How Kimberly-Clark Is Modeling Its RGM Strategy Like an Innovation Pipeline
As an example, the Super Deluxe line of diapers (shown above, at left) feature an organic cotton liner that’s thinner, softer, and better able to absorb. Lewis cites this as an example of a launch that charges more but provides greater value through skin health, organic cotton, and a product thinness that parents perceive as helping their babies feel better by being able to crawl, wriggle, and flail more easily.
Kimberly-Clark, which operates with a good/better/best product strategy, also launched a midtier line extension in China called Royal Silk (above, right). With real silk in the lining of the diaper for softness and elevated red and gold packaging, Lewis says it’s another example of providing consumers with a little more value, which enables the company to charge more for the product benefits.
Finally, in addition to all of these adjustments, the company is also exploring RGM opportunities with its retail partners when it comes to standardizing and/or developing performance-based commercial terms. As with price pack architecture, doing so is helping the company avoid making rate-based price increases.
In-Market Execution Success
In doing the hard work in getting their data into a data lake, organized, and measurable, the No. 27 publicly owned consumer goods company has been able to implement automated and standardized scorecards across the globe. As a result, they can better understand the traditional key execution metrics of distribution, price, space, and merchandising (DPSM) in physical retail, and content, rating and reviews, in-store, search and share of search, and pricing (CRISP) for e-commerce.
“It sounds boring,” concedes Lewis, “but it’s critical. We found around the world we were solving that country by country, which is fine, but you end up with uneven capability, and we want to focus on being more even.”
This has translated into growing distribution for the last three years in 60 percent of the places they’re operating, she says, providing a greater share of the market.
Now they’re building up the digital interface to automate more of the sales routine. Beginning in Brazil with plans to scale globally, they’ve automated steps to be managed through a mobile phone interface by the sales reps, a process estimated to save the reps 30% of their time.
[See also: Kimberly-Clark Tapping a Customer-Centric Approach to Data]
“What we can do is have them spend less time on order entry — which is necessary but time consuming — and move more of their time to selling and merchandising activity,” she says. “All that order entering needs to be done, but it can be automated.”
On the e-comm side, Kimberly-Clark is working with various markets and teams to build a digital interface to identify gaps in the selling process. Alerts are delivered when out-of-stocks are imminent, enabling the company to more quickly ensure the SKU returns into supply chain distribution.
“If we don’t have that SKU, we can shift our marketing to another SKU,” notes Lewis, “and ensure we don’t waste that marketing dollar on the SKU that’s out of stock.”