Marketing in the SDGs Era to Enhance Brand Value | A Blueprint Connecting Management and Marketing

I am Okura, and I recently retired from my position as CMO and Senior Director of P&G APACFocus Market Hair CareCMO In this article, I would like to discuss marketing approaches to enhance corporate and brand value in the SDGs era, based on the experience I have cultivated through many successes and failures. Actually, I intended to write a book as a memoir of a chapter in my career, but I decided to compile and publish it like a book on note to fit the current times. Because of that, it is quite long for a note. It might take 30-60 minutes to read it all, but please read it with the mindset of reading a book.

Since the content is quite advanced, I thought it wouldn't appeal to the masses, but thankfully, since publishing it, I have received a great response from the official note account, numerous executives, prominent marketers, and influencers, as well as many publishing offers from publishers.

https://twitter.com/maru3happy/status/1423843051563147271?s=20&t=qCzPpQVgS5l2fgmVVJDF1g

There are two reasons why I decided to write this article.

I have experience in doing business while being responsible not only for brand P/L but also for various management indicators. I have repeated many successes and failures and accumulated valuable lessons. Among them, at Pantene, #HairWeGo as SDGsa brand campaign based on a brand purpose rooted in SDGs I created. One of the series of that campaign not only became a hot topic, but it actually became a catalyst for the Tokyo Metropolitan Government to declare the correction of forced hair dyeing in schools. Also, the series of campaigns contributed to a V-shaped recovery of the business.

Recently, it is said that directly linking SDGs to business growth is a challenge for many companies, but fortunately, I was able to have the valuable experience of growing a business while truly embodying the SDGs.

This article is intended for
1) Management (Executives/Funds/Investors/CXOs) 2) Field Marketers (Marketing Managers/Agencies)
. Since it is quite long, let me summarize the main points of this article first.

By the way, I think this is an approach not often seen on note, but because I wanted to verify if it would be truly meaningful for the target readers I want to read this note, such as professional marketers, executives, PE fund managers, and agency executives, I received reviews from several people in the form of 'note complimentary copies' in advance. (If I may say so, I received many wonderful reviews. The text has become small, but please enlarge the images and read them.)

The content written in this article deals with very difficult issues. I have learned from many failures that it is not something that can be addressed with superficial measures, and it cannot be achieved without meticulous execution based on a comprehensive perspective. As a result, this note has become somewhat redundant, and some may feel it is wordy and difficult.

I hope you will read it as a 'dried squid' type of article that you can get new hints from by re-reading it several times or when you are in trouble during actual planning in the field. I don't know if this way of thinking is applicable to all industries, but I hope it will be a hint for marketing thinking that can increase corporate/brand value, and for building a brand based on a brand purpose that has a positive impact on society while growing the business, which has few successful examples in Japan yet.

Finally, please understand that the content I am talking about this time is my own unique method based on my practice and experience, while making use of what I learned at P&G, and also reading many management and marketing books. There are quite a few parts that are different from the so-called P&G-specific frameworks. Also, it is based on the content of public lectures I gave in the past during my P&G days, and it does not expose P&G's internal information.

Now, let's get started!

*Some slides have small details, so we recommend clicking on images that are hard to see to enlarge them.

1. The important management indicator for improving corporate/brand value is 'TSR' considering SDGs

Recently, terms like SDGs, ESG, brand purpose, and narrative have become buzzwords. In such an era, what is important for companies and brands? I believe it is a company or brand that can achieve both business target figures and social good through a properly defined corporate/brand purpose. As business people, achieving business targets is essential. Social good that does not contribute to business may lack sustainability and cannot be continued.

On the other hand, although it may seem contradictory, I also believe that it is dangerous to engage in SDGs-related corporate activities, branding, and marketing solely from the perspective of tools to grow the business. It becomes superficial and dishonest, and consumers are in an era where they can see through that. The best approach is for the founder's strong passion to be the starting point, defining the company or brand's purpose, and then conducting corporate activities and marketing. And, in the process of that becoming a solution to social issues, it naturally leads to business as well.Pantene's #HairWeGo also started based on my personal thoughts.

That said, in reality, it is necessary to think about business figures and social good in parallel while keeping an eye on both. From here, let's look at the specific steps for that.

[1-1: What is TSR?]

From here, I will talk about finance, which is a bit stiff. You might think at first, does this have anything to do with marketing? But please bear with me, as it connects properly! If you can understand the outline of the finance story I am about to tell, the probability of being able to implement marketing that truly enhances corporate/brand value will increase significantly.

As a major premise, as long as you are doing business within the rules of a capitalist society, you cannot escape from "maximizing corporate/brand value". And if you are a "member of management," you are expected to maximize the market evaluation and value of the company/brand, and return significant returns to those who have invested in the company. This is even more true for listed companies, and the same applies to startups as long as there are investors.

So, what does it mean to return a profit?

Here, I will introduce the concept of "TSR" (Total Shareholder Return). In the United States, the salaries of management teams are even determined by this "TSR" figure. It is that important as a management indicator. By the way, my bonus at my previous job was also determined by a figure based on TSR. "TSR" is an abbreviation for "Total Shareholder Return", and it literally means how much return was provided to shareholders.

The calculation is extremely simple: it is how much the total of how much the stock price has risen (capital gain) and how much dividends have been paid out (income gain) exceeds the investment amount.

Expressed as a calculation formula,

is the result.

Let's give an example.
Nintendo's stock price at the time of writing is 63,290 yen.
The stock price exactly one year ago was 48,880 yen. The annual dividend amount is 2,220 yen.

Applying these to the formula,

This is the result.

Since the average TSR for companies listed on the First Section of the Tokyo Stock Exchange is said to be around 9%, I think it can be said that Nintendo stock is providing good returns to investors. (Strictly speaking, it is required to exceed the average TSR of the industry to which the company belongs.)

To increase capital gains and income gains, the following are necessary.

This is difficult, isn't it? Let's look at each of these in a bit more detail.

First, regarding Profit Growth.
To begin with, how can stock prices be increased?
"Stock Price" = "EPS (Earnings Per Share)" × "PER (Price-to-Earnings Ratio)"Based on this formula, "Profit" is crucial. This is what is known as the area where the business itself can contribute the most.

Increasing Multiples—what does this mean?
Generally, multiples are determined by investors comprehensively evaluating various factors such as a company's potential growth, risk, quality of earnings, and the sustainability of its competitive advantage. Communicating these points to investors as an attractive investment opportunity is called an equity story. When many investors empathize with and are convinced by an equity story, the evaluation from investors increases, and the multiple may rise. Furthermore, in recent years, it has become necessary to consider growth, quality of earnings, risk, and competitive advantage while incorporating the perspective of the SDGs, which can be said to have increased the level of difficulty.

Increasing Free Cash Flow—what does this mean?
"Free Cash Flow = Operating Cash Flow - Investment Cash Flow." To promote income gains such as dividends and share buybacks, it is important to generate as much of this "free cash flow" as possible. (This means that if you don't have enough cash to use freely, you cannot return value to shareholders through dividends, etc.)

In other words, to increase TSR, marketing must be considered on the premise of increasing ① "Profit" and ② "Free Cash Flow" as key indicators.The point is to think in terms of "profit and cash," not sales. Furthermore, breaking this down into elements, to increase "Profit" and "Free Cash Flow", the following three major requirements are needed:
1) Sales improvement
2) Profit margin improvement
3) Asset efficiency improvement

Also, to increase TSR, an equity story for improving multiples is important, and if there is ③ "SDGs activities that lead to business performance improvement" as one element of that, the multiple should increase even more.

I have gone on and on with a finance lecture. You might be wondering why I am talking about this in a marketing article. Actually, marketing can have a significant impact on these three important management indicators (sales, profit margin, and asset efficiency improvement) and on SDGs activities that lead to business performance improvement for the purpose of increasing multiples.

For example, in terms of improving asset efficiency, what marketing can contribute is:

And so on, there are many things that can be done.

For now, let's summarize the points discussed so far as follows.

[1-2: 7+1 Drivers to Increase TSR]

We have looked at the elements to increase TSR. From here, I would like to propose the 7 drivers to increase profit and free cash flow, plus 1, which is SDGs activities to increase multiples, as the 7+1 drivers to increase TSR.

To improve sales and profit margins

I mentioned earlier that marketing can also contribute to improving asset efficiency. That said, marketing can certainly influence, in particular, "sales" and "profit". So, how can we increase "sales" and "profit"? Let's look at the seven drivers that grow TSR. First, let's start with

sales.

The real thrill of marketing is growing sales, and when sales grow, profits often grow simultaneously. We create business and marketing plans by considering which drivers should be primarily grown, depending on the situation the brand is in. Of course, it would be ideal to grow all drivers, but since money and human resources are basically limited, it is also important to determine where to focus to achieve significant business impact. For example, with Febreze, which I have been in charge of, there was

an opportunity to grow the business through purchase frequency. The product itself, "fabric deodorizer," is a relatively new category that has emerged over the last 30 years or so. Furthermore, unlike laundry detergent or shampoo, it is ultimately a product category that one can live without in daily life. Therefore, even if people bought it once, it often didn't become a habit, and it was frequently forgotten and left at the back of the household shelf.

To have customers purchase it regularly, we needed to get them to make using it a habit. It is extremely difficult to establish a completely new habit for people, so a good strategy is always to link it to an existing habit.

Therefore, we decided to develop communications such as "spray Febreze as the final touch to your cleaning routine." We would constantly air TV commercials to educate consumers, and in stores, we would create business and marketing plans that encourage the behavior of buying Febreze while they are at it by placing it in the section where cleaning supplies are sold. Let's also briefly touch upon

improving profit margins. This is also quite a profound world, so let me mention a few key points.
In my experience, as long as you grasp the key points, you can logically improve profit margins, so when I start a new assignment, I first approach things from the perspective of how to secure profits.

(5) Business portfolio organization (CORE + MORE strategy):
The definition of CORE is a brand or product that accounts for a large portion of sales and profits, has a high gross profit margin, embodies the company or brand's equity, and allows consumers to clearly feel the effects (= high repeat rate). This often applies to what are known as standard or core brands and products. A clear example is the Burberry trench coat.

The definition of MORE refers to brands or products that target trends occurring within a category or among consumers. Often, these play a role where the business size is not large at the moment, but they are given advance investment because they have the potential to grow in the future, or they are used to suppress competitors growing in this area.

This CORE + MORE way of thinking is a strategy that can be applied when managing multiple brands in a category, or even when managing a single brand. A common mistake is to neglect selling the core brand or core products and keep launching only new products. Another is to allocate marketing resources to products that do not have a viable profit structure in the first place to grow sales. The former is a simple matter: since flagship brands and products have large sales to begin with, if they decline, it is difficult to compensate for the lost sales with new products, no matter how many you launch. In the latter case, even if sales grow, profits do not.

CORE and MORE must be properly and strategically defined, and you must have the courage to discard things, especially regarding MORE. On that basis, first, allocate resources to and sell brands or products that are synonymous with the CORE brand. For new products that fall under MORE, there are tactics such as creating products with a better profit structure than existing ones, or creating products with meaningful differences so they do not cannibalize existing ones. Organizing your business portfolio in this way is an essential step for marketing strategy. It is also important for decision-making by management, so please use it as a reference.

⑥ Lowering costs:
This is an area where small daily accumulations make a difference.
For example, is it really necessary to use glossy, high-cost materials for packaging? Is four-color printing necessary, or would three colors suffice? Are all the ingredients in the product necessary to satisfy the consumer, and is there no room for reduction? Collaboration with production management and R&D is essential.

⑦ Efficient use of money:
This is the item where the most waste is hidden. In my experience, there is always waste somewhere. Waste refers to things with poor returns on investment. Major elements include R&D expenses, marketing expenses, and labor costs. Especially regarding marketing expenses, you should look at advertising costs, ad production costs, and product discount costs.

For example, are you pouring large amounts of advertising into products with poor profit margins? Are you relying solely on TV commercials for your marketing budget (TV commercials have very poor investment efficiency once they exceed a certain line)? Are you paying the asking price to agencies or distributors without comparing them to others or holding pitches? Are you paying unnecessary rebates to retailers, and so on.

The +1 SDGs that should be evaluated as a driver for corporate value enhancement in the 21st century

At the beginning of this chapter, I stated that to increase TSR, it is necessary to increase the multiple, and for that, an attractive future vision (equity story) depicted by the company or brand is required.

I am convinced that an era is coming where SDGs elements will contribute significantly as part of that equity story.While making long-term declarations of SDGs activities that align with the company or brand's philosophy, if you actually act on those commitments and they are returned in numbers as business sales and profits, you should be more highly evaluated by investors and your corporate value should increase.

In fact, in the investment world, as represented by ESG investment, the buds of this are already beginning to appear. When it comes to SDGs in the brand business, you might first think of things related to sustainability and environmental issues, but challenging issues related to E&I (Equality & Inclusion) and D&I (Diversity & Inclusion) is also a worthy endeavor. In fact, the #HairWeGo campaign for Pantene that I developed received high praise for challenging uniformity in Japanese society, with themes such as school hairstyle rules, job hunting, and gender diversity.

However, one of the challenges of corporate SDGs activities these days is that it is difficult for those activities to lead to improved business performance. I would like to look at this in more detail in the following chapters.

To summarize so far,
in order to expand corporate value and brand value,

is necessary. I have included a power chart summarizing the main points below.

2. What management should decide is "Market size expansion > Share expansion"

[2-1: Looking at the 4 sales levers of TSR from the perspective of market size expansion]

I have introduced drivers for increasing TSR from a marketing perspective to enhance corporate value, but there is one more business concept I want you to know. That is, instead of fighting for sales share with competitors within a category, "thinking about approaches to grow the pie of the category's market size itself."

Regarding this point, it seems that various companies are conducting meta-analyses in every industry, and about 60% of the sales growth rate of companies that increased sales is due to expanding the market. Incidentally, most of the rest is M&A, and surprisingly, there are almost no cases where sales grew further just by increasing market share.

To make it easy to visualize, I will introduce a few examples where the category market size has grown.

We tend to focus too much on market share within a market, asking things like, "Are our sales higher or lower than our competitors?" While that is important, we should look at the TSR drivers mentioned earlier from the perspective of how we can expand the market.Let's look at the specific example of Febreze fabric deodorizer mentioned earlier.

Let's examine it using the specific example of Febreze fabric deodorizer mentioned earlier.

Every driver is important, butthe most important lever for expanding market size is "number of buyers," or in other words, how much you can increase the number of new users. Incidentally, the next most important thing is to increase the "purchase unit price."I will omit the details as it would take too long, but this has also been proven through meta-analysis. The examples of market size expansion mentioned above are generally the same.

To state a few points for increasing the number of new users and purchase unit price:
1) Identify consumer segments that are not yet using the existing category, and provide new benefits, usage methods, or experiences that resonate with those segments to attract consumers who previously did not turn to that category,
2) Solve dissatisfaction with existing categories with high-value-added, high-price-range offerings,
and so on.

Actually, the methods for expanding market size are determined to some extent by the size of your brand's market share and the household penetration rate of the market your brand is competing in, but this would also take a long time to discuss, so I would like to summarize it another time if the opportunity arises.

Now, let me explain why acquiring new users is important based on an interesting market principle. By understanding these, youcannot predict the individual purchasing behavior of consumers, but you can almost certainly predict how the market will ultimately be formed as the sum of each consumer's behavior.can.

[2-2: "High repeat rate" and "sales" are not proportional (Double Jeopardy Law)]

Please look at the table below.

What this table suggests is thatmarket shareorhousehold penetration rateis proportional topurchase frequencyandloyalty(the percentage of the total annual category purchase volume that is spent on that brand).

In other words, it shows that it is impossible for a business to expand solely because its repeat rate is extremely high, or that it is impossible for a brand with a small sales volume to have a higher repeat rate than a brand with a large sales volume.This is known as a law (Double Jeopardy Law) that applies not only to consumer goods but also to many other categories.

For example, the D2C business that has become a trend in Japan over the last few years.It is common to grow a brand while communicating with core fans at first, but aren't many D2C executives facing the challenge of sales hitting a ceiling once they exceed a certain level of sales?Just as this law states, if you cannot create a way to fight that captures new users, it is difficult to continue growing a business with repeat customers alone.

[2-3: Consumers try and use multiple brands (Duplication of Purchase Law)]

Individual consumer purchasing behavior is random every time,meaning that purchasing behavior occurs as if throwing darts at a target.that is.

For example, let's say you want to buy some beer at the store. There are many choices, right? Kirin, Asahi, Sapporo, craft beer, etc. At this moment, consumers feel like they are throwing darts at a target where multiple brands are placed unevenly to make their purchase decision.

And, the size of each brand's target area is proportional to its market share. The brand with the highest market share (perhaps Kirin right now? By the way, Managing Director Yamagata, who is very active at Kirin Brewery, was my mentor when I was a new graduate) has the largest target area.

Therefore, as I mentioned in the Double Jeopardy law above, brands with larger market shares also have higher repeat rates. And another thing we can say from this is that a single consumer tries and uses multiple brands within a category. Of course, if you look at the individual level, there are people who say they only ever use this one brand, but in the aggregate, the majority of people try and use various brands.

Also, 50% of a brand's sales are basically composed of light users (users who buy that brand only about once a year), and every brand loses 40-60% of the users it acquired the previous year. This doesn't necessarily apply to services like SaaS, but in the case of BtoC brand businesses, it is said to apply even to high-end products (such as fashion or jewelry).

Increasing new users. This is the most difficult, and at the same time, the most exciting job for a marketer. This is because, compared to the other three TSR sales drivers, acquiring new users requires the most science and art. So, how can we acquire new users? I mentioned the dart example earlier, but to have consumers hit the target with darts, you just need to make the target area larger. In other words, you increase the share your brand occupies in the consumer's mind. To do that, it is necessary to increase brand value.

At the time, Pantene was a cheap, old brand that "my family or I used to use in the past" in the fiercely competitive hair care market where new brands and products were being launched one after another (and at high price points), which is common for long-established brands. When looking at the TSR drivers from the perspective of market expansion, the main challenges were acquiring new users and premiumizing the brand.

3. "Brand Value = Brand Equity ÷ Price" determines business results

So, what exactly is brand value? It all boils down to this formula.

I believe this formula encapsulates the essence of all business.This is because the essence of all commerce is whether the performance of the product or service the consumer receives exceeds their expectations compared to the money they pay. Furthermore, the performance obtained from the product also has a major impact on the brand image. Therefore, brand equity is determined by the actual product performance and the accumulation of images that consumers have toward the brand. And, it is statistically proven that the higher this brand value is, the more sales will grow. (By the way, in a familiar example, "cost performance" has the same meaning. We judge what we should buy based on whether it was a "good product" for the price.) Now, what does

brand equity mean more specifically? It is the essence of the brand engraved in the consumer's Head and Heart. It is the image or emotion that pops into your mind when you hear the name of a brand. It might still be a little abstract. So, let's break down the components of brand equity.

①Awareness:
Literally brand awareness. It all starts with brand awareness. Here, let's keep in mind that there is both quality and quantity in awareness. Quantity is what is generally referred to as awareness level. Quality consists of two types: Top of Mind awareness and Unaided awareness. The former is the first brand that comes to mind when asked, "What brands do you know in this category?" The latter is the brand that comes to mind spontaneously when asked, "What brands do you know in this category?" (Even if it's not the first one recalled, it counts as long as it is recalled.) If you can expand to qualitative awareness, brand equity becomes even stronger.

②Performance:
The performance that comes to mind about a brand, commonly known as benefits. The performance of a brand and product is always at the center of the brand and is also what consumers first experience. For brands where this is shaky, the first step is to solidify this part. Moreover, those benefits need to be more differentiated from competitors.

③ Imagery:
This is the abstract image that comes to mind regarding the brand. It includes things like what kind of person would use the brand, what personality the brand would have if it were a human (so-called brand character), and what kind of history the brand has.

④ Judgement:
This is a state where consumers have made a certain judgment that the brand is better than its competitors regarding the Performance and Imagery mentioned above. For example, that this brand is the most reliable, or that this brand properly delivers the benefits it promises.

⑤ Feeling:
This is a state of having a positive emotional reaction toward the brand. For example, that the brand gives you confidence when you use it, that you feel like you are doing the best thing for yourself, or that you feel like you are doing the best thing for your family by using this brand.

⑥ Attachment:
This is what is known as a state where the consumer has an emotional attachment to the brand, such as feeling troubled if the brand were to disappear, wanting to recommend it to others, or loving the brand.

What is important here is that the elements mentioned above are built roughly in order, and must be built in that order. Also, these can be tracked quantitatively through fixed-point observation.

To classify them simply,

This is what it comes down to.
Something that marketers and creatives aiming for buzz or advertising awards often do is create emotional creatives or campaigns in a single leap without the foundation of the brand being built, but it is important to first properly create and communicate functional benefits, and then provide emotional benefits to consumers.

By the way, this is also statistical, but the more you can expand toward the lens of ⑥ Attachment, the more sales will grow.

Also, as mentioned in Chapter 1, in today's world, consumers have come to expect companies and brands to fulfill social roles. In other words, brands that have SDGs-like values and act properly are more likely to conquer the higher-level concepts of brand equity: ④ Judgement, ⑤ Feeling, and ⑥ Attachment.

In the case of Pantene, as it is a long-established mega-brand, awareness was sufficient in both quality and quantity, and an image regarding performance was still firmly established due to assets from the past. However, with the market flooded with new brands chasing many attractive trends, there was an opportunity in the higher-level concept of consumer connection within brand equity.

4. Brand value increases by being superior to competitors in the "8 Factors"

So, how should we grow each of these elements of brand equity and, by extension, increase brand value? Here, we will introduce the "8 Factors" that a brand should pursue and the points for thinking about their KPIs.

For the most part, KPIs can be quantified for all "8 Factors," but since it would take too long to explain everything, we will focus on the points necessary to move consumers (excluding retail). If you can demonstrate superiority over competitors in at least 5 of these "8 Factors," the probability that brand value will increase and business will grow should increase significantly.

#1. Communication

This is literally the communication part of the brand.
Having mainly been in charge of beauty products like SK-II and hair care in the past, I feel this even more keenly: the era where you only needed to cover mass advertising TV commercials and in-store is over. Recently, media has become increasingly complex, and consumers' attitudes toward media consumption have completely changed. The premise we marketers should stand on is to think that the initiative has shifted to the consumer. Consumers basically think of advertisements as annoying, and it has become difficult for them to listen to push advertisements that are spoken unilaterally by brands.

Based on that premise, the following can be cited as KPIs for this factor.

The first two are easy to understand and often heard, but the remaining three are more important.
③ Number of searches on search engines is an indicator of how much interest in the brand you have been able to arouse in consumers. (In an era where you can easily search with a smartphone in hand, the fact that "the brand name is not searched" in the first place means, in a sense, that you have not become a brand that consumers want to know more about.)
④ # of engagement on SNS is an indicator that looks at exactly how much consumers tried to engage with the brand on SNS. (In an era where you can easily search with a smartphone in hand, the fact that "it is not talked about on SNS" in the first place means, in a sense, that you have not become a brand that can blend into the consumer's daily lifestyle.)
⑤ Next purchase consideration rate is an indicator that asks, "When you finish using a certain brand you are currently using, would you like to buy it at the next purchase timing?" It is not just awareness, but an indicator more directly linked to purchase.

As you may have noticed, ① and ② are metrics leaning toward push-type initiatives, ③ and ④ are metrics for pull-type initiatives, and ⑤ is something like a comprehensive metric that encompasses all of them. (I will explain push and pull later.)

#2. Product Performance

As I mentioned in the brand equity section, product performance is the core of a brand. Performance here refers to what is called chronic benefit, which is the effect obtained from a product that can truly be felt after using it for a certain period. For example, in skincare, if you use a dark spot serum for 30 days, the spots actually decrease.

There are various research methods to quantitatively examine the quality of performance, but here, I would like to suggest ratings & reviews on e-commerce sites as a KPI that you can use immediately. For example, on Amazon, is your product getting better scores and more reviews than the product you are benchmarking as a competitor?

#3. Five Senses Stimulated by the Product

It has been a long time since the term "Instagrammable" appeared, but in this era, creating products and services that appeal to the five senses is becoming truly important. The unique and interesting texture when you first touch the package, when you open the package, and when you first use the product... These do not play a major role in terms of the chronic benefits mentioned above, but they help appeal to consumers about the effects and benefits, and they also help spread the brand and product on social media. For example, although it is an old example, facial cleansers with scrubs are a good example. It is unclear how much the facial cleansing effect actually improves by including scrubs, but thanks to the scrubs, it feels like it was washed well, and above all, a new facial cleansing experience became possible.

#4. Packaging

Packaging is also an advertisement that should best embody brand equity.
Packaging needs to be considered from the perspective of the store or online store, and from the perspective of the actual product usage experience. In terms of stores or online, the perspective of "See," "Select," and "Buy" is used. "See" means that consumers can stop and recognize the brand even when looking from a distance, "Select" means that they can immediately choose the best product for themselves at the selection stage, and "Buy" means that the benefits the consumer wants are presented at an appropriate price.

From the perspective of the usage experience, it is important that it has high usability and is easy to use. Also, these days, creating packaging that considers sustainability is a major challenge.


#5. In-store Deployment (Offline/Online)

"Distribution," "Display," and "Price" are the elements. In the first place, if there is no "distribution," the product will not sell (and distribution also greatly affects brand awareness), and the more exposure you get with "display" (so-called special sales or special corners), the higher the sales will be.
Also, it is important to think about both "distribution" and "display" in terms of both quality and quantity. From the perspective of quality and quantity, we will develop in-store deployment in accordance with the basic philosophy of "See," "Select," and "Buy" mentioned in the packaging section. In terms of quality, it means whether it is placed on a shelf that stands out properly, or whether a wide variety of products are placed, etc. Since the store is the moment when a purchase occurs, it is directly linked to sales.

And to have wonderful in-store deployment, you need to have a brand/product design with clear intentions and collaborate with retailers. This is also a very deep world, but if I start writing about it, it will be long, so I will write about it another time if I feel like it!

Also, online, it becomes important to win with CARS, which stands for Contents (enrichment of E-contents on product sites/pages), Assortment (whether the specific product types that consumers seek online are available), R&R, and Search (SEM/SEO within e-commerce sites).

#6. Value-Added for Retailers

As mentioned above, whether you can collaborate well with retailers is directly linked to business. As value-added for retailers, we set KPIs such as whether you are able to grow the market size of the category (as mentioned at the beginning, retailers also know that growing the category means growing the business, so they care about this metric!), and whether you are giving sufficient retail margins compared to competitors.

By the way, although it is also greatly related to distribution, collaborating well with retailers to increase offline distribution is one of the most important points for business expansion. There are many examples in US D2C where sales expansion stopped with only online at some point, and eventually, it became possible to expand the scale by distributing to Walmart or Target, and only then was it possible to generate profits.

#7. Value Provided to Consumers in Terms of Price

Pricing must be done with clear intentions. As a major premise, as stated in brand value, is it a price setting where consumers are happy to pay for the benefits they get from the brand? Also, is it a price setting that can properly grow the market size of the category (is it higher than the market average), and within what range of plus or minus percentage compared to the benchmarked competitor can sales and profits be maximized? This can also be measured quantitatively. You can just ask consumers in a fixed-point observation whether the brand value is high on a 5-point scale and compare it with competitors.

One point I would like you to be careful about here is price reduction measures. I am not saying that price reduction is evil. Appropriate price reduction at the time of product launch or when it really matters contributes to acquiring new users. However, in my experience, and this is also statistically proven to some extent, constant price reduction often only promotes purchases by repeat users and does not contribute to acquiring new users. Therefore, as a marketer, you should first focus on acquiring new users by raising the benefits and equity provided by the brand or product, thereby relatively increasing the brand value without changing the price.

#8. Connection Between Society and Brand

This is a part that overlaps with the "communication" factor, but it is to find an angle where the brand and social interests overlap well and create brand communication. It is not an era where consumers will listen even if a brand sends out a self-serving message. Therefore, by overlapping with social interests, it becomes easier for consumers to listen. As for KPIs, those mentioned in the communication section also apply, and it is ideal for social topics and the brand to be searched together.

And by demonstrating superiority in these "8 factors," it also leads to mastering the following 5 evaluation points by which consumers evaluate the brand.

The idea is to use mass advertising, digital, and PR to build a brand image among consumers in advance, use that as a trigger to provide appropriate information—mainly online—to those who become interested and look up the brand, ensure consumers purchase it in-store or online, delight them when they first touch and use the product, satisfy them when they continue to use it for several days, and thereby turn them into repeat customers and make it easier for them to recommend the brand.

In the case of Pantene, there were minor weaknesses in each of the "8 Factors," but the biggest issues were in "communication" and the "connection between society and the brand."

Among these, the KPIs I mentioned—"number of brand name searches on search engines," "# of engagement on social media," and "next purchase consideration rate"—were fatal. To be precise, before I took office, the situation was typical mass marketing for consumer goods: running TV commercials that looked no different from any other shampoo over 1,000 GRPs every month, and continuously providing retailers with special promotional packs and discounts to secure in-store exposure, so these KPIs weren't even being tracked in the first place. Therefore, while I worked on fixing the KPI aspect, I also revived the team capable of actually implementing the "8 Factors."

5. The 21st Century Marketing Framework is "Talkability" x "WHY/WHO/WHAT/WHERE/HOW"

Let's summarize what we've discussed so far using the Pantene case. Despite being a long-established brand with sufficient awareness, Pantene continued to compete only with low-priced mass-market products. Consequently, it ended up in typical, boring mass marketing (continuously pushing undifferentiated TV commercials to sell old, cheap products, and maximizing in-store exposure), and had devolved into a brand that long-time users only bought during special sales.

Therefore, when looking at TSR from the perspective of market expansion, acquiring new users, and doing so by launching products with prices above the market average, became one of our major strategies. In particular, to acquire new users, improving brand value was an urgent task, and looking at the drivers of brand equity and the "8 Factors," there was an opportunity in emotional connection with consumers and making the brand itself a topic of conversation. By properly organizing the drivers to truly grow the business and formulating a grand strategy, we then began to use the WHO/WHAT/HOW marketing framework, which became famous thanks to our predecessors in the P&G mafia. I have added my own flavor to this framework inherited from my predecessors.

Considering the media environment surrounding consumers, which is becoming more complex due to the rise of the SDGs and digitalization, I believe frameworks should also constantly evolve. In particular, the changes in WHERE/HOW can be said to be remarkable. And what I introduce below is something I consider essential for modern brand builders and marketers. This time, let's focus on the Pantene #HairWeGo case.

[5-1: TALKABILITY MARKETING]

Let's confirm the major premise surrounding modern consumers. With the progress of digitalization and the explosive increase in the amount of information, consumers want to block information as much as possible. Pushy advertisements are out of the question. Moreover, in such a situation, consumers are even trying to protect themselves from the brand's voice by using social media and other means to refer to the voices of third parties, such as friends and family, rather than the brand's voice. The initiative is shifting completely to the consumer. As brand builders and marketers, we must make it a major premise that our communication design for the brand and its associated advertising is something that consumers want to see for themselves, want to talk to others about (thereby spreading it on social media), and want to look up. I call this "Talkability Marketing." Talkability means having something to talk about.

[5-2: WHY]

The first step is to clarify why the brand exists in this world (brand purpose). It is also called brand narrative. In the case of brands that already exist in the world, even if it is not explicitly stated, there should be hints if you unravel the history and birth story of the brand. Also, even if it is stated in some way, there is a possibility that it has become outdated, including its expression, as times change, so it is necessary to modernize it. In the case of a new brand, the founder's thoughts and why they are starting the brand would correspond to the WHY.

For example, Red Bull's brand purpose should be expressed as, "Give wings to people & ideas."

In the case of Pantene, we naturally defined the brand's reason for existence as, "Supporting a positive step forward for everyone through the beauty of hair that is uniquely yours."

This is the real thrill of being a marketer, requiring both logic and sensibility, but as a piece of advice, studying what kind of brand expressions and communication the brand used when it was doing well in the past can provide hints.

This WHY is the starting point for everything. And now that the SDGs are starting to be called for, its importance is increasing more and more. According to one survey, even in Japan, which is behind in SDGs compared to the West, 60% of consumers expect companies and brands to play a good social role, and that can also be a reason for purchase. Also, fundamentally, if people can empathize with the reason for a brand's existence, it can generate talkability, and consumers will be more likely to listen to the brand's communication.

[5-3: WHO]

Regarding consumer targeting, I think the basics have been discussed in various books and articles by my predecessors at P&G, so I will leave that to them, but I would like to write about a somewhat unique perspective from the viewpoint of marketing to generate talkability.

As I explained in the section on expanding market size, one of the classic measures to acquire new users is to expand the pie of consumers that the brand has not captured (or has lost). It's the same story as Mr. Morioka of Katana setting USJ to be enjoyed by the whole family, not just Hollywood fans. In the case of Pantene, as mentioned above, there was clearly an opportunity in the younger generation.

Next is to clearly imagine a specific "tribe" and its community at n=1, and unearth deep consumer insights. "Tribe" might also be called a community. A trap that marketers often fall into in consumer understanding and target setting is thinking in terms of so-called demographics, such as "working mothers." Even if you imagine consumers by demographics, it is difficult to imagine deep insights, and it will only be commonplace.

Also, to generate talkability, it is easier to spread if you talk to a tribe that belongs to a community. For example, "ultimate muscle training enthusiasts." "Tribes" who are immersed in something often form communities as well. And once a fire is lit within that community, it often spreads to others. Once it catches fire, it becomes easier to be picked up by the media, etc. What does it mean to draw an "insight"? All talented marketers are good at clarifying consumer insights. In fact, marketers who cannot do this may not be first-class.



"Insight" is something that the consumer had not been able to express themselves, but when they hear it, they slap their knees and think, "Ah, I see, you understand me." And a great "insight" includes not only things related to the product category in which your brand is competing, but also things that intuitively appeal to human life and living. Think about it. Consumers probably don't think about the category our brand belongs to for even a few minutes a day. Therefore,

it is important to understand the consumer as a human being within the framework of life, and if you can find a strong connection with the category within that, it will be easier to lead to business growth.

In the words of the famous Jobs Theory, by completing a functional job, you can also complete a social/emotional job. It's a somewhat cliché example, but the functional job of a home space deodorizer is to remove odors from the house and make it fresh; the social/emotional job is to be recognized as a good host when guests come over, and so on.

Now, how was it at Pantene? The "tribe" I first set my eyes on was job-hunting students. This was the younger generation where Pantene had weaknesses (plus, the timing of job hunting is when various purchasing habits change, so it's easy to switch brands and increase LTV), and we were able to draw an "insight" that perfectly matched Pantene's WHY: they want to go to job interviews with their preferred hair and clothes, but they can't express their individuality because they succumb to peer pressure.

[5-4: WHAT]

Once you have an image of your target consumer, the next part is to define the value and message the brand provides. From the perspective of talkability, there are several points to consider.

・Define a 'three-way satisfaction' (sanpo-yoshi) WHAT where the brand, consumer, and society overlap
As mentioned above, consumers basically do not care about brands. Therefore, successfully getting society on your side becomes important. If you can successfully tap into social topics that consumers are interested in, they will be more likely to listen. Moreover, there is also the aspect that it becomes easier to get picked up by the media. A common mistake made by marketers and creators aiming for a one-hit buzz is creating campaigns that have nothing to do with the brand. That is a waste of money that yields nothing back to the TSR.

・Plant seeds for talkability

To generate conversation, it is crucial to launch a strong message, one that is controversial enough, based on a properly selected specific theme, at a moment when empathy is easily generated strike. Let's look at the example of Pantene's #WhyIsThisHairNotAllowed.

It goes something like that.

This campaign not only contributed to business, but also brought about a major social outcome, with the Tokyo Metropolitan Board of Education actually requesting that public schools in Tokyo stop forcing students to dye their hair black.
【5-5: WHERE】

It is about properly understanding where consumers are and where the touchpoints are that are likely to generate conversation. As I have stated many times, the era of only TV and storefronts is over. Please look at the figure below. The creators of content are broadly categorized into brands, media outlets, influencers, and consumers (so-called UGC), and this is a model of which platform to use to deliver that created content to consumers according to the purpose.


We formulate marketing plans while properly understanding the behavioral attributes of consumers in the category where your brand is competing, where the target consumers are, and considering which creator's content will resonate most with consumers depending on the touchpoint, marketing plans are formulated. For example, depending on the category, more people are searching directly on Amazon than using search engines like Google for product searches. In that case, you should prioritize Amazon over Google and spend money on search measures, right?

Note that I will refrain from going into detail as it would become too complex, but it is more effective to think about WHEN together when looking for WHERE. It's about when and where you can reach consumers so that they are more likely to open their hearts to the brand. For example, I think 'spring cleaning fairs' are often held at drugstores at the end of the year, and for brands selling cleaning supplies, the end of the year is a good WHEN when consumers are willing to open their hearts.

【5-6: HOW】

Once you have an idea of where consumers are (WHERE), the final step is HOW (what kind of content to use to convey the WHAT (message) created based on WHO). This might be the part generally referred to as marketing or advertising in the world. (If it is just HOW, it is marketing in a very narrow sense.)

・Create a 5A Path to Purchase (customer journey)
First, map the content to be created for each phase according to the 5A customer journey. As I have stated repeatedly, one fundamental idea in 5A is that consumers do not trust what brands say and are difficult to listen to. Therefore, Ask and Advocate are especially important in the modern age. This means whether appropriate content is prepared at appropriate touchpoints when consumers are curious and investigate a brand, whether content from third parties recommending the brand is prepared, and whether mechanisms are prepared to make third parties want to talk about it (otherwise, it would become fake-looking content). Let's look at the example of Mr. CHEESECAKE this time. In the case of Mis-Che,

it is wonderful that they were able to create a viral loop very skillfully, especially with ASK and ADVOCATE. Also, it seems that Instagram was the main touchpoint for the entire funnel. For small brands or brands starting without spending money on advertising, it seems that focusing on ASK and ADVOCATE while using SNS effectively like this is one way to win. Note that for large-scale brands that spend plenty of money on advertising, AWARE and APPEAL are often considered separately.

・How to create content: The concept of push and pull
Since there are many books and articles explaining the customer journey and 5A, here I will share the secret sauce I have cultivated by spending hundreds of millions of yen across markets and various categories around the world, testing every possible touchpoint.Naturally, if the content is not good, you cannot move consumers.When creating content, first remember the concept of push and pull.

Push content is, literally, something that a properly branded brand unilaterally talks to consumers about. TV commercials are a typical example, and short-form videos on YouTube, banner ads, etc., also fall into this category. Basically, it is used for the purpose of reaching consumers widely and shallowly. In terms of 5A, it contributes to awareness (striving to appeal).

On the other hand, pull content refers to content that makes consumers interested and want to know more about the brand when they see it. And, as a trend, the creators of the content are often media or influencers rather than the brand itself. This is because, as I have stated repeatedly, consumers basically tend to ignore what brands say.

So, specifically, how should you create good pull content?
One answer lies in “search back”.

What consumers are actually searching for are topics that they have already shown interest in themselves, so it becomes a hint for creating the strongest pull content. It is very important to know these consumer trends for each platform (Google, Facebook, Instagram, Twitter, etc.). This is because consumer search interests tend to differ by platform, and therefore, it is necessary to create content optimized for each platform.

For example, on Twitter, people want to know more realistic reviews about products that are specifically on their minds, while on Instagram, they want to know more general trends that are popular right now. There are cases where content worked well on one platform but not so well on others.

Another secret to creating good pull content is to properly find third parties (so-called influencers or media outlets) who have strong influence on the tribe set as the WHO mentioned above, and work closely with them to create content together. By doing so, you can create content that does not feel fake and truly resonates with the set tribe.

The point to note here is to properly manage the coordination between content and the brand. A common failure is being too swayed by the opinions of influential third parties, resulting in content that buzzes but fails to intuitively convey what brand it is about or why that brand is good. If this happens, it becomes a waste of money.

If you design content properly following these steps, the ROI of your advertising will jump many times over.

Furthermore, in my experience,

This is because in categories with high interest (cars, luxury cosmetics, etc.), consumers take time to research before purchasing and want to refer to the opinions of various people. In such a situation, it is meaningless to just hit them with push ads that talk unilaterally from the brand.

The reason why you should use targeted push ads like digital instead of mass reach in 3) is simply that if your brand's household penetration is still low, it is more investment-efficient to prioritize ads to niche segments that are more likely to buy your brand.

・Media & PR Planning
Once you can create the 5A and the content to be made is clear, you do media planning. This area has a huge number of tactics, and I have considerable knowledge myself, but since the volume is vast and deep, I will omit the details this time. However, just a little bit from the perspective of the main theme, how to generate talkability and get consumers to listen.

There seem to be people who think that if you just create good content or creative, word-of-mouth will naturally increase and media will pick it up, but in 90% of cases, that is not the case.Talkability is only born when you firmly balance media and PR planning and it meshes with the created content in the best state. For example, first create push content with a message, and use that as leverage to get media exposure through PR. When the campaign starts to become a topic in the world, use advertising costs to boost the push content further to gain more awareness, and at the same time, use advertising costs to boost the content picked up by PR and influencers.

・ONE Team Structure and Tracking PDCA System
I have stated various things. The WHERE/HOW territory is complex. Design the 5A while being conscious of where the consumer is (WHERE), and once you understand consumer interests by doing search backs on each platform like Google, Facebook, Twitter, etc., have the four parties—brand, media, influencers, and consumers—create content optimized for that, and accelerate it with PR and media planning. The people involved are also vast. Agencies for each area (creative, PR, media, storytellers who draw the overall picture of communication), each platformer (Google, Facebook, Twitter, etc.), and so on.Therefore, the brand manager must stand at the center, lead all stakeholders, and assemble the puzzle. Yes, it is exactly the same role as an orchestra conductor.Furthermore, you cannot let your guard down even after launching the campaign. Every day, or every week, you must gather the relevant parties to monitor the progress of social listening and digital media performance, and take appropriate actions.

As a summary of WHERE/HOW, how was it for Pantene's #HairWeGo ?#Let's make job hunting hair freer in the Reiwa eraLet's look at it briefly with this case.
We were committed to making the complex overall picture, which utilized everything including comprehensive marketing, media plans (TVCM, digital, outdoor advertising), PR, and influencers, function.

We captured the timing of October 1, 2019, the "first informal job offer ceremony of the Reiwa era," as a moment that the target job seekers, prospective employees, and by extension, society would pay attention to, and we carried out a very high-difficulty overall design that was conscious of how we could create "signs of social change (signs that job hunting styles might really become free)" within the project as a point to maximize that moment.

For that purpose, even if Pantene declares the message alone, it is difficult to be perceived as a sign of social change, so we started the project from recruiting supporting companies, on the premise of developing message advertisements together with many supporting companies.

In this way, we organized PR and media plans so that the job seekers could firmly understand the aspects where society began to move and change. For example, making it picked up in the informal job offer ceremony special feature of a TV program, etc.A series of #HairWeGo campaigns are generally posted on the Yahoo Top, and this job hunting campaign was also posted on the top as aimed.

It is a very detailed and difficult task, but through the accumulation of such integrated planning, it led to results as a brand.

6. To connect the theme of SDGs with corporate management and brand marketing

【6-1: What is necessary for brands in the SDGs era】

I have written at length, and I have finally reached the point I want to emphasize the most. In a world that is becoming this complex, what kind of companies and brands will fit the coming era, the SDGs era? As I stated at the beginning of this article, I believe it is having a proper corporate or brand purpose, and being able to balance business and social good based on that.

Also, ideally, there is the maxim force for good, force for growth (be a force for social good, and as a result, a force for business growth), but good should come first, and growth should follow as a result. Otherwise, it will look fake and superficial.

I will record specific advice for balancing these two.

[6-2: What is required of a brand builder in the SDGs era]

I have intentionally used the term brand builder throughout. I also write 'brand builder' in my SNS profile.

A brand builder is, literally, someone who can build a brand. To become a brand builder who can play an active role in the Reiwa era and the SDGs era, I believe two aspects are important. Let's look at them, including the meaning of summarizing what has been said so far.

I consider marketers to be the same as artists of the brand. There is a book I love, 'Can You Create Emotion?' by Joe Hisaishi, which is one of my favorite books.Marketers in the SDGs era must find the optimal solution at the intersection of consumers, society, and the brand, and while firmly achieving the TSR committed to shareholders, how can they create emotion for consumers?I believe this balance is the greatest joy as a brand builder and marketer. Personally, through the series of Pantene #HairWeGo campaigns, the results were covered by media not only in Japan but all over the world, and above all, I was able to directly glimpse an unbelievably large number of positive reactions from consumers, such as 'I was moved' and 'Well said, Pantene,' and there was no moment happier than that.

Create a brand that fulfills social responsibility, is loved by consumers, and as a result, grows the business. There is rarely such a wonderful job.Another aspect is to be a

brand entrepreneur. As I mentioned in the WHERE/HOW section, understand and master the diversifying digital and media, stand at the center of many stakeholders and lead, and create and orchestrate multiple push-pull contents. Especially since digital marketing is a world that changes day by day, there are times when no one knows the correct answer. In that, how to test on a small scale and learn quickly. An entrepreneur's mindset is truly required.Also, you should never give a brief to an agency where the strategic intent to grow the business, as described in this article, is not clear, and then just leave it to them. Only when the brand's stakeholders get their own hands dirty, enter the process thoroughly, think hard together, and properly orchestrate the whole thing, will a wonderful plan be born.

Postscript:
Since the volume has become quite long and I have used many frameworks, I will include a single picture at the end as a souvenir where all the frameworks I talked about today are organically connected. I think there is almost no other theory in Japan or the world that has connected management, marketing, and SDGs so comprehensively and organically.

※ This slide is quite detailed, so we recommend viewing it in enlarged mode.

References:

Reading is a hobby, so I have literally read hundreds of books, and among them, I will list the '10 Books I Recommend to Become a Brand Builder/Marketer Who Can Win in the 21st Century' which also serve as references for this article. I will introduce them with the intention that it would be good for everyone to read them in order, from business strategy to marketing, in light of the content of this article.

1. Playing to Win: How Strategy Really Works:
A book by the legendary former CEO who restored the performance of P&G as a whole. In this article, I did not mention much about 'business strategy,' but since business strategy should exist before marketing, and marketing should be within that, I recommend it to all managers and marketers. In terms of this article, the CORE + MORE strategy part comes from something relatively close to this content.

2. How Brands Grow:
Although it is a book with pros and cons, it is very useful for understanding a certain pattern for growing a brand business. By the way, Mr. Morioka's Probability Thinking Strategy Theory also seems to be quite influenced by this book.

3. Marketing 4.0:
A book by Dr. Kotler. I believe it is a must-read for marketers, brand builders, and executives living in the 21st century. The 5A model introduced in this article is also detailed here. It is excellent for gaining a bird's-eye view and understanding the entirety of WHY/WHO/WHAT/WHERE/HOW. Needless to say, Dr. Kotler's past marketing1.0-3.0series is also essential reading for understanding the transitions occurring alongside the changes in the marketing era.

4. Let's Talk About True Brand Philosophy (WHY/WHAT):
A book by a legendary former CMO of P&G Global. He is a pioneer who has been advocating for brand purpose for about 20 years.

5. Jobs to Be Done (WHO):
A book by Christensen, the author of the famous The Innovator's Dilemma. This is also a must-read. It covers the JTBD concept I wrote about in this article. However, even if you understand the theory, it requires considerable training to put it into practice.

6. The 22 Immutable Laws of Branding (WHAT):
A book by Al Ries, a global authority on marketing. It comprehensively states the laws of branding. Although it is not phrased this way in the book, the push-pull concept I introduced in this article is actually mentioned several times within it. Al Ries's books are numerous, and I recommend taking the time to read them all. You won't regret it. In particular, this book is also recommended for executives. It should provide hints on how a CEO should engage with a CMO regarding the somewhat eternal theme of CEO vs. CMO.

7. Books Related to Mr. Adachi (HOW):
A book by Mr. Adachi, who also provided a recommendation for this article. I have always admired Mr. Adachi's marketing methods because they don't feel like typical P&G. Regarding the "talkability" I wrote about in this article, I believe Mr. Adachi's plan is one of the best examples in Japan. His other books are also highly recommended.

8. Tomorrow's Communication (WHERE/HOW):
A book by Sato Nao. I read it when I was still a young rookie, and I found it very interesting how different it was from the P&G way of thinking. Looking back now, I feel that there are parts similar to the 21st-century marketing framework I wrote about in this article. Sato Nao also has various books, so please give them a read.

9. Data-Driven Marketing (HOW):
This book is quite heavy and advanced. I used it as a reference during my P&G days when I was promoting DX in the media domain of the business I was involved in. If you talk about data strategy only in the HOW part, it becomes a peripheral discussion and loses its essence, so it must be discussed from the business strategy stage. However, that becomes a very difficult conversation, so you might want to read it as a reference for the HOW part for now.

10. Can You Create Emotion?:
A book by the famous Joe Hisaishi, also introduced in this article. It makes you realize the similarities between brand builders and artists. Furthermore, it is the book that made me, who was originally super left-brained and completely clueless about what an "idea" was, realize that "anyone can become a good artist or creator if they practice." As a result, I have managed to win brand and advertising awards around the world, including the Cannes Lions.