April 18, 2020

Fadi Karam, former General Manager & VP of Marketing at Nestlé Shared His Thoughts on "Applying the Science of Marketing to Build Brands."

By Michael Diamond and Julie DeVito

“You actively build what and how your consumers feel when they use your products and services ... because you are helping them in their decision making, and making their lives easier.”

Renowned consumer product executive Fadi Karam is no stranger to marketing during times of crisis - from wars to collapsing businesses. When he presented to the NYUSPS Integrated Marketing and Communications community, via Zoom, on April 17, 2020 in the midst of the Covid-19 pandemic, he shared the universal truths that can be applied even in these situations, where the world is rapidly changing. For Karam, that means returning to the fundamentals of marketing.

Karam opened his presentation to students, faculty, and friends with a reminder that the fundamentals of marketing are tied to the fundamentals of decision making.  In essence, Karam was arguing that with better insights into how we make decisions, we can improve not only how we approach marketing but also how we conduct our everyday decision making.  Given how rapidly the world is changing, and how unreliable the traditional models appear, this re-examination of the fundamentals is especially valuable today.

Karam shared three fascinating case studies to demonstrate that the role of marketing is much broader than simply getting people to try and buy intrinsically valuable products, but rather relies on the ability of branding - in and of itself - to shape how a consumer experiences and values the product or services. Unbranded beers in taste tests showed almost no distinction from each other in terms of taste and appeal,  but once a brand was introduced, consumers were drawn to choose their ‘favorite’ and dramatically raise their estimations of its positive taste relative to other choices.

Karam’s conclusion that “the idea that the intrinsic value of products and services leads to their success is simply false,” was a key fulcrum of the work he shared with the community.   From a professional perspective, Karam counseled: "the more counter-intuitive things are, the less likely people are to apply them, and by you trying to adopt these learnings you can really have an edge on everyone else."

With an enlightening delve into consumer psychology, Karam shared some of the ways marketers leverage behavioral insights, recognizing that many of us are using ‘judgemental heuristics’ to make choices about what we purchase. Branding helps aid consumers in the ‘categorization’ of what they perceive around them, helping them navigate swiftly to what they need and want among overwhelming choice.  While there is clearly a ‘dark’ side, and marketers must be aware of the ethics behind their actions, ultimately marketers, Karam believes, are helping consumers discover the things that make their lives better.

While many of these counter-intuitive insights are part of the mainstream understanding among academics, many businesses have been slow to adopt them.  Karam believes that marketing is still “stuck between being an art and a science, and companies tend to approach it as an art,” ignoring these well-researched findings.

Asked about whether some of the strong reactions to the Covid Crisis from brands in how they go to market, for example cutting back spending on marketing or shifts from “top of the funnel” advertising to performance marketing, etc were signs of fundamental shifts, Karam reminded the group that “the panic and novelty of any crisis makes it feel much worse [but the fundamental drives remain] … hope, wanting to go on with our lives, wanting to build better businesses, wanting to build our families ..”  

The broad discussion with this insightful and well-informed marketing leader ended on a positive note -- a sense that the silver lining in our recent crises has been the witness of individuals helping each other, of a deeper sense of empathy in society.  Karam believes that if this is experienced at scale, this sense of empathy will be felt long after the crisis and have a deep impact on how we frame the meaning and value of business and of our lives.

About Fadi Karam: Fadi is a consumer product professional specializing in turnarounds and the fast scaling of high-potential startups. He previously held several roles in the consumer goods industry including overseeing the Nestle confectionary business across Asia and Africa and globally leading the KitKat brand. Fadi is also a mentor at StartX, Stanford University’s startup accelerator, and an advisory board member at the CMO Council.


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