'Demand Chain' rules at McCann

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McCann Worldgroup is adopting a companywide, media-neutral approach to stimulate consumer demand for marketers' products.

Underpinning the approach is "the Demand Chain," a concept analogous in many ways to the supply-chain theory, which advocates that companies link operations to deliver the right amount of product to meet but not exceed consumer demand.

According to the Demand Chain's creators, McCann's Eric Einhorn, exec VP-chief strategy officer, and Jonathan Cranin, exec VP-worldwide creative director, desire for products and services can be created with various tools. "What the supply chain did for cost-cutting the Demand Chain will do for revenue growth," Mr. Cranin said.

The Interpublic Group of Cos. agency network has built and fine-tuned its Demand Chain over the past three years. It incorporates some existing tools used by McCann WorldGroup entities (such as Universal McCann's Media in Mind) and includes new ones, such as Fusion 3.0, a computer program that determines in a media-neutral way how to best allocate a marketer's budget.

"It is a culturally correct and properly defensive strategy," said consultant Dick Roth, president, Roth Associates, New York. "When TV [efforts are] being viewed as less effective and more expensive to develop, a marketing partner needs to supply strategic thinking as well as execution of that thinking."

from cars to coffee

Becky Alseth, VP-brand marketing, Cendant's Avis and Budget, credits McCann's Brand Clout, a return-on-investment-measurement tool used in the Demand Chain, with helping to develop a separate strategy for each of the car-rental brands. Through analyzing the results of customer questionnaires, she learned the factors that influence car renters' choice of company as well as how her competitors go to market. "You want to find the space you can go, and we've done that," she said.

Nespresso, a subsidiary of longtime McCann client Nestle, used the Demand Chain to fine-tune the positioning of its high-end espresso products and build a market. The company's revenue comes mainly from ongoing sales of special coffee capsules, so customer satisfaction is crucial. "Year to year, we approach [the challenge] in different ways," said Gerhard Berssenbrugge, CEO, Nestle Nespresso. To reach consumers, Nespresso uses direct response, both Internet and mailing; call centers; and TV and print. "It is essential that the agency understands all facets of the brand. We don't look to the agency for just advertising; I want them to be good advisers," he said.

The Demand Chain approach tries to provide media-neutral solutions by categorizing marketers' goals into seven "universal marketing drivers"-such as brand awareness, activation, product experience or buzz-each of which can be achieved via any discipline, though one may be more effective than another. A marketer ranks each of those according to importance, then inputs those into Fusion 3.0.

To measure the Demand Chain's success, Messrs. Einhorn and Cranin are keeping close tabs on the number of clients currently using three or more world group companies' disciplines. Right now, 39 of McCann's top 50 clients do so. "There's huge acceptance already," Mr. Einhorn said. "But we want that to grow."

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