Marketing in the age of the customer

Thank you for that. So I'm Oliver and I'm Arun and we're from Arle. So we want to talk a little bit about how we approach this term of digital and technology and how we aim to win in the age of the customer driven by technology. I'm going to talk a little bit about how we approach this from a centralized team. So I'm in a team in our marketing department working only with digital supporting our marketing rights and Arun is... Arun Kishorekwaranamadhyay, Marketing Manager, Arun Kishorekwaranamadhyay, Marketing Manager, Well I work in the category team specifically on cooking cheese. And contrary to what Simon said, I'm not one of the clever digital marketeers that you'll hear from today. I'm just a marketeer who sometimes uses digital channels to get closer to consumers. Or just clever. Cool. So our title is Shortening Time to Market with Customer Driven Innovation and Online Focus Groups. And three themes we're going through. Arle Foods, just very briefly touching upon what you said, we're not the biggest dairy company in the world, but we are aiming if not to be then to move closer to the top. We are the fifth. Thanks Arun. We are the fifth biggest dairy company in the world and the largest owned organic. Then I'm going to talk a little bit about our more theoretical approach. So I have the buzzword slides and then Arun takes over with actual knowledge. So this is Arle and these numbers are from 2014. Just to give you an idea about how much milk goes through the fifth biggest dairy company in the world. We produced 25 billion glasses of milk in 2014. Which equals 3.5 glasses for every person on the planet, seven times to the moon, if you stack them all 47 times around the planet. And that's only milk and not powder, excluding every drop of milk going into milk production, butter production, and what else we do. It's a hell of a lot, basically. And this is why we're here and this is probably also why you are here and why Internet Week Denmark has its reasoning in this way. world. So the world is changing, and you might argue the world has always been changing, and that's right, it has. But what's different these days is that technologies these days are fueling this change. So what we see with digital technologies and digital channels, communication, transactions, and so on, is that it's fueling the change and accelerating this change in a way we haven't seen before. And that means that success, not now, both now, but also in the future, will come to those who adapt and who adapt best. And we set out two years ago to say, so what are we going to do about this? In Arla, we're a dairy company, we produce milk, butter, cheese, fast-moving consumer goods. So how are we going to approach this? So how are we going to engage with these new types of technologies and outlets to engage closer with our consumers? And we did that saying, let's put together a vision for what digital should be in a company like Arla, and this is it. How are we going to attempt to allow technologies for Arla to be part of people's lives? If there are any marketers here, besides the one that probably is in the room, there's a difference in this to saying that it's just about getting clever and better at doing digital marketing. So the way we approach digital in Arla is not just to be the number one on social, or we should have the best of the websites, even though we probably have. But we're also putting a lot of effort into understanding that new technologies are not just ways of engaging with consumers, it's also, or in a traditional way, when it comes to digital marketing, it's also understanding how technologies can change the way we operate, and the way we distribute, or how we distribute, and so on. So we have a very broad view on this. When it comes to how we work with Arun and his team, or the Arla brand team, or other marketing teams in Arla, this is more or less what we feed into. So this is our key slide when we talk to our colleagues in Arla, saying, when you look at digital, what are you actually looking at, and how should you approach it? And we split that into two parts. So digital provides two key... ...things for Arla. One is we're able to serve our audience, our consumers, in a much better way than we were before. Going back to saying anything about nutritional products, how you can live healthier, how you can live exactly the way that you want by the products that we produce, or serving with services that could be allowing you to get low on subscription, getting milk delivered to your doorstep, new ways of igniting without fur. And then the other part is the learn part. So this should not just be a massive cost for Arla, saying we should go out and use all kinds of services to our consumers and pour a lot of money into that without getting something back. What we get back, and what we should aim to get back, is the learn part. So what's possible today with technologies is not just relationship and actually understanding your crowd in a better way or in a totally new way than you were used to before. So when you did TVCs before, you produced a beautiful TV commercial, pushed it out into media outlets, and then you just sat there and waited and could see sales goes up. Don't go up. Sales goes up, good campaign, let's do more of that. But what you can actually do today with digital is travel to the whole United Kingdom. shouldn't do anything. And we're very early in this still, but we are starting to tap into how we can utilize these channels to actually get a much better understanding of our product. Thank you. That was an animation. I don't know where that came from. It was not intended. So doing this also means that we aim to become much more consumer-centric, customer-centric. And we do this because it gives us new opportunities. When we do this, it sets some requirements to how we actually go out and meet the world. And we do that in a very agile way, or at least we try to. So when we approach this, we do it with these three themes in mind. Act quickly, validate constantly, and finish the center. So this is always in beta. Yada, yada, yada. The whole story around this. Acting quickly means, and I want you to talk a little bit about this, understanding your crowd, way better understanding what is the need in the market, and being able to actually deliver products that fill that need. Validate constantly means that not just shipping a product out and then sitting there waiting for whatever to put out next, but also to constantly track, measure, test and learn about how is this performing. Are we actually meeting that need? Could we do it even better? And then adapting both products, but also our offerings in general to that. And finish is never done. So whatever we come up with is never really done because it has to adapt to the crowd. It has to adapt to whatever direction the world goes in. Does this make sense? It's early morning. People are not falling asleep yet. All right. So, Arun? Thanks, Oliver. Let me just check how many marketeers in the room, or people who would own up to being marketeers? Okay. Fair amount. Me as well. As I said, not yet a digital marketeer because the world is going digital, but it's not wholly digital. Not yet at least. We've got about 200 people in this room who've chosen to attend this conference in real life, as they say, rather than somewhere on the internet. Although somebody said this might be being live streamed. So hello to you as well. When we look for growth, that's where we need to start. We need to start where our consumers are currently shopping. In a company like ours, we work, as Oliver said, we're one of the world's largest dairy companies, and we have limited areas for growth. So we have to look in different ways. I chose to start in the supermarkets in Denmark when I first moved here five years ago. I noticed two conflicting things. One, that this is a country that about a third of the milk market is organic. And I came from the UK where it's about 7, 8% is organic, and then as the financial crisis hit, then people struggled to match up with the prices of organic. But in the milk category, when I came to Denmark, it was about a third, and that's a high amount. Then I noticed another thing. When I went to the baby milk aisle, there was absolutely no organic milk. I thought that's just shocking. Because all my knowledge of mums and first time mums suggested that people become organic or start to get into an organic lifestyle when they become parents for the first time. So the next thing to do is start to spend some time with these mums, understand what's going on. So if you are a mother who became pregnant for the first time or getting into that zone of becoming a mum, how many people here know or have spent time with, become parents? I know at least there's one who was a recent parent. But you'll notice a few things that when, especially for first time mums, this thing comes into your life, completely changes things you knew or you might have studied what to expect. And then once it arrives, it all gets thrown out of the window. I noticed my own wife, when she became a mum for the first time, you get the baby and you're trying to struggle, you're trying to figure out why it's crying. And there's probably about three things. And after a few months or a few weeks at home, you get it controlled. And you know what the crying is for, whether it's hungry, whether it needs to be cleaned, or whether it's sleepy. And you kind of know what to do. And then you decide to venture out. For a coffee morning with your friends because you haven't been out for a while. And you know what I noticed? That it's almost a small suitcase you take with you. Because you've got to take about a dozen diapers just in case the baby gets dirty a dozen times into us. You take the bag of milk, you take the hot water, you take this huge bag. But that's just reality. And that's what you need to understand. So spending time with mums in real life gets you to understand what are the issues in this category. Because it's not just about selling milk powder or milk products. It's understanding the concepts in which these products play. The other thing I noticed about the behaviours of especially first time parents is you get online a lot. And this is something that didn't happen 20 years ago because there was no online 20 years ago or thereabouts. But now that they're going to be a mum for the first time, they go on to Google. And they get into chat rooms. And they find out a lot about what's going on. So if we want to get closer to these consumers and customers, then we need to spend more time with them there. In our view, it was also a lot more efficient to start to engage with consumers in an online forum. To Oliver's point, this helps us not only understand insights, but then when we create solutions to these insights, then we can test them and validate them very quickly. So in this case, what we did was we created an online closed user forum of lead users in three countries. Sweden, Finland, and Denmark. For the marketers in the room, in the old days, we used to do focus groups. Some of us still do focus groups these days. I hate them. They're not particularly efficient for several reasons. They're expensive. And if I had to do them, I would do them. But in three countries, it would take me a long time. This was done over a period of four weeks. Then we created some solutions. And then we had another forum for about four weeks. And it's a lot quicker. It's a lot more engaging. Focus groups run for two to three hours. You can do in-depth interviews as well. This is creating a relationship with consumers over a four-week period. You start to get to know them. The forum is moderated by a professional. And they start to tell you a lot more. You might ask, why would people spend this time online with a commercial organization such as ours? If you choose the consumers carefully, you will find consumers that are so pissed off with the category. The category has not done enough for them over the years. And they're just happy that somebody is going to create some solutions. So they're very happy to give off their time. It's not about the money. It's not about getting some rewards. It's, I want to contribute to creating some great solutions. And that's what we did in this case. And what we came up with was Baby and the Organic. This was launched in Denmark about three or four years ago. Any people in the audience who are users of this product? Thank you. So the insight that this product needs is, I want to know that what's going into my baby is as pure as they are. And for those of you who are not in this category, I invite you to go and look at the products. And I want to know what's going on in the market at the moment or that were there before. And they do not suggest that what you put into your baby is as pure. It's a colorful, boring section that looks like it was created in the 1950s, which it was. So in the first case, we just upped the design, made it more engaging to two months. However, for us in the Danish organization, this was quite new territory for us. We were used to selling products for adults and children that come under the, in the dairy aisle. This comes under a different part of the supermarket. It also comes under different legislation. You might be surprised to know that the legislation on infant nutrition is more strict than alcohol or tobacco. I'm not joking. There are guidelines from the World Health Organization. Is my microphone on? No, it's not. That has a very strict code of conduct on how to market infant nutrition products to consumers and customers. You're not allowed to put offers. You're not allowed to directly say to moms that they should buy these products. So what is the market here to do? You find creative ways around it. First of all, you understand the law. And then you understand what the law is. You understand what are the boundaries of the law and where the boundaries do not extend towards. And one of the things we discovered was there are different stages of infant nutrition. There's stage one, which is breast milk substitute. And then there's stage two, which is follow-on milk. We also didn't have a big budget. So we figured out that Facebook was the best place to engage with mothers. And what we did was, this just comes with trying something. You don't know if it's going to work. If it works, you do more of it. So in this case, the marketer on this brand, she thought how could she reach a large number of people with a small budget. She approached mothers' groups. And she approached mothers' groups on Facebook saying, we want to send you some free samples of stage two products. Just give us your names. And we thought, okay, you know, we might get 10 or 15. And mother groups responded. I think in the first round, we got about 40 or 50. And then we had to hire a couple of student assistants to help us fulfill these. And we then did this another three months later. Then we needed professional help. And to all of us, this is about learning. You try something. You don't know if it will work. But when it does, you very quickly accelerate. The other thing about the Internet and the beauty and the challenge is there are no boundaries. There are geographical boundaries. So what's available in Denmark is also available in other parts of the world. And this product now is being offered by Chinese online agents for some crazy amounts. I don't know the numbers, but yeah, about six times the amount. I think a couple of years ago, had to put a restriction on the number of products people could buy. And then in the last few years, you had Chinese traders buying these products at 90 krona, shipping them over, and then selling them at 540 krona. True story. Again, this is not just about saying, hey, we've got a great new product. Let's be happy. But we're also looking at getting new products out there. This is something, a range of apologies and recent rule that we launched earlier this year. I think it's important. You can just see the comments. It's a bit small. But things like, waiting for my baby to grow up to the stage where she can buy and use these products. Someone else saying the baby only uses these products. And these are real comments on Facebook. You can go in and have a look. And again, now that we know this is an effective and efficient way of getting closer to our consumers, we do this a lot more. At the moment, I wasn't able to grab the screen in time. But a couple of days ago, I saw that Baby and Me was asking for mother's groups to try out new products. If you like the Baby and Me page, then you might see some of these coming up more and more. But it is about using the power of the Internet, social media tools in ways that we were not able to do before. But ultimately, then, it is products that appear in our stores and that we use. Thank you.