Remaining mindful of five global trends, a leading beverage company designs bottoms-up strategy for reconnecting with customers
1/29/2007 - Connecting with consumers can be as simple as making a cocktail, according to Ivan Menezes.
Delivering a Jan. 29 keynote address at the Kellogg School Marketing Conference, the president and CEO of Diageo North America likened the event’s theme – “reach, engage, connect” – to the idea that marketers must shake up how they think about their customers, stir their interests with new products, then bond with them by earning their loyalty.
Menezes ’85 stressed that at Diageo, a global premium beer, wine and spirits business, the customer is at the heart of everything. “Our No. 1 job is to engage consumers worldwide with brands that will delight them and earn their loyalty,” said the Kellogg School graduate.
“As we look at this ever-changing consumer marketplace, we at Diageo realize that the traditional ways of thinking about marketing just didn’t cut it. We needed to shake up the way we thought about consumers and how to connect with them.”
One of the company’s most simple insights about consumers, he explained, was that when they choose to drink, they don’t look at brands and products the same way the producers do.
“Wine makers look at what wine drinkers want in their wine brands. Distillers ask what a scotch, vodka or tequila drinker wants from their brands,” he said. But consumers start with the type of experience they want to have, and then they think of the products and brands to consume.
“To build brands, start from where consumers are, and make your brand and your category actually the last think you think about.” Menezes called this lesson brand humility.
“Once we understand our consumers, we go from shaking up how we think about them to how we stir their interest and passion.” Diageo accomplishes this by developing new products and line extensions, said its CEO.
Menezes discussed five global trends that Diageo focuses on for product development. First is trading up, or seeking brands and experiences that provide consumers affordable luxuries. Second, consumers are celebrating their roots. He explained they want to balance the homogenization of culture around the world while protecting their local, regional or national identities.
The third trend is individual expression. “Consumers are seeking increasingly creative ways to express their individuality, even in mass consumer products.” Examples he gave range from ordering personalized M&Ms to uploading home videos on YouTube. Experiential leisure is the fourth trend. Menezes believes affluent and demanding consumers are seeking more intense, richer leisure experiences that help them to feel that they are “living life to the fullest.” Finally, he identified the fifth trend as busy lives: Today’s consumers look for shortcuts to make their lives easier, and they want products and experiences that enable them to slow down their lives, even just for a night or a weekend.
Menezes closed his address with a look at how social responsibility is a key piece in Diageo’s marketing strategy. The company bonds with its consumers through responsible drinking campaigns that are strongly tied to its brands.
Conference attendees had their choice of three panels following the morning keynote address. In the Consumer Connections Panel, moderated by Professor Gregory Carpenter, participants discussed how to reach audiences on an emotional level. Clinical Associate Professor Robert Schieffer led the Multicultural Marketing Panel, which addressed how companies are reaching America’s Hispanic consumers.
Both panels emphasized that the consumer must come first in the minds of marketers for successful brand strategy.
Additional Saturday keynotes included Scott Bergren, president of Pizza Hut, Yum! Brands, and Jason Few ’98, corporate vice president of Motorola Global Retail & Seamless Mobility.
The two-day, student-run conference kicked off Friday Jan. 26 at the Kellogg School’s downtown Chicago location in Wieboldt Hall. There, participants enjoyed the opportunity to catch up on the latest marketing research with two MBA Updates, a keynote address by Tim Furey, chairman and CEO of MarketBridge, and a practicum session led by Kerry Henderson, vice president and media director of MediaVest Worldwide.