8.7.09

Agency Management System

Agency Management System:
Integrated Operations & Planning Solution for Marketing‐ Creative Agency Engagement
_____________________________________________
By Chetan Saiya

Marketing Resource Management (MRM) is a process of end to end marketing optimization,
from planning and budgeting, through marketing content management, to global marketing
execution and analysis.

A crucial aspect of MRM is the management and coordination of creative agency
operations. Agency operations are driven by expensive resources working within a tight
timeline to create artistic works for objective marketing benefits. Allocation of suitable and
consistent resources from the agency is vital to the delivery of creatives, with marketing
objectives fitting in to an overall plan.

In medium to large marketing functions, a multiple of creative agencies may need to plug in
and deliver solutions across brands or even to a particular brand or service. An efficient
marketing function looks to coordinate, cost manage and make the operation and products
visible and accessible across board. An agency management tool, deployed by the marketer
and shared with the key stakeholders, formats and integrates operation details, manages
times and costs, creates a central repository of digital products, enables report generation
on various parameters and builds a live bank of data for reference and use.
In the current scenario, brand managers and marketing managers dealing with creative
agencies follow ad hoc systems to manage these relationships. Notes recording plans and
spreadsheets recording quantitative data have limited portability and lend themselves
poorly to collation and parameterization. Cross referencing, report generation, comparison
of models, efficiency, costs and times need to be made manually. Poorly connected dots in
the marketing landscape results in an incomplete picture and, importantly, scalable and
usable lessons remain invisible.
Limited availability of agency work rates, profiles and contracts makes it difficult for key
functionaries to steer operations and enforce compliance.
When the smallest of the top 100 advertisers reportedly spend a minimum of $300 million a
year on advertising the sheer financial benefits of an agency management system is huge.
Such a system has the potential to save at least around $3 million a year for the marketer on
accountability, compliance, efficiency and better rates from the advertising agencies.
Increasingly, when CMOs are under pressure from CEOs and CFOs for more accountability of
advertising dollar, management systems make a whole lot of business sense. Business practices benefit from usefulness of management systems for SOX Compliance,
parameterized report generation and easily accessible audit reports.
Agency management systems are now part of the MRM deployment by the marketer and
shared with key stakeholders like advertising agencies, brand managers, marketing
managers, sales force and other functionaries. These end‐to‐end processes initiate, monitor
and parameterize the marketer‐creative agency engagement from job to project levels. A
creative job and project is reviewed, steered and approved by the content creation teams
across marketing and agency. Resource allocation and cost of jobs are quickly available for
comparison with the estimate and budget. Accountability across levels keeps this system of
working highly efficient and cost effective. Repository of digital work created out of this
process is shared with stakeholders for quick deployment and seamless brand consistency.
Dashboard and multiple parameterized reports keep the marketing finger on the button for
steering any project at any point in time.
Key benefit 1: Campaign budget utilization. Allocation and audit of resources
An agency management system requires that the marketer shares with the creative agency
the budget outlay and the projects to be taken up for the year. Resources are accordingly
evaluated in terms of experience and suitability, and allotted for an agreed upon time for
the project. This accountability for every job by time and by resources creates a high
efficiency framework for jobs to be delivered, meeting objectives and costs. The agency on
its part is on top of its manpower planning, while the marketer is assured of committed
resources and accurate billing for them. And further, because each job requires such inputs,
‘blended rates’ are avoided and costs are according to job merit and scope.
Key benefit 2: Conformation to contracts, fulfillment
An agency management system ensures fulfillment of all financial management related
steps in a marketer‐ agency engagement leading to a more efficient and cost effective
relationship. An annual Statement of Work (SOW) clearly defines the projects that the
agency/vendor will be working on for the year. It can track ongoing SOW modifications and
corresponding approvals allowing the agency to make the necessary changes to the initial
SOW. It can track actual spend on a monthly basis per brand/agency relationship. It is a
transparent monitoring process that can also manage agency profiles, including rate cards
by different services and volumes and generate reports to capture varying levels of
information.
Key benefit 3: Central Repository
A central repository of the marketer‐agency engagement guidelines and operational
information is visible to key functionaries. Contracts, policies, modifications are easily
available for conformation checks. Rate cards, resource deployment, skill profiles can be
pulled out, reviewed and co‐related with creative products and marketing objectives.

To sum up:
  • Agency management systems drive accountability and transparency in the marketer-agency relationship.
  • Results in saving marketing operation dollars‐ up to 10%. More accountability, leading to efficient job planning, aided by system driven rate definition, resulting in better job rates.
  • Better compliance and fulfilment of contracts, tracking modifications and deviations. Better business practice, compliant with laws, auditable spends.
  • A system with high visibility within the marketer landscape, of different parameters of agency engagement. Like service rates, time rates, resources and skills and more. Generate reports with different correlations for innovative perspectives.

About the Author:
Chetan Saiya is the Founder, Chairman and CEO of Assetlink Corporation, a leader
in Marketing Operations Management solutions that serves Global 2000
companies worldwide

BIC


BIC


BIC
the write approach
by Barry Silverstein
July 6, 2009 issue

Three initials, B - I - C, have graced more than 1 billion ballpoint pens since 1950. They are emblazoned on 1 billion lighters each year. And they are imprinted on the 10 million shavers that BIC sells each day. Along with those initials appears a quirky little illustrated character, the “BIC Boy.” He represents a school boy, with a head in the shape of a ball, holding a pen behind his back.

BIC is the number-one ballpoint pen manufacturer in the world, the number-one branded pocket lighter manufacturer in the world and number two in the world in one-piece shavers. As a maker of primarily disposable products, BIC is a French powerhouse worth almost 1.5 billion euros in annual sales—not bad for a company that specializes in throwaways.

BIC clicks with most of the world’s population, though its penetration is largely in Western countries. About 40 percent of BIC’s sales come from North America and 30 percent from Europe. Latin America accounts for over 20 percent, while the Middle East, Africa and Asia contribute about 5 percent. Currently, Latin America is the fastest-growing geographic area for BIC.

Pens and other stationery items make up about 40 percent of the company’s sales, lighters about 30 percent and shavers about 20 percent, with the remainder spread across other products.

The company’s name derives from founder Marcel Bich’s last name—he shortened it to make BIC more memorable when he introduced his ballpoint pen in Europe in 1950. By 1958, Bich had recognized the enormous potential for growth in the US market. He not only brought his pen to the United States, he also bought the renowned Waterman Pen Company and established a BIC headquarters in Connecticut.

The 1970s were years of significant expansion as BIC leveraged the low-price, high-value model from pens to lighters and then one-piece shavers. BIC also continued to make acquisitions that led it into other, mostly related, markets. In 1992, BIC acquired the Wite-Out brand, and in 1997, the company purchased Sheaffer, a brand known for premium writing instruments.

Some of its other business interests may be driven more by serendipity than strategy, however. In 1979, for example, BIC acquired a boat manufacturer, which eventually became BIC Sport. The reason was simple: Marcel Bich loved the sea and was taken with windsurfing. His fancy paid off: Today BIC Sport is the world leader in surfboards and also manufactures wind surfboards and kayaks. The BIC Longboard World Challenge is the first worldwide monotype surf competition, and BIC Sport team members have won two World Champion titles.

One venture that did not succeed was the ill-fated Parfum BIC. In 1988, BIC produced four French perfumes that were intended to combine quality with affordability. After three years of marketing the perfume primarily in Europe and North America, Parfum BIC was disposed of.

An occasional stumble has not prevented BIC from exploring new markets and stretching beyond its roots. In August 2008, BIC, in collaboration with telecommunications firm Orange, introduced the BIC phone. Targeting the youth market, the BIC phone was available in either citrus orange or lime green, came with 60 free minutes, and included a refillable “pay as you go” card. It was sold in supermarkets and convenience stores only in France. The company was careful to point out that the BIC phone was not a “disposable” phone. BIC used 11,000 billboards and posters, along with banner ads on websites, to launch the new product.

In all three of its key markets, BIC faces fierce competition. That’s why BIC is always looking for ways to differentiate its brand. For example, to separate its disposable shavers from those of Gillette and Schick, the company’s two major competitors, BIC introduced “BIC ecolutions” in early 2009. BIC ecolutions features an innovative bioplastic handle, green colorants of vegetable origin, and lightweight packaging with 100 percent recycled cardboard and ink of vegetable origin.

BIC has taken advantage of the online world to promote its brand in novel ways. A viral campaign called “Les perles du Bac” was introduced in 2006 and has been updated each year. This collection of mini-films with clever sayings won numerous awards in France and was adapted for use in Italy.

Despite the global economy, BIC shows no signs of slowing down, whether it’s new product introductions or acquisitions. This year, BIC joined forces with the famous Formula 1 racing team, ING Renault F1, to launch a limited series of BIC lighters. In March 2009, the company announced the acquisition of 40 percent of Cello Pens, India’s leading writing instrument brand.

In May 2009, BIC Consumer Products USA announced that its Comfort 3 Advance brand shavers will hook up with Major League Gaming, the professional video game league, in a deal that will integrate the shaver into MLG’s programming as well as put MLG’s logo on over 250,000 shaver packs distributed in the United States. By redeeming the unique code found inside these specially marked packages, consumers will receive 20 free credits on MLG’s GameBattles site, where they can compete against gamers from around the world in thousands of online tournaments.

Clearly, BIC is aiming to make a mark on both the virtual and the real world.



Tropicana orange juice packages::: Loosing Continuity


The recent debates about the redesigned Tropicana orange juice packages that made a brief appearance on the market and disappeared after an outpouring of customer complaints brought to light again the need for caution when changing the packages of major brands.

The problem with the Tropicana packages has been mulled over enough, and there is no reason to rehash the details again. But it may be helpful to review the key elements that brought about the unexpected controversy because these apply to all package redesign ventures. It appears that the designers did not recognize or chose to ignore:

(1) The significance of the Tropicana icon, the straw inserted into an orange, in signifying freshness (i.e., juice straight from the fruit).
(2) The influence of the Tropicana logo on brand selection.
(3) The need for clearly differentiating among several Tropicana line extensions.
(4) The realities of different store display situations.

This spotlights the importance of assessing the realities of the marketplace and recognizing what is important in redesigning the packages of a major brand, whether introducing a line extension, planning product modifications or updating an aging brand.

The importance of brand recognition when changing packaging of a major brand

The temptation of wanting to put a personal stamp on a brand and using the packages to accomplish this is often irresistible. But such well-meaning initiatives require careful planning, a thorough understanding of what makes consumers prefer their products over competitive ones and awareness of the variety of display conditions at the point of sale.

Let’s take a look at how package changes of major brands create different consumer reactions.

Metamucil

To ignore the critical factor of brand recognition when introducing a package design modification is to risk losing loyal customers who, unaware that the package that they have been used to buying has been changed, will not find the altered package and will instead turn to a more recognizable competitive brand. Metamucil Capsules, for example, recently changed its packaging, making it difficult to find in the drugstore, even for the drugstore employee who—in this particular and personal case—tried to be helpful.

The Metamucil Capsules line, which previously referenced the benefits of regularity and fiber supplement, had been divided into two product varieties—one promoting heart and digestive health, the other emphasizing strong bones—each in a redesigned package.

The new packages had little visual reference to the package that had been on the market for years. The large logo was greatly reduced, buried in the midst of a busy promotional label design, and the label colors and cap color for the two varieties had changed. In short, the unannounced product and package design changes had altered the brand imagery of Metamucil to an extent that was confusing.

When there is a product change of a well-known brand, the packages need to retain some visual transition to the design that is being phased out or the marketer will risk losing loyal consumers who are unable to comprehend the unfamiliar product and package design changes.

Pepsi-Cola

The history of Pepsi provides a good example of brand continuity. At the beginning, Pepsi-Cola emulated Coca-Cola with its script logo. Coke had a strong red color as a brand identifier, and Pepsi identified itself with a taller bottle that held several ounces more product than Coke. In the mid-20th century, Pepsi graphics introduced its red-white-and-blue cap design, which later appeared as the round globe shape on the labels. In the latter part of the 20th century, when Pepsi adapted a blue background to contrast with the Coke red, Pepsi’s globe shape became its main brand recognition element.

Last year, Pepsi undertook another package design update. When you see the old and the new packages side by side, this redesign of the Pepsi brand is really quite radical. The bold Pepsi brand name on the previous label has disappeared and been replaced with a much smaller, vertical one. But the designers were careful to retain the well-recognized Pepsi globe, changing it slightly to suggest an inviting smile, and using its bull’s-eye effect as an impactful and memorable display feature. There is no mistaking Pepsi-Cola wherever the new packages appear.

Heinz wine vinegars

Several years ago, Heinz wine vinegars, then in a unique bell-shaped bottle but with an ordinary metal screw cap and a lackluster, industrial-looking label, was redesigned to better communicate the product quality implied by the “Wine Vinegar” product description. By changing the bottleneck configuration and using a flush plastic cap, the bottle could accommodate a neck wrap resembling a wine bottle. Redesigned label graphics further communicated the gourmet quality of the products and emphasized flavor differentiation.

Thus, retaining the unique bottle shape as a reminder of the longstanding product line made brand recognition possible even when neck- and bottle-label graphics were dramatically changed to convey the gourmet quality of the marketer’s brand.

Even when economic considerations require changes in package structure, careful exploration of ways to sustain brand recognition continuity is critical. A recent change, presumably for economic reasons, replaced the bell-shaped Heinz wine vinegar bottle with a simpler, straight-sided bottle. While this required some resizing of the labels, the unique neck- and bottle-label graphics were retained, making the brand unmistakable.

Breyers ice cream

On the other hand, there have been brands built through major changes in package design where existing brand elements were discarded. A good example is Breyers ice cream, which, until the mid-1980s, served a strictly regional, northeastern market. But Breyers wanted a national market and needed a strong national program to compete.

At the time, Breyers had a bland white package that looked like all other ice creams in the retail shelf. To accomplish national distribution, it was suggested that the brand totally change its branding and packaging. Instead of white packages, black became the background color—the first time ever on any dairy package—and the photography and graphic elements were completely changed. Retaining the Breyers leaf logo from the earlier packaging, the new design featured oversized, mouth-watering photography of ice cream that, against the black background, enabled each flavor to pop off the shelf.

Since then, low-fat and other varieties have been added to the Breyers line. These are differentiated through additions of color on the package. The most recent line extension, Smooth & Dreamy, introduces bright colors but maintains the black background at the top for brand continuity. Thus, though some package “drama” has been lost by reducing the ice cream photos and a new angled Breyers logo, brand identity recognition has been maintained.

While brand identity continuity was less critical when Breyers ice cream moved from being a regional brand to becoming a national brand, design continuity for this leading national brand is now a necessity.

Carefully planned strategy is critical when changing packaging of a major brand

Some major package design changes are successful, and some are not. When a major package change discards recognizable elements on the package, marketers and designers must carefully evaluate the risks. It may be the right thing to do at the right time. But it can backfire if the realities of the marketplace and the brand equities are not carefully assessed.

While there are exceptions, most brand strategies require sustained brand recognition continuity, especially when the brand is performing well, when it has a recognizable color and unique graphic elements, when it is marketed to older people, and when the brand’s non-packaging elements are not being changed.

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