Marketing execution capabilities are being questioned in the commoditized daily necessities market -- the key is customer insight and visualization of promotional effects

A commoditized market calls for marketing execution capabilities

Q. Please tell me your responsibilities.

Mr. Nagai:I belong to the Fabric Care Division, which is responsible for developing and cultivating detergents and fabric softeners. As building staff, we are mainly responsible for managing the brand's profit and loss, formulating sales strategies, and developing products. I am in charge of the fabric softener brand "Soflan," and Arai is in charge of the detergent brand "NANOX."

Q. What are the characteristics of this market?

Mr. Nagai:The products we handle are so-called daily necessities. The market is characterized by the fact that there are so many products, and it is difficult for customers to understand the differences in the functions of the products. In this situation, it is important to make customers perceive the value of your brand and choose it. Because the market is becoming commoditized, I think that marketing execution capabilities will be put to the test. I think that this is what makes marketing in this industry difficult, but also what makes it interesting.

As promotional measures became more diverse, the effectiveness of each measure was unclear

Q. What challenges have you faced in marketing so far?

Mr. Nagai:The company had challenges in accurately grasping the effectiveness of each promotional measure. In recent years, customer values ​​and behavior have become more diverse. Traditionally, TV commercials had an overwhelmingly large influence, but with the number of digital native consumers increasing, TV commercials alone are no longer able to produce results in recent years. For this reason, the company now uses a variety of media, including online advertising, to approach customers in an integrated manner. However, as measures become more diverse, it was not possible to visualize the extent to which each measure was contributing to results.

Mr. Arai:In terms of marketing 4P analysis, the current data sources show that in-store distribution rate (Place) and price increase conversions. However, we did not know how promotion contributed to this. Until now, the evaluation of each measure was left to the experience and intuition of each person in charge. Many of the decisions regarding budget allocation were based on past practices, and we were unsure whether they were correct. MAGELLAN has made it possible to visualize the effects and make well-founded decisions regarding budget allocation, which has been a great help.

Now I can make decisions and give explanations based on numerical evidence

Q. How do you use MAGELLAN?

Mr. Nagai:It has been three terms since we started analysis using MAGELLAN._*However, we are very impressed with the output that has been produced. It has been an effective initiative that has resolved the issue we had up until now of not being able to visualize the effects of our promotions. In particular, MAGELLAN's suggestions on how to allocate our budget to online advertising were very helpful. This was an area where we had little experience or knowledge, so it was very helpful to receive suggestions in that area.

Mr. Arai:We use the results of MAGELLAN's analysis in two main situations. The first is an effect visualization analysis conducted once every three months. We can check the so-called sales data at any time, and these regular reports are like a medical checkup for marketing. The second is analysis for formulating budget allocations for future measures. We use MAGELLAN's suggestions as a basis for making decisions in managing our limited budget effectively and efficiently. We are currently conducting an analysis to formulate the budget for the next fiscal year.

*As of September 2020

Q. Are there any other cases where MAGELLAN's suggestions have been utilized?

Mr. Arai:Although it may not be the intended use of MAGELLAN, I have also used it to simulate the change in the top line when the budget is changed. Even during the period, the budget is often changed depending on the expected profit and loss. In that case, by simulating how much the top line would change in relation to the profit generated if the budget was changed or not, I was able to explain to my superiors which was the greater risk with numerical evidence.

Mr. Nagai:At that time, I was able to respond quickly once the rough budget was decided, and I'm really glad that I was able to make the right decision in the end.

Continuing to gain customer insight and aiming for user-driven marketing

Q. How do you plan to use MAGELLAN in the future?

Mr. Nagai:In the future, I would like to shorten the analysis span of MAGELLAN and make it available for daily use. Since the competitive environment is fierce, I would like to be able to take swift action against the movements of our competitors.

Mr. Arai:In integrated communication, we are currently taking appropriate measures for each stage of the customer purchase funnel, with TV commercials as the axis, but we would like to structure the relationships between communications a little more. There should be some horizontal links in the funnel that create synergistic effects, so we would like to clarify those relationships.

Q. Lastly, please tell us about your goal in marketing.

Mr. Nagai:It's about always looking at our customers and thinking about what products and services should be. We want to continue to gain insight into our customers, and value the hypotheses we gain from that, or the discoveries we make in light of current social trends, such as "Maybe a certain type of product or service is needed?" In order to improve the accuracy of these hypotheses, it is important to quantitatively verify them using MAGELLAN, in addition to traditional research. I believe that by doing so, we can get closer to the ideal image of marketing.

Mr. Arai:My ideal image of marketing is data-driven in the sense that it enhances expertise. I interpret data-driven as user-driven. The starting point is the end user, and I would like to clarify the interests and values ​​that influenced the end user before purchasing a product and continuing to purchase. I would like to use MAGELLAN to gain insight into this and form hypotheses. I would like to use MAGELLAN to carry out more ideal marketing, in order to understand customers comprehensively.