The secret to good business performance is maximizing brand power! Marugame Seimen's "emotion-driven marketing" realized through sensitivity and data science

Advertisers, media, advertising agencies, creatives, and academia. The Borderless Marketing Community (BMC) aims to create interaction and discussion among professionals with different specialties, and to realize undivided, holistically optimal marketing. An advertiser-only subcommittee was held in Tokyo on Tuesday, September 2023, 9.

The event was divided into two parts: a "seminar" where experts from various fields spoke, and a "lab" where practical knowledge was generated through two-way communication between the speakers and participants. This article reports on some of the content of the seminar.

【Speakers】

Mr. Katsuaki Nagumo
Executive Officer and CMO of Toridoll Holdings Co., Ltd., Head of KANDO Communications Division, and Director and Head of Marketing Division of Marugame Seimen Co., Ltd.

Graduated from Waseda University Graduate School of Commerce with an MBA. Served as marketing manager for various brands at B2C companies such as Konami Sports and SAZABY LEAGUE. Joined TORIDOLL Holdings in 2018. Has been in his current position since 2022. Promotes "emotion-driven marketing" that uses "emotion (KANDO)" as a starting point to continuously increase the probability of being selected from both the emotional and data aspects. With a focus on improving brand power and customer experience (CX), he is committed to innovating and expanding marketing that continues to grow business and corporate value, from innovation through new value creation.

[Moderator]

Mr. Yoshiaki Hirao
President and CEO of XICA Corporation

What is the strategy to increase brand power and continue to grow your business using data science? ~Approaching to "emotion-driven marketing" that increases your chances of success~

The guest speaker for this first advertiser-only session was Katsuaki Nagumo, Director and Head of Marketing at Marugame Seimen. The company has been attracting attention for its rapid recovery and great progress, even as the restaurant industry as a whole has been hit hard by the COVID-1 pandemic.

The main factor supporting their strong performance is said to be "maximizing brand power," and part of that is the use of data science in "brand equity (brand accumulation effect) analysis" and "KSF (Key Success Factor) analysis." We explored maximizing brand power and business value by going beyond the barriers between branding and data science, based on the latest examples of initiatives at Marugame Seimen.

The source value that creates customers is "emotion"

All thoughts and actions at Marugame Seimen exist to create "emotions" -- all strategies and tactics at Marugame Seimen are designed to lead to the realization of the vision of "providing the No. 1 moving experience." The company defines its source value as the moving experience that is woven together by "each and every noodle factory," "handmade and fresh," and "the power of people." This applies not only to marketing strategies, but also to product strategies, sales strategies, digital transformation strategies, and everything else.

"Customers are not something to be collected, but something to be created, and I believe that 'emotion' is the source value that creates customers. People take action (purchase) because they are strongly moved by something." (Nagumo)

To spread this idea throughout the company, Marugame Seimen is spreading it throughout the company by incorporating specific stories into the customer experience, explaining where and how value is felt at each customer touchpoint. To make it easier for employees to understand the brand's vision and the customer journey, the company has also devised ways to express specific stories in the form of manga.

80% of sales are determined by brand power

In this way, the company believes that making "emotion" the top priority in decision-making and achieving sustainable business growth requires a balance between emotion and data.

You can't create emotion from data. The probability of it being created by intuition alone is low. For this reason, they are strengthening their efforts to combine the two and put together marketing strategies and tactics. This seems to be an expression of their attitude of aiming for a trade-on based on the idea of ​​"dual compatibility" that is alive at Marugame Seimen.

Mr. Nagumo introduced the company's marketing communication as an approach to the left and right brain. He explained that the reason and perception for choosing a product are created through an approach to the left brain/rationality, such as the reason for wanting it and POD (Point of Difference), while the impulse for choosing a product is created through an approach to the right brain/intuition, such as the five senses, emotions and instincts.

"We use a hybrid strategy of using branding to create an ever-increasing baseline, and then using fair products to create a mountain of impulse. 80% of our sales are determined by our brand power, so we think it's most important to create an environment in which there is heightened understanding, favorability, and empathy for the brand. On top of that, we roll out fair products eight times a year, every 1.5 months, to maximize the urge to eat and ensure sustainable growth for our business," says Nagumo.

As a result of thoroughly implementing these strategies and tactics, Marugame Seimen won first place in the 2022 customer experience value ranking* and achieved its highest-ever sales revenue, up 1% from the previous fiscal year, for the fiscal year ending March 2023. In other words, it can be said that the company has found a winning strategy to strengthen its brand power, create a steady increase, and maximize the effectiveness of its promotions.
*Interbrand Japan Inc. "Customer Experience Value (CX) RankingTM 2022"

Marugame Seimen's efforts to improve its brand power

In the second part, Marugame Seimen explained how it balances intuition and data, using the company's marketing model.

The company believes that in the short term, the accumulation of customer experience value (CX) will lead to brand power, and they are practicing how to make customers feel "what value at what place" at each touchpoint along the customer journey through the customer experience. They also value agile, high-speed action using data science in order to visualize the accumulated CX and share it with related departments and work together as one.

Specifically, by conducting a "brand equity analysis" to determine the optimal investment allocation between product promotion and branding, and a "KSF analysis" to verify key brand indicators that lead to business results, they were able to measure emotions with data and increase the success rate of their marketing.

First, to fairly evaluate product promotion and branding in the brand equity analysis, an analysis was conducted that took into account the long-term brand accumulation effect. The results showed that the synergistic effect of the short-term spike from product promotion and the long-term accumulation of branding had created the upward growth that was aimed for. Furthermore, when the long-term effects were taken into account, it was found that ROAS had improved for all measures, and that branding had boosted the effectiveness of product commercials. This visualized the effects of the aforementioned "hybrid strategy of creating an upward baseline with branding and creating a peak of impulse with fair products." It also quantitatively demonstrated the risk of being misled by looking only at short-term effects.

"Because what we knew intuitively to be correct was now visualized as numbers, it has become easier to make decisions and has also been helpful when deciding advertising budgets for new products," says Nagumo.

KSF analysis is conducted to clarify the background and mechanism behind a product's sales. Using survey data obtained after COVID-19, it was revealed that the most important KSF for repeat purchases is the intention to use. The hypothesis that favorability is linked to the intention to use was also proven. The image directly linked to favorability is "can eat with peace of mind," and it was also found that peace of mind for Marugame Seimen's customers means delicious food with a quality that is safe and reliable, such as "no mistakes or mistakes in taste" and "safe domestic products," and this correlates with items close to the source value of Marugame Seimen.

"I believe that the reason why Marugame Shake Udon, which was newly launched in 2023, achieved results that exceeded expectations is because we conducted a thorough KSF analysis. It was precisely because we understood what customers expected from the Marugame Seimen brand that we were able to confidently launch Marugame Shake Udon, which combines the 'traditional Marugame Seimen style' with 'new experience value'," said Nagumo.

In addition to Nagumo's comment that being able to quantify the effects of branding has made communication with other departments smoother, Hirao commented, "KSF analysis is also useful when working with creators, as it clarifies the elements that must not be left out and the elements that should be highlighted in branding," to which Nagumo strongly agreed.

They are currently building an integrated evaluation model that incorporates the indicators revealed by these brand equity and KSF analyses. In addition, they are working on building a "pre-release buzz analysis" that verifies the optimization of marketing investments when launching new products, and a "store performance model" that visualizes and predicts the effectiveness of marketing by store area and location type. Ultimately, they aim to quantitatively predict business results, such as "if we change our branding measures in this way, sales will change by this much."

What will be required of future marketing?

To close the seminar, Nagumo introduced the mindset of marketers to improve CX. He said that improving CX in an integrated and sustainable way from the customer's perspective is one of the most important strategic issues, and that the role of the marketing department is to involve the entire company, lead, and realize this.

Meanwhile, Hirao introduced some key points regarding marketing: "Marketing is the driver that supports lasting growth, not short-term growth. By continuing to change, stable growth is guaranteed. And in order to continue to grasp changes with a medium- to long-term perspective, I want you to utilize data science."