There’s so much choice available that customers can pick and choose who they buy from and where, when, and how it happens. They want to discover, research, evaluate, and purchase on their preferred channel. Give them that option, and they’re more likely to choose you. That’s the whole point behind the multi-channel approach.
Tip Top’s marketing and innovation leader, Graeme Cutler, is the first to admit the bread business isn’t an easy one to be in.
For a start, the baking category from a volume perspective is pretty flat. Sliced bread, for example, is seeing just 0.3 per cent growth in volume, and it’s down in value. There’s also active competition and price deflation, a troubling combination. And social media’s impact on how consumers perceive products and services has only exacerbated some of the negative myths and misconceptions about what’s in bread and whether it’s good for you.
“The way through is what brands bring to the table that encourages people to make a change, and innovation that inspires our consumers and customers alike,” Cutler said.
Cutler joined George Weston Foods, Tip Top Bakeries’ parent company, in May 2012 as business development director across the cake and chilled, frozen and international breads categories, tasked with helping turn the business around. The company had experienced a period of turmoil that saw four managing directors come and go in quick succession.
“We needed to clarify our purpose, strategy and grow the business,” Cutler said. “We are now starting to see the rewards from a growth perspective.”
Before foraying into food, Cutler built his career in trade marketing and sales, largely with cleaning products giant, Clorox. Most recently, he was a regional marketing director, developing innovation and strategy across a diverse set of geographies including Australia, New Zealand, South Africa, South East Asia, China and the Middle East. Prior to that, he was the US marketing director for the Clorox laundry portfolio, a US$5 billion division. He’s also covered car care and cleaning utensils categories locally.
Cutler said he was attracted to Tip Top Bakeries because of the iconic brands it produces, such as Tip Top, Golden and Abbott’s Village Bakery. As marketing and innovation director, he also has a more hands-on role that allows him both to set the strategy and take charge of the P&L, as well as work with local teams to execute.
“Tip Top is unique – increasingly it’s not the case in FMCG – in that we are marketers of our own destiny,” he commented. “We don’t have a central head office or regional team guiding strategy, we do the whole gamut ourselves.”
Marketing wise, things are continually changing, Cutler said. “That’s the beauty and the challenge all in one,” he said. “I see the role of marketing as orchestrating the change that’s needed to adapt to the market environment and how that’s changing, to ultimately grow the business.
“Here, that required a refocus on brands and innovation, which had been let go to a certain degree, and addressing a core issue of the category, which is the issue of declining consumption.”
3-step marketing recipe
Cutler identified three core pillars to how his marketing team is looking to rise to the occasion and better engage end consumers. The first is creating a desire for Tip Top’s brands and gain mental availability.
“We need our brands to be top of mind on the shopping list on a daily basis in our category,” he said. “Insight and data helps us understand what needs to be done there.”
The team is now tapping the findings of a recent market mix analysis report and econometrics model from Foresight ROI to better understand the drivers of sales. “It’s about pulling that down to a level where we can discern which campaigns are more effective than others,” Cutler said.
Tip Top’s second marketing ambition is better influencing along the path to purchase. Cutler described this as getting a decision out of shoppers, and shifting from awareness of the brand to putting the product in their basket or trolley. These efforts are being helped by insights from penetration data, sales data from its retail partners, and shopper research.
The third and arguably most marketing emphasis is delighting the customer through experience. “If you’re not delighting the end user, and the experience of eating our food isn’t good, then the rest of the effort is for nought,” Cutler said.
Again, data from panels, usage experience and sensory work are all critical to achieving success, and he said these are increasingly fed back into Tip Top’s marketing programs and communications.
“We want to grow our business and these three elements are the way we see ourselves doing it,” he said. “We have to create a desire, influence the decision, then ensure the experience is one people want to come back for.”
Media and channel experimentation
Baking is the ultimate FMCG mass market, and Cutler noted there’s not much else that’s fresher, that’s delivered on a day-to-day basis and has a 96 per cent penetration rate. So when it comes to the rise of digital, Tip Top’s strategy is to maintain a focus on reach through media spend and extending campaigns by using digital channels.
Cutler said Tip Top will spend 40 per cent of its media dollars on digital in 2016, increasing in the last four years from a base of between 5 and 10 per cent.
“Digital is driving efficiency for us,” he said. “We’ve found some work we have done on market mix analysis or econometrics is by far highest in terms of ROI in our marketing mix. TV is really important for mass market, but digital is driving efficiency. When it’s a tight market with limited dollars to spend, you’ve got to keep your eye on ROI.”
But Cutler also believed no brand has cracked the optimal media mix yet, and said his team has had its share of successes and failures. What’s minimising risk is test-and-learn.
“It’s complex, there are lots of things changing, and you’ve got to constantly be experimenting with new technology,” he claimed. “We’re constantly learning – it’s a cycle of experimenting with something, learning, and if it’s good, then adapting it to the core. If it’s not, we let it go and move on to something else.
“We allocate 10 per cent of our budget to what we can try that’s different and that provides us with an advantage in the market, or helps us engage and target consumers better to drive better insights. It’s about constantly looking for new ways of communicating with consumers.”
While mobile apps and Instagram haven’t been successful, Cutler said areas it’s seeing great results in are crowdsourcing content and pre-roll in digital video. Tip Top launched its own online community 12 months ago, with the help of digital vendor, Vision Critical, and now has 1500 consumers nationally it talks to about a range of subjects.
“We can test products, concepts, assess attitudes, and get feedback on what’s going on in the marketplace,” Cutler said. “That’s been a flexible, agile, cost-effective tool for us.”
Embracing transparency and authenticity
Alongside agility and experimentation, another facet to how marketers keep up with consumers and influence perceptions is through two-way and authentic engagement. Tip Top has sought to do this through its ongoing ‘A Grain of Truth' campaign, where it uses bloggers and experts to engage with the community about what’s going on, talks trends in food and media, and try and overcome negative perceptions of baking products.
“In this case, we took it up a level and addressed the broader trend being driven particularly by social media, which was the rise of the new expert,” Cutler explained. “We’re finding lots of people have opinions, and it was starting to impact consumption of bread.”
Tip Top research had shown that as a nation, Australians are confused about what’s good for them, he said. “Bread is the posterchild of carbs, which people kept saying are bad for you, but we had lots of information to show that’s not the case, and we wanted to bust the myths,” he continued.
To do this, Tip Top engaged nutritionists and staff to take bloggers through the process of how bread is made, what’s in the bread and what’s not in it, and “told them the truth”, Cutler said. “Through their articles, we were reaching people on different level without talking about our brands,” he said. “This built up the support of nutritionist, and we used partners to give credibility and amplify that voice.
“Three years ago, we were not in that head space or looking to do something of that scale.”
Tip Top has also built a strong social following and is increasingly using these channels for consumer support and education. According to Cutler, brands need to be much closer to customer service than ever before because the timeliness of response is critical.
“You can’t sit on feedback, it has to be instant. That’s what consumers are demanding and we have to be agile enough to get back in the right timeframe,” he said.
Being transparent inside and out
Transparency is the thread underlying all of this, and being able to answer questions from a position of truth. And it’s this approach that’s being pushed internally at Tip Top as well as externally.
“We have information people want to know about, and we have to be more transparent,” Cutler said. “For example, people think there’s sugar in white bread, but we don’t put sugar in white bread. And the reason our bread lasts longer on shelf is because there’s vinegar in there, not because there are artificial preservatives.”
The next phase for marketing is to bring this transparency in-store, and secure the support of supermarket customers in bringing the broader bread category message to life for end consumers, Cutler said.
“We’re putting the category first and have invested a lot in talking to customers about the benefits we offer to the category,” he said. “We’re supporting that with innovation across our brands as well so we can drive growth for both parties. What we do with the end user is going to be beneficial to the customer because those insights are going to be brought into the way we do things. It’s a partnership, but we have to be constantly vigilant about sharing information.”
Understanding both customer and consumer need through data is vital to achieving this, and Cutler said it’s trying to get better at insights as a way of driving competitive advantage. One of the steps it’s taken is to structure things internally so there is a clear focus on developing insights, with a team now servicing the need for insights from both a consumer and customer point of view.
“We are developing capabilities in that space both for the consumer market and also our food service arm,” Cutler said. “We have a CRM system there to be more in touch with end customers ordering and use on a day-to-day basis. That’s critical.”
At the end consumer level, Tip Top is bringing in data from many sources, but Cutler said developing the point-of-sale data side is still a work in progress. The emphasis to date has been scan data, research, penetration data from stores and bespoke research.
“The challenge is the fusion of those, whether that’s through a system or process to get to that unique insight that drives competitive advantage,” he said. “That’s the fundamental challenge, not the systems or processes that exist.”
Baking in innovation
Product innovation is also part of Cutler’s remit, and to do this he has a team of 11 people focused on development.
“They’re looking for two things: Product renovation and launches that are smaller in nature; then more critical innovation streams that start 3-4 years out,” he said, adding that there are a dozen or more innovation platforms active at any one time.
A number of bread trends are driving efforts at the moment, including convenience, the push for real food and products that are better for you, and the next best thing.
“It’s particularly important for a category that has copped a lot of flak previously for not being as healthy – which is unwarranted, but it’s out there,” Cutler said. “It’s how we think about growing the category through innovation, and how we engage with customers, sharing with them our plans.”
For Cutler, being a successful marketing leader comes down to driving growth. The way Tip Top achieves growth is through its brand and innovation, he said.
“There has been a real shift in the dialogue at Tip Top, and we have moved from functional positioning and functional creative to much more experience-based connection with our end users around the brands,” he said.
“Both Tip Top and Abbott’s Village Bakery campaigns at the moment are great examples – there is product in the ad, but it’s not the main message. It’s more about how the brand makes you feel and if you can relate. We leave the functional messages for in-store, on pack and in social.”
But all of these growth efforts are in vain if the CMO can’t prove the marketing team’s ROI, Cutler said.
“When we see purchase intent and consideration going up to record levels, we know the approach is working,” he concluded. “The credibility and accountability of marketing back to leadership and the business is to demonstrate that what we are doing adds value and that it is working. Through our innovation record and way brands are evolving in the market, we are able to do that.”
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