When Kraft Heinz announced it was writing off an extraordinary $15 billion from the value of just two of its brands – Kraft and Oscar Meyer – analysts were quick to blame the business model followed by owner 3G Capital.
The Brazilian investment firm has a reputation for cutting costs, and a lack of spending on branding was highlighted as a major factor contributing to the decision.
But trimming investment in advertising and promotion was only part of the picture, according to Julie Kollman, chief research officer at Kantar.
“If you look at a deeper analysis, the real issue is that neither of those brands had responded appropriately to the changes in their marketplace,” she told last week’s MRS Impact conference in London.
“They didn’t respond to the changes in consumer needs and desires, they didn’t respond to the changes in the retail environment. And, therefore, consumer preference, consumer relevance had completely eroded.”
Successful businesses, she argued, have to become much more responsive to such changes if they are to avoid losing brand value and being disrupted by newcomers.
This is where Kantar’s idea of ‘intelligence capital’ enters the picture, sitting alongside the more traditional notions of physical capital and human capital as a form of investment that creates financial value for an organisation (For more, read WARC’s report: Intelligence capital: an idea whose time has come?).
“We think there are four very clear ways that intelligence creates value for an organisation,” she said. These include:
Diageo’s approach required a cultural realignment that has made using Catalyst “a part of the day job” and this aspect was also stressed by Kollman.
“Data and insights have to underpin every decision,” she stated, “they have to be embedded into the decision-making process in a very organised way.”
Sourced from WARC