Simon Canning | December 24, 2008
CREDIT ratings, cash flow and a willingness to support their brands will mark the difference between the winners and losers in the global economic crunch, the chief marketing manager of one of the world's biggest consumer brands says.
Tony Palmer, an Australian who two years ago was appointed the first global chief marketing officer for Kimberly-Clark in its 137-year history, said brands with strong credit ratings and positive cash flow would be able to treat the economic slowdown as an opportunity to grow rather than as an excuse for cost-cutting.
At the same time, he warned that the ailing economic environment would expose the flawed nature of marketing in many companies. In an exclusive interview with The Australian, Mr Palmer said that even as questions remained about the length and depth of the current crisis, some key messages for brand marketers were emerging.
"There are some things that are very clear to me," he said. "It is very clear to me that companies like ours have an enormous opportunity in these times.
"The one thing you know about recessions is they are uncertain -- you don't know how long they are going to be; how deep they are going to be. One is not like the other -- there is no standard for a recession.
"(But) it is clear that the companies with strong brands and strong balance sheets and strong cash flows are in a great position -- if you keep your eye on the ball -- to come out of this recession positively." Mr Palmer oversees marketing for global brands including Kleenex, Huggies, Scott and Kotext.
The company boasts profits of $US2.7 billion ($3.95 billion) on sales of $US18.2 billion to consumer and professional markets.
But Mr Palmer said marketing would only have an opportunity to allow companies to weather the storm if its role was understood and supported at the uppermost levels, particularly in finance.
He regularly gives presentations in tandem with Kimberly-Clark's finance directors.
"We have consciously started at the board level," he said. "We have a whole bunch of very senior marketing people on the board -- the vice-chairman of Pepsi; the chairman of Clorox -- and we have a board marketing committee that oversees marketing in the same way a board would have a compensation committee, for example, so we take it seriously from the board down."
He said marketing was also defined not as being focused around promoting brands, but as "the organising principle for growth".
"We think about it as being the combination of the channel in which you touch the consumer, the delivery of the promise, which is all your R&D work and the making of the promise which is all your brand marketing work," he said.
"But it has to be an idea you can act upon that makes you money -- we are very commercially focused."
However, while he sees Kimberly-Clark as being well positioned to take advantage of the current economic climate, the veteran of Coca-Cola and Kellogg's believes that the basic model of marketing in many organisations is broken.
"I believe that the marketing system is actually badly broken and it is really, really going to come to the fore in this recessionary environment," he said.
"Historically, the industry has been built around being a production system for 30-second ads."
He said that from the very beginning of the process of a marketing campaign, companies still relied on a model devised to create TV ads, a massive shortcoming in the era of fragmentation and digital marketing.
"Companies tell you that they don't do it this way but the vast majority do."
