The traditional approach to marketing is fundamentally flawed today. That's why we're reengineering our marketing process at Kimberly-Clark. At K-C we have started asking ourselves what is the real purpose of marketing, which in the simplest of terms is to sell more product to more people more often.
Executing on this requires a sustainable business model. Ours involves increasing gross margins so we can increase our spending on advertising and consumer promotions. K-C has committed to increasing our marketing spending by 100 basis points as a percentage of net sales; that essentially represents a $200 million increase by 2009. This increase will help us build brand equity, while at the same time drive product price and mix by giving consumers a better value proposition.
When it comes to building brand equity, most companies devise a brand promise, shoot a 30-second TV ad, and then ask their promotions agency and sales force to translate that into action. At K-C we start with solidifying a brand's promise. Next, we identify the obstacles keeping consumers from using or hearing about the brand. Based on this information, we then develop the appropriate marketing programs to ensure every consumer we are targeting understands the brand's promise and the relevancy it brings to their life.
Our marketing teams and agency partners collaborate to generate the right marketing ideas to help solve the challenge of delivering the brand's promise to the right consumer within the right channel. This approach creates an environment in which innovative ideas can emerge to help accelerate a brand's growth.
Consider our Depend branded products, which provide bladder control protection. The promise of the brand is to preserve dignity and relationships through discretion, because people who are incontinent often feel a desire to withdraw from society. So we wouldn't want to create a marketing program that reminds consumers of their incontinence. Rather, we created a program that enables users to purchase the product more discreetly.
Building brand equity
Another marketing approach that drives brand equity is new news. We generate new news in three ways.
First, we are making new news by focusing on the innovative promises of our brands. As an example, our new GoodNites Sleep Boxers and Sleep Shorts underpants are designed to look and feel like popular boxer-style underwear and offer an odor control feature for added discretion to help children who suffer from bed wetting feel self-confident while they sleep. The new campaign, entitled "Lighten the Night," focuses on reducing the anxiety around bedwetting by driving home the brand's promise: feelings of normalcy through trusted nighttime protection.
Second, we are creating news around how we deliver a brand's promise. Rather than sticking an ad for our WypAll brand towels and shop rags on a racing car, we chose to sponsor NASCAR crew chiefs instead. Why? The people who use these products have an affinity for NASCAR crew chiefs. We connect with that affinity by allowing WypAll customers to vote online for the best NASCAR crew chief each week as part of a larger campaign.
Third is selecting innovative channels to communicate our brands' promise. For example, a campaign for our DIY business' Duckbill face masks consisted of an online (www.duckbill.tv), word-of-mouth campaign. It included a video contest that used a YouTube-esque approach to entice consumers to submit videos that focused on comical uses of the product to help illustrate its key benefit: superior fit that keeps dust and other construction materials out of the user's nose and mouth. The campaign helped K-C DIY grow total sales in 2006 of its personal protection bundle, which includes the Duckbill face mask, by 30 percent.
Finally, attracting, developing, rewarding, and retaining the best talent is the basis on which all successful marketing operates. We give our people clear career paths, provide them with meaningful work, and enable them to live a full life outside of work. In return, they are constantly developing innovative marketing programs that help ensure we sell more products to more people more often.
However, to understand which marketing innovations are working and which are not, we measure the results of our campaigns relentlessly. We select metrics that link directly to business growth. We also balance our short- and long-term measures. In doing so, we understand that there's a risk that some long-term investments in brand strategy could potentially have negative short-term impacts.
Far too often many people in large organizations tend to avoid taking risks when it comes to marketing. Our people embrace it because they know K-C's leadership understands the challenges of taking calculated risks in marketing. They also know that should a marketing program not deliver a positive return, our leadership will encourage them to return to the plate to take another swing.