Touched by a Fairy
In 1931, V.J. Salomone was the agent for Fairy soap, made by a small British company called Thomas Hedley and Sons.Even then, Procter and Gamble was on a roll. The company founded in 1837 as a candle and soap maker sensed that it would become one of...
In 1931, V.J. Salomone was the agent for Fairy soap, made by a small British company called Thomas Hedley and Sons.
Even then, Procter and Gamble was on a roll. The company founded in 1837 as a candle and soap maker sensed that it would become one of the largest companies in the world. It was growing through acquisitions and when it bought up the Fairy brand, it kept its Maltese agent.
Over time, it bought more and more companies like Thomas Hedley and in the past 75 years, put the new brands into the Salomone hands, sometimes taking them away from the previous agent - as happened recently following the acquisition of Gillette and in the past with Pantene and Vicks, to name but three brands.
It got to the stage where V.J. Salomone set up a company dedicated wholly to the distribution and sales of P&G products - V.J. Salomone Marketing Ltd, headed by Victor Galea.
"You cannot take it for granted that we will be given the distribution for new brands. I am convinced that we did not get Gillette last January just because we have such a long-standing relationship. We are assessed constantly on whether we deliver with regards to objectives like turnover and so on. We got it because we have such strong operational capabilities.
"Some of the other parts of the Salomone group handle other products but it provides clarity in the market to separate P&G, especially in the case of possibly competing lines that we represent.
"For example, P&G bought Gillette which means we compete with Nivea in male grooming. So it is important to keep things separate," Mr Galea said.
He is part of the third Salomone generation - and sees the creation of new companies as a very important part of succession planning.
"We were lucky enough to foresee any potential problems and addressed them years ago. We restructured the organisation in a way that ensured that each family member has their own company or division to look after, under the holding company, V.J. Salomone Ltd," he explained. They all sit on the board as directors, with Albert Grech as non-executive chairman, one of various ways in which the company ensures good corporate governance.
"When you reach the third generation of a family company, the grandparents and parents are often still around so there is a common thread. But by the time you get to the fourth generation, you start to see the age gaps widen. We have second cousins with decades between them. It gets very complicated but we have very mature discussions at board level and it helps having people from the outside on the board."
V.J. Salomone Marketing employs around 40 of the 150 people employed by the group - it had to take on staff to cope with Gillette (and the Duracell brand that came with it).
"Luckily we have a lot of room for expansion, including our air space. However, we need to address the question of efficiencies with regards to loading bays and so on. Right now we operate from four different warehouses and even though they are all next to each other, we are assessing whether we should move our logistics centre.
"We looked at demolishing and rebuilding but the cost was exorbitant, particularly since we operate in a consumer goods sector where margins are very tight so you need to be very lean and efficient."
The sale of consumer goods is far removed from the mom-and-pop stores of yore. Supermarkets are now designed and run scientifically - and some now charge for shelf space. With so many market-leading brands in its portfolio, Mr Galea feels that this is not the best way to go.
"I honestly feel that we can support supermarkets in different ways. If you think about it, it does not pay a supermarket to negotiate with a brand that might not have the justified turnaround on shelves when they could give that shelf to a brand leader. They should allocate space - preferably at eye-level - according to market share because this makes it easier for the consumer to find that product on the shelf. It saves supermarkets from having to re-stock a shelf all the time because there is not enough space allocated to a fast-moving product," he said.
Mr Galea believes that he has learned more from P&G about marketing than any university could ever teach. Being part of a company that represents 300 brands - of which 22 generate more than $1 billion in annual sales - is an education in itself.
Mr Galea is almost as passionate about P&G and what it represents as he is about Milan FC, which is no small thing.
"They are ranked No.1 in the world as a household and personal care company. And it is all done with one principle: To provide branded products and services of superior quality and value that improve the lives of the world's consumers. Everything has to be top notch," he said.
Even the terminology counts. It's not diapers but baby care. If you talk about Pantene and Herbal Essences, you don't talk about shampoo but hair care. Fairy is classified as dish care, not detergents. The list is endless...
"Everything revolves around caring. This is important because P&G touches the lives of consumers three billion times a day in more than 160 countries."
The key, he explained, is research and development. In 2004/05, P&G invested $1.8 billion in R&D, putting it among the top 20 R&D investors - including pharmaceutical companies!
"The money they plough into innovation is incredible. Take the recently re-launched Pantene hair care brand. It was already the market leader and yet they felt the need to get even closer to the consumer and research drove the cosmetic side of the brand. It resulted in an upgrade of the formula as well as new packaging to drive it as a beauty product."
Is this just branding gone mad? Mr Galea smiled and shook his head.
"To be honest I think P&G's adverts show what the brand delivers. If this were not the case, it would affect their sales. The group works on the principle of the first and second moments of truth. The first is when a client stands in the store and decides whether to buy a P&G product or a competing one. At that point, the consumer assesses the performance, the message, the quality, the value of the brand. When we strike the right balance between the brand promise and the price, that is the first moment of truth.
"That is half the battle. The second moment of truth is when the consumer uses the product. If they get what they expect when the product is put to the test, then we have succeeded. You can never take the consumer for a ride because the consumer is king."
Even then, Procter and Gamble was on a roll. The company founded in 1837 as a candle and soap maker sensed that it would become one of the largest companies in the world. It was growing through acquisitions and when it bought up the Fairy brand, it kept its Maltese agent.
Over time, it bought more and more companies like Thomas Hedley and in the past 75 years, put the new brands into the Salomone hands, sometimes taking them away from the previous agent - as happened recently following the acquisition of Gillette and in the past with Pantene and Vicks, to name but three brands.
It got to the stage where V.J. Salomone set up a company dedicated wholly to the distribution and sales of P&G products - V.J. Salomone Marketing Ltd, headed by Victor Galea.
"You cannot take it for granted that we will be given the distribution for new brands. I am convinced that we did not get Gillette last January just because we have such a long-standing relationship. We are assessed constantly on whether we deliver with regards to objectives like turnover and so on. We got it because we have such strong operational capabilities.
"Some of the other parts of the Salomone group handle other products but it provides clarity in the market to separate P&G, especially in the case of possibly competing lines that we represent.
"For example, P&G bought Gillette which means we compete with Nivea in male grooming. So it is important to keep things separate," Mr Galea said.
He is part of the third Salomone generation - and sees the creation of new companies as a very important part of succession planning.
"We were lucky enough to foresee any potential problems and addressed them years ago. We restructured the organisation in a way that ensured that each family member has their own company or division to look after, under the holding company, V.J. Salomone Ltd," he explained. They all sit on the board as directors, with Albert Grech as non-executive chairman, one of various ways in which the company ensures good corporate governance.
"When you reach the third generation of a family company, the grandparents and parents are often still around so there is a common thread. But by the time you get to the fourth generation, you start to see the age gaps widen. We have second cousins with decades between them. It gets very complicated but we have very mature discussions at board level and it helps having people from the outside on the board."
V.J. Salomone Marketing employs around 40 of the 150 people employed by the group - it had to take on staff to cope with Gillette (and the Duracell brand that came with it).
"Luckily we have a lot of room for expansion, including our air space. However, we need to address the question of efficiencies with regards to loading bays and so on. Right now we operate from four different warehouses and even though they are all next to each other, we are assessing whether we should move our logistics centre.
"We looked at demolishing and rebuilding but the cost was exorbitant, particularly since we operate in a consumer goods sector where margins are very tight so you need to be very lean and efficient."
The sale of consumer goods is far removed from the mom-and-pop stores of yore. Supermarkets are now designed and run scientifically - and some now charge for shelf space. With so many market-leading brands in its portfolio, Mr Galea feels that this is not the best way to go.
"I honestly feel that we can support supermarkets in different ways. If you think about it, it does not pay a supermarket to negotiate with a brand that might not have the justified turnaround on shelves when they could give that shelf to a brand leader. They should allocate space - preferably at eye-level - according to market share because this makes it easier for the consumer to find that product on the shelf. It saves supermarkets from having to re-stock a shelf all the time because there is not enough space allocated to a fast-moving product," he said.
Mr Galea believes that he has learned more from P&G about marketing than any university could ever teach. Being part of a company that represents 300 brands - of which 22 generate more than $1 billion in annual sales - is an education in itself.
Mr Galea is almost as passionate about P&G and what it represents as he is about Milan FC, which is no small thing.
"They are ranked No.1 in the world as a household and personal care company. And it is all done with one principle: To provide branded products and services of superior quality and value that improve the lives of the world's consumers. Everything has to be top notch," he said.
Even the terminology counts. It's not diapers but baby care. If you talk about Pantene and Herbal Essences, you don't talk about shampoo but hair care. Fairy is classified as dish care, not detergents. The list is endless...
"Everything revolves around caring. This is important because P&G touches the lives of consumers three billion times a day in more than 160 countries."
The key, he explained, is research and development. In 2004/05, P&G invested $1.8 billion in R&D, putting it among the top 20 R&D investors - including pharmaceutical companies!
"The money they plough into innovation is incredible. Take the recently re-launched Pantene hair care brand. It was already the market leader and yet they felt the need to get even closer to the consumer and research drove the cosmetic side of the brand. It resulted in an upgrade of the formula as well as new packaging to drive it as a beauty product."
Is this just branding gone mad? Mr Galea smiled and shook his head.
"To be honest I think P&G's adverts show what the brand delivers. If this were not the case, it would affect their sales. The group works on the principle of the first and second moments of truth. The first is when a client stands in the store and decides whether to buy a P&G product or a competing one. At that point, the consumer assesses the performance, the message, the quality, the value of the brand. When we strike the right balance between the brand promise and the price, that is the first moment of truth.
"That is half the battle. The second moment of truth is when the consumer uses the product. If they get what they expect when the product is put to the test, then we have succeeded. You can never take the consumer for a ride because the consumer is king."