research report

THE PREEMINENT ORGANIZATION FOR DIVERSITY THOUGHT LEADERS

 

Published By: Diversity Best Practices 2 Park Avenue, 10th Floor New York, NY 10016 DiversityBestPractices.com Copyright © 2013 by Diversity Best Practices. All rights reserved.  

Employee Resource Groups Prove Their Worth to the Bottom Line

June 2013

Increasingly, ERGs are contributing to a company’s bottom line. Companies as diverse

as General Mills, Novartis, and American Express have found ways to tap into their

ERGs to improve their marketing of products to specific demographics. At Walmart,

where Tony Rogers, senior vice president of brand marketing and advertising, once said,

“100 percent growth [in sales] will come from multicultural customers,” such

collaborations have become mandatory in all aspects of the business.1 The partnerships

have been a boon to the bottom line, increasing revenue and proving the worth of the

resource groups.

This paper delves into specific examples of companies teaming with ERGs in successful

marketing campaigns. It provides information on how the campaigns developed as well

as how the companies implemented them.

Luxottica Retail

Luxottica Retail is a major leader in the design, manufacture, and marketing of

prescription eyeglass frames and sunglasses, with its brands sold at LensCrafters,

Pearle Vision, and Sunglass Hut. In 2005, Luxottica instituted four ERGs, also called

culture teams, to leverage their skills and creativity and add value to the organization’s

strategic business direction. In a Diversity Executive magazine article, Keith Borders,

vice president of associate relations and diversity, explained, “The [goal] of culture

teams is to tap into the creativity, perspectives and experiences of employees to help

[the company] understand what customers want and need.”

Luxottica’s culture teams are involved in most aspects of the company’s marketing,

including product development, identifying markets, and creating appropriate messaging

that resonates with targeted consumer groups. One result of a product development

effort was the Asian culture team’s input on tailoring several eyeglass frame offerings

that took into account the specific facial features of Asian consumers. Other culture

teams play a key role in Luxottica’s marketing process. For instance, the Hispanic

culture team was instrumental in broadening the marketing efforts to Latinos for

LensCrafters and Sears Optical. After consultation with its Hispanic culture team,

Luxottica redesigned its consumer advertising by casting actors and models of different

races in television advertising and targeted print ads. The company also used input from

the Hispanic culture team to create consumer messaging and creative promotional

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efforts to appeal to the Latino market. While the company has not disclosed sales figures

from these efforts, Borden implied a successful outcome by saying, “Companies need to

think about how to get people in the organization to connect better and, from that, get

ideas that impact the bottom line.”2

General Mills (Betty Crocker)

For years, General Mills, which owns Betty Crocker, has trailed Jiffy when it came to

corn muffin sales. Hoping to be more competitive, the company discovered that Blacks,

who make up about 13 percent of the U. S population, buy 36 percent of the cornbread

mix. The company decided to focus its advertising on Blacks, even though they mostly

bought Jiffy. Before attempting to tap into this market, the company first turned inward,

seeking help from its ERG for Blacks, Black Champions. Some 20 members of the group

were put into a focus group so executives could learn why sales lagged. Execs

discovered that Blacks were very devoted to cornbread, but not to the highlighted words

on Betty Crocker’s packaging, “corn muffins.” They also learned that Blacks often put

numerous other ingredients into a cornmeal mix, such as sugar, buttermilk, peppers, or

kernels of corn. As a result, Betty Crocker instituted several changes:

• The packaging label was changed from “Golden Corn Muffin and Bread Mix” to

"Authentic Cornbread and Muffin Mix." The emphasis on cornbread from corn

muffins was a result of the Black Champions focus group sessions.

• Members of Black Champions noted that the image on the packaging made the

product look cold. To create a warmer and more appealing look, the design was

tweaked so steam now rises from the cornbread and lettering on the package

was given a softer shading.

• Company executives recruited African-American restaurateur B. Smith to use her

image on the packaging.

The bottom line: the company’s cornbread mix sales jumped 50 percent in the first year

of the new design and marketing effort.3

Frito-Lay and The Guacamole-Flavored Chips

Adelante, the Latino ERG at Frito-Lay, approached top executives with the idea of

guacamole-flavored chips. The execs were initially skeptical but moved forward with the

idea. The Latino employees provided feedback on the taste and packaging throughout

the development process. For instance, they told developers that the initial chips they

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used didn’t have the distinct lime flavor. Developers went back to the drawing board until

the chips passed muster.4 The chips, introduced in the Lay’s and Doritos brands, were

an incredible hit, generating more than $100 million in sales in the first year.5 The

success story spawned more success—Adelante helped develop Chile Limon flavored

potato chips and Gatorade Xtremo, which are both aimed at the Latino market.6

Buoyed by success, Frito-Lay then partnered with its Pan-Asian Network to create a

Cheetos-like snack to be marketed in India. The result, called Kurkure, which is Hindi for

“crunchy,” is a lentil-and-rice-based snack in flavors such as Green Chutney and Chilli

Chatka. The snack is now available in the U.S.7

Novartis

Over-the-counter medicines are popular in Russia because of the country’s burgeoning,

health-conscious middle class.8 When Novartis looked to increase sales of the

company’s cardiovascular products among Russians living in America, company

executives realized that they needed more than just a strong brand name. They

consulted with the organization’s Russian Culture Club, which brainstormed new ways of

approaching the demographic group. A direct-to-consumer TV advertisement was re-

shot in Russian and used actors who looked more like the target audience. The ad was

also placed on channels that the ERG members said Russians tend to watch most

frequently.9

American Express and the Gift Card

In conjunction with Hispanic Heritage Month, American Express launched ¡Felicidades!,

a gift card targeted to Latinos. Members of AHORA, the company’s Latino ERG, worked

with the company’s global diversity team and were instrumental in developing the card’s

name and design. AHORA also made sure that promotion of the card spoke to the

unique aspects of Latino culture, including holidays such as Three Kings Day, in

January.10

Avon

Avon’s Pride Network has sponsored LGBT events to promote company products. It has

also leveraged the use of product sampling and couponing at LGBT celebrations,

parades, and other events to profile and share Avon products with this influential

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consumer segment. The Pride Network leaders invite Avon representatives to these

events, which has boosted sales and brought in new customers.11

Ford

People with disabilities have the most buying power of any traditionally

underrepresented group. To appeal to that demographic, Ford Motor Company tapped

into its ERG group FEDA, Ford Employees Dealing with disAbilities. The group has

helped ensure Ford products enable people with disabilities to have functional vehicles

that suit their needs. For instance, Ford introduced a Mobility Motoring sales program

that reimburses customers for specialized adaptive equipment. In addition, the company

also has the SMART Taurus concept car, which allows drivers to operate the car by

talking to it, as well as the similarly modified Ford Focus and Ford Eclipse Conversion

van. FEDA also has supplied Ford with marketing research showing people with

disabilities are a vital market for company growth.12

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Endnotes

                                                                                                               1 Laurel Wentz, “Walmart's Tony Rogers: 100% of Growth Is Multicultural Plans to Double Its Ad Spending in Area,” Ad Age Hispanic, October 31, 2012, http://adage.com/article/hispanic-marketing/walmart-s-tony-rogers-100-growth-multicultural/238051/  2 Deanna Hartley, “Culture Teams Target Business Opportunities at Luxottica Retail,” Diversity Executive, September/October 2008, http://www.nxtbook.com/nxtbooks/mediatec/de_200809/index.php?startid=29  3 “Betty Crocker Adds B. Smith to Package For Cornbread Mix, and Sales Take Off,” Wall Street Journal online, November 14, 2006, http://online.wsj.com/article/SB116346781301522241.html  4 Deanna Hartley, “Like Minds Think Great,” Diversity Executive, September/October 2008 http://www.nxtbook.com/nxtbooks/mediatec/de_200809/index.php?startid=29  5 “Growth and Trust,” Pepsico Annual Report, Pepisco website (last accessed May 30, 2012 http://www.pepsico.com/Download/2003-Annual-English.pdf  6 Carol Hymowitz, “The New Diversity,” Wall Street Journal online, November 14, 2005, online.wsj.com/article/SB113164452069493749.html  7 “Frito-Lay to launch Kurkure in US,” FnBnews.com, November 4, 2006 http://www.fnbnews.com/article/detarchive.asp?articleid=19261&sectionid=31  8 “Meeting healthcare needs in emerging markets,” Novartis website, February 4, 2009, http://www.novartis.com/newsroom/feature-stories/2009/02/healthcare-emerging-markets.shtml  9 “The 4 Cs of ERGs,” Diversity Executive, (last accessed May 29, 2013) http://diversity-executive.com/articles/view/the-4-c-s-of-ergs/4  10“AmEx celebrates Hispanic culture with holiday gift card,” The Green Sheet, November 9, 2009, http://www.greensheet.com/newswire.php?newswire_id=16572  11 Andrés Tapia and Robert Rodriguez, “Next Generation Employee Resource Groups: Bold, Business-Centric and Still a Blast,” Diversity Best Practices, August 20, 2012, http://www.diversitybestpractices.com/publications/next-generation-employee-resource-groups-bold-business-centric-and-still-blast  12 “Ford Employees Dealing with Disabilities Organize Support Group,” Ford.com website, (last accessed May 29, 2013) http://media.ford.com/article_display.cfm?article_id=13354