3M uses the power of its two most recognised brands – Post-it and Scotch – to drive overall product awareness and sales in the category, as Dr Jack Truong, vice president of the company’s office products division, explains
OPI: This is an important year for 3M, with both your Post-it and Scotch brands reaching major milestones. How are you marking these events?
JT: Yes, it’s an exciting year for 3M. Both Post-it and Scotch – two of the world’s most recognisable brands – are celebrating major anniversaries. And given the remarkable heritage of these brands, it’s only fitting that we are marking these milestones on a global scale.
In the US, for instance, we have been executing a highly successful integrated marketing campaign that spotlights the role Post-it notes have played in American popular culture during the past 25 years as a revolutionary communication tool. Other countries all over the world are creating a variety of programmes to celebrate. In New Zealand, for example, 3M is launching a national contest to design the next Post-it note.
As far as the Scotch brand’s 75th anniversary is concerned, we plan to expand the scope of the highly successful Scotch brand ‘most gifted wrapper’ contest. First conceived and executed in the US, this contest has already been replicated successfully in the UK. We also intend to create holiday gift wrapping contests in several other countries this year. An interactive event like this really gets consumers connected with the brand and drives demand.
OPI: What other ‘channels’ are you using for your marketing efforts?
JT: 3M uses all the spokes in the marketing wheel – advertising, promotions, public relations, web-based initiatives, sampling and word-of-mouth buzz.
OPI: And I guess they vary according to geographic location and product?
JT: Yes, very much so. Indeed, the actual marketing mix varies by country, continent, culture and region. We want to empower our 3M subsidiaries to develop and execute marketing plans that deliver the most targeted impact for our customers while staying within our global brand promise and guidelines.
For example, Post-it brand is an associate sponsor in the NASCAR Nextel Cup Series, which generates exciting promotions based on the huge popularity of the sport among retail customers and consumers in the US. 3M Brazil meanwhile has established effective grassroots programmes for children that reinforce the reputation of 3M as a good corporate citizen.
And of course, we continue to build upon the highly successful breast cancer awareness campaign the Post-it brand launched in conjunction with the City of Hope cancer centre in 2004. The centrepiece of this campaign involved the creation of the world’s largest pink ribbon – made from 75,000 Post-it super sticky notes – on a billboard in Times Square in New York.
OPI: Please tell me about 3M’s global reach in the office supplies division, from a manufacturing as well as a reselling point of view.
JT: 3M as an entity has a very broad global presence, with subsidiary operations in more than 60 countries and strong relationships with major customers around the world. During the past few years, we have made significant inroads in China, Russia, the Middle East, India, Brazil and eastern Europe.
Establishing even better key account relationships with international retailers and office distributors extends 3M’s global reach while fuelling growth. The strength and quality of our key account relationships are best exemplified when some of our largest customers rely on 3M for assistance as they expand abroad. For example, when one of our biggest customers opened its first stores in Sao Paulo, Mexico City, Seoul and Shanghai, 3M was already there with products tailored to meet local requirements.
OPI: Scotch and Post-it products have been household names for many years and are used in virtually every office. 3M has also won various accolades in the recent past for its innovative efforts in product development and outstanding achievements as a company. How many of these achievements are a result of the Scotch and Post-it brands? Is there a direct correlation?
JT: In survey after survey of corporate executives worldwide, 3M ranks among the most innovative companies in the world. In April 2005, Boston Consulting Group released a new survey ranking 3M as the second most innovative company in the world, behind only Apple. We also ranked second in corporate reputation in the 2004 Harris Interactive Poll.
So the answer to your last question is ‘yes’. Post-it and Scotch are among 3M’s best-known and respected brands. It’s no surprise then that when customers, consumers and investors realise these brands are growing and innovating at an impressive rate, it reflects very positively on 3M as a whole. For this reason, we continue to invest heavily in these two core strategic brands.
OPI: What specifically are you doing in terms of new product innovation for these two brands?
JT: Both Scotch and Post-it brands have been driving the office category forward with exciting product innovations that are generating a buzz worldwide. During the past two years, we launched Post-it super sticky notes, providing consumers with the opportunity to stick their notes practically anywhere – at home, the office or on the go.
Now we are rolling out Post-it super sticky notes in different designs. This extensive collection of notes contains a variety of colours, expressive designs and fun shapes, allowing consumers to make a personal statement with each scribble. 3M is also marketing a line of kid-focused products to extend the Post-it and Scotch brands into new and younger audiences, building a new generation of loyal users in the process.
Furthermore, we are partnering with the US Postal Service on an application in which Post-it notes can be placed on the outside of mailing envelopes. This simple yet innovative application of the product is a highly effective attention-getting device that has proven to raise direct mail response rates.
Scotch brand has two noteworthy new product innovations in 2005: the Scotch contour dispenser and Scotch stretchy tape. The contour dispenser is the first major change to the classic snail dispenser in decades. Scotch stretchy tape meanwhile utilises innovative technology that enables the tape to stretch and conform to irregular objects of all shapes and sizes, making it ideal for hundreds of taping applications. The impressive end user benefits of these two new tapes are enabling 3M to breathe new energy into the entire category.
OPI: You mentioned some kid-focused products. Other than that, what markets are you targeting specifically with these products?
JT: We continue to see expanded use of our array of innovative products in a variety of vertical markets. We see great opportunity to increase penetration in markets such as healthcare, legal, finance and education.
OPI: What general trends do you see at the moment? What is important to customers?
JT: As always, quality, value, productivity and ease of use are very important considerations for our customers and end user consumers around the globe. During the past year or two, we’ve been observing a significant trend that has been voiced by our customers: the increasing emphasis on innovative design that combines award-winning form and function.
3M stays ahead of the curve by working with internationally renowned design firms in Europe and the US to develop new, boldly designed products. We are taking design one step further by identifying trends in the marketplace and then proactively anticipating consumer needs 18 to 24 months down the road. This new emphasis on design provides 3M with the means to innovate and reinvent faster than ever before.
OPI: What are your other strategic priorities? You are a great believer in category management – where does this factor in at present?
JT: We have four strategic priorities at the moment. First, to invest in 3M’s brands in the office industry – especially the Post-it and Scotch brands. Second, continuous innovation on the product development side is key. There are a host of innovative Post-it and Scotch brand products hitting shelves this year, and the new product pipeline needs to keep flowing into 2006 and beyond. Third, further extending 3M’s impressive global reach is a very high priority.
Fourth, and perhaps most importantly, is the need for effective category management and supply chain excellence. 3M’s approach to category management can be best summed up as consumer-driven product innovation coupled with customer-driven execution.
What this means is the ability for 3M to manufacture and market innovative new products such as Post-it specialty notes and the Scotch contour dispenser, and then find the optimal mix of products in each country to provide the maximum benefits to our customers and consumers.
OPI: You mention supply chain excellence. I believe this is not a new focus point. What progress has been made here and what are your plans?
JT: You’re right, supply chain excellence is a longstanding priority at 3M, and the office supplies division continues to build upon our proven track record in this area. In fact, our efforts in supply chain management have been recognised internationally, as evidenced by awards bestowed upon 3M by the world’s leading mass retailers and office dealers.
In fact, in the AMR Research published in November 2004, 3M is rated #14 – ahead of companies such as Coca Cola and Best Buy. Our plans for supply chain excellence reflect the need to continue forging an even stronger, more integrated link between manufacturing and distribution, thereby helping both 3M and its customers become more competitive and profitable.
OPI: You’ve been in your current position at 3M for about two years now. Has your role changed much during that time?
JT: Not substantially. As mentioned earlier, I have four strategic priorities. Sharpening the focus in these four areas will help 3M build upon the growth realised by the company’s consumer and office business, which achieved all-time high revenue and earnings results in 2004. Net sales were up 9.7 percent from 2003 while operating income increased 17.9 percent. All of us in the 3M office supplies business look forward to working closely with our customers to grow the office products industry to even greater heights.
OPI: And based on your current performance you certainly will.