“Embedding analytics in business is imperative”
Leading business leaders -- Unilever’s CR Sundarrajan and ITC Foods’ GK Suresh -- elaborate on why analytics can be a game-changer
In today’s times, analytics has become a key input for business planning. Large corporates have seen analytics, as a function, evolve to become a robust contributor to decision making even though they continue to face challenges of getting the business to believe that analytics would truly help them.
One key hurdle faced over the years revolved around the technical aspect, where the key question was whether the company had the right tools and techniques and if it was capable of handling different types of data. The second was around data itself. Data was sourced from several external sources – the market, the media, and research agencies. However, the key issue was whether it was really representative. Finally, and perhaps the most important piece of the puzzle, was interpretation -- how can companies interpret data in the business context.
Embedding analytics into business: CR Sundarrajan
According to CR Sundarrajan, Director Analytics, Developing and Emerging Markets - Unilever, over the last decade, the analytics division in Unilever has been growing. There were several barriers that the team came across in this period. The first barrier was about executives who came with the ‘I know everything’ attitude and were unwilling to accept any new insights. The second was when executives complemented the analytics team but had already made their decisions. And finally, when results were selectively picked out, and for not necessarily the right reasons.
Up to 2007, the analytics division was in its nascent stage with analytical projects carried out and solutions found in a bid to confirm that it could work. From 2007-2010, Unilever established Analytics to deliver critical inputs for key cells across countries they were present in. However, what they noticed was that only 20 per cent of suggestions were implemented with a mindset change in only 5 per cent of the cases as 15 per cent corresponded with the decisions that were to be taken.
Sundar listed out five steps to embed analytics into business:
• Get a buy-in early by identifying burning issues. There is a marked difference seen when solutions are provided.
• Customise solution to give actionable recommendations on burning issues. The solution should not be mathematical and technical but easy to understand and implement
• Intense and continuous business partner training and scenario planning.
• Track results or implementation and communicate benefits constantly.
• Communicate to top business leaders -- it is important to move from offering brand category solutions to corporate solutions.
Doing good work is not enough unless you ensure that it gets adopted. Implementation, Sundar pointed out, has gone up from 20 per cent to 41 per cent now. In 26 out of 31 cases, recommendations taken had led to protection and growth of brand share. On the other hand, in 34 of 44 cases, where the recommendations were not taken, brand share went down.
Analytics and Marketing – Return on Investment
Analytics enabled intelligent research allocation among different media to increase ROI. G K Suresh, GM - Brands, Foods Business, ITC admitted that marketers are faced with key dilemmas everyday – where to spend, how to spend, which brand to put money behind, which geography to cater to, etc. Marketing cannot be looked at in silos by considering revenues, but should also factor the cost to earn those revenues.
Suresh cited the example of the brand Bingo, where 27 per cent of the brand’s sale volume came from TV and some percentage from print, radio. Some was attributed to the halo effect because according to him, advertising for Mad Angles led to an increase in sales of potato chips per se. About 30 per cent of the sales were unexplained. Variables such as role of PR, product pricing, retailer recommendation and others were not considered. It was classified as ‘brand equity’. Then ITC decided to look at three years’ data since Bingo was launched to find reasons behind the unexplained portion. Analysis showed that a cut in prices led to increase in sales. TV advertising led to significant sales but radio and print did not play a significant role. However, smaller mediums used in the right markets are effective in driving sales.
This is where the question ‘how much is enough?’ arises. Analysis showed that beyond a certain point, for every 1 per cent spent, lesser than 1 per cent increase in sales was seen. That was the point of inflection. Then came - ‘How to schedule?’ Do you spread the advertising through the year or come out in a couple of short bursts? ITC realised that when they spread it out, there was a 3 per cent increase in sales. Analytics helped to plot the importance of each effect individually as well as the inter-linkages. If you are able to understand the ramifications better, then you do not need to duplicate actions. So, marketers should engage more with consumers, generate the right insights, and work closely with agencies to break through clutter.
The two business leaders were speaking at the inaugural edition of the Pitch Analytics in Action conference held in Bangalore on January 16, 2013. V Balasubramanium, Chief Knowledge Officer & Director, RainMan Consulting was the moderator for the session.
Pitch Analytics in Action was powered by The Hindu Business Line. Dekhooh was Outdoor Partner for the event, CIOL.com was the Online Partner, Institute for Competitiveness was the Think Tank Partner, Marketelligent was the Knowledge Partner, and 24 Frames Digital was the Webcast Partner.
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