GET TO KNOW...
President and CEO, Reynolds American Inc.
Ricardo Oberlander's professional life spans 30 years, most of them dedicated to B2C and B2B marketing through local, regional and global roles. He started his career in 1984 at Xerox Brazil in a market research role. In 1989, he joined British American Tobacco (BAT) in Brazil (Souza Cruz), and in 1991 he moved to the U.K. to lead projects in product research and trade research. He returned to Brazil in 1994, where he held various roles in marketing (intelligence, brand management, sales and trade marketing) in Souza Cruz. In 2000, he joined Telemar (renamed Oi), the largest telecom group in the country at the time to head the small and medium enterprise business unit, along with maintaining responsibility for broadband and long-distance services. In 2002, he joined BAT (Latin America region) to lead a two-year project that contributes to fully revamping marketing planning and targeting in the group. He then moved as Marketing Director to BAT Malaysia, where he held full functional accountabilities (brands, trade marketing and marketing intelligence) for the company for more than three years. At the end of this assignment, he worked on a project to redefine the marketing structure and way of working for the whole BAT Asia-Pacific region. In 2007, he took over the role of Regional Head of Marketing for BAT Latin America and soon expanded to the Americas and Canada. In 2010, he moved to France as President and General Manager. In 2012, he moved to London as Global Consumer Director, accountable for the established and iconic brands Lucky Strike, Pall Mall, Rothmans and Viceroy. In 2013, he joined the BAT (LSE: BATS) management board as Regional Director for the Americas, reporting to the group’s CEO. In this role, he had full P&L accountability for £3 billion of net turnover/revenues and £1.2 billion in profits/net income, covering all countries in the Americas, excluding the U.S. In addition, he held joint responsibility for global strategy, results, governance and business management for BAT Group. On January 1, 2018, Oberlander took over as President and CEO at Reynolds American Inc.
He served as Chairman of the Board of Souza Cruz (BM&F BOVESPA: CRUZ3; market capitalization: £10 billion) from 2013 to 2016 and served on the board of directors for Reynolds American (NYSE: RAI; market capitalization: US$90 billion) from 2014 to 2017.
Born in Brazil, he has been married to Maria Fernanda for 27 years. They have a daughter and a son. He is a statistician (ENCE/FIBGE) and holds an MBA degree (IBMEC).
Please share some information about your background and how it has prepared you for your current role with Reynolds American.
I have been with the group for 27 years altogether, but my experience has occurred in two separate phases. I started my career in Brazil with Xerox doing marketing research and planning, and I spent five years there. Then I moved on to British American Tobacco (BAT) in Brazil, conducting market research there as well. In 1991, I moved to the U.K. to work on product research and trade research before moving back to Brazil, where I essentially worked in every single area of marketing at BAT—marketing intelligence, brand marketing, trade marketing, etc. I was directly involved in many projects around the globe in the U.K., and in Brazil, I was mostly involved in marketing projects across Latin America. I then left the group and joined the telecom industry as a business director for small and medium enterprises at the largest telecom company back then in Brazil, Telemar (now Oi). This was a fascinating experience because it was totally different for me, and I had to rely on my background—most specifically marketing—in order to completely revamp the corporate segments and introduce services like broadband for the first time in our incumbent area in Brazil, which was then comprised of 16 different states.
After two years there, I was invited to return to BAT on the international side, where I ran a project focused on reviewing the marketing approach in light of new regulations on tobacco in general. While we had close involvement with the central marketing team, this project was based in Latin America because we were losing TV and communications in many markets. After two years there, I became the Marketing Director in Malaysia in early 2004, where I stayed as marketing director until mid-2007 before coming back to the Americas as Regional Marketing Director for the Americas. I was in that role for nearly three years before spending two years as General Manager in France. Then I moved to London as Global Consumer Director and was accountable for aspirational premium value for money segments, primarily looking after the Lucky Strike, Pall Mall, Rothmans and Viceroy brands on a global scale. As of January 1, 2018, I was appointed to the board of BAT as the Americas Director and now serve as President and CEO for Reynolds American.
How has your cross-cultural background shaped your strategic views and recommendations on globalization?
Having the proper knowledge of the consumer and understanding the challenges of executing various initiatives in different countries requires you to have culturally sensitive strategies in place. If you apply a blanket strategy across different markets and neglect simple but important facts about a particular country and the way consumers think, you will not effectively engage your consumers and may even risk alienating them.
For instance, in France, you cannot do anything in August because it is a no-business month. It's as simple as that because people really enjoy their summer holiday. In countries like Malaysia, three major ethnic groups and three religions are represented, and you have to be tuned into different perceptions of brands and constraints around adopting some brands. Even colors can make an impact on consumers. You have to think about those things as it relates to the way you implement or deploy brands and campaigns.
We are particularly attuned to these kinds of issues because when BAT started its operation, although we were called British American Tobacco, we didn't have a business in Britain or America. The company started as an overseas operation from day one and made a very aggressive expansion at the beginning of the last century to set up operations in countries all over the world. Back then, we didn't have global brands. We didn't have central marketing policies and guidelines. The experts had to work with our local teams to develop the best proposition they had, and some international brands came along throughout the years, which led to the need for us to have very good consumer insights. It also brought about the drive to develop local talent, and we are very proud to have a strong program to recruit local talent, develop local talent and see them promoted, but we also want them to move around the globe in order to enrich the collective knowledge we have in different countries. We believe we develop better leaders this way.
When you think about all of that that in terms of how we deploy marketing, it's a two-way avenue for us because we have our global brands and our key marketing principles, but we seek insights from the different markets to enrich these programs, and we have tailor-made adjustments for markets to actually make the most effective use of our resources and our brands.
When you look at brand performance, what measures and metrics are key to consider apart from revenue?
Market share is very important, and share in strategic segments is also very important because you have to prioritize value when it comes to developing your brands to understand which segments you should be focusing on from a profit perspective. Brands should be developed in a way that creates space for them to innovate and think about what interests emerging segments. We also need to think about how consumers are assessing and evaluating our brands versus our competitors, which involves a collection of few metrics that are drilled down and view in greater detail by the marketing team. We frequently interact with the board to share an understanding on how our brands are progressing overall and in different countries because looking at the overall average can be very deceiving.
When you look at marketing transparency and visibility, what are your company leadership and board interested in learning more about in terms of marketing spend, impact and ROI?
We merge brand expenditure with the distribution of spend, and we call this trade marketing expenditure. Overall, there are some categories where we are working to better understand how we are assessing our brands. One of these is sustainability of results. Having spikes in performance is not necessarily helpful if they don't have a reason why or if they do not support an argument for continued success, so this is something that we understand is very important. We look at this not in terms of just one brand, but rather as the collection of brands represented in a particular market because we have five global brands, but they are not necessarily all present in one market. There are markets where we have two or three brands present, but the most important consideration is how the portfolio of brands can effectively and efficiently compete in a particular market.
Something that is less discussed is the ability to execute our plans. We pay a great deal of attention to this because ideas don't materialize out of thin air. You need to have robust plans, understanding the route to consumers and markets. Having proper distribution structures, communication structures and engagement structures is particularly important for us, and all of this needs to have a high degree of governance embedded in the way we view our marketing principles. We also work to maintain a high sense of responsibility and ethics in the way we operate when it comes to advertising, tracking, using data analytics, etc. This is fundamental for us not only as a tobacco company, but because we have a duty to society and consumers in general.