CREATING BRAND VALUE THROUGH SOCIAL INNOVATION
Global Marketing Summit, Tehran, 21st Nov 2015
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AN ECONOMIC OPPORTUNITY
• Educated population
• Good infrastructure
• Low labour costs
• Strategic access to markets
• Internal stability and security
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FULL FOCUS ON ECONOMIC GROWTH
IR Iran’s Supreme Leader’s official website June 2015
Rapid, sustainable economic growth focusing on employment, mobilizing all capabilities and facilities of the country, such that 8% average growth is fulfilled through the plan
1980 - 2010 average
2012 – 2014 average
2016 - 2021 Government objective
10
8
6
4
2
0
-2
-4
Annual GDP growth Iran 1980 - objective 2021
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A LEAPFROG ECONOMY?
Long term annual growth rates (1980-2010)
GDP JOBS HDI CO2
3% 2.5% 1.6% 5-6%
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ECONOMIC CHALLENGES
Inequality
World Bank
Unemployment: 10.5%
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SOCIAL CHALLENGES
“The shocking statistics of crime”
More than 4m drug addicts Crime increasing
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Iranian consumers want brands to take action and contribute to solving pressing social problems
Report on Company’s Social Responsibility, Samsung Iran 2015
A VALUE OPPORTUNITY FOR BRANDS
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VALUE THROUGH LOCAL RESONANCE
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SOCIAL CHALLENGES
Poland 2002: • Deep economic crisis • High unemployment • Many living in poverty • Low trust in companies and brands
Consumers turned nationalistic: “buy Polish” Danone perceived as foreign and losing loyalty and share to local Polish brands
18.1 19.5 19.3 20.2 21.1
22.5
1.7 2.1 2.2 2.7 3.1 4.1
13.2
10.5 10.4
13 14.5
17.4
0
5
10
15
20
25
1996 1997 1998 1999 2000 2001
People living in poverty vs unemployment rate
Social minimum Subsistence minimum Unemployment rate
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#1 PUBLIC PARTNERSHIP
Danone’s challenge: • Re-gain trust and win hearts • Grow its business in lower socio-
demographic groups Solution: identified child malnutrition as a key social issue with business relevance Partnership with public authorities and civil society
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#2 BRAND INNOVATION
Launch of the SHARE YOUR MEAL campaign Major cause marketing initiative to promote awareness of the issue and engage citizens in a collective response On pack, PR and above the line campaign
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#3 PRODUCT INNOVATION
Development and launch of a new product range targeted at the Base of the Pyramid 30% of daily micro-nutrient needs of children Affordable price due to product design, supply chain and distribution
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POSITIVE OUTCOMES
The SYM program was an astounding success for Danone and wider society: • More than 11 million meals financed • Turnaround of the brand image into a
“local hero” brand • Strong penetration increase overall
and in low socio-economic groups • 65 million units Milky Start sold in 5
years
70
53
57
66
49
30
0 20 40 60 80
The brand I buy
Company that cares about people
Helps to fight malnutrition among
hungry children
Jan 03 Oct 03
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VALUE THROUGH SUPPLY CHAIN INNOVATION
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AGRICULTURE IN NEED
Major challenges in the food supply chain: • 20% decrease in crop yield forecast
due to climate change • 40% of crop production at risk due to
water scarcity • Crop yields are stagnating at a low
level • Iran a net importer of agricultural
products
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#1 ADDED VALUE SUPPLY
Nespresso and its partners have helped coffee farmers deliver transformational improvements Working with agricuLtural NGOs and farmer organisations • Yields up 26% • Quality rejections down significantly • Net income up 23% • Ability to invest in labor, agro-inputs
and energy
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#2 LEADING FARM MANAGEMENT
The Nespresso AAA Sustainable Quality Program brings advanced systems and management to support farmers • 70 000 farmers • 9 countries • 300 agronomists • Database of farm visits to monitor
training programmes and KPIs
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#3 LEVERAGING BRAND VALUE
AAA has become a major asset for the Nespresso brand • Guarantee quality and supports
premium brand position
• Unique in the category
• Endorsed by leading NGOs
• Driver of innovation and new product development
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POSITIVE OUTCOMES
Awareness of Nespresso AAA and recycling programmes drives net promoter score NPS is a critical driver of profitable growth for the business