Who owns Christmas?
The Risk of Unchecked Long-Held Beliefs
This story came from something other than a typical brief. Instead, it originated from an annoyance with a frustratingly repetitive brief. Every September, Nestlé requested a big promo campaign for Carlos V Chocolate, Mexico’s most traditional, affordable, and best-selling chocolate brand.
The problem with forming an effective brief during this time? September is the worst period to sell chocolate in Mexico, second only to summertime.
An approximate idea of chocolate consumption in Mexico.
Nestlé tried hard to fight against this trend — it slashed Carlos V’s price and advertised promotions on mainstream media to attract more consumers. Although these actions negatively affected the product’s tight margins, Nestlé remained hopeful that sales would increase enough to meet its yearly goal.
Unfortunately, the results fell short. Yet again. In our yearly briefing sessions, which started with the less-than-stellar results from the previous year, we were reminded: “This time, we are really expecting something disruptive to make the promo a success!”
It seemed like a doomed, circular task. The entire team knew that no matter how brilliant our work was, we’d fall prey to big ambition and little money.
We don’t ask those questions!
Surprisingly, Carlos V never offered similar promotions during Christmas, a much more promising period. I asked my client why; why did Nestlé commit so much money to sell their product at a discounted rate during one of the least favorable periods of the year while disregarding a much more promising period?
Well, they explained: They cannot invest on Christmas because Ferrero Rocher “owns it.”
I discovered later that this phrase was a mantra consistently repeated by members of Carlos V’s team as though it were a given, an immutable aspect of reality.
Of course, there were valid reasons behind this thinking. For example, Ferrero Rocher invested heavily during Christmas by displaying extravagant brand-related holiday decorations and advertising special-edition products.
A typical Christmas display of Ferrero Rocher, available in many supermarkets
Still, I was irked by the idea of Ferrero “owning” Christmas. Words are tricky — they can lead to fallacious beliefs and questionable decisions. Consequently, claiming that one person or entity “owned” Christmas prevented Carlos V from investing during the holiday season, a crucial time for chocolate sales.
Looking at the actual data
Nestlé wanted the agency to become more knowledgeable about the business and was pursuing ways of achieving that.
When I began to delve into the Christmas issue, we were invited to all of Nestlé’s regular meetings with its top data providers. This provider analyzed detailed data on sales performance versus their competitors.
This came in handy; I asked them if they could hand me a side-by-side comparison of the yearly sales for Carlos V and Ferrero Rocher, broken down by the main sales channels.
The data told a different story about chocolates and Christmas.
Mexico’s three main retail channels are supermarkets, convenience stores, and changarros. A “changarro” is a small, humble store with everyday goods sold at accessible prices. These quaint stores also happen to be the veins of Mexican retail.
A typical “Changarro” or “Tienda de Abarrotes” in Mexico
Carlos V makes most of its sales from changarros and convenience stores, which makes sense given its parallel affordable price and presentation. On the other hand, Ferrero Rocher is marketed as a more premium chocolate, so it is mainly sold at supermarkets.
Overall, Carlos V sells substantially more units than Ferrero. However, given the resolute claim that the latter “owns” Christmas, you’d expect this sales ratio to flip during the holidays.
Yet there is no significant surge in Ferrero sales over Carlos V. Ferrero sales increase notably during Christmas, but so do Carlos V sales! Unsurprisingly, the entire chocolate market benefits greatly during Christmastime.
Most of Ferrero’s sales come from supermarkets, where their representation is stronger, and Carlos V’s is weaker. But even in these more upscale establishments, this premier chocolate doesn’t sell as much as Carlos V.
Ferrero’s flashy, expensive sales decoration and special edition packaging concerned Nestlé’s team. Yet, it fits nicely in supermarkets, where people were prepared to buy their Christmas turkey amongst other pricey indulgencies. This was not the case in convenience stores and changarros, where these flashy displays don’t belong, and the average ticket is incompatible with expensive celebratory chocolates.
But a humbler atmosphere did not deter people from visiting these stores.
They visited.
And they bought Carlos V at high rates.
Conversely, marketing and agency professionals, who usually fall under the middle or upper middle class, tend to make most personal purchases at supermarkets, where they are exposed to Ferrero’s communications. This fact significantly affected them over-estimating Ferrero’s footprint in Mexican Christmas. They were only exposed to the supermarket atmosphere and dominating Ferrero displays without looking at the numbers.
Change of beliefs, change of course
I presented my analysis to Carlos V’s team, and they were amazed. Ferrero’s “ownership” of Christmas was not backed by sales figures. If any chocolate brand was to “own” Christmas, no one was in a better position to do so than Carlos V.
Richard P. Rumelt defines strategy as “force applied to the most promising opportunity.” My recommendation to Carlos V was straightforward — forget about creating artificial demand in September and instead push their products according to the natural demand in December, which has been overlooked until now. I could almost taste how powerful a Carlos V Christmas campaign would be.
This conversation was one of those satisfying “a-ha” moments with the client — even more so because they saw the results of sharing data with the agency. Slowly but steadily, they began to produce Christmas material for Carlos V, dedicating money and resources to Christmastime. It was better than pitching a campaign. It was about changing a long-held belief and setting a new policy.
The agency team was excited by the perspective of a refreshing creative brief — but it saddened me that this was the end of my participation on the account, as I was on my way to Japan by that time.
Two can play this game. Nestlé started experimenting with Christmas presentations for Carlos V on their way to pivot the strategy towards the end of the year.
*Data has been modified from original sources and is only for illustrative purposes.
Impact
Motivated Nestlé Mexico to review its strategy and move investment from a less promising period of the year to a more promising one.
Debunked a long-held belief about a key competitor that led to an unsuccessful, circular path.
Helped increase the agency’s positive evaluation by helping it understand the client’s business.