To Sell in Australia, Being Nimble Counts

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Because it showcased the brand as all-natural and made-in-Australia, the company was able to achieve its goal of appealing to younger consumers. Average customer age dropped from 35 to 30, and Jurlique's share of the premium skin care market in Australia rose to 11%. The company now shares the top spot with rival Clinique.

Create a smart and nimble organization

Listening to consumers makes a company smart. But the organization must be nimble enough to take advantage of those consumer insights.

As it responded to the unexpected tax hike, Diageo recognized that something it considered to be a strength—a consensus-driven culture—was a liability when it needed to make quick changes. There were too many people involved in too many decisions, at too many levels, too far removed from consumers. The company systematically stripped away organizational layers so that its front-line sales force could respond on the spot to data captured on changing consumer sentiment. It also put in place a system to quickly transmit relevant data to senior executives, who monitored a dashboard with key indicators and metrics. And the company implemented a program to clarify decision-making accountability. Diageo's new organizational muscle allows it to more quickly adjust prices and product offerings to remain attractive with consumers.

The company shares its research with its retail partners. For example, Diageo's insights into how consumers select brands in "cool rooms"—special areas in Australian bottle shops where alcoholic beverages are sold—has enabled retailers to refurbish this underutilized area of the store.

Coke, too, has been smart and nimble in shifting gears to address consumer insights, particularly during the economic downturn. As sales began to drop off in upscale restaurants, CCA shifted focus to selling more value offerings in the grocery channel, as well as installing more refrigerators to drive higher-margin single-bottle servings in the convenience and leisure channel, including mom-and-pop stores. The strategy paid off: Last year, despite softness in upscale restaurants, CCA's single-serving sales grew by 3.4%, and it now plans to invest $40 million in Australia in 2009 to continue growing share.

And leather goods maker Oroton is now better positioned to respond to uncertainty. The company vigilantly monitors such data as store traffic and how much consumers spend on each transaction. "We monitor everything that matters," says Sally MacDonald, Oroton's CEO. Just as important, the company can zero in on evolving trends and make adjustments, such as making more inexpensive items like key rings and fewer pricier handbags, or introducing knitwear and adjusting window messaging. In a similar story at Jurlique, "We have seen a decline in store traffic, so we have focused on improving conversion to ensure that the net result is positive growth," says Sam McKay, the company's managing director for Australia and Asia.

Whether or not the downturn hits Australia as hard as other regions, consumer products companies need to prepare. Those companies that have a low-cost position, listen to shoppers, and create nimble organizations that can act on customer insights will end up leading the pack.

Emma Gray and Jayne Hrdlicka are partners in Bain & Co.'s Sydney office and members of the firm's Consumer Products and Retail practices. Mike Booker, a partner based in Singapore, leads Bain & Co.'s Asia-Pacific Consumer Products and Retail practices.

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