Marketing Unbound_ES_V3b2 (1)

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May 20th 2016, Hong Kong
MARKETING
UNBOUND
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MARKETING UNBOUND 2016
2
economistinsights.com
© The Economist Events 2016
Forget what you know about marketing. To
compete in today’s highly connected and
rapidly changing global market, it is no longer
enough to advertise a product and spread
brand awareness. Modern marketers must
develop marketing strategies that reach out
to consumers, help their businesses create
enticing and satisfying products, and drive
business performance. This was one of the
key insights to emerge from panel discussions
at the Marketing Unbound event on May
20th 2016, which explored the evolution of
marketing and how marketers can help shape
the businesses of the future.

3
ASIA’S CONSUMERS
ARE DRIVING CHANGE
Today’s Asian consumers are highly connected and engaged. They have different expectations
from brands than consumers of the past, and want to be able to communicate with brands on
mobile devices and through social media. Marketers’ challenge, in this environment, is to tap
into these new consumer behaviours.
Asia has a high penetration rate for mobile phones, and its consumers are way ahead of
Westerners in using these devices rather than desktop or notebook computers for gaming,
watching videos, and searching the web. In Korea, for instance, 80% of video consumption
happens on mobile devices. “Countries in Asia, because of the consumers, are leading the
way in pretty much every single area … on a mobile device,” said Karim Temsamani, Google’s
president for the Asia-Pacific.
But marketers are falling behind in adapting to use these tools to engage with their customers.
Companies that are more successful are quickly working this out and devising not just different
products, but different business models. This is “more than just a marketing challenge; it’s a
bigger business challenge,” said David Roman, senior vice-president and chief marketing officer
at Lenovo.

THE CHANGING
ROLE OF MARKETING
Changing consumer behaviour is also driving changes in how marketing is managed, as an
internal activity and when working with media agencies and other partners. As one example,
the traditional division between sales, revenue management and marketing no longer exists at
Marriott International. The company has combined its top roles in these areas under a new title;
the chief sales and marketing officer (CSMO) now has to bring the company’s marketing strategy
together. “This integrated marketing … now has to happen to be more effective, to not only reach
consumers but drive [the] performance of the business,” said Peggy Fang Roe, the Marriott CSMO.
“That’s how the role of the CMO, or the role of the marketing leader, has been changing in the
markets in Asia.”Global and local teams
One challenge for regional CMOs is getting their global marketing teams to understand that the
local team needs creative freedom to adapt the global brand message for the domestic market.
Tricia Weener, head of marketing, commercial banking and global banking and markets for the
Asia-Pacific at HSBC, pointed out that there is no single formula for this kind of localisation. For
example, a three-word tagline in English that neatly fits a mobile phone screen may not translate
pithily into Chinese.
Finding a universal consumer truth for a product, which transcends cultural differences, can also
be challenging. But despite surface variation, some human traits and values are common across
all cultures. For instance, the Snickers bar has successfully tapped into the universal premise that
you eat when you’re hungry.
“The things that you might do when you’re hungry might be slightly different in India versus China
versus the United States, but the unifying thought underneath that certainly does travel,” said
Nicole McMillan, vice-president of marketing for the Asia-Pacific at Wrigley. Todd Handcock, chief
executive for the Asia-Pacific and global head of marketing at Williams Lea Tag, said that when
marketers can find a message that touches the roots of human nature, they can adapt marketing
solutions to suit local markets rather than reinvent them each time.
4

5
Brands are no longer one iconic thing, said Adam O’Conor, chief executive at Ogilvy & Mather
Hong Kong. “Gone are the days where it’s ‘me plus Ray-Ban equals Top Gun’,” he said. Bringing
brands to life now takes different skills. For example, Netflix has introduced “smart” socks that can
pause a show when they detect you’ve fallen asleep, and has built an all-in-one button that can
dim the lights, order a pizza, silence the phone and switch on a Netflix show. “I don’t even know
how to categorise these services anymore. Product design meets maker moments,” said Jayant
Murty, Intel’s director of strategy, media and integrated marketing for the Asia-Pacific.
Moreover, brands are starting to make smart and interesting uses of the data they collect from
consumers. Walmart’s Shopycat app will suggest to gifts for friends based on their Facebook
use, and it doesn’t just point to Walmart.com for gift items, but also recommends products from
two dozen other retailers, excluding Amazon. Meanwhile, HSBC is trialling an app called Nudge,
which tracks customers’ behaviour and prompts them if they spend too much on certain items.
“We don’t need to do focus groups anymore. Search behaviour, shopper behaviour—it’s a sharp
definition of what you’re doing,” said Rahul Asthana, senior director of childcare-sector marketing
and innovation in the Asia-Pacific at Kimberly-Clark.
MASTER OF ALL TRADES

6
Even as marketers’ traditional roles are
evolving, they still have to be their companies’
biggest advocates in the market. According
to Ipsita Dasgupta, executive vice-president
and business head for the Asia-Pacific and
Russia/CIS at Glenmark Pharmaceuticals, the
core traits of a good marketer are curiosity,
common sense, the ability to distil and prioritise,
and the capacity to build intimacy with and
deep understanding of the market. Whether
the company is a start-up or an established
multinational, Ms Dasgupta says that a marketer
should be the person within the company who
challenges the status quo and understands
what the market wants.
When it comes to delivery, the old model of
shouting your message to a mass audience
through traditional advertising vehicles no
longer works. Personalisation has become a
key element of successful marketing. “From a
marketing perspective, yes, there is a lot of use
of data, but … most people [are] essentially
shouting their messages … around this region,
when we now have the ability to cater the
right message to the right consumers,” said Mr
Temsamani of Google. “Do you want to send
the same message to everyone, or do you
want to market yourself differently to someone
who already has your services?”
The ubiquity of mobile devices now makes
it easier for companies to identify and track
their customers, allowing them to target
products and services more accurately—to
individuals. In China, e-commerce players such
as travel platform Qunar.com are capitalising
on personal data gathered through mobile
phones and logins to push users relevant
information about travel routes, hotels
and airlines. “That personalisation pushed
consumption not only through first- or second-
tier cities [in China], but much lower down, to
whoever owns that mobile phone,” said Zhao
Yilu, co-founder and partner of Zebra Global
Capital, who was previously the chief financial
officer at Qunar.com.
DEFINING MARKETING

7
With consumers now so connected through
their mobile phones, companies need a
“customer-centric” approach that uses this
technology to deliver targeted marketing.
“Everyone wants personalisation and services
catered towards them, and people are willing
to give up data if they get personalisation,”
said Danny Yeung, chief executive of Prenetics,
a biotechnology company. Mr Yeung quoted
an Accenture study of the insurance industry
that found 80% of customers would provide
their data in return for a personalised service.
“You need to have great products, value-
added services and personalisation … to be
able to leverage technology,” he said.
Shopping has become more seamless.
Consumers no longer distinguish between
online and offline platforms; they merely seek
what is most convenient. Alan Lau, a senior
partner at McKinsey and leader of McKinsey
Digital, Asia, said very few transactions are
purely offline or online: most are multi-channel.
Myntra, an Indian online fashion and lifestyle
company, has recognised the blurring of lines
between online and offline retail, and has plans
to open physical stores. “The biggest obstacle
for online fashion shopping is size and fit and
touch and feel. Data tells us an offline presence
will increase online sales,” said Ananth
Narayanan, Myntra’s chief executive.
ENGAGING THE CUSTOMER

While there is no single type of millennial, there
are some commonalities between people of
this new generation, who have grown up with
digital devices and internet access. They keenly
understand marketing fundamentals and expect
dialogue with the brands whose products
they buy. They don’t like to be talked down to,
are open-minded, and seek information from
anywhere and everywhere. The mobile phone
is millennials’ device of choice, and they use
it, in conjunction with social media, to inform
themselves about the latest products and trends.
To connect with them, marketers need to identify
their passions. Working with influencers on social
media, from celebrities to grassroots bloggers,
can have a huge impact in creating positive
consumer perceptions of a brand.
“The key influencers influence not just people
in one country but multiple countries, because
the world is very connected,” said Adrian Toy,
regional marketing director for the Asia-Pacific at
Puma. Rather than trying to speak to everyone,
Puma looks for the super-influencers that influence
the influencers. “They are not necessarily the ones
with the highest reach, but they have the highest
engagement. So we work with them in different
ways, like creating look books,” he said. Some of
the biggest opinion-makers are in Asia, and their
sway is global. Korea’s pop stars and television
shows have such a huge following worldwide that
sponsorship of Korean celebrities sends Puma’s
sales through the roof.Social media moves sales
In India, people are influenced dramatically
THE OPINION-MAKERS
8

by what their friends say. With this in mind, Mr
Narayanan said Myntra subtly mixes content
with commerce. It has found that chats hosted
on its platform generated double the sales it
made from online searches. Another successful
strategy for Myntra has been encouraging
social media users to take photos and tag
themselves wearing its clothes. The effect is that
users are creating collections for the brand,
rather than the brand creating collections for its
customers.
Teaming up with grassroots influencers has also
reaped benefits for beauty brand L’Oreal. For
one otherwise typical PR event held in China,
it also invited 50 grassroots influencers to do
live online broadcasts from the venue, giving
their opinions of the event and the products
on show. “That evening, there were tens of
thousands of lipsticks that got sold on unrelated
online shops. All these separate platforms got
connected and worked well, and it surprised
us,” said Asmita Dubey, L’Oreal’s chief
marketing officer for the Asia-Pacific.
When Puma launched its Rihanna slipper with a
live broadcast on Twitter, people from all over
the world began asking for the shoe. At the
time, it was not yet available in Asia, and as Mr
Toy pointed out, if consumers see a product on
the internet, they expect to be able to buy it.
Brands need to get better at making products
available worldwide rather than on a market-
by-market basis.
9

IT’S ALL ABOUT
THE EXPERIENCE
In future, marketing will increasingly focus on the brand experience rather than just the product
itself. “People form perceptions based on the experience with your brand—because of mobile
devices, because of the way people communicate,” said Ms Dubey of L’Oreal.
Virtual and augmented reality, although now in their infancy, will eventually have greater roles
to play in how companies reach out to consumers and bring them richer experiences. Google’s
augmented-reality mapping app is already being used successfully by museums around the
world, creating heightened interest and increased attendance.
“It’s the responsibility of the brand to take ownership of a bigger part of that [customer]
experience than just the delivery of the product itself,” said Lenovo’s Mr Roman. Users expect a
high-quality experience, and it is ultimately what will provide more opportunities to make money.
10

Traditionally, chief executives of FTSE 100 firms
have been chief financial officers rather than
chief marketing officers (CMOs), but that is
starting to change. At private-equity backed
firms, 24% of chief executives come from a
marketing background, while 19% are from
finance. A study at the University of Notre Dame
looked at 155 companies listed in the United
States and found that the firms with a CMO in
the chief executive’s chair outperformed the rest
by 15%.
What makes a CMO the natural choice for chief
executive? In 2015, 80% of S&P 500 companies
were businesses based on intangible assets,
including firms like Uber and Airbnb that rely
heavily on customer relationships. “If that’s the
case, then why shouldn’t the CMO be the CEO
of tomorrow?” asked Vivek Kumar, chairman of
the Asia-Pacific advisory board of the Global
CMO Council.
CMOs who become chief executives have
broad and deep skills and experience beyond
being great marketers. “If we want to be the
highest-paid person in the organisation, we
have to have an informed opinion,” said Ruth
Rowan, group executive of marketing
at Dimension Data. “We need to go sideways
and do other things—run a business, then
come back to marketing. That’s the career
path we need to take if we want to be
credible CEOs.”
CMOs who want to make chief executive need
cross-functional, cross-country and general
management experience. More importantly,
candidates have to be able to speak the
language of the board and give them the
answers to hard business questions.
“The CMO needs to work with sales and
financial data and make it into something that
is real and answers the questions that the board
is asking,” said Mr Kumar. “Who are the most
valuable customers for us? What are the non-
customers thinking about? What can we do to
swing them? Those are the larger questions.”
TODAY’S CMO,
TOMORROW’S CEO?
11

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