WE MUST NOT LET OUR PAST, HOWEVER GLORIOUS, GET IN THE WAY OF OUR FUTURE, Charles Handy. You must have read the exchange of comments from various quarters. I find it a healthy discussion. What I initially thought as PHILOSOPHICAL DEBATE and INTELLECTUAL MASTURBATION (pardon the pun), ended up as a mental exercise which benefits the senior citizens like me ( and to Alfredo Reyes Reyes and Victor Serrano ) as it becomes an anti-dote to Alzheimers and Parkinsons. A good case to understand as well for marketing practioners re: srategic brand management. I cant help but to express my final piece on this subject since I was the CEO/ President of Unilever-Bestfoods when the 3-year merging period happened. As such, I take the responsibility and accountability of the decisions I made ( or jointly with Unilever-Bestfoods Regional Team). Furthermore, I was a party to the BRAND RATIONALISATION of the 6 Bestfoods companies in Asia ( Phil, Thai, Indo, Viet, HK, Tai). Here are my thoughts which were the foundations of the decisions ). I hope you will find time to read this. 1. CMC: There is no doubt at all that CMC was a successful company. No debate. No further discussion. That is perhaps why so many people have emotional attachment to the company, and more so, to the brands.And how they built the company and brands from scratch. In fact, CMC was the most successful Bestfoods company amongst the 6 companies I mentioned above. As the CEO of CMC, there was so much pressure for CMC to deliver. 40% of sales and 60% of profit. Kaya kapag sinipon ang CMC, siguradong magkaka-flu ang region. It is also against this bacground why I started saying We must not let our past, however glorious get in the way of our future. 2. LOCAL vs GLOBAL: Unilevers strategy is global while CMCs and other operating companies execution is local. For example, Knorrs brand positioning and one look pack design are global while flavours are local. So, mali yung mga arguments that Indonesians have different taste preference than Filipinos therefore hindi puedeng global. Of course! But that was considered in the local execution of a global strategy! This is not any different from McDonalds. Design, color schemes, brand positions are global but variants are both local and global. McDonalds Philippines I think is the only country in the world that has spaghetti in its menu! 3. BRAND RATIONALISATION: Long before the acquisition, Unilever has already embarked into a brand rationalisation exercise. (PS. It should be differentiated from consolidation). Because of Unilevers historical growth thru acquistions in different countries, it has accumulated/collected 1500 brands in 50 odd countries. The mandate was to rationalise the brands down to 300 with 50 brands having sales of $1B/brand globally. Natiempo ang acquisition ng Bestfoods, so isinama na rin sa brand rationalisation and equally important is creating SYNERGY between ULP and BF brands which I will discuss separately in #5. Brands that were scrutinized under the microscope were Knorr, Ladys Choice, Royal, Alsa. Mahabang proceso ang brand rationalisation, which brand to keep, migrate or phase out. It is one marketing course in itself. Marketing practitioners who are interested to stimulate their brains, please let me know. Okay na sa akin one free lunch. 4. CATEGORY RATIONALISATION: What goes hand in hand with brand rationalisation is category rationalisation. Unilever will divest in categories that have no future. Ex. Cooking oil. The victim of this strategy is pasta. Hence, hindi ako nagulat with the news na ibinenta ang pasta business ng Unilever. What went with it is the Royal brand because pasta=royal. Noon pa dapat ibinenta yan. Kaya lang walang takers. Also as CEO mahirap uraurada to sell that because you have to find another category/brand in your portfolio to replace 1B pesos which at that time was the sales of Royal. The downside of course is that the value of the brand will deminish if you stop advertising or promoting the brand. Kaya yung mga ex CMC na nasesenti na walang facing ang Royal sa mga Supermarkets, that explains why. Considering cost of money in 2003, if you ask me, 2.1B pesos for Royal is already a good deal for both parties, win-win, so to speak. 5. SYNERGY: One of the key elements in justifying the price UL paid for BF is synergy. Here, I disagreed with Unilever. Ito yung sinasabi ng karamihan that soups are not soaps. Tama! You achieve synergy in backroom and support functions only but not in sales and marketing. In fact, it is counter productive because: trucks are different, distributors are different, buyers are different and most critical, mindsets are different! Foods get defocussed due to the strength of personal care and homecare. Dito ako naniniwala sa pananaw ng mga taga CMC. This is just one of the element but should not change the equation! 6. ORGANISATIONAL RESTRUCTURING: What goes with synergy is restructuring! Hence, many positions were declared redundant. Simultaneous with restructuring is alignment of remuneration packaging with UL. In this business process, maraming nakinabang from CMC. All excep one had salary adjusts up while the only one based on UL should go down, was kept on status until another round of salary adjustment. Redundancy package was likewise aligned to UL, which was beneficial to all. 7. CORPORATE CULTURE: Magkaiba talaga ang kultura. Because of its long Filipino heritage, BF is more of a Filipino company. And the fact that BF even its mother company is paternalistic. Sa totoo lang mas brutal ang american companies than british. As CEO of two companies with divergent cultures, I was conscious of it from day 1. And with my diverse operational experience from from R&D to manufacturing to sales to marketing, I was also conscious of the differences between departments. Medyo naging litany. But I thought better this ways kaysa may mga pagdududa pa ang iba. Kung sa pananaw ng iba that Unilever messed it up, my answer is NO. It is the right strategy, both from local and global points of view. Those who have emotional attachment to Royal, it is now in good hands better than if it were in Unilever or even in CMC. RFM showed interest in Royal not just as a category and brand, but because of its partnership with Unilever in Selecta, now the market leader in ice cream. With Fiesta and Royal, it will surely dominate the pasta market! Then, we can still proudly say, we built that brand from scratch, from the time when spaghetti was not familiar to many! Cheers! Si Bong Revilla na lang ang pag-usapan natin! PS. FEEL FREE TO ASK ANY QUESTION TO COMPLETE YOUR INTELLECTUAL MASTURBATION UNTIL ONE GETS ORGASM. Hehehe.
Posted on: Tue, 21 Jan 2014 03:28:54 +0000
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