Kewpie continues to contribute to food and health around the world based on the principles of "delicious, kind, and unique," and while it is achieving such strong performance this fiscal year that it expects to achieve its highest annual profit ever, it has also begun the challenge of marketing digital transformation to further strengthen its marketing functions, aiming to strengthen its core products and expand its value-added products.

On December 2024, 12, at Marketing Agenda Tokyo 5, Japan's top marketing conference, held in Tokyo, Kewpie's Executive Officer and Head of Marketing, Ken Nakajima, and XICA's CEO, Hirao, took the stage to talk about examples of marketing digital transformation that the two companies are working on.

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

Kewpie's Marketing Strategy

Kewpie's core business is the market for condiments such as mayonnaise and dressings.

Condiments are generally classified into 13 categories, and the market characteristics of the two categories that Kewpie develops are quite different. For example, mayonnaise has the highest oligopoly of the 2 categories at about 85%, while dressing has a low share of about 13%. In terms of the number of SKUs (Stock Keeping Units), mayonnaise has the fewest of the 60 categories at about 13 SKUs, while dressing has the most at 300 to 2,000 SKUs.

In particular, dressings have a low barrier to entry and a wide variety of products, so they are primarily targeted at variety-seeking consumers. "The dressing market is characterized by a cycle of new, loyal, and defecting customers," Nakajima explained.

In such a market, the major themes of Kewpie's marketing activities are:Strengthen your productsThen,Improve the accuracy of campaigns and advertisingNakajima says that this is the key. 

There are two main policies for product enhancement. The first is to strengthen the portfolio through volume strategies. Until two years ago, there were only two varieties of Kewpie Deep Roasted Sesame Dressing, a core product, but now there are seven varieties, with more varieties and flavors. The second is to turn dressings into general-purpose seasonings. As dressings are mainly used with salads, demand for the category does not arise unless salads are served at the dinner table. Therefore, by increasing the frequency with which salads themselves appear on the dinner table, and at the same time, by exploring the general-purpose uses of the dressing, the company aims to increase the opportunities for it to appear with ingredients other than salads. These are said to be Kewpie's main strategies in product development and communication. 

Aiming for team-wide activities through marketing digital transformation

Next, Nakajima talked about the challenges Kewpie faced in its marketing activities. 

Although various communications were conducted using the strategies mentioned above, each measure was somewhat ad-hoc and partially optimized. In addition, the effectiveness of the measures could not be adequately measured, and there was also the issue of being unable to rationally decide on the next step. Because the perspectives of the organizations differed, it was difficult to carry out unified marketing activities as a team. 

Based on his own business experience overseas, Nakajima explained as follows: 

"Three years ago, when I returned from overseas, the first thing I felt was,We need something in common that we can talk about at eye levelThe common language overseas is English, but what is more common is the use of numbers and data.fact"If you have facts, you can have a constructive exchange of opinions and make decisions based on those facts. I wanted to adopt this model in my marketing organization as well (Nakajima)." 

Nakajima further stated,It is important to make this a company-wide initiative"Not only the marketing department, but also the product development and advertising departments make decisions based on data and facts. Not all measures will work, but Nakajima says that the key to making the most of unsuccessful measures is to thoroughly check the facts with data. 

"The Kewpie project was much bigger than just an analysis issue. It started with the idea that data and facts are important for unifying everyone's awareness across departments and companies, and that data science is necessary for that purpose," says Hirao. 

Hirao says that the larger the company, the more marketers and managers there are who face similar challenges. 

Next, Hirao explained the efforts toward digitalization of marketing, which was the theme of the session. The roadmap for organizational collaboration across the entire company at Kewpie is shown in the figure below. 

First, they will build a marketing foundation by optimizing the quality and quantity of their marketing activities, and then use this foundation as a base to gradually promote marketing activities while working across the entire company. Here, we have concretely introduced the key initiatives for building a marketing foundation. 

The project started by first grasping the current situation and "optimizing the amount." Optimizing the amount means optimizing the allocation of the marketing budget (where and how much to invest). The method for this was as follows:MMM (Marketing Mix Modeling) Solutions MAGELLANAnalysis was conducted using the following method. 

Hirao said that they place special emphasis on accuracy in their analysis. For example, by adopting a multi-stage model that is within XICA's patented area, they can properly evaluate each awareness/acquisition measure and obtain analysis results that reflect the actual situation. Kewpie's analysis model is designed to visualize the impact on storefronts and recipe sites, as shown below. 

Another important point was that they were able to visualize the short-term and long-term effects of the measures (using MAGELLAN's brand equity analysis function). Even for the same measures, there were some cases where the results were reversed when evaluating only short-term effects and when evaluating with long-term effects taken into account (see the figure below). 

Regarding these results, Nakajima had this to say: 

"Until now, each person has evaluated measures from their own perspective with different ideas. For example, if you are in a position committed to short-term results, you will evaluate things that will produce more direct (short-term) results, while if you are in a different position, you will evaluate long-term results from an investment perspective; there was no alignment of perspectives. We often ended up just clashing opinions from our respective positions, but that meant we ended up not being able to communicate effectively. By visualizing the short-term and long-term effects of each measure with data using MMM, we were able to align our perspectives on these facts, which was a big help.By aligning the understanding of the relevant departments, constructive discussions can take place.There was also a change in that regard (Mr. Nakajima).” 

In a large company like Kewpie, it must have been difficult to get everyone involved across the organization and company to agree on the same thing. In fact, even at Kewpie, some members were skeptical of the analysis results and MMM itself at first. However, as the project progressed, understanding gradually spread, and they began to feel a positive response, Nakajima recalls. 

Further efforts to build a data-driven decision-making foundation 

In addition to the project to optimize quantity, we are currently working on a new project called "optimization of quality." This is an effort to elucidate the mechanism behind customer loyalty and optimize the strategy (who should receive what) to ensure that our brand is chosen. The method is as follows:COMPASS, a CMM (Consumer Mix Modeling) solutionThe company is currently working on building a data-driven decision-making platform by optimizing quantity and quality in combination with MMM. 

"While MMM explains the results of marketing activities, CMM makes it possible to clarify the reasons why a result was achieved. I think that considering the next strategy based on these reasons is an important decision-making process for marketers (Hirao)." 

Hirao explained the roles of MMM and CMM as follows: 

Nakajima explained the background to this initiative as follows: 

"There are many types of loyal customers, but what's easy to fall into is thinking about measures based only on the feedback from loyal users with whom you have a lot of contact. This puts the growth and maintenance of your brand at risk. To prevent this from happening, we wanted to understand the path of customer loyalty," said Nakajima. 

Through the MMM project, the foundation for communicating with data and facts has been established to some extent, so the decision was made to tackle elucidating quality using CMM. Although it has just started, Nakajima hopes that the project will provide insights that go beyond marketing activities and are closer to corporate strategy. 

Cooperation between people and organizations is important to ensure consistent success

To summarize the session, Hirao shared the key points that can be learned from the Kewpie case. 

What is important in marketingContinue winning with high repeatabilityAnd to achieve that,Collaboration between people and organizations is importantBecomes 

While XICA is involved in providing analytical support to various companies, one opinion they often hear is that "analysis is impossible because there is no coordination within the organization," but Hirao stated that the opposite is actually true. 

"We can thoroughly explain things using data.Creating a data-driven decision-making foundation is the key to organizational collaboration(Hirao) 

As the Kewpie example shows, this foundation cannot be built overnight. By gradually expanding the circle of understanding and continuing constructive discussions with each stakeholder based on the facts of data, it will be possible to achieve highly repeatable and winning marketing. Kewpie's efforts are not limited to mere marketing digital transformation, but demonstrate the possibility of revolutionizing the decision-making process of the entire company. 

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