Marugame Seimen is at the forefront of data-driven marketing, which is the ideal approach for many marketers. The man at the helm is Katsuaki Nagumo, Executive Officer and CMO of Toridoll Holdings and Director of Marketing at Marugame Seimen.

At Marketing Agenda 2024, Japan's top marketing conference held in Okinawa on June 6, 20, Nagumo and XICAi CEO Hirao spoke about examples of data-driven marketing that the two companies are working on together.

This report will provide an overview of the sessions that took place on the day.

Marugame Seimen's Marketing Strategy

First, Mr. Nagumo explained Marugame Seimen's marketing strategy.

At Marugame Seimen, the three keywords that they value in their marketing are "emotion," "balance," and "sensibility and data science."

Of these, the most important"Impressed"" is the source value that creates customers. And what is important to create excitement is"Dualism"It is a way of thinking that pursues the strength of irrationality. When there are two opposing things, we often think of them as a dilemma, taking one and discarding the other. However, Nagumo aims to achieve both. He also uses data science to improve the reproducibility of emotions."Sensibility and Data Science"He said that he keeps this idea in mind when doing his marketing.

Next, he explained Marugame Seimen's marketing strategy.

"Marugame Seimen's strategy is simple. To make it inevitable that people will choose us,How do you approach the left brain and reason? How do you approach the right brain and intuition?We are conscious of these two things when we do our marketing (Nagumo)."

I would like to gain a deeper understanding of this strategy that Mr. Nagumo spoke of by referring to the slides projected on the day.

First, as an approach to the left brain and reason,Creating a "perception" that makes you the chosen oneIn addition, as an approach to the right brain and intuition,Creating the "impulse" to be chosen"The thing about eating out is that impulse overcomes reason. Our marketing is focused on how to create that impulse," says Nagumo.

Furthermore, the core of the strategy isMultiplying brand power and CX (customer experience value)It is.

Through communication (creative, copy, and various other projects)"Perception" and "Impulse" to be chosenand through the in-store experienceA "realization" that leads to repeat businessCreate.This multiplication will spiral up, making it easier for business performance to improve.Nagumo said.

Elucidating the structure of "key drivers" that increase the success rate of marketing

 "With the environment constantly changing, winning strategies must always be up to date. Precision and agility must be pushed to the limits," said Hirao.

To solve this problem, Marugame Seimen took two major steps.

one is,Identify the key drivers of business successAwareness Data AnalysisUsing data from a consumer awareness survey, we were able to clarify what (what and to whom) could not be clarified by MMM (Marketing Mix Modeling).

The other one is,Clarify how to boost what and comprehensively evaluate the appropriate allocationMMM hubThis is an initiative.

Both initiatives are based on MMM.

Originally, Marugame Seimen had built a marketing model as shown below.

What supports the improvement of LTV, which is necessary for the sustainable growth of a business, is the intention to visit the store and the intention to revisit. Furthermore, what supports the intention to visit the store are the quality of the creative, the amount of media, and the brand image. On the other hand, customer experience value (CX) is important for the intention to revisit, and for that, the store experience and CS/EX are important.

What we are working on with XICA is to increase the resolution of this marketing model.

Through awareness data analysis and efforts to become an MMM hub,The lines connecting each group were all quantified, and each group was further subdivided..

What is awareness analysis?

Hirao then gave an overview of awareness data analysis.

When the goal is the number of times of use, we quantitatively clarify which attitude indicators are important for each target, from new to repeat users. This is the first analysis.Identifying the key driverIt is.

Then, as the second analysisIdentify the evaluation items that influence each key driverFor example, there is brand image, number of accesses, category entry point (CEP), amount of media, and quality of creative. Link all of these together and express the importance of all of them in numerical terms.

So what do we learn from that?

For example, for new customers, it was found that what is important in relation to frequency of use is not the intention to recommend or pure recall, but the intention to use. And what drives the intention to use is the perception that "the udon is delicious." Furthermore, all of the images that make up "the udon is delicious" are also clarified numerically. By using the odds ratio (*1) to determine the importance, it was found, by chance, that the so-called POD (point of differentiation) was an important point for Marugame Seimen.

Among these, the most important one is "good quality," which had the highest odds ratio. Digging deeper into the elements that make up "good quality," we found that the two key factors are "can eat with peace of mind" and "has something different from other restaurants." Furthermore, causal factors linked to this include "can empathize" and "has a particular style."

(*1) Odds ratio: The probability of an event occurring divided by the probability of the event not occurring is called "odds," and indicates the likelihood of an event occurring. The "odds ratio" compares the odds of two groups, and the probability of each event is p₁,p₂Then, it can be calculated by the following formula:

Marugame Seimen's promotional case study using data science

Now, if we look back at Marugame Seimen's promotions for 2023, we can see that they are exactly as analyzed above.

"Safe to eat" is the key driverHowever, the combination of "noodle craftsman x noodle factory" expresses their commitment and sincerity.BrandingLeading to,The key driver: "Different from other stores"The shake udon, which was announced in June this year, is a mega hit in 2023.Udon NutsThis seems to be contradictory to branding.Product PromotionThis has contributed to the realization of this goal and has set the store apart from other stores.

"It's a winning strategy that combines intuition and data science. We've made progress by calculating exactly where to pull the lever to see how much usage will increase." (Hirao)

However, internal coordination was not that easy, and a strong will to see the project through in the face of headwinds was required.

"This alone sounds plausible, but four years ago, the branding of noodle craftsmen and noodle factories was almost 4% opposed. Shake udon was also almost 100% opposed at first, so we decided to see it through despite the strong opposition to both, and that's how we got results today," said Nagumo.

Data science for continued successAnd

After multiple improvements, Marugame Seimen's marketing model has been updated to the diagram below.

The key drivers for new and repeat customers, and the brand image that boosts these key drivers, are clarified when the final goal is the number of customers (number of drinks). This is then linked to the "how" of branding, product promotions, in-store experience, and happiness, and it is clear how many points each of these has contributed to the results.

Furthermore, when it comes to branding and product promotions, the analysis includes not only advertising but also PR, and when it comes to television, the analysis also includes the cumulative effect several years down the line. These analyses are carried out on a weekly basis.

The idea of ​​quantitatively structuring key drivers and combining them with MMM to increase the success rate of marketing has been in the works since Mr. Nagumo joined Toridoll Holdings seven years ago. We asked Mr. Nagumo about MMM.

"It's been seven years since I started MMM, but when I was working with another company before, the sense of speed didn't match. Speed ​​is value, so it's important to quickly turn the PDCA cycle around, provide suggestions, and connect them to the next step. I also have a responsibility to quantify and explain all marketing activities. At times like that, MMM alone isn't enough," says Nagumo.

 MMM can help you understand budget allocation, but it cannot explain why it is allocated that way. When it comes to increasing investment in a certain initiative, it is difficult to understand how to increase ROI.

"Not only a hypothesis but also evidence to support the hypothesis is required.Without both my own intuition and numerical evidence, progress will be slow.Data science is also necessary to support hypotheses” says Nagumo.

Until now, XICA has offered the MMM "MAGELLAN" that specializes in elucidating "how", but in working with Marugame Seimen,Identify the key drivers (What) between results and How, and clarify the attitude indicators that should be boosted and the perceptions that should be gained, as well as the measures that should be focused on to achieve them.And this is exactly what we have been trying to achieve.Data science for continued successI believe that is the case.

 "If you're told to win for just one year, you can do a lot of things without thinking too much. It's difficult to keep winning all the time, but we marketers have to do it. I think one of the reasons we make full use of data science is because we want to keep winning all the time (Nagumo)."

Flywheel effect of Brand Power, CX and EX

As explained at the beginning, Marugame Seimen is based on creating perception and impulse through communication, and then creating a sense of reality in its stores, but the marketing that Nagumo pursues goes even further.

"Marketing that enhances brand power, CX, and EXWe are working on this. Of course, brand and CX are important, but in a business like ours where people work,The more employees who are internally motivated, the more our numbers, brand power, and CX will continue to improve.(Nagumo)"

Marugame Seimen began investing in data science in 2019, allocating about 3% of its total marketing investment each year. As a result,Total marketing investment remains constant, while sales revenue increases 6% over six years.Business profit up 148%It was recorded.Revenues, profits and efficiency are all increasing year over year.

"There's no point in wasting money. It would be better to use that money on employees or to renovate stores. We pursue efficiency as much as possible, but more than efficiency, we pursue excitement. And data science is what unlocks that excitement," says Nagumo.

Three points to learn from the Marugame Seimen case study

To summarize the session, Hirao shared three points that those interested in data-driven marketing can learn from the Marugame Seimen case study.

The 1 one isThe importance of hypothesesIt is.

Marugame Seimen uses data science to make hypotheses and understand the basis of those hypotheses. "With the rise of AI, you might think that data science will give you some answers, but that's not 100% true. It's people who give you the answers. Using data science to increase the accuracy, success rate, and reproducibility of answers is a smart way to use it," says Hirao.

The 2 one isThe importance of identifying key drivers for business growthIt is.

By clarifying the elements and structure that make up what Marugame Seimen calls "delicious udon," marketing investments will be less likely to waver and decision-making will become faster. It will also serve as a basis for logical communication, such as pushing back against opposing opinions within the company.

The 3 one isContinue to change your marketing strategy and budget allocation to keep up with the changing timesIt is.

In the case of Marugame Seimen, because an analysis platform has been built, they can continue to make changes at high speed. Some people may be hesitant due to the size of the initial investment, but Hirao said, "The investment in building an analysis platform can be recovered if results are achieved, so in the end the ROI is good."

Mr. Nagumo agreed with the three points that Mr. Hirao mentioned,"It's also important to have team members who can talk openly about hypotheses, while being fast and accurate."He also mentioned the importance of the data science team.

MAGELLAN×COMPASS makes "winning marketing" a reality

XICA has worked with over 270 prestigious clients to date and has helped MMM penetrate the market.MMM alone cannot make practical decisionsSo, in addition to MMM, what is needed is what I've been talking about today.Solutions that reveal key driversOnly when these two things are in place can you consistently win.

"I remember when we first introduced MMM five or six years ago, I had the feeling that no one knew about it," said Hirao, introducing the concept of CMM (Consumer Mix Modeling).

MMM is a quantitative approach that determines the optimal investment allocation by determining "where and how much" based on business results.CMMStarting from the reason why consumers choose a brand, we clarify "who and what".

The two wheels of "MMM x CMM" can improve the accuracy of decision-makingBased on this idea,MAGELLANIn addition, to confirm the wayCOMPASSWe introduced the following service.

Using COMPASS, you can understand which brand assets are important and which consumer characteristics are to be targeted, and then clarify the 4Ps (product, channel, price, promotion) and external factors that apply. Once these have been implemented into a strategy, you can use MAGELLAN to check how it impacts the 4Ps and consider optimal budget allocation. Furthermore, to increase the ROI of budget allocation, you can return to COMPASS to improve quality - in this way, you can improve the precision of your marketing by going back and forth between COMPASS and MAGELLAN.

"When I first proposed MMM, people said it was nothing, but now it is used as a matter of course, including by Google. I declare that CMM x MMM will definitely become the standard in Japan and globally from now on (Hirao)."

"I would love to work with Marugame Seimen on this initiative, and I would also like to create the same kind of 'experience of continued success' with everyone here as Marugame Seimen," he said, concluding the session.

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