A colleague highly recommended a just released book called, the CEO Factory, by Sudhir Sitapati currently an Executive Director of Foods and Refreshments at HUL. She was a HUL veteran, nostalgic she stated, the book was a quick crash course on the HUL way of doing business and captures fundamentals of marketing very well. So I ended up purchasing the book.
The book sings peans to HUL and is filled with anecdotes from within HUL – stories from the management training grind, from the efficiencies squeezing manufacturing floor, from competition trumping brand building strategies, to folklore ethical tales. In between these tales, some great wisdom is squeezed in. It is a breeze to read and I could relate to a number of nuances captured inside. The book also draws you in because, the glamor part (read ad making) of marketing is brought upfront and then the book goes into the hard work of building a product and ends with an absolute drab preaching about culture and values.
Here are a handful pointers I thought captured 20 years of learning rather well:
- Size of prize: It is easier to…
- …grow a category than grow a brand (penetration vs market-share?)
- …increasing number of users than increase frequency of usage (adoption vs consumption)
- …convert non-users and light users than heavy users of a brand/category because they are difficult to influence given their knowledge (vs switch)
- Extensions that have worked have…
- …not implied the performance of the ‘core’ brand was an issue
- …solved real and meaningful consumer problems
- …built on top of the fundamental associations of the brand
- Insight haiku: a contradiction that is obvious in hindsight
- Find a link between disparate observations and express it pithily
- Positioning: Be clear on what you are before you say what you want to say; then, reinforce this in every piece of communication
- Communication: Salience (being remembered) is much better than persuasion
- How brands grow: consumers don’t change the brand she mainly uses but is quite open to changing the set of brands she infrequently uses depending on whether it is TOM
- Salience is driven by enjoyment (like seeing again and again) and branding (recognise the brand without the logo); Insight drives persuasion
- Persuasion is driven by the benefit
- Spend on advertising deployment and not on creation
- Media: Reach is more important than frequency
- Whispering to many is better than shouting to a chosen few!
- Select media based on economic cost and not on what it is perceived to be – using ‘media as a message’ is bad economics
- Product: Delivered quality of the product and not the design quality matters
- Design for output rather than input
- Spend money only on things consumer is willing to pay for
- Drivers of consumption and penetration
- Adoption is driven by access, awareness and availability
- Pricing (discounts) drive consumption and doesn’t recruit new users
- Price to maximise long-term value
- Pricing rules:
- When costs go up, take price hikes incrementally; absorb losses during hyper-inflation
- When costs drop, drop prices in a shot
- Occupy critical price points – whatever the cost
- Fix the price and profit you want to make and engineer costs around these
- Margins can be only improved when brand equity gets stronger
- Distribution:
- Focus on driving availability and dealer recommendation (width vs. depth) and visibility
- Velocity trumps margins – Keep stocks low and ensure rotation
- Reward the system for creating enablers for revenue
- People calibre + character is key for recruitment; calibre measured in 3 abilities:
- Judgement: to take right decisions (Senior Management)
- Drive: to get things done (Junior Management)
- Influence: to get the world see your POV (Middle Management)
- Trinity of professionals
- Mavericks – high on integrity,weak team players, rebellious but genuine value creators; remembered for decades in oral folklore
- Company Men – high on integrity, rigorous, loyal, process-driven team players
- Rogues – high energy, creative and achievement-oriented but put short-term self-interest ahead of long-term company goals
- HUL secret sauce and its core values
- Middle-class soul, meritocratic culture, managers who are comfortable anywhere and everywhere
- Action, Courage, Caring and Truth
The book is littered with case studies that are sure to be quoted in marketing and advertising circles for years to come and is worth a buy just to get to know how some wonderful products, brand and campaigns were built.
