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Power of Consumer Research: Lessons from Nestlé on how KitKat achieved 45% Sales Growth in a Year
58 Plays1 year ago
Hosted by Julie from Vase.ai Market Research. In this episode, we speak with Anthony, a former VP at Nestle, about his experiences in building global brands and driving business growth across different countries such as Japan, China and Malaysia.
Anthony shares insights on the importance of data-driven marketing and the use of consumer research to drive innovation and renovation in product development. For example, he discusses how Nestle has used blind taste tests to increase the success rate of launching new product. He also shares how Nestle has used data to drive innovation and renovation in their product lines.Anthony also discusses the role of leadership in growing a business and the importance of sales experience in gaining marketing insights.
He shares how his own sales experience has helped him to better understand consumer needs and drive business growth. Throughout the episode, Anthony shares examples of how Nestle has used data to enhance ROI in marketing activities and drive business growth. For example, he discusses how Nestle has focused on marginal contribution to drive growth and how they have used consumer insights to pivot their business models.
In addition, Anthony discusses the importance of brand building and consumer delight in driving business growth. He shares how Nestle has focused on building consumer trust and delighting consumers with their products to drive brand loyalty and growth.
This episode is a must-listen for B2C marketers looking to gain insights on how to build global brands and drive business growth. Anthony’s experiences and insights provide valuable lessons for marketers looking to enhance their own marketing strategies.
In this episode, we discussed :
00:00 Introduction
01:25 Why Anthony stayed in Nestle for 30+ Years
16:14 The key success behind Nestle : Understanding what consumers want through consumer research
21:40 Case study on how KitKat increase 45% sales in a year with consumer research
24:34 Case Study of Reformulation of KitKat in China by listening to customer feedback
35:48 How Nestlé build a premium brand
36:23 How to turn research findings into actionable strategies
46:08 How Nestlé uses data to innovate new business model
46:30 Case Study of Nestlé campaign in China working with Alibaba on singles day
56:01 How Nestlé build brands that resonate with consumer
01:02:13 Lighting round - Advice for aspiring marketers
01:04:28 Lighting round - Key metrics that's being monitor
01:07:14 Lighting round - Recommended marketing book
For the full show notes, transcript and links, check out the episode page
Recommended
Transcript
Nestle's Consumer-Centric Approach
00:00:00
Speaker
I'd like to share with you the reason why we are so successful in our product launch and we have a very high success rate when it comes to new product launch simply because we start off with a very important consumer research called focus group interview. In Nestle, the reason why we started with this research is
00:00:30
Speaker
Consumer taste testing blind is it must have more than 60% preferred blind taste test before we can launch the Nestle product.
Introduction to the Podcast
00:00:45
Speaker
Welcome to Winning with Data-Driven Marketing Podcast. This podcast is brought to you by WASD.AI Market Research. I'm Julie, your host in this podcast. And in every single episode, we talk to industry leaders, marketers, and growth experts in Asia about how to use data to enhance the ROI in their marketing activities. We will bring you to our speaker shortly after a quick word from our sponsor.
00:01:13
Speaker
WaaS.AI Market Research is an AI-powered digital research platform that can help you understand your target customer as quick as 24 hours from as low as $1,000 US dollars. For those who are having questions about what your target customer think about your brand, your ads, or your product, you are guaranteed reliable findings that can help you build better branding, advertising campaign, and launch a more successful product.
Anthony's Nestle Journey
00:01:40
Speaker
Find out more at www.vase.ai. It's www.vase.ai and use promo code podcast to get your first 10% off. Now, back to the show. Today, joining me is Anthony, former Vice President at Nestle Global HQ. Thank you for joining us today. Welcome, Anthony. Hi, Julie. How are you doing?
00:02:09
Speaker
Bye Anthony, I'm good, I'm good. Well, I'm very happy to be able to share with you. I think your podcast topic is a very inspiring and valuable topic. I look forward to sharing my experience with you and the audience.
00:02:30
Speaker
Thank you. And knowing you for a couple of years now, Anthony, I always find this is something the audience would love to know. You spent more than 30 plus years in Wesley. 30 plus years. And this is really not something common that we see, right? Can you share with us why do you stay for such a period in one single company? Well, the year was 1981.
00:02:59
Speaker
And that's how I started in Nestle. And my first job was reporting to the managing director of Nestle Malaysia as a special projects director, looking at the entire organization to see areas for improvement and rationalization and innovation.
00:03:30
Speaker
And that seems to be a great starting point for me. So I will share some of the slides of my life through the long journey in Nestle. And hopefully this will benefit you and the audience. The first project I was looking at
00:03:55
Speaker
was when I realized that our distribution cost as a percentage of our market necessarily Malaysia operation was on the very high side.
00:04:09
Speaker
Why? Because there were 13 warehouses in each of the states in Malaysia and East Malaysia, West and East Malaysia, and each of the regional sales managers wanted to have a warehouse. It's almost like keeping money below the pillow.
00:04:28
Speaker
And when you need to achieve your sales target, you just deliver the stock stays from the warehouse. And all this inventory as well as product which are expiring in the warehouse is costing us a very high distribution cost as a percentage of our sales revenue. I came up with a proposal which was accepted and supported.
00:04:56
Speaker
by my boss who is the CEO, but of course not very popular with many of my other colleagues who see me as a paratrooper from, a parachute from up there. And I, with the support, I launched the first ever most innovative central factory warehouse in Malaysia.
00:05:23
Speaker
It was innovative because it only exists at that time in Western countries in Europe and US, but not in Asia. And in Malaysia, it was way ahead of time. It was a high bay warehouse, fully automated robotic palletization and
00:05:52
Speaker
By building that fully automated, innovative, groundbreaking warehouse not seen in Malaysia or in Asia, we managed to close down all the 13 warehouses in Malaysia and East Malaysia. And we deliver from this particular high bay warehouse, which is located among three factories in Sha'alam Batutiga.
00:06:23
Speaker
And that warehouse is still in operation since 1981.
Keys to Anthony's Success
00:06:30
Speaker
And I am referred to as the father of the central factory warehouse whenever you talk to the Nestle Malaysia colleague.
00:06:39
Speaker
It is still operating, running, and it helps to drive our distribution costs as a percentage of total revenue significantly. And that's why it continues to perform extremely well in Nestle Malaysia.
00:06:59
Speaker
Now you asked me why after, why do I stay for almost 38 years in the company? Why it feels like only a few years ago when I joined Nestle Malaysia, simply because every two, three years they gave me a new assignment, a new responsibility, a new country to work in. And I keep on moving and that's why
00:07:29
Speaker
I have been a sales manager. I have been a marketing manager and every two, three years they gave me a new role, including a production manager in the PJ factory making Milo formulation. And I was there for six months before heading up sales and marketing.
00:07:55
Speaker
It's very clear that I love my job. I am very passionate simply because I am surrounded by bosses at that time who trusted me.
00:08:10
Speaker
who empower me, who gave me a lot of space to grow, a lot of space to bring innovation to the company. And I love what the company is worth doing at that time and still is. That is naturally enhancing quality of life.
00:08:30
Speaker
and contributing to a healthier future for all of us. And so for me, the bosses have been great mentors and coach to me and the company is clearly what I love to do and continue to do. And in Nestle, as you know, it's like when you throw a baby in the air,
00:08:55
Speaker
The baby comes down laughing and not crying, laughing, why? Because the baby knows he or she is in good hands, is in safe hands. In Nestle, quality is the cornerstone of Nestle. Food safety and food compliance are non-negotiable at Nestle.
Anthony's Leadership and Values
00:09:17
Speaker
And for us, creating shared value at Nestle means that
00:09:23
Speaker
For us, for a company to be successful over the long term as Nestle, we should continue to create value for shareholders, but not only shareholders, but also create value for the society and the community. And that's why it is a company I trust, it's a company I feel confidence in because it brings
00:09:49
Speaker
a quality of life and a healthier future for all of us. So clearly, if you look at the slice of my life towards the end of my life, you can say it's 38 years. I spent about six years in the global hit office.
00:10:13
Speaker
Where we are responsible to help CEOs and the leadership team in the countries, we have 115 countries under us for Asia, Oceania, Africa, and Middle East. 115 countries, 15 time zones.
00:10:31
Speaker
So as a slice of my life, I'd like to share with you even towards the tail end of my career of long 38 years. I was I was getting my at five o'clock. I go from my jogging
00:10:48
Speaker
Autumn, summer, winter, spring, even in the snow, I'm joking at 5 o'clock, 6 o'clock, I am ready for the office. I'm in the office at 6 a.m. and the security guard in the global office is always saying, Mr. Lau is already in the office because he's the first one in the global office that have about 4,000 people.
00:11:13
Speaker
So at 6 o'clock, I'm in the office, 6.15, my phone will ring because the phone call comes from different markets and some of them are ready to go home. They want to talk to me. Some of them just started coming into the office. So when you have 15 time zone, that's what life is all about. I just want to share with you a slice of that, that even towards the pale land of my last chapter of my long journey at Nestle,
00:11:44
Speaker
I loved what I was doing and I gave the best version of myself.
Mentorship and Modern Career Perspectives
00:11:50
Speaker
The reason why I stopped was because my mom was very ill with stage 4 cancer and I wanted to spend some years with her so I decided to ask the company
00:12:08
Speaker
that I wanted to go back home to Malaysia to be with my mom because I was traveling all over the world when my father passed away and I did not want to make the same mistake with my mother. So I came back and I was very, very blessed to spend two years with her at her sickbed.
00:12:31
Speaker
And then she passed away two years later. Because of the mentors and coach, I have a next slave who inspired me. I continue to be a mentor.
00:12:48
Speaker
to many, many mentors to spot up and scale up entrepreneurs, about 26 of them. And I'm an executive coach to 29 CEOs and business owners. So I continue to love contributing
00:13:09
Speaker
helping people grow and develop in their business. So my 39 years of leadership feels only a few years ago and simply because every year I get my best and I love to contribute to see other people as well as the organization continue to improve and grow. Wow.
00:13:36
Speaker
I think what you say definitely rings a bell. We need to work in fields when in companies that we really align with the vision, really have the passion. Fully agree. Anthony, you mentioned something very interesting, right? So every two to three years, you change a new role. It's definitely sound exciting, but as you gave some examples just now, you went from sales, marketing to productions to leadership, right? So I am curious to know what's your view on this.
00:14:06
Speaker
Southern people will choose their career choices by staying in the same field because they believe that by staying in the same field, they can keep on going up and up. But it seems like you are going around in different exposure. How do you see the growing in career when it comes to generalist versus a specialist? I would say today's millennials, Gen Z and Gen Y,
00:14:35
Speaker
have quite a challenging environment. Clearly, they don't see a lifelong employment like working in Nestle for 38 years as something that they aspire to do.
Nestle's Global Brand Strategies
00:14:55
Speaker
They will probably look for two, three years. I did my best here. I will see whether the organization has got the most competitive pay.
00:15:05
Speaker
I will see whether they encourage flexibility and work out of home some of the days of the week. I want to see whether they give me the right training so that I have the right skill to do the job. Do I have an overseas assignment sometimes?
00:15:23
Speaker
I would say clearly if I put myself in a shoe of the millennials and Gen Z, Gen Y, today's environment is different. I was fortunate and blessed to have a different responsibility. As I said, I cover almost every aspect of general management in production, in sales, in marketing, in corporate communication.
00:15:54
Speaker
I was responsible for global CEO role and clearly helping markets to grow.
00:16:06
Speaker
That makes it more exciting, rewarding each time you see an opportunity to progress, an opportunity to bring innovation to the workplace. And what is also important is you have people around me that are great mentors, great coach, and I keep on
00:16:34
Speaker
my connection with them up to today, even though many of them are in their 90s, I still keep in touch with them. I visit them if I can because I appreciate the time that they had to support me, to push me on.
00:16:53
Speaker
to encourage me and that is valuable for me. And I want to do the same for many others, whether they're entrepreneurs or CEOs or business owners. Thank you for sharing that.
00:17:08
Speaker
Now I wanted to shift a little bit, though it's, you know, understanding. So you have 39 years of experience, Nestle. I think we are all very interested to know deeper.
00:17:23
Speaker
about how Nestle keep consistently build the global brands. So we saw a lot of cases where some brands grown to the top and then they went down, but it seems like Nestle keep being the market leader here. So can you tell us a little bit more about that?
00:17:43
Speaker
I would say at Nestle, even though we have 2000 brands and over 12,000 products,
00:17:54
Speaker
And some you are familiar with, like in Malaysia, we have Milo, Maggie, but many of the products that are sold all over the world, many of them are not available in Malaysia because we tailor-made our products for consumer needs specifically in Malaysia.
00:18:17
Speaker
Now, I'd like to share with you the reason why we are so successful in our product launch and we have a very high success rate when it comes to new product launch simply because we start off with a very important consumer research called focus group interview.
00:18:42
Speaker
where we get together our target consumers maybe something like 20 different batches and many many batches and then we let them taste our product and competitor's product many many competitor's product and we call this
00:19:02
Speaker
blind taste testing, which means that they don't know which product it is because we don't show the packaging or the brand or the label. We let them do blind taste test and we let them do evaluation based on taste texture, mouthfeel,
00:19:21
Speaker
fight our new product versus competitors product and Nestle will then show after they have done finished everything we will then put the packaging beside it and the brand beside it then they will know which product they have been
00:19:38
Speaker
preferring and rated the best. In Nestle, the reason why we started with this research is consumer taste testing blind is it must have more than 60% preferred blind taste test before we can launch the Nestle product.
00:20:04
Speaker
If a product do not pass a 60-40 blind taste test, we will not even discuss it. We will send it back for renovation innovation until it has improved in the next taste testing session. Once it is passed 60-40 and it has been tested by several focus group interviews of target consumers,
00:20:31
Speaker
Then we'll do a selling price calculation, which is a very methodical selling price based on what price you want to sell, what revenue generated based on the quantity, where you're going to sell it. And then it must have a minimum 60% PFME behind brand building, behind market research,
00:21:01
Speaker
behind improving the product and understanding of the target consumers. So the CEO is the one that approved the selling price calculation and if he doesn't have at least minimum 16% PFME,
00:21:21
Speaker
then it will not be approved because then you are launching a product where it doesn't have the right oxygen for the brain and the brain is like a living creature. It needs oxygen to survive and continue growing.
00:21:39
Speaker
So the CEO will look at it minimum 16% PFMP behind the brand and for the next three years you are going to support the brand to ensure success. That's why initially we continue to do well with new product launch because we
00:21:59
Speaker
We believe brand is the most valuable asset to a company and we will continue to invest and build the brand to make sure that it continues to delight the target consumer.
Innovating KitKat in Asia
00:22:13
Speaker
If I could give you another example and I would like to do this
00:22:20
Speaker
by illustrating to you an example in Japan, where we have launched KitKat for many, many years. And our positioning is called, take a break, have a break, have a KitKat, which you have seen it globally all over the world. And we have used this, whether you go to Australia or you go to US or you go to France,
00:22:51
Speaker
Have a break, have a KitKat. Somehow we were struggling with that tech line, which is a global tech line in Japan because they don't understand why are you so lazy that you need to take a break every time. Can't you continue to work hard and don't talk about taking a break all the time.
00:23:16
Speaker
We decided to go and see these target consumers where they are and they are normally sitting around waiting for their turn for the entrance exam in the university. There we sample our KitKat and we give away free sample for them to try and we were listening to the conversation that they have with each other.
00:23:41
Speaker
And then we noticed something which is a very powerful human truth. When they took our KitKat product, they were offering it to their close friends and say, KitKat Hitokatsu.
00:23:58
Speaker
KitKat Kitokatsu. So we ask them, why do you say that to your friends when you give a KitKat? They say it means, KitKat, I wish you success in your entrance exam for the university. So we said that is the human truth.
00:24:17
Speaker
That can be an honorable brand proposition. So why don't we start a campaign in Japan? We were there in Kobe, we were there in Tokyo, and we said, let's roll out in every city in Japan. We launched a campaign, KitKat, Hitokatsu. And guess what? Sales for that year showed up 45%.
00:24:46
Speaker
And suddenly the brand means very relevant to the Japanese youth target group, I bring you success. That is an example of how you leverage understanding into insights, into brand, honorable brand proposition, and you build a campaign around it.
00:25:14
Speaker
Another example I'd like to share with you is very clearly as I shared just now, every two, three years I'm given a different function, a different responsibility. And over the years I have covered every function of management that I'm familiar with because I've been exposed to them and including
00:25:45
Speaker
many, many countries and many, many different marketplaces. And I had traveled literally all the 115 countries within Asia, Oceania, Africa, and Middle East countries. I was the managing director of Nestle Singapore. Very happy there. My family was very well settled in. My kids were in international school.
00:26:15
Speaker
And then my global CEO came to visit me at Changi Airport, wanted to have a dinner with me and my wife. Which came as a surprise, I did not expect it. And during the dinner, he said to me and my wife, I want your husband to pack up his bag and go to China tomorrow.
00:26:41
Speaker
we say what we just started in Singapore for seven months and you want me to back out my back and go yes you can go first and your wife and your two daughter can join later after the semester is over and they can come later you go first you back out your back because
00:27:04
Speaker
China is a very big market, very important to Nestle, and we are struggling with our sales and struggling with our revenue generation. So we need you to go there immediately tomorrow. And my wife, I look at my wife and say, shall I say no? And then maybe join another company after that.
00:27:31
Speaker
And my wife said, no, you love Nestle so much. I don't see you joining another company. You better say yes to your boss. He made a special trip to come to Singapore to have a dinner and to persuade you to go to China tomorrow. So after a few days, I replied, OK.
00:27:53
Speaker
I peck at my back and go in medley. Guess what? When I arrived in China, I suddenly became responsible for commercial operation of Greater China region, which is mainland China.
00:28:08
Speaker
Hong Kong Macau and I realized that we have already started building factories and making production of a number of products that require me to confirm whether they are the right product to grow the Nestle business in China.
00:28:26
Speaker
For the purpose of time, I'm going to focus on one which I thought is going to be a big benefit. I will bring the insights to you, Julie, and to the audience who are listening.
00:28:41
Speaker
And this is our big KitKat factory in China, in Tianjin. We built a big one because we say, well, you know, China with 1.3 billion population, they could eat a lot of KitKat. And we also sell a lot of KitKat in many other countries. So surely the Chinese know how to eat KitKat. Unfortunately,
00:29:09
Speaker
The factory was big, production was huge, but the Chinese were not queuing up to buy KitKat. And we run the risk of destroying value and having an investment that is so huge with very little consumption of KitKat in China.
00:29:32
Speaker
So the first thing I did was to say I don't want any presentation on why this product KitKat is not doing well in China. I want to hear from the Chinese consumers who have bought the product and I want to hear from them why are they not continuing to eat and buy our KitKat product. So I started off
00:30:01
Speaker
walking the street in China. And at that time, the street was not the 130 cities in China. It was first all the coastal cities from Dalian, Guangzhou, all the way to Hainan Island, along the coastal, all the coastal cities, and then interior, including Chongqing, Wuhan, all the way to Hurumuchi.
00:30:31
Speaker
I walked 112 cities and I spoke to a lot of consumers. I gave them product to sample, many, many products to sample that we were producing in China and asked their opinion to give me a focus group interview to groups of Chinese, 20, 30, you give to them and then you ask them for feedback.
00:31:00
Speaker
And let me summarize this feedback on one product, which is supposed to be an improvement over the KitKat in China. And the feedback was, why are you not buying this KitKat one renminbi product? Very cheap one renminbi.
00:31:24
Speaker
and the feedback among hundreds and hundreds of Chinese consumers because it is too sweet and too much chocolate. We Chinese don't like too sweet and too much chocolate and the chocolate gives us heatiness, salt, fruit and pimples on our face. So we want it to be less sweet and less chocolate.
00:31:54
Speaker
And we want it to be three times bigger than the current KitKat, because one renminbi KitKat is two finger only and that is too small, we want it to be three times bigger. So, after spending a lot of time talking to hundreds of consumers,
00:32:18
Speaker
I then called my team in China, in Beijing, and said, technical director, I want you to reformulate for me a new product. Leave KitKat alone because maybe the time is not right to sell a lot of it. We will make it available. Whoever consumer wants the KitKat as it is,
00:32:44
Speaker
but I want you to make me a one RUMM B product, three times bigger than the current two finger KitKat, and I want you to find a way to enrobe it, make it like a wafer, less chocolate, less sweet.
00:33:07
Speaker
And we introduce what we call aeration, where we enrope it with very little chocolate. And we introduce a new product they made for China called Nestle Crispy Sharp Chocolate Wafer.
Consumer Insights and Brand Innovation
00:33:30
Speaker
Nestle Crispy Sharp Chocolate Wafer.
00:33:35
Speaker
If you Google it, you'll find it because that product when we launched it became a star. All Chinese consumers want to have it. We could not produce enough of it.
00:33:51
Speaker
We run one-shift production, two-shift production, three-shift continuous production, and we build additional capacity in Tianjin and elsewhere, and we could not walk up with the consumer demand. It became the biggest brand, Nestle Crispy Chocolate Shark Wafer.
00:34:20
Speaker
It became a very successful product launch in China. And if you visit China today, USC is the biggest brand, biggest product in the chocolate wafer category.
00:34:35
Speaker
So that is to illustrate to you that when you listen to the consumer, you can innovate, renovate, and you can pivot and find new ways of delighting the target consumers in China.
00:34:53
Speaker
That is definitely a very inspiring story. Thank you so much, Anthony, for sharing that. I wanted to visit back a little bit on your first case study. You mentioned when you do product launches, you do a blind case test. And then they have to pass through the 6040 test. And then after that, you do the selling press calculation. And you mentioned a word called PFMA. Am I getting that correctly?
00:35:19
Speaker
That is correct. It's brought up six marketing expenses. Marketing expenses cover your brand building, your advertising, your campaign launch, your market research, your consumer research, your trade audit, your market share audit, which we get on a monthly basis.
00:35:46
Speaker
It will cover all expenses on tracking trust score. How is your brand been trusted? Right across versus competition. Gotcha. And you may, you, Nestle will always put aside 16% of the budget to the PFMA and then definitely resonate with what you mentioned as brand you believe is the most important asset.
00:36:15
Speaker
Yes. And with that in mind, right? I'm curious. So I think there are more and more people to realize that there is always this brand premium.
00:36:27
Speaker
If you're able to establish a great brand, you can charge that brand premium rate. However, it is absolutely difficult to actually create a successful brand or create this brand relevance and actually find that strong connections with the target customers or target consumers rate. And do you have any learnings that you can impart to us on this regard? What is important is not
00:36:53
Speaker
the size of the data you get from your research, even though you need to be very extensive in covering your target audience and making sure that your database marketing is comprehensive and dig in deep into consumer needs
00:37:24
Speaker
What is important to recognize is after you got the data feedback from the market or from the consumers, you need to dig deep into it to draw out the insights.
00:37:43
Speaker
The insights can lead to renovation, which is, okay, I will introduce two more new line extension. All right, I have Nestle, crispy, sharp, vanilla chocolate, strawberry chocolate, green tea chocolate. That is called line extension.
00:38:12
Speaker
So the insight can lead to a decision online extension, which for me is only renovation. But if you dig deeper and you find a human truth that become an honorable brand proposition, you will dig into more insightful and valuable actionable plants, like innovation, not only
00:38:42
Speaker
you have line extension, you have totally a new product offering to the consumer like the Nestle Crispy Chocolate Wafer product, which is a very different product from the Nestle KitKat. So that for me is called innovation.
00:39:06
Speaker
Then within innovation, you can also premanage. No one said you consumers is only willing to pay one renminbi, no? When you add value to the product and you premanage, you are moving vertically up the price pyramid into
00:39:31
Speaker
sometimes five times more expensive, 10 times more expensive. And I want to give you an example. In light example in Japan, we can sell a standard KitKat product and we can value up with green tea, cherry blossom flavor,
00:40:01
Speaker
special matcha. Then we introduce when there is a purple yam that comes from Okinawa and suddenly you realize that the premonized product that's up in the pyramid of the price ladder becomes something like 20 times, 30 times,
00:40:24
Speaker
The consumer is willing to pay for more value if you can add more value and satisfaction to the consumer. And that is an important example I want to illustrate to you that you have to dig deep into your data-driven
00:40:46
Speaker
marketing feedback from consumer and target group in order to offer a stronger and a deeper value to the consumer. Gotcha. That's definitely interesting because as we know, FMC a lot of times when we launch the product, usually one of the key criteria is value for money. We definitely wanted to aim for something that people are willing to
00:41:12
Speaker
People feel like it's affordable at the beginning, but usually a lot of the brands sort of struggle when they want to go up the ladder in terms of criminalizations. So, and what you said is adding, we need to find out, adding what kind of value would actually helps the consumer to be willing to pay more for it. Gotcha. So I, and
00:41:40
Speaker
I am also curious, like you mentioned just now that it's not about the size of the data, but what do we do about the data? How do we translate the insights into actionable strategy? So when we are doing our survey with our customers, we notice one of the key challenges they face
00:42:06
Speaker
A lot of times it's also not just about the availability of data, but how do I turn this data that seems to be available to me into what they call an actionable strategy that actually gives them ROI? So a lot of your case studies suggest that you have a lot of successful ROI from there, right? So I'm curious what kind of learning you can share with us on.
00:42:27
Speaker
and to that help leaders on how do they translate those human truth that you call the insights into actionable strategy or actionable item. I give you a specific example. That was something we did in 2003 in Manila, Philippines.
00:42:51
Speaker
We were doing focus group interview like we normally do every week. We have groups of target consumers coming in to taste our product and give us evaluation blind taste test. And we were there earlier. We enjoyed coffee with them, talking to them, chatting with them. And we realized that the ladies in Manila
00:43:20
Speaker
were preoccupied talking about a very interesting subject that make them giggle, laugh, compare notes, touching each other, and we are wondering what they were so delighted about.
00:43:35
Speaker
And we suddenly realized the ladies were comparing the tummy of each other. Oh, you just gave birth, you know, and your tummy still looks so fit and trim. What did you eat? What exercise do you do? And so on and so on.
00:43:54
Speaker
that we realized that they were so preoccupied with their tummy, staying slim, nice, even after giving birth and after reaching 50 years old. And then we said, wow, that is a human truth. Because it's something that they care about, it's important to them. Can we translate that human truth
00:44:23
Speaker
into an honorable brand proposition. And in Nestle, we always try to look for that sweet spot, the sweet spot where you can build and bring your brand to life. So,
00:44:42
Speaker
That honorable brand proposition caused us to revamp our Nestle Fitness Serials in Asia Pacific region. Where we take the pack of Nestle Fitness Serials,
Capitalizing on E-Commerce Opportunities
00:45:00
Speaker
we design the box, we strip the middle part
00:45:05
Speaker
to show that the consumer can see what kind of cereals are inside the box.
00:45:13
Speaker
and we started the 100-day challenge. That is, you eat this Nestle Fitness Cereal and you do the following exercise program for the next 100 days and then you see how it impacts on your trinkummy. And guess what?
00:45:35
Speaker
That became a huge innovative idea in Asia Pacific region where we are able to relate to a consumer, delight the consumer and make the brand come to life in the consumer's lifestyle and day to day. And that is a fantastic way of delighting the target consumer.
00:46:05
Speaker
I would also like to share that we also need to dig in even when we have to look for a new business model because apart from renovation, innovation, you can also look at opportunity where it becomes a pivoting opportunity
00:46:34
Speaker
which allows you to change the business model. And this was what happened in the year 2012 in Shanghai, where we were having discussion with Alibaba. And at that time, we were fully aware that the Chinese government
00:46:58
Speaker
was wanting to encourage youngsters to go back home during Chinese New Year and spend time with the elderly parents that they left behind in the villages. And because of the one child policy, many of the parents only have one child and many of them are working in the cities and they are so preoccupied with their career and their new lifestyle that
00:47:28
Speaker
they do not go back home to spend Chinese New Year. So the government started a campaign called Hui Lao Chia, Sinyan Choiler Hui Lao Chia, and it wasn't a very successful campaign encouraging these young people to go back home. At that time, we wanted to know how many
00:47:53
Speaker
Singles are we talking about working in the cities and to our amazement it was 300 million singles in China. That means 300 million of them who were away from their hometown and working in the cities and we said why don't we start a singles day
00:48:19
Speaker
double 11 on the 11th of November in Chinese, means double 11. And we encourage the youngsters to go back home for Chinese New Year, but if they cannot go back, they should send
00:48:40
Speaker
a gift to their parents to show how much they miss them. So we started pivoting a new business system called e-commerce. And double 11 Swansai and guess what, in 2014, first year of our operation, Alibaba has a turnover of 9.3 billion sales.
00:49:10
Speaker
9.3 billion US dollars. Not too many companies can boast that they have a 9.3 billion US dollar sales. And this was done one day only, double 11 single day. And the following year we improved on that program
00:49:31
Speaker
and the turnover was $14.3 billion, and in the year 2020-21, it was exceeding $30 billion.
00:49:44
Speaker
Just to show to you renovation, innovation, but also pivoting new business system like e-commerce, leveraging your insight that you need to address 300 million singles who did not go back home, but they need to show their love to their parents by using e-commerce to express and send loved ones a special gift.
00:50:16
Speaker
I hope that is a useful example for you. Yes, indeed. And I often hear people say, you know, two people can be seeing the same exact set of data, but then the articulate could be different and they may or may not make the same action or actually one may egg and one may not. What advice would you give to leaders to make sure that
00:50:44
Speaker
to make sure they increase the probability of the actually translate the insights or the data that they are getting into actually a strategy or action that they will actually get our eye from. I would say as leaders is our responsibility to challenge the process and bring improvement
00:51:11
Speaker
And one expression I like to use often is you need to cut tail and add teeth. It's just like a lion with a very long tail. What is the purpose of having a six foot tail for a lion when it's not going to use very much of that tail because a lion doesn't work like a dog when they see the owner.
00:51:39
Speaker
Lion is more useful to chase after animals and prey if they have sharp teeth. So the expression is, as a leader, you have to constantly look for opportunity to add teeth, which is your competitive advantage.
00:52:01
Speaker
and cut out what is complexity, simplify it, and make it more relevant, make it more appropriate. So cut out what is not necessary, adding wasteful resource, and use that resource to add behind teach versus competition so that your success
00:52:27
Speaker
will be measured based on the business that you have. How much is it growing? Are you growing in your market share? Are you growing in retention and consumer coming back in terms of loyalty? Are you growing in terms of your brand health?
00:52:50
Speaker
brand strength, brand shares, and leaders need to be measured based on how they have taken an organization from one point to the other. Like when I was asked to go to China, it was a
00:53:16
Speaker
where we build the business from literally ground zero.
Leadership, Innovation, and Growth
00:53:23
Speaker
And guess what is it today? China is the second largest Nestle market in the whole world after US. And another example I want to give you 1981 is where I started in Nestle, Malaysia as my first job.
00:53:45
Speaker
Towards the end, after a couple of years, before they moved me to Singapore, where I said I did not stay more than eight months, one of the campaigns we did together with the leadership team in Nestle, Malaysia, was we decided to mobilize the entire organization behind a battle crime.
00:54:12
Speaker
And the battle cry in Nestle Malaysia at that time in 1985 was, we care, we excel. We care, we excel. Towards 1 billion Malaysian ringgit sales turnover. Towards 1 billion Malaysian ringgit sales turnover.
00:54:43
Speaker
retired. And guess what is the sales turnover in Nestle Malaysia to show to you that leaders need to continue to grow the business and take it to the next level. From trying to deliver our first 1 billion Malaysian ringgit during 1985
00:55:09
Speaker
Do you know last year, Nestle Malaysia delivered 5.5 billion Malaysian ringgit, 5.5 times the amount I left when I moved on
00:55:28
Speaker
to Singapore and the organization continue to grow. It shows you leaders after leaders continue to take the organization, cocktail at teeth and take it to the next level through innovation, renovation, pivoting. And the organization is five and a half times bigger than when I left Nestle Malaysia.
00:55:57
Speaker
you know in 1985. I hope that illustration will open a lot of eyes.
00:56:05
Speaker
I think it definitely would. So before we end our sessions talking about brand, right? You, you highlighted a few examples there at Nestle, you focus on building brands with that actually give values to the customer and the consumer, right? I'm curious, this will be as our last question. Is there any big secret or key guiding principles that you could share with us on doing so? I would say.
00:56:34
Speaker
is down to a very simple advice I keep on saying. That is, put consumer first in everything you do. If you put consumer first in everything you do and focus on target consumers and focus on shoppers and continue to delight them, you can't go wrong.
00:57:04
Speaker
you will be very successful when you build brands that is focusing on purpose and value. And when you build brands that has got purpose and value, you will continue to do extremely well. Just like when we were in the marketplace
00:57:34
Speaker
I just wanted to illustrate an example. In Japan, we use a chef called Takagi-san, who was a chef that is very good at adding natural flavors to Kit-Kat. And we started with him
00:57:59
Speaker
a Kit-Kat that allows new flavors like cherry blossom, purple Okinawa yam, a matcha green tea that comes from Hokkaido, and then he will make it into limited edition. And then we will start it through our shop called Kit-Kat Chocolate Story.
00:58:28
Speaker
that we started in Japan, but after that, we started in many other cities in Japan. And they will ask me, because we are from the head office, how do you know when that novelty idea has ended? And I said, very simple guide for you.
00:58:56
Speaker
If you continue to delight the consumer, you can judge it based on how long a queue you're getting at the KitKat Chocolatory Outlet. And the queue normally is 400-500 people.
00:59:15
Speaker
And when the queue is so long, you know, millennials and gen x, gen y, when they see a long queue, everybody also want to queue up, wondering what are they queuing because they want to take pictures and show it to their friends in their social media. So the guideline from us from the head office in Switzerland was very simple.
00:59:41
Speaker
You keep delighting the consumer with natural flavor. When it's cherry blossom season, you introduce cherry blossom. When it's pink Okinawa green yam, you launch it. When it's special matcha harvest time from Hokkaido, you launch it. Continue to delight the consumer and the queue and line is going to be long and you multiply it.
Lightning Round and Final Thoughts
01:00:06
Speaker
When the queue is short, it's time to pivot and think of another idea. And guess what? The queue is continuing. And we launched it in Westfield in Sydney. If you are in Westfield, Sydney, you will also see a KitKat Studio there. It's called KitKat Studio, where we also use
01:00:36
Speaker
flavors which are available in Australia to delight our target consumers.
01:00:43
Speaker
And guess what, we also have launched a KitKat studio in Mid Valley Mall and you will find a KitKat studio there where the consumers are also invited to go and make your own KitKat flavors and whatever you make, you pay for it and you can take back home and share with your friends the KitKat product that you have just made at the KitKat studio in Mid Valley.
01:01:14
Speaker
And that is showing to you how much excitement you can create when you continue to delight the consumers. I like how the simple cue it is to actually give signal around when we should innovate.
01:01:35
Speaker
Thank you so much, Anthony. That's actually, I want to wrap it up your voice here. It's amazing that you shared a lot of key studies to help us bring home the idea and to give us a little bit more reason about, you know, how NESTME grow to where they are today. Now I'm going to start with what we call a lightning rock. How NESTME consists of three questions. I have three questions that I'm going to ask you.
01:02:00
Speaker
to get your thoughts on. Are you ready? Sure. Ever ready. Sam, so question number one, what are the key data on metrics that you monitor when you are building your brand? Very important is your sales. When you look at sales. Question number one. It's the first report on our table as a leader.
01:02:30
Speaker
the daily sales report. And it covers all the markets we are in, like 115 countries. How are the sales doing for today, for this week? And how is the month closing?
01:02:50
Speaker
We look at our market share report that we get once every month. Are we growing market share for this brand in this country where we are having difficulty? We look at, are we continue to grow our marginal contribution?
01:03:13
Speaker
Marginal contribution is what we call MC, which initially at that time when it should be more than 45% because we don't want to do a business that is not making enough marginal contribution. In Chinese, we always say in China, that means are losing business we don't do.
01:03:41
Speaker
we will focus on growing the profit margin of the business. And of course, we look at consumer trust, our investors, shareholders, stakeholders, having confidence in the Nestle brand and the growth of the Nestle brand. So we have
01:04:06
Speaker
many KPIs that we prioritize and we track it on daily basis, on weekly basis, on monthly basis to make sure that our brand, our business and our company continue to grow market share versus competition. Now let's go to question number two. What advice would you give to someone who is interested in pursuing a career in marketing or becoming a future leader? Just
01:04:33
Speaker
Remember what I said earlier that I started in Nestle, Malaysia, and after creating the innovation groundbreaking, sent automated high bay warehouse that brought a significant reduction in distribution costs for the whole company,
01:05:01
Speaker
I then move on to be regional sales manager.
01:05:06
Speaker
in many places in Malaysia. Then I was made the head of marketing and sales. And what I learned from my experience, and I like to strongly encourage people who want to build a solid marketing experience, whether as a general marketing person or a specialist in marketing,
01:05:33
Speaker
Make sure you spend a minimum two to three years in sales. Have your feet in the street, talk to consumers, talk to shoppers, understand what delight them. Learn from competition even if they are tiny and small because you can learn a lot of wisdom even from small companies because they know how to build
01:06:03
Speaker
to innovate and great ideas. So I learned a lot from competition.
01:06:12
Speaker
That's why we said in Chinese, only when there is competition, you can improve yourself because you're always benchmarking against the best in class and you continue to improve and move on. A sales experience of two to three years will make you have a sense of deep insight
01:06:37
Speaker
in the marketplace. You know what is changing in the marketplace. You know what will delight the consumer. And this will sharpen your insights in marketing when you become a specialist in marketing. So I would strongly recommend that to you. Nice. And my last question here in the Lightning Road. What is the one marketing book that you would recommend?
01:07:08
Speaker
I have read many, many marketing books, but the recent one that I just finished reading and I will recommend to you all is called Market Your Way to Growth, Eggways to Win by Philip and his brother, Milton Kotler. And the publisher is really
01:07:35
Speaker
And I will recommend this book because it gives you only eight chapters to read. It's a very small book. It's only 220 pages and you can finish it in four hours, but each of the chapter will give you insights in growing your business and growing brands and taking it to the next level. So it's a great book, highly recommend.
01:08:05
Speaker
Thank you, Anthony. I don't know if you know, our company do have a book club whereby on weekly basis, the book club, book club peeps will come together on every Tuesday and we will discuss about a simple book that we look at. So I will definitely put this book into our book club. Eight chapters here. Gotcha. So final, final questions. Where can people find you if they want to reach out and learn more about what you're up to?
01:08:37
Speaker
As I am on business trips very often, travelling in different countries and different time zones, I would suggest if you want to connect with me, it's via my Zing-In. That would be the easiest place to get me, even with many, many hours of time difference.
01:09:03
Speaker
Amazing. Thank you so much Anthony for sharing with us so many insightful experiences. Thank you so much for listening. If you find this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or Google Podcasts.
01:09:19
Speaker
Also, please consider giving us a rating or leaving us a review because this really can help other listeners to find the podcasts. You can find all the episodes or learn more about this podcast at was.ai. See you in the next episode.
01:10:01
Speaker
Bye!