Situation: A major Private Equity firm was highly satisfied with the work we had done on one of the companies in its portfolio. From that prior experience, the Private Equity firm knew that, as experienced marketing practitioners, we actually had the skills to get inside a company’s business strategy and marketing activities in order to improve the results. So, when one of their Eastern European beverage companies was facing a market and category that had experienced significant per capita decline as well as increased competitive pressure, it was no surprise that they turned to us for help. They had done significant work to reduce costs by consolidating plants, exiting less profitable lines of business, and rationalizing SKUs. Now they needed to actually run the business to increase sales, and they knew that we had the expertise in an area that is beyond the typical focus of Private Equity firms.
Core Strategy Group’s Approach: Our team immediately recognized that this company needed to adapt to a major transition in its business fundamentals. Having faced similar circumstances before with beverage clients in emerging markets, we knew that the key was to get this company to think like an aggressive challenger, not the incumbent market leader they had inherited after privatization.
To accomplish that, we set about: redefining their view of the market so that they could win usage occasions and volume from outside the direct category; positioning the company’s distinct brands to win individually and as a portfolio; and, using our practical experience and alternative viewpoints to challenge existing ideas that might limit volume increases. In the initial project we looked at the company’s existing business plan, including its marketing strategy and activities calendar, and we put fresh eyes on their existing consumer and market data. Very quickly, using our unique lens on the beverage industry acquired while working for companies and clients across the globe, we developed a point of view on potential opportunities to gain about 10% volume lift and reverse the long-term decline in consumption.
Based on that strategic perspective, we were asked to drive a second phase, which had multiple workstreams and a more embedded role within the company’s marketing and sales efforts. The work included brand activation—putting into practice our recommended strategies by working with their third-party agencies to develop to develop programs and communications. We also developed a channel strategy for the company that leveraged some new insights we obtained from customer research. This effort was vital to ensuring the company’s growth, since the country was seeing the rapid emergence of a café society that affected on-premise consumption, as well as the growth of super- and hyper-markets that were changing shopping habits and moving consumers away from traditional mom & pop shops. Finally, we created a consumer tracking and measurement system that included developing new supplier relationships, new questionnaires, and new business reporting processes and formats.
Results: For the first time, the Private Equity firm received what it considered a “proper” three year business plan that successfully identified opportunities and linked those through strategies, integrated sales and marketing programs, investment levels and anticipated results. The company over-delivered on its 2007 volume and profit goals as we were working with them. After years of decline, the category actually grew for the first time in years. In the first half of 2008, as the global economy faced pressures not seen in generations, the category accelerated its increase. The company continues to execute the strategy we delivered that focuses on activating key occasions, meals, and consumer activities, and it continues the new brand and product launches we developed with them.
The Core Strategy Group Difference. The problem that most companies face is that while markets have changed fundamentally, the practice of marketing has barely changed at all. Core Strategy Group combines traditional business focused marketing discipline with the aggressiveness and drive of an insurgent strategic model. It is a model built for clarity, speed and impact. This is the new model for companies who are serious about improving their market performance, revenues, share and return on marketing investment. It provides the most effective way for any organization to compete—and win.