The art and science of marketing

Diageo Marketing Director, PHILIP ALMOND talks to Judie Lannon about his career in marketing and how the culture, values and consumer focus of Diageo has made the company one of the world’s great brand organisations

JUDIE LANNON: How did you get into marketing? Did you train for it , or was it a vocation or did you just fall into it?

PHILIP ALMOND: I suppose you could say I fell into it. I went to the Careers Service in my last year at university and they looked at my experience and said advertising was a combination of commerce and art. So that’s what I did. I started off at Ogilvy & Mather on their graduate scheme and after two years went off to work in arts admin, in the early days of what was then called alternative comedy. At 25, I decided I needed to sort my life out. I talked to a lot of people to work out what to do, and eventually took a job at Craton Knight and Lodge, which was a new product consultancy. It was there that I got interested in proper marketing. The agency side is fascinating but I was really more interested in the client side, being able to run the whole thing and make the decisions.

JL: What was the eureka moment?

PA: I was working on a project looking at why Martini sales were declining and I suddenly realised that I loved both the drinks business and the whole marketing strategy, not just one bit of it.

The problem Martini was facing wasn’t just a communication problem, it wasn’t just a new product problem – it was a much broader set of related issues and I wanted to look at everything and solve the problem myself. The frustrations of advising and seeing one’s advice ignored just got a bit too much after a while.

My natural route into clients then would have been through an NPD or a brand development job, but not many people were investing during the early 1990s recession, so there just weren’t the jobs out there.

I decided to do an MBA at the London Business School and joined IDV as the economy picked up – initially in new brand development. I took on specific brand responsibilities when Diageo was created.

JL: Tell me about life at Diageo

PA: To begin with, I was marketing director of Baileys and a group of brands in this country and then took on the Smirnoff brand, where we successfully launched Smirnoff Ice.

I then got sent off for good behaviour – or bad behaviour, depending on the way you look at it – to Burger King, which was then within the group. It was more a sales job with TV advertising attached than a marketing job – managing franchisees and doing promotional marketing. It was a fantastically broadening experience.

When we sold Burger King I came back into Diageo to run the Smirnoff vodka brand globally for a couple of years and got started in this role nearly two years ago.

JL: At what point did the real importance of having a consumer focus register with you? How did that happen?

PA: I think I learned it initially at CKL which was very market research based, so you were talking to consumers all the time. I worked on a whole variety of projects such as looking at how you manage the Schweppes brand equity across Europe, given that it’s a mainstream carbonated drink-in-a-can in Spain, a mixer in Britain and something else in Germany. Big corporations have an overwhelming desire to pull all this together and gain the synergies. But you have to establish the fundamentals of what the consumer wants and balance that with what the corporation is trying to achieve.

You’ve got to be different from your competitors, you’ve got to be true to what the brand and the company are about and you’ve got to fit that with what customers require. Any solution has to meet all those criteria. So the real skill is in balancing those three, sometimes competing, demands.

JL: Do you think your experience in doing market research has made you more conscious of the limitations of research?

PA: Probably. Some of the worst mistakes I’ve seen in brand management have been made by listening too directly to what the consumer wants – and failing to interpret that in terms of what’s possible, profitable and sustainable for the company. For example, if you put the Smirnoff name on any type of new product, consumers will say yes to it because the brand is so powerful. And, you can kid yourself any new variant could be a good idea because vodka is the ultimately flexible, mixable spirit and versatility is part of what it’s about. But following that route without careful thought can be disastrous for the business and the brand.

So you have to understand the difference between what people say and what they really mean, or even if they mean it, and whether it is a good idea in the context of what’s right for the brand or the company longer term.

JL: Diageo has gained a very powerful reputation as a skilled brand owner. How has this happened?

PA: We have a lot of people in this company who are passionate about brands and who have a distinctive understanding of the brands they manage. Also, we’ve developed tools that are really useful for codifying success when it’s happened, and making it happen again. But although the tools are essential, the reality is that the big leaps often come from intuition.

JL: That’s a very good point. Companies need to codify their practices if they are ever going to be able to learn from them.

PA: One of the things that is very valuable about having methodology like the Diageo Way of Brand Building (DWBB) embedded in the company is that having a common language about consumers and brands at the heart of your culture allows you to analyse and codify what you are doing. It makes it easier to communicate with other people in the company and with your agencies. But that is only the beginning. Relying on the rules to get you to breakthrough is never going to be enough.

JL: The importance of your methodology is a clue to why marketing is successful at Diageo. In what other ways do the company’s structure, culture and values support you in your job?

PA: First of all, everyone recognises the importance of brands and everyone understands the importance of listening to consumers. Our company purpose – which is about celebrating life every day everywhere around the world – points you straight at consumer behaviour in drinks, and being passionate about consumers is one of our core values. It means that we have to think about consumers and the role our products play in different kinds of celebrations – whether your job title says you are in marketing or not.

The next thing is that senior management – not just marketing senior management – believes in the importance of marketing. The monthly results that go from GB to the European executive and then up to the global executive always have the latest consumer measures alongside our sales numbers – the preference measures and brand equity measures. These measures and others are looked at across all our brands at management level, which is an indication of the importance the corporation attaches to consumers and brands, not just sales figures.

The structure of Diageo is also important in supporting brand marketing. We have a consumer planning function and so we have a planner in every team who is the consumer champion for that business.

JL: Are these consumer planners the same breed of person that advertising agencies have developed and what is their particular contribution?

PA: They’ll usually have both quantitative and qualitative market research brand experience and some may have been planners in agencies as well.

But the important thing is that they’re not there to be ivory-towered planners. What I value from them is that they synthesise and summarise the huge amount of consumer data now available to us in order to drive the business. They’re there to make those insights come alive for the team in a way that they can be acted on to drive growth.

That’s why you have them internally rather than externally. Most of their work is directed by the people who drive the business, rather than creating a cottage industry in pure research methodology – which is an easy thing to create.

JL: How do you champion consumerfocused brand building through the other departments in the company? How do you avoid the silo effect that so many companies suffer from?

PA: The first thing is that everybody who joins Diageo gets a thorough education in what our brands are about, who they’re targeted at, what we want them to achieve and so forth. A lot of our sales people have had the full DWBB training. When we first did it, putting everyone on the commercial side of the company through the DWBB was a big cultural change.

But it works. For instance, I was in a meeting the other day where the marketing people were arguing from a commercial point of view and the sales guy was saying no, it’s about the brand. There are always trade-offs to be made but it’s much easier and we have much healthier debates and discussions if all the individuals from the different functions have a common language and understand the ultimate aim of the business. We have created a common culture that accepts certain principles – that this business is built on consumers and brands as well as trade customers – and that there is value in long-term brand building.

JL: Looking back over what you have achieved so far, what would you say are the things that you’re most proud of and what are the things that you wish you’d done differently, either in your career or as business decisions?

PA: I don’t think I regret anything in my career, although I moved around and tried different things early on. But I made those moves in order to find the right place to be and I value the experience I got before coming directly into marketing.

In terms of business issues, the ones I’m proud of are the ones where there’s been that combination of good, solid basic thinking with a strong element of gut feel and risktaking which have led to a major improvement in the brands.

JL: Which have been the most satisfying?

PA: Smirnoff is one of those I’ve been most associated with. I’m immensely proud of the launch of Smirnoff Ice. Not only was it a successful breakthrough for the brand at the time, which built us a multi-million-pound business, but the core vodka brand is now twice the size it was before Smirnoff Ice – so the core has benefited too. There were rational arguments to say why that was the right thing to do, but also lots of rational arguments to say why it was the wrong thing to do. And so I’m proud of being part of the team that launched that initiative.

JL: Anything that you wish you’d done differently?

PA: There are always things that I wish I’d done differently. In the drinks industry there are fashion trends in drinks you wish you’d spotted sooner – the shift to cider and rosé wine in recent years are examples. The only decisions I really regret are the ones where there was something niggling at the back of my mind saying ‘this doesn’t feel right’ – but at the time you let your instinct be over-ridden for lots of rational reasons like research, or because you wanted to give an individual his or her head, or you felt that actually you should compromise in the interests of moving forward. So you regret those decisions when your gut feeling told you something wasn’t quite right – because you could have done something about them.

JL: Finally, what would be the three most important pieces of advice you’d give to someone who wants to instil the kind of consumer-focused culture that you have at Diageo in their company?

PA: First, it’s got to come from the top. It’s got to come from the executive level. It’s got to be modelled by the sales and managing director as much as by the marketing director. It has to be rolled out from the top and it has to be meant sincerely. People know if you’re just paying lip service.

Second – measure it. Measure what’s happening with consumers and treat those numbers as important and review them regularly. Even if you’re not getting massive insights all the time, metrics are a signal, and an important signal, that this stuff matters and that we care about it.

And the third thing is to train it into everyone. A consumer focus makes sense and no sales person, no finance person, no HR person would disagree with you when you say that ultimately we’ve got to appeal to the end customer if we’re going to win. But the discipline often gets in the way day to day.

It’s important for everyone to go through some form of training to see the implications and to see where their job fits in. Marketing is too important to be left just to the marketing department.

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I’m immensely proud of the launch of Smirnoff Ice ... the core vodka brand is now twice the size it was before Smirnoff Ice – so the core has benefited too