Hall of Fame Profile: Steve McGowan

In recognition of the shopper marketing success he has guided at Mondelēz International, as well as for the ongoing commitment he has made to helping advance industry knowledge through thought leadership at various public events, Steve McGowan has been selected as a 2020 inductee into the Path to Purchase Institute Hall of Fame.A 17-year veteran of Mondelēz and its predecessor companies (Kraft Foods and Cadbury), McGowan is responsible for leading the consumer packaged goods leader’s shopper omni-commerce marketing function in the U.S. He also guides strategic partnerships with manufacturers, vendors and other entities across the company’s portfolio, and plays an instrumental role in the development of strategies, plans and post-analytics for both shopper and strategic partnerships solutions.Under his guidance, Mondelēz has won 12 Shopper Marketing Effie Awards in the last four years, showcasing the exemplary work that he and his team are doing to drive best-in-class shopper engagement.In January, Bill Schober and Peter Breen interviewed McGowan at Mondelēz’s offices in East Hanover, New Jersey.Tell us about your background.MCGOWAN: I grew up on Long Island. I was one of five kids, three boys and two girls. My dad was a lawyer with his own civil practice and my mom was a homemaker. In high school, I mowed lawns and worked at a car dealership, where I washed the cars that came in for service. It taught me the important lesson of doing the extra things to make the customer feel special to ensure the repeat visit.So then off to college presumably?MCGOWAN: I picked Carnegie Mellon University for its business and engineering schools. Each was ranked in the top 10 at the time. It was an amazing academic school that didn’t have a great athletic department. They built a new football stadium to attract more attendance to the games. To entice students, the school offered free floppy disks to any who attended. Unfortunately, this was our claim to fame that got written about by Sports Illustrated.You went in thinking engineering, majored in managerial economics and industrial management, but in your junior year, something changed. What happened?MCGOWAN: I took a new products class and immediately knew it was what I wanted to do. It had analytics, but there was also insight, strategy, vision and creativity. I decided I had to figure out a way to pursue my career passion. I knew that to get into brand management I would also need a master’s degree. Carnegie Mellon is a very technically driven school where students work primarily on individual projects, but Wake Forest University, where I earned my MBA, was the opposite. The education was focused around group projects and collaboration. It was a great dichotomy of education philosophy.You earned an MBA and joined Applied Information for Marketing (AIM).MCGOWAN: The executive team all worked at IRI or Nielsen previously. The company built and sold a piece of software to CPGs that basically lined up shipment data versus consumption data, week by week, brand by brand. It was an impressive piece of software for 1993 and our clients were companies like Heinz, Kraft, Unilever and Church & Dwight.I, of course, had no prior experience in this field. But with the training of my manager, I really learned how to interpret consumption data and programming results. I could see how certain merchandising only drove forward buying of product, while others truly drove incremental consumption. It was a great foundation of business analytics for my future roles.From AIM you went to Weight Watchers. You weren’t weighing people, were you?MCGOWAN: Ha. Not exactly. Heinz had bought the brand from Kraft a year earlier, and for various reasons, it was headquartered in Hamden, Connecticut. That’s where I signed on as an assistant brand manager. Weight Watchers was a great business, and believe it or not, Heinz owned both pieces of it: the packaged goods (my end) and what they call “The Classrooms.” The consumer products were tailored to meet the needs of the brand’s members as well as its consumers. The two unique sides of the business model worked well together. I was able to leverage the business analytics skills that I picked up at AIM, but the other aspects of brand management were new to me. Therefore, strategic brand equity exposure and understanding were my biggest takeaways. Although I will add this: I learned a little bit about big corporate politics there as well. As you recall, my prior job was at a 35-person startup. So, big corporate politics were new to me and I learned that it can be a rough sport. But most importantly, I learned the most valuable lessons of my career as well: the importance of loyalty, collaboration, trust and building strong relationships. I strive to work and lead with these in mind each and every day.Eventually, Heinz moved Weight Watchers and you back to Pittsburgh, where you were promoted into additional roles.MCGOWAN: Yes, I stayed within the frozen division of Heinz for eight-plus years. I was promoted into different roles across different brands where I worked for the same VP (John Carroll) for six years. It was a great run. I got to launch a new brand, recommend a divestiture of a brand and lead Smart Ones to three consecutive years of double-digit topline and bottom-line growth. Overall, Heinz was a wonderful learning environment with great brands and fantastic people.Do those old brand loyalties stay with you afterward?MCGOWAN: Oh yeah. My family grew up on Smart Ones frozen entrees, Ore-Ida potatoes. And my four daughters still enjoy Bagel Bites as a Saturday snack.You also learn interesting things about your brands from different people along the way. The importance of margins, sales, packaging graphics and consumer relations and consumer and shopper insights. We did not have robust A&C budgets, making us very judicious with the support we received to ensure it was leveraged to the maximum. This was another great lesson for me, to learn how to maximize a small marketing budget.Why did you move to Cadbury PLC?MCGOWAN: Family reasons. We loved Pittsburgh but had three kids under 4 years old and wanted them close to their grandparents. Being seven hours away was difficult for us, and we decided to get back to the East Coast. It was a tough decision. The brand I ran before I left Heinz, Smart Ones, was a large high-profile brand. When I moved to Cadbury, I was given the brand responsibilities of Sour Patch Kids and Swedish Fish candies. Interestingly, the sales of the candy brands were much lower than the brand I left due to the average price points. However, the learning I gained from moving into the candy category with large competitors, with channels and customers that I was not accustomed to, helped round me out as a marketer and increased my understanding of the overall food category.Even so, it was all about seizing opportunities because candy was a lower priority in the portfolio due to margin and growth trajectory. Therefore, I went to work on my first commercial for Sour Patch Kids with my manager, Sydney Taylor, and we landed on the positioning of “Sour. Sweet. Gone.” I’m proud to say that, 15 years later, we are still using the same tagline and strategic positioning. It was so simple yet so strategic that it really conveyed the brand’s essence. The Sour Patch Kids brand and business has grown significantly since I first joined.You said in our pre-interview that this job was a turning point in your career. Why?MCGOWAN: I say this because of a few factors. The first is that I was learning the new candy category and helped pave our strategic path forward. The second is that it re-enforced my belief that you must be willing to raise your hand, go outside your comfort zone and take on special projects. For example, I volunteered on a project designed to generate $20 million worth of ideas, by 20 team members, in 20 days. We were able to find the $20 million with the help and support of our sponsor, Bill Higgins. The first thing we did was analyze our 150 SKUs, and then cut 38% of them. Well, productivity and margins increased immediately. The whole project focused on getting back to basics: SKU reduction, growth and distribution ideas, prioritizing and focusing on certain channels and customers.A second project was with McKinsey, where we redefined how to go to market. My focus was the commercial planning process. I mapped the process from end to end across functions. The key deliverables were what was our category growth plan, and how did our innovation, activation and thought leadership support this plan. We laid out who was responsible and when things were due. This all linked to our customer lead times so that we could provide customers with the right information, at the right time, to have the right conversation. A great insight I learned on these projects was that, when you sit with cross-functional partners or McKinsey employees, you get exposed to new ways of thinking that help broaden your understanding. I have recommended to my mentees as well as my four daughters: You don’t get something for which you don’t ask. You have to be willing to raise your hand, step out of your comfort zone, and do the work to get new experiences, opportunities and chances in life.And this earned you a promotion?MCGOWAN: Brad Irwin, our president, called me into his office, said the McKinsey work was terrific but we now needed to bring it to life. He offered me the “Director strip,” but it was a sales role in category development and planning. He said I would set up the department and it would be the liaison between marketing and sales. He told me to think about the offer.That brings me to another great lesson of my career, the importance of having internal and external mentors. Obviously, internal mentors understand the dynamics of the building/corporation. It is the external mentors who help you understand market dynamics and the bigger picture. For me, I called both former bosses as well as external recruiters about the role. All of my conversations led me to taking the position.Placing you between marketing and sales, it would seem like this job was a precursor to your later shopper marketing role. Was that the case?MCGOWAN: Absolutely. You know, I would have stayed in that job for 20 years. The environment at Cadbury was very collaborative. We were just over $1 billion in sales competing with Hershey, Nestle and Mars/Wrigley. We had to think smarter, focus on thought leadership and always go to a customer with a strategic plan that would help drive its overall category. We could never fall back on our size because we were too small.Of course, now that I’d been promoted, it meant that I also “owned” the McKinsey project and I had to deliver. The SVP of sales, Jay Joyce, made sure I was held accountable. At our first sales meeting, he got up on stage in front of the entire sales organization, 300 people, and said, “Steve McGowan, we thank you. We are better than we were. However, there were nine mistakes in the sales materials. This is a vast improvement but we can get better.”And he was right. At the end of the day there shouldn’t be any mistakes. I appreciated that he was holding me accountable just like everybody else – most importantly raising the bar for the entire organization.Now that you were positioned between sales and marketing, what did you learn from that perspective?MCGOWAN: My job for the last 15 years has been “in the middle,” making sure everything works cohesively between the two disparate groups. The job really taught me a lot about sales. I knew traditional marketing, but I didn’t know the various nuisances of calling on a customer and having that responsibility.Sales is much more decisive and fast-paced, whereas marketing is more creative and has more iterations. In my experience, indecision does not work well in sales or with customers. They are on tight deadlines, need an answer or will need to move on.With sales, I pull from the principle learnings that I acquired at Carnegie Mellon around being pragmatic, fast-paced and analytically focused. However, I also draw upon the collaboration, teamwork and relationship-building skills that I gained at Wake Forest. Quite honestly, I have leveraged both sets of these attributes in every role that I have had in my career.So, your first direct experience as a shopper marketer came at Kraft?MCGOWAN: Yes. Kraft bought Cadbury in 2010. We didn’t do a great deal of shopper marketing at Cadbury since the largest part of our portfolio was at the front end [of the store] where such programs are very difficult to execute. When Kraft came in, I was given an opportunity to create a small-format shopper marketing team focusing on drug, value and convenience across all Kraft Foods divisions and reporting to Mary Sagripanti and Laura McCorvie. It was a tremendous learning experience as it was my first true shopper marketing role and I was learning from veterans in the industry. But then two years later Kraft split, and I wanted to stay on the East Coast. I landed a job on the Mondelēz International side through the help of Craig Simon and Jay Joyce. In my new role, I was responsible for shopper marketing, shopper insights, category management and strategy for the Target business, where I reported to Cory O’Neal. The job was incredible because we were the category captain and had a strong shopper team and a lot of customer-facing opportunities. We grew the business, were rated highly by our customer and completed the first-ever CPG-partnered marketing mix analysis with Target. After two years I was promoted into this position, to lead the entire U.S. shopper team.You’ve been in the role five years. Still enjoying it?MCGOWAN: Absolutely. I have the pleasure of working on fantastic brands, at a terrific company, with a wonderful team. My role continually evolves and I am challenged everyday both analytically as well as creatively. I have a very supportive manager, Anthony Rasetta, as well as a strategic, dedicated and supportive leadership team.Let’s talk about your role in bringing ROI into shopper marketing evaluation at Mondelēz.MCGOWAN: It is a regression-based model we developed with Kantar Analytics and Geometry Global that isolates the impact of shopper marketing activity and helps assign the value to the specific tactics during a program. It enables us to determine that a display is worth X, digital is worth Y, and so on. We started this model in 2014, and it gets better and more evolved each year. As with all models, it’s not 100% perfect, but with each year we improve and I personally like to look at the trends across customers, brands, programs and tactics for key learnings to apply to future programming. The results have been great; since 2014, Mondelēz International shopper marketing has driven up ROI substantially.In terms of measuring the ROI, do you stick to basics or do you go for some intangible things like return on retail relationship?MCGOWAN: Generally we stick to ROI. We do look at other areas, including return on relationship, and will footnote it. However, when we are evaluating the allocation of dollars across the marketing mix, we need to be able to speak ROI from a media, consumer promotion or shopper marketing perspective so it’s all on a level playing field.Sales and ROI are the ultimate metrics, but are there other measures that you value?MCGOWAN: We look at all marketing metrics, including foot traffic, CTR, dwell time, ROAS. In addition, we monitor external surveys and ratings, including The Advantage Rankings report. This survey goes out to retailers and asks them to rate manufacturers on things like customer service, innovation, account relationships, trade support and shopper marketing. When I took over the role in 2014, we were ranked No. 9. Over the past three years, we have been ranked in the top tier.The role of shopper marketing inside Mondelēz has evolved to the point where you believe it now has the proverbial “seat at the table.” How was that achieved?MCGOWAN: Honestly, it’s persistence. It was a lot of showing up, proving ROI, showcasing the work and educating about what’s going on in the marketplace – most importantly, educating and showcasing how shopper marketing can help bring our brand equities to life at retail.However, it is a constant education given the rotation of marketing personnel and the ever-changing marketplace dynamics. This can vary brand to brand. But the important aspect is the need to consistently communicate the true benefits and how the programming will change shopper behavior.Would you say that overall, the perception of shopper marketing is getting better?MCGOWAN: Yes. I think from our brand partners to our field sales team, the organization sees the true value and benefit. The ability to bring our brand strategies to life at retail in conjunction with our sales partners’ programming has been substantiated as great in returning strong ROI.We also focus constantly on improving our perception from an external perspective as well. We value feedback from our vendor, agency and retail partners and constantly try to put programming in place that will grow the category, is innovative and aligned.You are also known to rely heavily on “test and learns.” How do you use them?MCGOWAN: When I started in the role, we didn’t do too many. I believe that digital transformation and rapid technology changes have made it necessary to focus here. In 2019, we executed 20 different test and-learns. The idea is to collaborate with a retailer, try something new, learn from it, further iterate and then look to scale up. One of the test-and-learns we put into market involved – no, it isn’t always rocket science! – putting monitors up on our displays. However, we wanted to put monitors in-store and dynamically change the content in real time to see what would have the greatest impact. The “conversion content” we tested included things like videos with a recipe, longer and shorter spots, focus on ingredients or the final beauty shot.One of the big learnings for us, aside from operational challenges, was that the content-creation workload for retail engagement and shopper enjoyment was enormous. We have directed a lot of these learnings into related areas we’re exploring, including digital shelves.You’ve also adopted a “digital first” mindset. How is that put into practice?MCGOWAN: As the world and technology have evolved, we are focused on staying current. In 2015, we put into place a requirement that all creative concepts from our agencies would have a digital component to them. The field customer director could ultimately reject the tactic, but they had to at least see what it could be. Fast forward to the last few years, and we’ve been much more focused on including digital tactics on all programming for customers. We do this because the ROI work that we’ve done has proven out that, when you link a digital component to an in-store component, the ROI is that much higher. We’ve tested against digital-only and against in-store only, and it’s not even close.Let’s talk a little about your team, which has a very low turnover rate within Mondelēz.MCGOWAN: Yes, we’ve been blessed to have a very low turnover rate over the past several years. The clear benefits of low turnover have been the strong continuity and in-depth shopper and retailer knowledge. We have a small but mighty, tight-knit team, always trying to “punch above our weight class,” so to speak. To thrive in this ever-changing and dynamic landscape, the organizational alignment to support the team and efforts have been a key to our collective success.We are constantly trying to raise the bar by working collaboratively with our retail and brand partners. Fundamentally, our belief is to bring strong, forward-thinking and category-growing programs that will delight shoppers and help drive sustainable, profitable growth.

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