Transcript

Bennie F Johnson

Hello, and thank you for joining us for another special episode of AMA’s Marketing / And. I’m your host, AMA CEO, Bennie F. Johnson. In our episode today, we’ll explore life through a marketing lens, delving into conversations of individuals that flourish at the intersection of marketing and the unexpected. We’ll introduce you to visionaries whose stories you might not yet have heard of, but are exactly the ones you need to know.

Through our thought-provoking conversations, we’ll unravel the challenges, triumphs, and pivotal moments that have been shaped by marketing. Today, my special guest is Richard Davies. Richard is a seasoned consumer goods industry veteran with a remarkable career spanning, I can’t believe this, good sir, three decades of contributing to over 250 brands across more than 50 categories, a true expert in marketing.

He has managed industry-leading brands across B2B and B2C spaces and across all retail channels. He has an extensive background in brand and corporate strategy, innovation management, and consumer insights. Having worked and lived in Asia, the United Kingdom, and the United States. Richard, welcome to the podcast.

Richard Davies 

Thank you, Bennie.

Bennie

So, you know, our podcast guests can’t see us. You’re looking quite dapper and spry this morning. You’re not gonna start off your bio with three decades.

Richard 

I’ve got a very short bio and I think you’ve done justice to it. So thank you for that. But I am a marketeer by both training and by vocation. And in particular, I specialize in three areas, brand positioning, communication and advertising. But I have to say, Benny, my real passion is around innovation. And I know we’re to talk a little bit about that later on.

I have worked across a range of industries, FMCG, CPG, services and so on. And I think, you know, most of all, I’ve had the privilege of living and working across a range of geographies, UK, Asia, East Asia, and North America.

Bennie 

Right.

Richard

And I think we’re going to kind of come back to that a little bit later on as well.

Bennie

Yeah, I’d love to start there. We talk about your classical and well-worn training as a marketing leader. What, in the global context, what are some of the lessons that you’ve been able to take from your experience in Asia, in Europe, in the US? What are those things that are kind of hallmarks that remain the same? And what have been some of the learnings that you’ve been able to kind of transition across borders in cultural contexts?

Richard 

That’s a great question. So, you the thing that I would sort of start off by saying is that, you know, consumers are the same until they’re not. And by that, I mean that there are many similarities, but there are many differences as well. And those similarities and differences will vary greatly by category, by brand.

And so on and it will depend on a huge variety of factors, income, lifestyle, climate, and so on and so forth. But one of the key kind of lessons is for me has been on my marketing journey has been you cannot assume that the consumer is fundamentally the same and you cannot assume that they are fundamentally different. You have to look at this on a case by case basis.

And it all comes down to wanting to know and understand the consumer and their local market. And you know, Benny, I think it does get even more complicated than that because it’s not just the differences between countries. It’s also the differences within countries that you have to look at. And so if you take a country that is as diverse, is as different as China, for example,

Bennie 

Right. Right, right, right.

Richard

And I don’t pretend to be a China expert, but we know that there are fundamental differences between the consumers in Shanghai and the consumers in Beijing in some areas. And so there’s no magic formula. There are no secret norms that sort of say they’re all the same, they’re all different or whatever. You really do have to make sure as a marketeer that you understand the consumers in these geographies.

Bennie 

Right, right.

Richard 

And what makes them the same, what makes them different. And then as a marketeer, of course, it’s up to you as to whether you want to exploit the similarities or you want to exploit the differences. That’s entirely up to you. But until you know what those differences and similarities are, it’s impossible to be able to do that.

Bennie 

And I think another good point to your space in there is the nuance that all of these things change across time. Right? So even if you look at a maturity arc or a hierarchy, you may have a community that is a generation ahead of another and one that’s two behind, and you can see similar paths, but yet they’re still different.

Richard 

Yeah, you’re absolutely right. And that’s something that I think does escape marketeers. And as you may know, marketeers do tend to move careers faster than other functions and so on and so forth. But one of the things that we like to do is we like to look at how the market has evolved over time and in particular, how the attributes that consumers are using to base their choice on how they’re evolving over time.

Bennie 

Right.

Richard

Now, it is true that in many categories, those attributes will evolve in a similar direction, but the speed with which they evolve will differ significantly country to country. So making sure that you understand where the consumer is on that journey, where the drivers of those markets are and the speed with which they’re evolving or the speed with which you can evolve them for your consumer.

Bennie 

Right.

Richard 

I think is really, really important.

Bennie

What? You know, I’m going to ask this question as you kind of, see that you can see your mind actively at work in this space in there. What brings you back to marketing time and time again?

Richard 

So I suppose one of the things that keeps me in marketing, and we’re a growth agency, so we get to do the good stuff around, the fun stuff around marketing, but for us, is this kind of, there is this deep challenge about trying to figure out how we satisfy the complex consumer we’re trying to serve. And there is no greater feeling as a marketing professional than seeing a mix.

Bennie 

Right.

Richard

Win with a consumer. It’s not about growing your share at the expense of the competitor. It’s about developing mixes, innovation, communication that the consumer is going to choose for them. And that is one of the most wonderful feelings as a marketeer. And of course, I have to say that the reverse holds true as well. There’s nothing more depressing than when you fail to satisfy the consumer that you’re trying to serve.

Bennie

Right.

Richard

When we do that, and every successful marketer will do that, trying to understand what went wrong and what it is that you didn’t do properly to serve those consumers. And when you figure that out, that’s also a pretty good feeling. Understanding why the mix didn’t resonate to the degree that it was supposed to have resonated is also a really, really good feeling.

Bennie 

Right. Right. Right. So we’re going to talk a bit about fun. So you and your partner started AlchemyRx. So on the continuum of that feeling of figuring out what didn’t work, let’s extend that to when we get the embarrassment of riches. What’s the process like when something goes beyond your wildest imagination? We have the spaces. We thought we’d deliver 10x, and you wake up the next morning and you’re at 50x.

Richard 

So there’s a couple of really interesting questions in there and I wish more people would ask them. So when you over deliver on a mix, it’s really important to understand why you may have over delivered against your targets. Because there are consequences to that for the organization. There are consequences for the supply chain, of course. There’s consequences about the allocation of resource. Have you allocated too much resource? Equally, there are gonna be some fairly near term challenges that you’ve created this great momentum and the challenges are gonna come from within, which is, well, what’s next? What are you gonna do to build on the success, to capitalize on the success? And so you’re gonna be under a huge amount of pressure to understand why you’ve been successful.

And equally, what are you going to do to capitalize on that success? that in three years time, when you or your successor looks back, no one is sort of saying, well, that was great, but it was a flash in the pan. And it’s a real shame that we didn’t have the next, the next launch in the, in the funnel in the bag. So, and so to speak, we didn’t anticipate what our competitors were going to do. We couldn’t foresee how our competitors would take our success and build on that and so on and so forth. So.

Bennie 

Right. Sure that you’ve got the second and third generation.

Richard

Making sure that you’ve got the second and third generation on your horizon to build on the success is going to be as important as that initial success was.

Bennie 

Right.

I know, one of the things you mentioned and, you know, it’s been top of mind for me lately is the notion of competitive response. You know, sometimes in marketing, we can make the mistake of thinking of our world in a vacuum. It’s kind of our actions and the things that we’re doing. And we look to measure, like you said, what we’re doing and how we’re delivering. But we don’t look at the fact that our competitors are learning and watching while we grow and deliver as well.

When you think about the work you do at Alchemy, how do you equip your clients to deal with the natural competitive response?

Richard 

So one of the things that we try to suggest to our clients is to wargame the scenarios that they’re going to be confronted with. And it’s a little bit like poking the bear. The more success you have, the more likely you are to to attract an aggressive response from your competitors. And you should be able to predict much of that. you know your competitors or sometimes we’re asked to help people,identify the strengths of their competitors and look at things like their historical launches, their historical responses, what their level of technology might be like, what their appetite for expenditure is going to be, what their relationship with the trade is going to be and so on and so forth. And all of that, we try and wrap it up in this approach to war gaming that sort of says, look, if we are successful, what is the competitor response gonna be and what is our response to their response gonna look like? The one thing that you can say is that your competitors are never gonna stand still. They’re never going to allow you that luxury. You may be lucky that you have got some sort of technological advantage, some sort of patent protection that gives you a window of protection. Oftentimes we’re talking about conceptual innovation or, you know, simply, you know, claims. And so what we sort of say to people is, look, you have to, you have to make sure that you have developed your counter attack and then your counter attack to their counter attack as a follow up. And all of this is kind of predictable. You know that you’re going to attract a response. The only question is how soon and how big. And the longer you wait for a response, probably the bigger it’s going to be.

Bennie 

Right, right.

Richard 

We would sort of say to all of our clients, look, you must have your counterattacks ready for when they come back. And depending on the category that you’re in, the competitors that you are going to be dealing with, you’ve got to have these things ready at the time that you’re launching.

Bennie 

You know, in our global world, in our global reality of managing brands on all fronts, talk to me about the tension and the promises of feet on the ground, head in the market, and heart in the market. Dealing with, you know, the strategy from afar, being in ground, or being in tied into the community. And now sometimes we’ll have market spaces where, you know, we’re marketing really blind and hands off in the marketplace and it’s all our head and other times we get the benefit of being in the market.

Richard 

Yeah, and I mean, I think that’s a real challenge that many marketing organizations are kind of confronted with. And some try and solve it through, you know, organization reorganizations or endless reorganizations about where the responsibility should start and stop and so on and so forth. But, you know, there is and I kind of grew up in a world of the original kind of brand management concept where you know, the expectation was that you would know everything about your brand, whether it be the theoretical, whether it be conceptual, whether it be at a very, very operational level as to what the pricing was in, you know, the top, you know, three or four chains in, you know, the second largest city. And so you were expected to acquire, no massive amount of detail to know that level of detail and to be able to move up and down the continuum from the operational to the strategic to the very conceptual from the very near term to the midterm to the very long term. And you’re expected to be able to traverse that those continuums quickly without missing a beat. And of course, that meant that as a marketeer. There is an expectation that you can multitask to a very great degree. And whether you would do this because of the team of people you had around you, a kind of a formal team of people you had around you, or whether you would do this because you had to develop an informal team of networking with people in your organization and with your suppliers, but being able to move quickly from talking about a three-year plan.

Bennie 

Right, right.

Richard 

To firefighting a launch that you had released and something had gone wrong and maybe the formulation wasn’t working or the customer, the trade was not happy with the margins on circle. That is all, in my view, the fun and the challenge of being a successful marketeer.

Bennie 

Right. Right.

I love your unique definition of fun, my friend. I love it as we think about that. I’m gonna ask a question that’s really a classic conversation. What do you see is the biggest difference in today’s world between B2B marketing and B2C marketing? There’s a time where the camps were so separate in the space and the two did not cross and then there’s today.

Richard 

Yeah. Look, I think that’s an awesome question. I’ll sort of count on the table. I spent much of my time in the area of B2C. And it’s only within the last two years, 10 years, sorry, that I moved into doing B2B as well as B2C. And before I moved into doing B2B, I did have reservations about my ability as a kind of…Classic B2C market here. I did have reservations about my ability to be able to move into a B2B role. And what surprised me was that in many ways, the B that you’re serving as opposed to the C, in many ways, they make decisions. The business owner, the business manager, the buyer, whoever it is, makes decisions.

Bennie 

Right.

Richard 

In a very similar way that our consumers do. And of course they’re the same person. They’re just in the office in the morning and the supermarket in the evening if you like. But in many ways, the way they look at your brains in a B2B context is how they look at your brains as a consumer. They are confronted with choice. What are the drivers of the market? How are you performing? They look at the value proposition. They look at things like…

You know, price, they may look at it as through a slightly different lens of, you making my organization more efficient? Are there labor saving ways of talking about value as opposed to simply talking about it as a price reduction? But many of the techniques that we have used in B2C, we were able to deploy in a B2B world. So let me give you an example. If we were advertising to buyers of hotel chains, we found we were able to pre-test our advertising using the same techniques that we would test with consumers. We were able to use them to test in the B2B world. So many of the techniques, many of the approaches that you would use travel extremely well from B2C to B2B. Now, of course, there are going to be differences in what B2B demands. But I was…

I came away from my five years stint in B2B thinking, so long as I get on and understand what my buyers in the B2B world want, what motivates them, how do they make decisions? How can I deliver a value proposition to them? How can I make sure that I’m satisfying their needs? How can I make sure that I, whether it’s the buyer of the hotel chain, or the janitor who is mopping the floors in that hotel chain, I need to understand these people. And I’ve got the techniques to go and understand them. I just have to deploy them in a slightly different way. And if I can do that, then I know I can be successful.

Bennie 

It’s so true. I’ll share this one personal experience. I was running marketing for a really complex brand portfolio and we had a consumer facing portion of our brand and we had a larger focus on a B2B facing space. And I learned early on that one of our key decision makers on our B2B side was proving through, was providing proof points on our brand from her experience on the consumer side of our brand.

And we were in this space in which all of the discussions were about just the B2B space. And the team had to step back and realize that in the wild, people are getting all parts of your brand promise. And a softer brand promise on our consumer side invalidated the stronger brand promise on the B2B side. Yeah. So. Right.

Richard 

Yeah, exactly. Yes, exactly right.

Richard 

Exactly right. Yeah, that’s exactly right. Yeah. I mean, there’s a massive crossover too, you know, with the way trade channels have evolved and the way information flows have evolved. There was, as you say, yeah, there was a massive crossover of information between the two. So that consumers often know what’s going on in the B2B world and people in the B2B world certainly know what’s going on in the B2C world.

Bennie

Right, right.

Richard 

And as you rightly suggest, you’ve got to be aware of that and use that to your advantage.

Bennie 

Well, you know, my new t-shirt for today is something that I know you believe strongly in, which is innovation is marketing, and marketing is innovation. How do you champion this mindset, which for some organizations is a huge shift?

Richard

Well, look, I think you’ve really hit on one of the great questions, the great marketing questions of our time, is that companies today, I think, or industries today, I think are suffering from a real crisis of confidence when it comes to innovation. And you can see this manifesting itself in many different ways, whether it’s the amount of innovation that’s being launched, whether it’s the success rates of innovation, whether it’s the contribution of innovation to top line revenue growth. Companies seem to be pulling back over the last five to 10 years to investing in innovation. They seem to be reducing the amount they’re prepared to develop their capabilities and innovation. And I think this is a real concern. And I think if you were to go back 15, 20 years, 25 years ago and you looked at across the board the innovations in categories and you compare that today, you would be surprised if not astonished as to just how far down the importance innovation has become. And companies don’t seem to have the patience now for investing in innovation that they used to have. And they seem to struggle to identify innovation as one of the greatest contributors to incremental top line growth.

And I think that’s really concerning. I think that’s really worrying. And it’s not just me saying this. There’s a ton of empirical data out there now about the decay or the demise of innovation rates. Sorry, go ahead.

Bennie

Yeah, and you know, as we continue our conversation, I want to demystify it a bit because I want people to hear that innovation is not a pure proxy for technology. Innovation is not a pure proxy for AI, which, you know, dominates all of our conversations and imaginations today. But I was at a panel with a dear, respected expert who I just love his approach and thought.

And he started off by saying, yes, we’re going to talk about AI, but let’s put a pin in it. And he was like, if AI were not the topic, what else would occupy our imagination? And he used this as a prompt to get us to look into all of these other transformative things that are happening as well, that in another time would be the big story. And I think about that for innovation that, you know, some of the great brand innovations of the last, let’s say, five to 10 years have very light technology underneath the real breakthrough.

Richard 

Yep. Yep. And I think, again, Bennie, you asked me a question, but actually you’re really asking me about three or four questions, which is very clever, thank you. So the first thing that I would sort of say to help frame my response would be that innovation can take many different forms. It can be a big breakthrough innovation, it can be conceptual innovation, it could be claims innovation, it could be renovation.

And all of those are good. And all of those have got a place in delivering growth for the organization, trying to figure out what the combination of those different types of innovation is for a particular organization we think is really, really important. And you want to have what we would say is a balanced funnel for the organization that has a mix of those different types of innovation renovation. That would be the…the kind of the starting point. I think that the next thing I’d say, and you make an excellent point about technology and AI is that we try to approach the quality of our innovation funnel through the lens of a consumer. You’d expect me to say that. Consumers want news. This is beyond dispute. Consumers want news. They want new news and they will gravitate to new news. And in the work that we have done over time, whether it’s advertising, whether it’s packaging, whether it’s from formulations.

Consumers are fixated on stuff that is new, improved, better, and so on and so forth. Giving them the same old stuff year after year after year, it does nothing for them. It does nothing for your loyal consumers, let alone being able to attract either lapsed or non-users to your brand. And so, innovation is at the heart of what the consumer wants. And if you wave the white flag of surrender around innovation and you say, you know what, we’re just going to focus on pricing. We’re just going to focus on, you know, endless consumer promotions, you know, buy one, get one free and so on and so forth. Your competitors will overtake you. And the only question is how quickly they will overtake you, because at the end of the day, in every category, the only thing I can say is that your consumers are demanding news. And our job as marketeers is to figure out, you know, what type of news are they wanting and with what regularity, what frequency. And of course that will be governed by the strategic objectives of the organization, the resources and so on and so forth. But the starting point I think has got to be, what do our consumers want in terms of news? And of course they want innovation. Of course they want that.

You make the point about technology, you’re absolutely right. They want innovation. The innovation may be highly dependent on technology, it may be somewhat dependent on technology. It may just be giving lip service to technology, but they want a combination of these three things in the mixes that we serve them up.

Bennie 

So in that, there’s often less of a challenge with a newer brand and a new offering. What advice do you have for brands that are legacy brands or established brands in this pursuit of new?

Richard 

Yeah, and that’s a great question. and again, I think it will depend on what the stage of a legacy brand is. Is it kind of in midlife or is it well beyond kind of midlife? And where do you want to put your technology? There’s no doubt that a legacy brand can be well served.

By the injection of innovation. I think what we would sort of say is that you would want to make sure that if you’re putting new technology into an existing brand, you’re doing so in a way that is respectful to the brand, to the brand equity, that you’re not taking it somewhere where it shouldn’t go by the addition of new technology. That may force a discussion around.

Should we launch a sub brand with the innovation? And then you’re going to be confronted with a very similar discussion about how does the sub brand coexist with the master brand? Is there, are they going to end up competing with each other? Are they going to be so wildly different that the brand ends up being sort of, know, schizophrenic or blurred in terms of what it means to consumers? Those are all really good questions for marketeers to answer before they launch.

And that will facilitate a legitimate discussion about what the appropriate vehicle is for the innovation. And of course, there’s nothing to stop you from launching the innovation in a new brand, launching the technology in a new brand, and then taking that same technology and putting it into an existing brand that you have. And so one of the things that we would sort of say to people, particularly in larger categories, is maybe you need to have not just one brand, but maybe you need to have a couple of brands. And again, we would say to people, look, you’ve got to do your homework. You’ve got to make sure you have a good understanding as to how consumers see the category, where they see the space for new brands, how do they see the existing brands overlap? And again, there are really good different ways of segmenting and mapping the market that will allow you to understand it. And that’s all good, so long as you do it before you launch, rather than trying to do it after you launch. But for sure, going back to your question, for sure, of course you can extend the life of a successful brand through innovation, through the careful application of technology to the equity, you would want to do your due diligence to say, look, am I just talking again to my existing users of this great brand? Or have I got the opportunity to attract new users to an established brand? And you’ll have to make those decisions accordingly.

Bennie

So yes, it’s that decision set that I go back to you talking about marketing really not being something that’s stationary. That it’s kind of this active space in there and that’s where kind of the excitement and fun comes in this moment. When you think about, we talked a bit about the global space in there, being in Asia, the United Kingdom and the US.

What encouragement do you have for marketers with this new, leveled up global nature of marketing? We can’t artificially limit our brands at any border now. And that’s been the case for some time, but it’s very real to brands today.

Richard 

Yeah, I think that’s absolutely right. I think, you know, with the global flows of information and people and products, I think it is a complexity that it existed 20 years ago, but I think it’s become much, much more important nowadays. You know, look, I go back to one of the things that you and I touched on earlier in the discussion, which is the starting point for any marketeer is to understand in the category they operate and in the brands that they are responsible for, to understand the differences and similarities between the consumers that they serve. And sometimes those differences will be small, in which case the issue is not necessarily going to be a large issue. In other instances, the similarities may be quite large.

And you’ll have to decide as a marketeer as to whether it’s worthwhile trying to exploit those differences through different packaging, different formulation, different communication, or not as the case may be. One of the things that I would sort of suggest is that we always find it helpful to make the distinction when looking at how well a mix will travel is whether we’re talking about the proposition, the underlying proposition of the mix, or the executional elements of the mix. So it may well be that, you know, the proposition, the brand position itself can travel very well. And it can travel, it can go around, you know, wealthy markets, it can go around, you know, less wealthy markets, can go from east to west, north to south, and so on and so forth as a proposition.

But it may well be that there are some executional elements. It could be government regulations. It could be if it’s a food around taste and flavor. It could be climactic, you know, storage conditions and so on and so forth. All of those things at an executional level will have a profound effect on the ability of that mix to of that execution to travel. And you will have to adjust your mix accordingly.

Bennie

Right.

Richard 

And you’ll also have to figure out ways to, you know, to do this in a way that the consumer can afford. You know, can they afford a mix that was developed in the first world? Are they able to afford that or not, as the case may be? But we keep coming back to the same sort of starting point, which is understanding the similarities and difference is absolutely paramount. And then trying to figure out a way to solve for those.

I would encourage your listeners to sort of say, the starting point isn’t that we should be, you know, hopelessly global or mindlessly local. It should be to understand those differences and similarities and then make a decision based on your organization as what is best for you and for your consumer in terms of just how global.

Bennie

Right.

Richard 

Or just how local you want those mixes to be. But don’t be forced down the road of saying we must be global or we must only be local. That’s probably not going to be a recipe for success.

Bennie

Right, so true. So I’m gonna ask you this question in this special way. I’ve been fond of saying, and in this season exploring even more, the notion that marketing is art, science, and magic. And when I think about your company and organization, the combination of that is really alchemy. So for my young marketing alchemist out there, what two items would you encourage them to have in their Alchemist toolkit?

Richard 

So you gave me a choice of magic art and science. Look, there is a really, really hard reality that you probably need all three of those in your toolkit. And you’re probably going to have to dial some of them up and some of them down as to when it is appropriate. I think.

Bennie 

Yes. Yes.

Richard

What we what we try to say to to our people when they’re looking at their toolkit and you’re absolutely right when we when we looked at the at the kind of the proposition around our brand name around alchemy of turning sort of metal into gold of you know turning them the ordinary into the extraordinary and so on and so forth We actually sort of said to people one of the kind of key things is to make sure that you start off with this profound understanding of the consumers that you’re trying to serve. Now, it’s true, not every company is going to have a massive budget to invest in consumer insights. But to your earlier point, in this age of, know, digital age of technology and so on and so forth, you would be surprised at just how cheap it is for even small organizations to be able to go out and invest in understanding the consumers that they serve. You would be surprised to be honest, just how much information even smaller companies have at their disposal. And oftentimes one of the things that we find is companies just don’t know how much information they really have got about the consumers they have. And so one of the great challenges that we are confronted with that we have solutions for people is about trying to make sure that people are aware as to just how much information people in their organization have got about their consumers and trying to get people through the use of AI to be able to bring that information to the forefront of the discussions that need to take place. The leadership team and the marketing organization with the advertising agency, with R &D, with the supply chain and with the people who are responsible for the customer relations. And if you can get the information that they already have as a great starting point, get that on the table. We can suggest ways to help them. We use a great company called Market Logic to help them do that. Get that information on the table and then go out and see what sort of information they need to acquire. And they don’t need to spend a huge amount of money to do this, but they can do it.

Richard 

Very choicefully, very surgically, get out there and find what’s the key information they need, you know, through selective agencies, and we can certainly help people find that, and find out the barest minimum they will need to be able to address the conundrum that you talked about of trying to find that right balance between, you know, emotional, functional, spiritual, you know, whatever the case may be that is operating in the categories that they are operating in.

Bennie 

I think my friend, that’s a great way of putting it front and center that there is no choice. It’s always alchemy to have marketing as art, science and magic. Thank you so much for sharing the journey. 250 brands, 50 categories, numerous stories and incredible strategic insight, my friend. Innovation is marketing and marketing is innovation. Richard, thank you for being a part of this episode of AMAs Marketing / And. I encourage you to explore the work of AlchemyRx, to think about your brands in dynamic ways, both locally and globally, to think about innovation first and marketing as a driver. Thank you for joining us.