Thursday, 28 March 2013

Unilever Logic (The HUB Magazine)

The great thing about marketing, says Unilever marketing chief Keith Weed, is that it is both art and science. ”It is creativity and effectiveness; it is magic and logic,” says Keith. ”But I do think that there will be more logic in marketing in the future than there has been in the past.”

For Unilever, the past is prologue. When William and James Lever founded Lever Brothers in the late 1800s, the logic was to make cleanliness commonplace, which it was not in Victorian-era Europe. Sensing opportunity, William and James worked with a chemist to develop an innovative bar-soap using glycerin and palm oil instead of tallow. What they created was a brand — a guarantee of consistent quality — and they named it Sunlight.

Like magic, the brothers Lever built a huge business that endures to this day as Unilever, where their purposeful legacy is alive and growing. Indeed, Unilever in 2010 unfurled its ambitious Sustainable Living Plan, pledging to double the company’s growth by 2020 while cutting its carbon footprint
in half; sustainably source 100 percent of its agricultural raw materials; and improve the health and well-being of more than one-billion people across the world.

Very much in the spirit of its founding brothers, Unilever plans to make a pile of money by  improving the quality of life, while treading more lightly on the planet. Or, as Keith says, “make marketing noble again.” It sounds lofty, but as he explains, it is actually quite basic: “It’s really about
getting back to the core of what marketing was: serving people by identifying current and future needs, so you can get to the future first and grow the business accordingly.”

Should all marketing should be noble?

Well, I use the word “noble” to capture a thought. I’m not suggesting that you need to describe all
of marketing as noble. It’s more to capture the imagination, and make people think about what marketing’s role is. The world has shifted hugely in recent years, and it’s going to shift hugely in the future. There are big trends in the world right now that are shaping how people live and why marketing needs to be more noble. First, and most important, is the whole challenge around sustainability in the world.

The World Wildlife Fund says that we’re living off one-and-a-half planets right now. If the whole world lived like Americans we’d need five planets and if the whole world lived like Europeans we’d need three planets. But the truth is, we have only one planet.

Between now and 2050 two-and-a-half billion people will arrive on this Earth who all want to have a standard of living like Europeans and Americans. There’s a huge challenge in how we satisfy the
future needs of people in a world of constrained resources. I think marketers need to take that
challenge on. Is that noble? Yeah, I’d say that’s noble because we’re going to be lost if companies don’t take that on.

How is Unilever taking that on?

At Unilever, our vision is that we’ve got to double our business so that we can serve the twoand-
a-half billion people who are coming into the world, while also halving our environmental
footprint and increasing our social impact. The thought behind that is very clear and bold and right at the top of our business: You can’t have a healthy business if you don’t have a healthy society.

Making marketing noble means being part of a society. If you are not part of the solution, you are
part of the problem. For an industry that calls people “consumers,” we’re going to be under a bit of a spotlight when the things we consume start running out.
Is every Unilever marketing activity as noble as you would like it to be?

No, I wouldn’t say that we’ve got everything right, right now. What we’re doing is committing
to a mission and taking a direction. It’s a visionary thought. Unilever’s Sustainable Living Plan includes 50 time-based commitments, ranging from teaching a billion people how to hand-wash properly to bringing pure, safe drinking water to 500 million people.

These are massive objectives. We’re the world’s largest tea company; we source 12 percent of the
world’s tea. To source all of that sustainably right now is not possible. But we are committed to doing that by 2020, for example.

Those are tasks that are big and meaningful. Call that noble, if you want to, but what I try to do
is get people to raise their vision to a horizon of a different world that will require a very different kind of marketing.

Where does Unilever’s ice cream fit into that world?

Happiness. It’s very hard to tuck into a bowl of Ben & Jerry’s without a smile on your face. I wouldn’t suggest that’s all you should eat, but as an occasional indulgence in a world that doesn’t have enough smiles, I think ice cream brings happiness.

Did the Ben & Jerry’s acquisition have an influence on the Unilever culture?

Yes, I think it did. Unilever always had this sustainable core to it. I refer back to William Hesketh
Lever and what he did with bar soap, and to this day we’re still the largest bar-soap company in the world.

So, you don’t have to scratch very hard to get to the feeling of sustainability at Unilever. But Ben & Jerry’s did bring a real inspiration to Unilever. They set off on a journey back in 2005 to source all their ingredients more sustainably. That level of ambition and their commitment to “a different
way” is inspiring.

The way they’ve combined social responsibility with social media to build a presence shows that if
people care, they will share.

So, we’ve learned a lot from Ben & Jerry’s, and I’m pleased to say that there isn’t that big a delta
between Unilever and Ben & Jerry’s. When we bought Ben & Jerry’s, they were certainly ahead of
us in terms of how to approach the business the 21st century, but I think we’ve done a lot of catching up since then.
What is Unilever’s greatest contribution to society?

I think it’s giving everyday products to people. We serve two billion people every day. That’s nearly
a third of the planet. These are very basic products: soaps and washing liquids, fabric detergents, tea,
margarine, shampoo, and so forth. These things really make people have a better life.

The role we play is certainly very evident in emerging markets, which is more in need of cleanliness. But even in developed markets, like the US and Europe, I challenge you tomorrow morning to
get up, to not take a shower and wash your body with shower gel or soap.

Don’t wash your hair with shampoo and don’t brush your teeth with toothpaste and don’t put on a
deodorant. Put on dirty clothes from yesterday that haven’t been cleaned by a detergent, and then eat
your breakfast. By the way, you can’t have margarine on your toast and you’re going to eat off dirty plates. Then try to have a good day. You won’t. You’ll have a miserable day.

Our humble products serve everyday needs and make the world a little bit better every day. We’re not
sending people to the moon. We’re not doing brain surgery. But we are making people’s live a little bit better every day.

How is sustainability best communicated as marketing?

We need to build the whole notion of sustainability into our brands, as brands with purpose and brands that can inspire change.

We do need to be part of the solution. We need to get to a situation where each of our brands can
resonate beyond just their product function. For instance, with Dove, we talk about selfesteem.
We have the Self-Esteem Fund, which takes Dove beyond being just a beauty bar. We now talk
about a different point-of-view on beauty. Or, we talk about Lipton tea as sustainably-sourced tea that is higher quality and better tasting.

These are all areas marketers can lead in, to make sustainability more a part of what their brand
stands for. And I say “sustainability” in the broader sense — environmental and social sustainability — and building brands with purpose.

And, by the way, people want brands with more depth and dimension. You can’t use social media,
which offers the great opportunity to engage more people in an ongoing way, and not have greater depth to your brand.

If I were to meet you in a party and tell you a joke and then 10 minutes later tell you the same joke
again, then 20 minutes later tell you the same joke again, you’d start avoiding me quite quickly. A lot of brands do that in social media. They basically take their 30-second TV ad and put it in the social media space and then get surprised when people get bored or walk away.

One of the things you have to do in the social media space is to be always “on” in a conversation
with people. To do that, your brands need to have some depth and interest beyond one-dimensional
functionality. So, I think that sustainability has a role in building brands through social media into the
future, as well.

Does that require a different kind of marketing organization?

We have a different structure at Unilever. I am the chief marketing officer, and I’m also in charge of
environmental and social responsibility. Sustainability is no longer a department on the side; it is part of the overall leadership of marketing, as well.

I’m also in charge of internal and external communications through our charitable foundation. You wouldn’t have put the charitable foundation in the same place as marketing not so many years
ago. You certainly wouldn’t have put environmental sustainability in there, as well. Our thought is that, in a joined-up world, you need to put how you do sustainability and how you
do marketing side-by-side, under the same leadership.

Similarly, in a joined-up world digitally, you can’t have communications over on one side running, and marketing on the other side running the Unilever corporate brand. The first thing is that marketing organizations need to join-up sustainability with communications, and, I’d argue, cross into historically what we would have called CSR — Corporate Social Responsibility — and
create a different type of approach.

The second thing is that marketers need to have a sustainability mission articulated for their brand. Again, I think that will help in social media going forward.

The last thing that marketers need to do is engage with consumers as people, not as consumers. I think the term “consumers” doesn’t help. Once you start looking at people’s lives, they are not a pair of armpits in search of deodorant or a head of hair in search of hair benefits. They are people with full lives and a lot of challenges in a rapidly changing world.

Does having a goal of sustainability change the way that you measure results?

Yes, it does. If it is just a thing on the side, you don’t drive change and you don’t get to where you
want to get to. I’ve always believed that “measure what you treasure” is true. If you’re not measuring
it you’re not going to get it. What gets measured gets done, ultimately. You do need measurements.
We have very clear measurements both on brand share, turn-over and profit as you would expect.
We have them on the road map to achieve our sustainability goals, which are owned by the brands,
as well.
How do you measure advertising’s contributions to sustainability?

Advertising’s contribution, as always, will be to communicate what the brand stands for. So, whether that is functional benefits, emotional benefits or image — or indeed that the brand stands for sustainability — advertising will always have that role. But advertising has an additional role over and above what the brand stands for, and that is one of behavior change.

So, when we measured our overall environmental footprint in Unilever, I was quite surprised to find out that our factories and offices account for only six- to seven-percent of our overall footprint. Now, of course, we will and we must minimize the water, electricity and power used in factories and
the amount of waste going into landfills. All those things we are measuring. What struck me was that
about a quarter of our overall footprint came from the sourcing of tea and palm oil. That means that we’re going to have to work with small-holder farmers in a very different way.

On the other side, about two-thirds of our footprint comes from how consumers use and dispose of our products. This is where advertising’s role will enter in a different way — on behavior change and
communicating to people how to do things differently.

For example, we launched a product called Comfort One Rinse in the developing, emerging markets across Asia. Basically, what it enables you to do is rinse your clothes in one rinse. In the world
right now, people wash in one bucket and then rinse in three buckets. If they can wash in one bucket
and then rinse in one bucket, you don’t need to be a mathematician to see they’ve halved the amount of water used.

To get people to do that, you need to explain what the product does, and that it actually works, to
drive that behavior change. In doing that, we actually brought a big, positive impact to the use of less water in countries that can ill-afford water to wash clothes.

How do you measure social media’s contribution?

Social media are raising the focus and the priority on some of these sustainability challenges and
creating movements that manufacturers and brands cannot ignore and that will hold us to account.

You can see the trends with social media, with all these people arriving in the developing and emerging markets, and the fact that we now have six- and-a-half billion mobiles connecting people around the world.

Social media will be a way that companies like Unilever will be able to communicate all the good
things we’re doing. It will be a way to engage with people and say that all companies are not the same. The sort of work that Unilever is doing is an example of what more companies should be doing in this space.
How does e-commerce square with sustainability?

E-commerce will enable us to engage in a more targeted way, which supports sustainability by taking
some of the waste out of the system. This is the best kind of “win” you can have in terms of sustainability, because it makes it much more efficient for us as marketers to provide people with the goods and services they are looking for.

The other great thing that e-commerce does is provide content and communication around your
brand at the time of purchase. In the old-fashioned model, we then had to lodge a television ad in your brain until you eventually went to a supermarket and walked down the aisle. With e-commerce — while you’re on Facebook, for example — we can put a “buy it now” button there.

If you’re reading about Lipton sustainable tea and that story interests you, you can press a “buy it now” button. From a marketer’s perspective, e-commerce connects that engagement through to the purchase decision in a much more efficient way.

Will sustainability ever be fully achieved?

The only thing that is guaranteed is the answer is “yes,” because we only have one planet and one
future. People talk about the end of the world is nigh, but the only thing that is nigh is sustainability.
We will sort it out. We are a clever race. It might be quite painful to do what’s required to get there,
but ultimately we have to get to sustainability or we’ll destroy ourselves doing it.

How would you like Unilever to be viewed a generation from now?

I would like Unilever to be viewed as a responsible company in the full sense of the word. We are a
company that wants to serve consumers better. That’s our primary task. So, let’s be really, really clear: We want competitive growth based on being able to serve people better than the alternative.
Growth gives you altitude and oxygen in consumer goods. The more people we can serve, the

We serve two billion people a day and we want to serve three billion. When we serve three billion
we will want to serve four billion. If we can do that in a way that’s more sustainable than the alternative, ultimately the world will get a little bit better every day.

I would like Unilever to be seen as the company that did make sustainable living commonplace, so
that we can decouple growth from the environmental impact and actually be able to go in tandem. This will require a major reconfiguration of how we deliver some of the benefits that we do today.

Ultimately, what does it mean to be accountable in marketing?

Accountability in marketing at Unilever is broader than it used to be. The accountabilities before
were very clear on metrics back to the organization.

A lot are based around growth. One of the concepts I was brought up with in marketing was that the only sustainable growth is consumer-demand led growth, and that’s the day job of the marketer.
But that sustainable growth was, of course, sustainable sales growth, sustainable economic
growth, and sustainable top-line growth.

In today’s  world, that isn’t enough. Sustainable growth needs to be broader. It needs to be sustainable in terms of environmental and social issues, as well.

Accountability in marketing today goes beyond just sales and profit generation to include the impact
of your product on the planet, both in environmental and social terms.

Marketing is at a crossroads. Capitalism is at a crossroads. We need some bold leadership in
marketing right now — not just to put marketing back on a different course, but dare I say, to put business back on a different course.

At Unilever, we’ve made a couple of calls which show our intention. We stopped giving guidance
on our quarterly results. We went further then and stopped doing full quarterly reporting because we
said a business this size and scale can’t be run sensibly on twelve-week cycles. We need to take a
longer-term view. 

I want to encourage marketers to take a longerterm view. Of course, you need to deliver sales and market-share growth today. But we need to keep our eye on how we’re going to do it for the long-term. The long-term, at the end of the day, is based on lots of short-terms. We need to make our short-term actions build to a longer-term future, which is a much more sustainable future — not just for the planet, but also for our children and our children’s children.