cut Sponsoring Serious cut Source: UBA/Profacts February 2009 Survey, combined with Stichting Marketing/THoM 2009 YMS Survey

Belgian media mix becomes more traditional and measurable due to crisis Source: The House of Marketing; Yearly Marketing Survey 2009

Crisis reinforces success of interactive marketing…

Traditional Marketing

“ Modern marketing is a two-way conversation that utilizes traditional, digital and social mediums to connect with existing and potential members.” Currency Marketing “ There is a trend from traditional media toward online marketing activities that allow for customer behavior tracking and concrete metrics.” Aberdeen Research … but stimulates a more balanced approach, where traditional supports interactive Interactive Marketing Supports

Mastering certain metrics tends to be key to be confident in outperforming competition % of respondents using the hard metric defined on the left Which of the following hard metrics do you use to track your marketing performance? N= 665 Source: The House of Marketing; Yearly Marketing Survey 2009 Respondents claiming a better performance in 2009 versus competition Legend: Respondent claiming a worse performance in 2009 versus competition

Too few marketers are mastering analytics and customer intelligence 1 out of 5 marketers do not use the full combination of metrics available to them Marketers rely on information in reports, instead of looking at the raw data Source: The House of Marketing; Yearly Marketing Survey 2009

Analytical deployment is mostly depending on organizational context and prioritization What is the main obstacle for analytical deployment? % of respondents N= 497 Source: The House of Marketing; Yearly Marketing Survey 2009

Agenda

Marketers are struggling to adopt a long term sustainable business model Buzzwords hint at a sustainable business model The marketer is being challenged financially, ROMI-wise Budget reductions make marketers rethink their media mix The marketer is less confident about the future Many marketers are fighting the crisis with lower budgets (and prices) Companies must highlight the added-value of their offerings more to customers

Sustainably position marketing as key value adding department in the long term Be genuine, be authentic…

Differentiation based on green arguments will only prove effective for who adopted this in their Corporate identity, Business model AND Culture

This becomes even more important as your company becomes more transparent to customers by choice or not

No proof, no budget

Today, the size of the marketing budget is among the first items to be challenged by management

Marketing budgets will not restore to their pre-crisis levels without marketers building up a rock-solid argumentation:

Pragmatic performance management tools allowing to track, manage, benchmark & predict financial return

Increase focus on the main concern of the boardroom: sustainable profitability requires evolving from a top-line to bottom-line focused marketing and investment in people

Invest in analytical skills

Analytical skills are paramount to making complex fact based decisions and generate relevant insights from available data

Marketing departments with a clear ambition to outperform competition should

Invest in developing analytical skills to a level allowing them to extract maximal value from internal data

Base their decisions on the qualitative and quantitative insights provided from the above analysis

Sustainability at a glance: From inside to outside Note: a company can be considered as socially responsible only if it acts within the three pillars.

Today’s situation

Businesses have accepted sustainability

as a mainstream concern but struggle to

integrate it at strategic level

Implementation of sustainability is

increasingly consumer and MKT driven

Sustainability is still often only a PR tool

Challenges according to senior executives:

leadership,

supply chains,

metrics and reporting,

the transformation of values

into processes

Critical Success Factors

Sustainability policies and practices should be driven by corporate values and be integrated meaningfully into strategy and performance management

Sustainability should be fully embedded

in all levels of the organization

Involvement of all stakeholders internal

and external

Credibility through partnerships with NGO’s or independent organizations

From customer perspective, value generation while avoiding price premium and differentiation from competition

Sustainability has to be understood in the context of a specific industry, not as a set of principles per se. Depending on value drivers, sustainability needs to be integrated at strategic and/or operational level.

Marketers must balance and manage various pressures Marketers’ role from 2010 Consumer engagement and experience Deliver customer value Differentiate and promote through retailers Develop innovative and sustainable offerings Leverage all information and analysis Demonstrate performance and impact What is Marketing’s USP?