Hi Kyle! To start, please tell us about the marketing planning process at Danone.
Our planning takes place in phases. The first step is for our leadership to determine the growth numbers we’re looking to hit for the year ahead.
Then, it’s up to the marketers and brand managers to figure out how to make that growth happen. We use a process we call “assumption-based forecasting”. Our product team will do some analysis and develop a hypothesis about the potential growth for each brand and product.
For example, they might see that product A has a 40% market share, and competitor X has a 20% share. They might hypothesize that by capturing additional market share from that specific competitor, they can grow the business by a certain percentage.
Next, it’s up to our activation team to turn that hypothesis into action. In that example, it would be about how we’d capture the extra market share. We plan the channels, customers and tactics that will make it happen.
My job is to drive velocity for Danone’s yogurt brands. In our business, it’s all about selling more units per store per week. I have a number of levers I can use to influence that metric, including pricing, promotion, physical placement on the store shelves, and of course the product itself. It’s the classic “four P’s” of marketing!
The financial side of marketing planning comes in once we have a clear picture of our strategies for the year ahead. For example, if we wanted to capture 4% additional market share in a specific region, we might need to increase our promotional budget by $1 million over last year, and that’s what goes into the budget we submit for approval.
If I had to sum up our marketing planning process, I’d say we start with an outcome we want to achieve, and work backwards to achieve it.
How do you adjust marketing plans throughout the year?
We revise our marketing plans every month in response to what’s happening the market. However, we always have to stay within our budget for the entire year.
For example, if we have a $25 million budget for the full year and notice in March that we need to spend extra money to defend against a competitor’s promotion, we have the freedom to do that — so long as we adjust the plan so that the year’s budget doesn’t get exceeded. We have to spend all the marketing dollars we’ve been allocated, otherwise we lose them!
What are your biggest challenges in marketing planning?
I can think of two.
The first is proving that our marketing plans support the company’s higher-level goals. Since there’s a time delay of many months between when we create the next year’s plan and when we start executing, we can never say with 100% certainty that our planned budget and activities will achieve the growth we want to achieve.
The second is about alignment. By the end of each planning cycle, we have to make sure that everyone is happy with the plan and fully understands our budgets. That’s why we can’t just present people with a list of line items; we have to make it more digestible so that they can understand the intentions behind what we’re doing.
What’s your top recommendation for better strategic marketing planning?
Give yourself and your team enough time to walk through the planning process correctly. It can be tempting to hustle through it, since it can be a painful process at times! But a well thought-out plan that you’ve debated internally, agreed upon and locked down will make execution much easier in the year ahead.
Special thanks to Kyle Watts for doing this interview!