F&N on building brand-centric team structures

First off, let’s start with defining brand-centric marketing. What does it mean? It actually all starts with the consumer. For many brand or marketing teams we always start off with the brand.

We ask these questions: What do we stand for today? How do we want to differentiate it? But what many are forgetting are the consumers. What are their deep-seated needs? And is your brand fulfilling those needs? This is what I have personally gathered from some of the brand discussions I’ve had in the past.

What’s worse, personal preferences and egos also come into play in the decision-making process. A more outspoken individual may come up and say, our brand should stand for this and that. But is this backed up by what target consumers are saying? Often, it isn’t. If you check with consumers what your brand stands for today, you might find very surprising answers. There’s often a huge gap.

One brand I personally feel that has done well is Mercedes-Benz. It has smartly repositioned itself in the past decade or so. If you asked what Mercedes stood for in the past, you would get an image of luxury and opulence, but at the same time of a brand for more mature executives – possibly your dad’s car.

It would be a challenge getting the younger aspirational target customers into the brand franchise then. I believe they realised that and started marketing themselves very differently, leaning towards a more energetic, adventurous and life-style position.

Most brands, especially in that sector, would have been resistant to making such a big shift. Most importantly, this wasn’t just in its communication approach – changes seem to have taken place in its product architecture, design and offerings. If it only still had an S-Class model, it would have been the same. It was a total system change. You could see it in the way it styled its C-Class. Everything looked integrated.

Structuring a team to be brand-centric

So how does this work when it comes to structuring your team? First, different structures work for different companies. Some structure themselves by business channels, some by geographies, some by brands. These work well in different settings.

But if you really want a brand-centric company, where the brand is the core driver of growth, then you need to structure your business unit and profit centres around the brand. Make the brand the core business unit.

The P&L of the company shouldn’t be overly aggregated in a simple manner. Many companies often ask, “how are we doing as an overall company?” This approach will not allow you to accurately see which brands are profiting or making losses.

To have a totally brand-centric company, each brand needs to be measured separately, with brand owners strictly accountable for their own brand. If one particular P&L is doing badly, it should be quickly corrected and dealt with, instead of dragging the whole company down.

You need to ask, is that brand strategic to the portfolio in the long term? Is it relevant to the consumers and the company? If not, fix it or dump it. This will force the company to be extremely brand-centric. Very often, when you have a big portfolio of brands, you can’t always see what’s wrong with individual brands and you may end up wasting money and resources on it.

I also believe that two key drivers of commercial success are our brands and our route to market. However, some companies today still don’t assign P&Ls to these key core drivers. Overall company P&L is often owned by finance or the general manager.

While management does ask, “how are the channels doing, how are the brands doing?”, sometimes it is unable to pay greater attention to the finer details that make up the brand’s health and performance. So that brings me to what I said – it is important to make sure each brand is measured separately, but at the same time, matrix it over with the different channels. Each commercial driver should have a P&L to it.

Also, a brand manager should have full control over the entire brand – cost of goods, which channels to distribute it over, what the investments should be over the next five years and investment in R&D. The channel leaders should also do the same.

The empowerment of brand managers

A typical organisation is structured by functions – marketing, R&D, finance, supply chain, sales, etc. There’s normally a director in charge of each function, who is accountable for their own function. Typically only the finance directors and the GMs are looking through the whole thing.

Brand managers need to be empowered to manage all the elements that impact the whole brand’s P&L lines. At P&G, where I started, the brand executives closest to the ground (sometimes the most junior ones) would be making the most important decisions on the brand.

The brand manager would own their own brand P&L, cutting across all functions. They would have an influence on the product, where it was made, what it would be priced at and how customers would be served, and would know at the end what the brand P&L structure would look like.

While being possibly more junior in the company, the brand manager would have to influence at times more senior function heads or the general manager on their decisions. The challenge now is increasingly that most companies today don’t enable their brand managers to do this.

Ultimately, the responsibility lies with senior management to make sure traditional functional silos do not dilute the brand’s holistic plans and health.

Having the right skills

Placing so much responsibility with a brand manager is a huge thing. What skills should a marketer in such a role possess? They should ideally have these relevant commercial competencies:

First, taking P&G as an example once again – back in the day, it would ensure its newly hired brand executives went through a rigorous and on-ground sales training.

You took on a role of a salesman for your initial few weeks or a couple of months in the company – so a marketer would have to walk the streets for those months and see firsthand what it took to sell the brand to a retailer and a consumer. Then they would get a more intimate feel of the marketplace and what works and doesn’t. So sales experience is very important for marketing.

Another important skill set to have would be financials. A good marketer should have sound training in financials and know how one little change would shape the overall financials of the brand. They should be able to think if prices need to be pushed up, if cost of goods can go down, etc. The third competency would obviously be their ability to keep a close pulse on consumer trends and effectively/creatively communicate our brand’s proposition across that.

Brand people are typically very creative people with strong communication capabilities. But they must not forget to stay close to the commercial aspects of things – at the end of the day, we are here to delight consumers, and at the same time, maintain a sustainable and profitable long-term strategy.

F&N’s strategy

As for F&N, we are trying to learn from our historical marketplace experiences and successes and move towards this model. We are measuring P&Ls at the brand level. We are looking at where our brands will be in five years time and which of our core/segment brands we will drive harder.

We are also moving towards this, especially with F&N’s integration into the broader ThaiBev group of companies. With a larger organisation now, this is critical. Our vision for 2020 is now crystallised, and we now have a greater clarity of what the F&N corporation will look like and where we are heading. We now have clarity on our core brands and categories. Resource allocation is also clearer.

The writer is Bart Lim, general manager, non-alcoholic beverages, CEO’s office, for F&N.

This article was from Marketing Magazine Singapore's April edition.