image source: the a2™ Milk Company
How do you establish a brand and launch a new product in a highly competitive and increasingly commoditised market? With good marketing. But how do you know you’ve achieved ‘good marketing’? Metrics.
More and more, marketers are demanding metrics for reporting performance to company boards, shareholders and outside groups (Byron Sharp). So what are metrics? Metrics can be any number of different factors which are relevant to the company and include: market share, reach, recall, profit, sales and growth, just to name a few.
With so many different types of metrics, how do you decide which are important? Byron Sharp believe there are three “vital marketing metrics” 1. the brands activities in the market (new products, price increases e.t.c.); 2. how the market is reacting to these changes (how buyers are buying, at what price); and 3. how the brands market based assets are holding up.
However, Clark and Ambler believe that “metrics cannot be a standard portfolio. Some, like market share, will be used by most large companies but may be insignificant and therefore useless to very small companies.” Therefore, the process of creating a relevant metrics profile mean aligning the metrics with the companies goals. Senior executives require a range of manageable key indicators that encompass the relevant strategic activities and outcomes specific for the organisation.
The a2™ Milk Company’s (a2MC) brand and launch campaign had to be successful for the company – for years it had been in a tenuous financial situation due to litigation. In order to gauge the marketing campaigns success, the company needed to measure certain outcomes – the metrics.
The a2™ Milk Company had been listed on the NZX Alternative Market since 2004 and so had a responsibility to its share holders. As such, the metrics that the company, and its share holders, were most interested in were sales growth, distribution and enhancing brand strength. The primary goal for the company was to build the a2™ Milk brand as a premium priced value added dairy product in the Australian milk market.
In 2011 a2MC had been established for 11 years and had already employed, and discarded, the services of two external marketing companies. In May of that year, they brought on the agency HBT to try and establish the brand nationally by effectively telling the company’s story.
a2™ was launching as a premium brand in a cluttered, low engagement market that was in the midst of a ‘price war’ with milk being sold for just $1 a litre. Added to that, the research to support the benefits of a2™ milk over standard milk at that time was non existent and so the marketing collateral could not definitively claim that a2™ was superior to standard milk in terms of digestive and cardiovascular health.
HBT tapped into the modern consumer’s desire for health and emotional connections via word of mouth endorsement and so came up with the ‘thank you a2‘ campaign. In 2012, the HBT team launched a TV and outdoor campaign featuring real a2™ consumers sourced via a national Facebook campaign. HBT correctly hypothesised that by targeting dairy sensitive consumers, non-sufferers would follow their lead in the hope of obtaining additional health benefits. Wyner believes this route allowed the brand to have a dialogue with consumers that then allowed the consumer to shape the direction of the brand. By giving up some degree of control, they expect to invigorate their brand with consumer input and ultimately improve performance.
Sales, Distribution and Market Share
According to the a2MC FY12 and FY13 presentations, In 2012, The a2™ Milk company saw sales increase by 48% compared to 2011 and a comparable increase in 2013 v 2012. In the subsequent two years, sales grew more than 90%. In Australia, a2™ Milk’s products are now sold in every major grocery chain and more than 140 cafes (O’Brien). It is even one of the few branded products sold in Aldi stores.
The Brand and Share Price
By 2013, a2™ brand fresh milk was, and still is, the fastest growing dairy brand in the Australian grocery market – beating out sales of organic milk. This is in the face of retaliation by the competitor a1 dairy companies. The strength of the brand is so evident, competitor companies took an “if we can’t beat em, join em”attitude, by adding the slogan “naturally contains a2™ protein” to their labels.
The strength of the brand is reflected in the share price, with shares having jumped 190 per cent to $1.64 since they began trading in Sydney in 2015. The a2MC is by far the best performer on New Zealand’s S&P/NZX 50 Index, so much so that in the past year, a2™ Milk has outperformed a gauge of major global dairy producers.
The Power of Marketing through Metrics
The above metrics clearly highlight to the company and its shareholders the success of the HBT team in achieving their goals of building the brand as a ‘premium priced value added dairy product,’ increasing sales and growing market share.
What is interesting, is that since the launch of HBT’s ‘thank you a2™‘ campaign, the a2™ Milk Company has sponsored a number of trials which aimed to show the digestive and cardiovascular benefits of a2™ milk vs milk containing a1 or a1/a2 proteins. These results were inconclusive. Despite this, a2™ branded milk is rapidly increasing in popularity, which goes to show the impact good marketing can have on the success of a company.
Lyndall Boardman, 214418665