Pernod Ricard – procurement gets to grips with global brand collateral

At the ProcureCon Marketing conference last week, Nicolas Meauzé of Pernod Ricard talked about his firm’s approach to managing marketing “collateral” material globally. This was a great example of how a thoughtful approach can really make a difference in a spend category that some organisations might put in the “too difficult” bucket when it comes to procurement involvement and contribution.

Marketing collateral is the branded “stuff” that most large firms purchase to support their brands. For a beverages company like Pernod Ricard, with major brands such as Chivas Regal Whisky, Absolut Vodka, Jameson Irish Whiskey, Beefeater Gin, Martell, Jacobs Creek wine, plus many local brands, this includes glassware, items used in pubs and bars (e.g. umbrellas), promotional give-aways, t-shirts and so on.

Historically, many firms including Pernod Ricard found it hard to control this spend, with consequential issues not just in terms of value but also branding issues. Meauzé explained that he initially found some countries using items that did not even stick to the core brand colours, let alone the right designs, lettering and so on.  Then there was a simple loss of procurement leverage – 9 different designs of glasses for the same product, for instance.

But changing this was a particular challenge as the firm operates in a matrix and very devolved manner, with powerful local “market companies” in 75 countries as well as global product managers.

So he used technology to drive that change management, leading to improved procurement and better compliance.  An eMarket platform – using the ProProcure software (that we first described here)was already being used by the Chivas brand. This provided a catalogue ordering process for approved suppliers of branded items and gave users around the world the chance to access the platform, look at and order items directly via the  platform. Items may come from warehoused stock items, or direct from suppliers.

Volume can be aggregated so economies of scale can be achieved – as well as the standard catalogue availability, collaborative “buying windows” or events are held for major items when a user can find out who else around the organisation is interested in buying that item.

And the devolved users can contribute themselves – if they come up with a new item or supplier, it can be approved and loaded into the platform for wider use. So it doesn’t just feel like the centre telling the businesses what to do – it is genuinely a collaborative tool, with local language capability, where anyone in the network can contribute to the process. Both the cost savings and the improvement in compliance have been impressive, and internal efficiency gains have also been achieved.

So at ProcureCon, I got the chance to meet Meauzé and ask him a few questions after his session. He’s an engineer by training, with a background in manufacturing, including helicopter engines and  automotive. That has clearly given him a logical, structured approach – but combined with excellent influencing skills, as he showed in his presentation (despite it being in his second language of course).

How and why did you choose ProProcure for the platform?

“We had done a pilot with that product and it looked good, but we then did a market investigation to see what else was available. That led us back to ProProcure as the right solution for us – but we asked them to make some changes to meet our needs better”.

Do you see it mainly as a catalogue process?

“That’s part of it, but users also place orders through the platform – it links into our ERP systems to capture those orders for payment and accounting purposes. And our users can also rate suppliers, so we build up a picture of their performance”.

How have your marketing colleagues accepted the process?

“Their opinion has changed – there is always some hesitation at first but once they have used the system, they are positive. And the fact it is optional for users has helped – we are getting good usage without having to mandate, which is difficult anyway in our business”.

How would you sum up the benefits of the initiative?

“It leverages work done at local level, allows synergies, collaboration and economies of scale across the different parts of the companies. And it also supports the brand values and corporate social responsibility”.

That last is an interesting point – it’s not an element of marketing services procurement I’ve considered much, but in part 2 we’ll hear more about how Pernod-Ricard and Meauzé are addressing that issue.

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