Insights into Emerging Markets
Newell Rubbermaid is 18 months in to a total marketing transformation to unlock the potential of its more than 40 brands globally and become a brand- and innovation-led organization famous for great design and outstanding product performance. Under the leadership of Chief Marketing and Insights Officer Richard Davies, the company has doubled its market research budget and will nearly double its advertising spend this year. It also invested heavily in new ideation processes, while reducing its agency partners from more than 70 suppliers to just one advertising agency and one media agency to achieve world-class creative. The company has also created bigger, more global roles with better career paths for its marketing professionals.
With these changes in effect, Newell Rubbermaid now has the support system in place to complete another mission that is integral to its Growth Game Plan (see sidebar): accelerating expansion into fast-growing emerging markets, namely Latin America and Asia.
Davies, who brings 30-plus years of global marketing experience from far-off regions like China, Taiwan, Korea and Japan, is leading the company’s effort to effectively adapt its brand, innovation and marketing strategies to the needs of developing country populations. Here, he reveals how the company’s investments in understanding a very diverse range of consumers will position Newell Rubbermaid as the preeminent consumer durables company in the world.
What is Newell Rubbermaid’s current position in emerging markets?
Davies: We already have a good foundation with about 15 percent of our business in emerging markets. In some markets we already have large leadership positions and in others we are a strong and challenging No. 2. Now, we have a huge opportunity to further build out our footprint in these fast-growing markets. Many of our brands serve the megatrends that are driving the underlying growth of these economies.
For example, the high birth rate in emerging markets is an opportunity for our Graco brand of baby products. As parents make a better life for their children through education, our Writing brands like Paper Mate and Sharpie, are well positioned to be the tools for a new generation of students. And the rapid construction of new buildings and infrastructure is not only a growth driver for our Irwin Tools brand, but also our Rubbermaid Commercial Products brand of building maintenance and cleaning products.
Which regions have the highest growth potential for Newell Rubbermaid today?
Davies: Our strategy in the emerging markets is to “go South,” building on our already strong growth in Latin America, and “go East” to grow our footprint in China and Southeast Asia. Key to this approach is doing the right consumer insights work to understand the local consumer and deploy the right portfolio for the market.
For example, a year ago we launched an expanded range of Irwin Tools to fill out the toolbag of the tradesperson in Brazil — led by Dupla, a unique double-sided hacksaw blade that lasts longer for a lower cost than the competition. Based on the success of this first wave, we are now launching wave two of Irwin Tools in Brazil, with an even wider assortment, and we are seeing good market share growth.
Another example is our Rubbermaid Commercial Products brand, where we have conducted tests in Brazil that showed high water usage and inadequate germ removal during the cleaning process in hospitals. We partnered with a leading hospital to demonstrate water and cleaning solution savings, with improved sanitizing, and as a result, we have expanded our product trials to other areas and campuses of the hospital.
What additional steps are you taking to understand consumers in these regions? How will you adjust your products/branding/campaigns accordingly?
Davies: I’m fortunate that my passion for engaging with consumers is one that is shared by our Chief Executive Officer Michael Polk. Consumer insights are critical to understanding how we best serve consumers’ unique needs in our categories. That’s why we doubled our research budget as we increase the innovation pipeline for our brands and build out our footprint in emerging markets. Even more important is the speed and enthusiasm with which our brand teams have embraced the drive for greater proximity to our consumers.
We have brands that are on-trend and translate well in new markets, but there are also distinct preferences among consumers in different countries that create opportunities. For example, in China drawing is one of the first expressive ways children learn to communicate their emotions, and one of the critical factors to getting your child into a good school is that they have well-developed creative drawing skills. This is a very interesting opportunity for our Writing brands, including Prismacolor art pencils and Sharpie markers. There is also more and more scientific research connecting the act of writing with superior learning and memory retention, which suggests new possibilities for our Paper Mate brand.
Another example is the trend toward cleaning for hygiene rather than cleaning for just appearance. Facilities managers of hospitals and other institutions know that the spread of germs has become a huge threat to public health. At our Rubbermaid Commercial Products brand, we have innovated new microfiber-based cleaning systems that remove 99.99% of germs, and we are doing a lot of work to educate our customers about how to use these solutions for maximum effectiveness. It turns out that sanitizing an operating room is actually a very complex task, and rather than just sell products we are providing real solutions including training materials based on extensive research into best practices.
Is internal collaboration important for executing growth strategies in emerging markets?
Davies: One other ingredient that is key to our success is our ability to recruit and develop local managers in emerging markets, and this is something to which we attach a huge amount of importance. It is critical that we have a seamless approach to the way in which we work together across different cultures to get the best possible mixes into the hands of our consumers.
What advice can you offer peer companies that are seeking to enter or grow in emerging markets?
Davies: My best advice from years in global marketing is to first understand your target consumer. While it’s true that brands and products travel, every market has its own unique needs and preferences. Only when you adapt to these opportunities can you truly be successful.
The Bigger Picture
Currently, Newell Rubbermaid is a global marketer of consumer and commercial products with 2013 sales of approximately $5.7 billion in more than 100 countries and a strong portfolio of leading brands, including Rubbermaid, Sharpie, Graco, Calphalon and Irwin Tools. In 2012, Newell Rubbermaid formed its Growth Game Plan, a corporate strategy to accelerate into a larger, faster growing, more global and more profitable company. As part of the company’s Growth Game Plan, Newell Rubbermaid is making sharper portfolio choices in order to accelerate growth in businesses with the greatest right to win, strengthen market share in the developed world and expand its geographic footprint in a select group of businesses with attractive growth potential. By investing in new marketing and innovation to boost performance and an executional powerhouse in countries around the world, growth is Newell Rubbermaid’s primary source of long-term value creation.
With these changes in effect, Newell Rubbermaid now has the support system in place to complete another mission that is integral to its Growth Game Plan (see sidebar): accelerating expansion into fast-growing emerging markets, namely Latin America and Asia.
Davies, who brings 30-plus years of global marketing experience from far-off regions like China, Taiwan, Korea and Japan, is leading the company’s effort to effectively adapt its brand, innovation and marketing strategies to the needs of developing country populations. Here, he reveals how the company’s investments in understanding a very diverse range of consumers will position Newell Rubbermaid as the preeminent consumer durables company in the world.
What is Newell Rubbermaid’s current position in emerging markets?
Davies: We already have a good foundation with about 15 percent of our business in emerging markets. In some markets we already have large leadership positions and in others we are a strong and challenging No. 2. Now, we have a huge opportunity to further build out our footprint in these fast-growing markets. Many of our brands serve the megatrends that are driving the underlying growth of these economies.
For example, the high birth rate in emerging markets is an opportunity for our Graco brand of baby products. As parents make a better life for their children through education, our Writing brands like Paper Mate and Sharpie, are well positioned to be the tools for a new generation of students. And the rapid construction of new buildings and infrastructure is not only a growth driver for our Irwin Tools brand, but also our Rubbermaid Commercial Products brand of building maintenance and cleaning products.
Which regions have the highest growth potential for Newell Rubbermaid today?
Davies: Our strategy in the emerging markets is to “go South,” building on our already strong growth in Latin America, and “go East” to grow our footprint in China and Southeast Asia. Key to this approach is doing the right consumer insights work to understand the local consumer and deploy the right portfolio for the market.
For example, a year ago we launched an expanded range of Irwin Tools to fill out the toolbag of the tradesperson in Brazil — led by Dupla, a unique double-sided hacksaw blade that lasts longer for a lower cost than the competition. Based on the success of this first wave, we are now launching wave two of Irwin Tools in Brazil, with an even wider assortment, and we are seeing good market share growth.
Another example is our Rubbermaid Commercial Products brand, where we have conducted tests in Brazil that showed high water usage and inadequate germ removal during the cleaning process in hospitals. We partnered with a leading hospital to demonstrate water and cleaning solution savings, with improved sanitizing, and as a result, we have expanded our product trials to other areas and campuses of the hospital.
What additional steps are you taking to understand consumers in these regions? How will you adjust your products/branding/campaigns accordingly?
Davies: I’m fortunate that my passion for engaging with consumers is one that is shared by our Chief Executive Officer Michael Polk. Consumer insights are critical to understanding how we best serve consumers’ unique needs in our categories. That’s why we doubled our research budget as we increase the innovation pipeline for our brands and build out our footprint in emerging markets. Even more important is the speed and enthusiasm with which our brand teams have embraced the drive for greater proximity to our consumers.
We have brands that are on-trend and translate well in new markets, but there are also distinct preferences among consumers in different countries that create opportunities. For example, in China drawing is one of the first expressive ways children learn to communicate their emotions, and one of the critical factors to getting your child into a good school is that they have well-developed creative drawing skills. This is a very interesting opportunity for our Writing brands, including Prismacolor art pencils and Sharpie markers. There is also more and more scientific research connecting the act of writing with superior learning and memory retention, which suggests new possibilities for our Paper Mate brand.
Another example is the trend toward cleaning for hygiene rather than cleaning for just appearance. Facilities managers of hospitals and other institutions know that the spread of germs has become a huge threat to public health. At our Rubbermaid Commercial Products brand, we have innovated new microfiber-based cleaning systems that remove 99.99% of germs, and we are doing a lot of work to educate our customers about how to use these solutions for maximum effectiveness. It turns out that sanitizing an operating room is actually a very complex task, and rather than just sell products we are providing real solutions including training materials based on extensive research into best practices.
Is internal collaboration important for executing growth strategies in emerging markets?
Davies: One other ingredient that is key to our success is our ability to recruit and develop local managers in emerging markets, and this is something to which we attach a huge amount of importance. It is critical that we have a seamless approach to the way in which we work together across different cultures to get the best possible mixes into the hands of our consumers.
What advice can you offer peer companies that are seeking to enter or grow in emerging markets?
Davies: My best advice from years in global marketing is to first understand your target consumer. While it’s true that brands and products travel, every market has its own unique needs and preferences. Only when you adapt to these opportunities can you truly be successful.
The Bigger Picture
Currently, Newell Rubbermaid is a global marketer of consumer and commercial products with 2013 sales of approximately $5.7 billion in more than 100 countries and a strong portfolio of leading brands, including Rubbermaid, Sharpie, Graco, Calphalon and Irwin Tools. In 2012, Newell Rubbermaid formed its Growth Game Plan, a corporate strategy to accelerate into a larger, faster growing, more global and more profitable company. As part of the company’s Growth Game Plan, Newell Rubbermaid is making sharper portfolio choices in order to accelerate growth in businesses with the greatest right to win, strengthen market share in the developed world and expand its geographic footprint in a select group of businesses with attractive growth potential. By investing in new marketing and innovation to boost performance and an executional powerhouse in countries around the world, growth is Newell Rubbermaid’s primary source of long-term value creation.