M&s marketing case_study_hill

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Marks & Spencer adopted a sustainability campaign, “Look Behind the Label” in an attempt to gain the growing fair trade market share in the UK. The campaign was a short-term success.

However, consumer research informed them that they needed to demonstrate their intention to continue to support sustainability issues that performance and credibility should come first, activities are more important than words, customers want to see the benefits of change and communications should be simple. In response, M&S integrated their sustainability goals tightly with their business strategy. This case study looks at whether this strategy was successful for M&S and why.

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M&s marketing case_study_hill

  1. 1.     Managerial  Marketing  SUS6060     Marketing  case  study:   The  Green  Path  to  Gold:  Did  this  work  for  M&S?                 Jos  Hill   10/04/2010    
  2. 2. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    Contents  Company  Overview .........................................................................................................................3  UK  Retail  Industry  Trends................................................................................................................3  M&S  Marketing  Challenges .............................................................................................................4  M&S  Social  and  Environmental  Campaigns.....................................................................................5   Look  Behind  the  Label .............................................................................................................5   A  recipe  for  short-­‐term  success?.............................................................................................5   Plan  A.......................................................................................................................................6   What  were  the  successful  attributes  of  the  campaign?..............................................................6   What  did  M&S  learn  and  what  did  they  do  in  response?........................................................7   Performance  and  credibility  first.............................................................................................7   Activity  not  words:  help  them  do  simple  things  to  make  a  difference....................................7   Show  consumers  the  benefits  of  change ................................................................................9   A  few  big  stories  backed  up  by  lots  of  small  but  consistent  underpinning  messages.............9   Plan  A  as  an  internal  change  management  platform ..............................................................9   Did  Plan  A  work? .......................................................................................................................10   Media  mentions ....................................................................................................................10   Marketing  SWOT  analysis......................................................................................................12   Financial  performance...........................................................................................................13  Resources ......................................................................................................................................15       2  
  3. 3. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    Company  Overview   Marks  &  Spencer  Group  Plc.,  known  as  M&S  in  the  UK,  is  a  major  British  retailer  that  was  founded  in  1884.  It  now  has  895  stores  in  40  countries,  600  of  which  are  located  in  the  UK.  M&S  is  an  up-­‐market  food  retailer  and  the  largest  clothing  retailer  in  the  UK.  M&S  brand  all  their  products  with  their  own  label  (Barry,  2009).  M&S  is  listed  on  the  London  Stock  Exchange  and  is  a  constituent  of  the  FTSE  100  index  (FTSE,  2010).  UK  Retail  Industry  Trends   The  last  decade  has  seen  a  doubling  of  the  number  of  stores  and  products  and  services  provided  by  the  4  major  supermarkets  in  the  UK:  Sainsbury’s,  Tesco,  Morrisons  and  Asda,  which  control  70%  of  the  market  (British  Brands  Group,  2010).  Most  industry  members  developed  their  first  CSR  reports  between  2005  and  2006  (IGD,  2010)  and  reports  have  presented  a  scattergun  of  activities  that  companies  have  been  engaged  in.  During  this  time,  sales  of  Fairtrade  products  in  the  UK  has  risen  significantly  (Figure  1)  which  indicates  an  increase  in  importance  of  corporate  social  responsibility.     3  
  4. 4. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill     EsCmated  UK  retail  sales  of  Fairtrade  products  by  value   1998-­‐2009  (£  million)   £  million  spent  on  Fairtrade   800   products   600   400   200   0    Figure  1:  Fairtrade  product  sales  in  the  UK  (Fairtrade  Foundation,  2010)  M&S  Marketing  Challenges   M&S  experienced  a  downturn  during  1998  as  their  brand  reached  the  maturity  stage  (described  by  Kotler  and  Keller,  2006)  as  competing  retailers,  such  as  Tesco  and  Sainsbury’s,  started  to  offer  increased  quality  products  at  reasonable  prices  (Carrell,  2006).  M&S  no  longer  seemed  “special”  to  UK  retailers.  Because  M&S  brands  its  own  products  and  only  carries  these  brands,  the  reduction  in  appeal  affected  the  whole  company  rather  than  select  product  lines.  To  turn  this  situation  around,  M&S  needed  to  reinvigorate  the  M&S  brand  as  a  whole  and  differentiate  itself  to  regain  market  share.  M&S  initiated  sustainability  campaign  in  an  attempt  to  turn  its  fate  around  and  set  the  company  back  on  a  course  of  profit  and  growth.  This  paper  looks  at  whether  this  strategy  was  successful  for  M&S  and  why.     4  
  5. 5. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    M&S  Social  and  Environmental  Campaigns  Look  Behind  the  Label   The  50%  increase  in  sales  of  Fairtrade  products  in  the  UK  in  2005  (Figure  1)  did  not  go  unnoticed  to  M&S.  In  response,  they  conducted  some  savvy  market  research  and  found  that  almost  one  third  of  shoppers  had  put  clothes  back  on  the  rails  amid  concerns  about  their  origins  and  78%  of  shoppers  wanted  to  know  more  about  the  way  clothes  were  made  (BBC  News,  2006).  M&S  decided  an  opportunity  lay  in  redefining  their  market  to  include  ethical  shoppers.  They  deployed  the  “early  adopter”  strategy  to  claim  their  market  share  of  ethical  shoppers  (Esty  and  Winston,  2006)  and  set  a  goal  to  jump  to  the  number  one  position  in  the  sustainability  arms  raceand  launched  their  Look  Behind  the  Label  campaign  2006.     The  aim  of  the  campaign  was  to  inform  shoppers  of  the  way  the  group  sources  its  products,  highlighting  everything  from  its  use  of  toxic-­‐free  clothes  dyes,  salt  reduction  in  ready  meals,  animal  welfare,  Fairtrade  products  and  sustainable  seafood.  This  campaign  was  the  first  by  any  retailer  to  focus  on  its  supply  chain  and  it  cleverly  increased  pressure  for  its  competitors  to  demonstrate  their  efforts  in  sustainability  by  exposing  their  lack  of  transparent  labeling  (Fibre2fasion,  2006).  A  recipe  for  short-­‐term  success?   The  Look  behind  the  Labelcampaign  generated  a  huge  upswing  of  consumer  trust  according  to  market  research  conducted  by  M&S  (Barry,  2009).  However,  the  company’s  research  led  them  to  understand  that  it  would  be  dangerous  to  stop  there  because  customers  were  saying,  “We’re  glad  you’re  telling  us  about  these  issues  that  you  are  good  at  today  –  but  what  are  you  not  telling  us?  Are  you  trying  to  hide  something?”  and,  “We  don’t  want  to  be  green  washed.  We  want  to  be  assured  that  this  change  will  be  for  the  long  term”  (Barry,  2009).     5  
  6. 6. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill       M&S  recognized  that  their  competitors  would  follow  them  and  if  they  did  not  respond  to  their  customers’  feedback,  the  company  would  risk  losing  the  benefits  they  had  achieved  through  their  campaign.  The  company  decided  to  take  their  campaign  to  another  level,  launching  a  new  environmental  and  ethical  plan  in  2007.  The  campaign  was  branded  Plan  A  with  the  slogan  “because  there  is  no  Plan  B”  when  it  comes  to  saving  the  environment.  Plan  A   The  Plan  A  campaign  was  launched  to  communicate  about  100  environmental  commitments  M&S  would  make  over  the  following  5  years  and  they  allocated  a  generous  budget  of  £200  million  to  the  cause.  Plan  A  has  5  core  goals:    1. Become  carbon  neutral;  2. Send  no  waste  to  landfill;  3. Extend  sustainable  sourcing;  4. Help  improve  the  lives  of  people  in  their  supply  chain;  and    5. Help  customers  and  employees  live  a  healthier  lifestyle.     In  2010,  M&S  announced  a  program  to  be  the  world’s  most  sustainable  major  retailer  by  an  ambitious  2015.  They  launched  80  additional  commitments  to  their  Plan  A.  What  were  the  successful  attributes  of  the  campaign?   The  key  to  the  success  of  M&S  was  that  the  company  listened  to  their  customers  by  conducting    “brand  tracking”  (Kotler  and  Keller,  2006)  throughout  the  campaign.  They  learned  that  their  initial  campaign  materials  needed  improvement  and  they  made  appropriate  adjustments  as  their  learning  increased(Barry,  2009).     6  
  7. 7. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    What  did  M&S  learn  and  what  did  they  do  in  response?  1. Performance  and  credibility  first;  2. Activity  not  words:  help  them  do  simple  things  to  make  a  difference;  3. Show  consumers  the  benefits  of  change;  4. A  few  big  stories  backed  up  by  lots  of  small  but  consistent  underpinning  messages;  5. Plan  A  as  an  internal  change  management  platform  (Barry,  2009).  Performance  and  credibility  first   M&S  modified  their  products  by  setting  a  goal  of  having  at  least  one  ethical  attribute  to  every  product  they  stock  (Fibre2fasion,  2010).  This  action  helped  their  credibility  as  well  as  helped  to  reinforce  the  re-­‐defined  M&S  brand  and  move  it  out  of  the  “brand  maturity”  rut  they  were  stuck  in  (as  described  by  Kotler  and  Keller,  2006).  They  achieved  successful  brand  re-­‐positioning  by  modifying  their  target  market  to  include  a  growing  market  of  people  who  want  to  make  ethical  purchases.  Activity  not  words:  help  them  do  simple  things  to  make  a  difference   M&S  discovered  the  initial  media  release  for  Plan  Awas  complicated  and  intimidating  to  the  general  public.  It  was  too  much  of  a  jump  for  customers  to  find  themselves  saving  the  planet  when  they  thought  they  were  shopping  (Figure  2).       7  
  8. 8. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill                    Figure  2:  Original  media  release  for  Plan  A.       M&S  replaced  the  manifesto  approach  with  a  campaign  more  relevant  to  people,  which  was  to  show  consumers  how  they  can  save  money  by  going  green  (Figure  3).                Figure  3:  Campaign  to  show  customers  how  much  they  can  save  by  going  green.     8  
  9. 9. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill      Show  consumers  the  benefits  of  change   This  approach  had  quite  a  bit  of  success,  but  consumers  told  M&S  they  needed  to  move  things  on  yet  again.  So  M&S  stopped  lecturing  their  customers  and  instead  gave  then  something  to  do.    The  company  launched  a  campaign  with  Oxfam  to  encourage  people  to  recycle  clothing.  When  people  gave  Oxfam  old  M&S  clothing,  they  received  a  £5  M&S  token.  This  had  a  fantastic  response.  Over  600  000  customers  have  returned  their  clothing,  Oxfam  has  raised  $3m  for  overseas  Aid  work  as  a  result,  and  M&S  consumers  started  to  say  they  felt  Plan  A  was  relevant  to  them  now  (Barry,  2009).  A  few  big  stories  backed  up  by  lots  of  small  but  consistent  underpinning  messages   M&S  were  also  able  to  re-­‐invigorate  current  campaigns  by  creating  a  new  story.  Their  customer  research  suggested  they  needed  to  keep  customers  engaged  and  feeling  good  about  themselves.  Research  also  told  them  that  92  per  cent  of  Brits  admit  they  cling  on  to  clothing  they  never  wear,  suggesting  they  could  do  with  a  pre-­‐winter  detox.  The  company  reinvigorated  their  clothes  recycling  campaign  with  a  ‘One  Day  Wardrobe  Clearout’  with  an  aim  to  raise  £1  million  for  Oxfam  and  help  reduce  the  amount  of  clothing  sent  to  landfill  (Glover  and  Himsworth,  2010).  The  £5  cost  per  item  of  clothing  incurred  by  M&S  may  seem  prohibitive,  however,  it  functioned  to  give  customers  a  reason  to  return  to  an  M&S  store  where  they  would  spend  more  money  and  leave  feeling  good  about  themselves.  The  feel-­‐good  factor  was  an  important  part  of  the  re-­‐brand.    Plan  A  as  an  internal  change  management  platform   M&S  positioned  themselves  apart  and  beyond  the  Corporate  Social  Responsibility  (CSR)  arms  race  that  other  retailers  were  participating  in  by  re-­‐defining  corporate  sustainability,     9  
  10. 10. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    branding  it  with  their  plan,  Plan  A.  To  take  control  over  any  evolution  beyond  Plan  A,  they  mapped  out  the  remaining  journey  towards  true  sustainability.  See  Figure  4    (Barry,  2009).                  Figure  4.  M&S’  re-­‐definition  of  corporate  sustainability  (Barry,  2009).  Did  Plan  A  work?   The  purpose  of  the  marketing  campaign  was  to  reinvigorate  the  M&S  brand  and  help  the  company  recover  its  profits  and  previous  status  as  a  “darling”  of  retail  establishments  in  the  UK.  The  success  of  the  M&S  re-­‐branding  campaign  is  analyzed  here  in  the  following  ways:   1. Review  of  online  media  mentions  in  the  past  decade   2. Marketing  SWOT  analysis   3. Review  of  changes  in  net  profit  in  the  past  decade  Media  mentions   Soon  after  Plan  Awas  announced,  M&S  were  voted  the  greenest  supermarket  and  the  one  most  popular  with  socially  and  environmentally  aware  consumers  (Butler,  2007;  Carrell,  2006;  Populus,  2007);  and  they  continued  to  be  rated  as  the  highest  sustainability  performers  in  the  world  (Figure  5)  (Brady  et  al,  2010).     10  
  11. 11. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill        Figure  5:  Overall  retailer  sustainability  performance  by  GreenBiz  (from  Brady  et  al,  2010).     Figure  6  illustrates  how  the  number  of  online  media  articles  about  M&S  has  increased  exponentially  since  their  Look  Behind  the  Label  and  Plan  A  campaigns.     M&S  online  media  menCons     2500    menCons  in  thousands   2000   M&S  online  media     1500     1000   500     0     2000        2001        2002      2003        2004        2005        2006      2007        2008        2009    Figure  6:  Google  advance  search  of  media  mentions  since  2000.       11  
  12. 12. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill     Moreover,  Citygroup  announced  the  ethical  campaign  as  “most  successful  in  M&S  history”  in  2006  and  estimated  the  group  had  generated  at  least  a  4  month  lead  on  sustainability  issues  on  the  other  major  retailers  in  the  UK  (Mesure,  2006).  Marketing  SWOT  analysis  Strengths   • M&S  focused  on  a  growing  market  of  ethical  shoppers  in  the  UK  for  their  re-­‐branding   campaign.     • They  created  a  significant  lead  on  their  competitors,  and  continued  to  innovate.   • Re-­‐defined  sustainability  with  their  own  Plan  A.   • Reinforced  the  sustainability  brand  message  by  applying  one  sustainability  attribute  to   every  product.   • Listened  and  acted  on  customer  feedback.   • Campaign  captures  emotional  story  telling  using  short  videos  about  their  sustainable   supply  chain.  Use  of  video  has  been  shown  as  the  most  effective  means  of   communicating  (Anderson,  2010).  Weaknesses   • Initially  the  Look  Behind  the  Label  campaign  was  short-­‐term  focused  and  customers   wanted  to  know  if  M&S  was  committed  to  continue  to  make  changes.   • Need  to  continue  to  make  improvements  in  order  to  validate  the  new  brand  image.   Future  success  could  hinge  upon  their  ability  to  stay  ahead  of  the  curve.   • Economic  recession  reduced  spending.   • Social  or  environmental  issues  that  come  to  the  public’s  attention  were  M&S  do  not   perform  well  yet  could  undermine  the  brand.     12  
  13. 13. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill     • M&S  only  stock  their  own  branded  items  and  do  not  sell  their  branded  items  through   other  retailers.  If  favor  in  the  M&S  brand  deteriorates,  the  whole  business  is  affected.  Opportunities   • International  growth  and  the  opportunity  to  outcompete  retail  industries  that  are  far   behind  in  terms  of  sustainability,  for  example,  in  the  US.  Threats   • Superior  performance  by  competing  major  retailers.   • Other  retailers  expand  to  offer  services  that  M&S  do  not.   • Sustainability  turns  out  to  be  a  fad  that  goes  out  of  fashion.  Financial  performance   By  2008  their  financial  performance  had  bounced  back  to  the  £1  billion  profit  level  but  they  suffered  during  the  economic  downturn  (Figure  7)  (London  Stock  Exchange,  2010).  However,  increased  energy  efficiency  achieved  through  their  activities  enabled  cost  savings  of  around  £50  million  in  2010  alone  rendering  the  campaign  extremely  cost  effective  (Fibre2fasion,  2010).   M&S  Net  Profit  (£  million)   900 800 700 £  million   600 500 400 300 200 100 0   1996      1997      1998      1999    2000      2001      2002      2003      2004      2005      2006      2007    2008        2009      2010  Figure  7:  Net  profit  for  M&S  between  1996  and  2010.       13  
  14. 14. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    Conclusions  &  Recommendations   There  are  numerous  businesses  in  the  marketplace  advertising  “sustainable”  products  and  this  dilutes  the  term  sustainable,  misdirects  consumers  and  leaves  no  marketing  space  for  companies  who  are  making  larger  strides  towards  doing  the  right  thing.  By  defining  the  journey  towards  sustainability  and  branding  Plan  A  as  a  step  beyond  CSR,  the  reporting  framework  everyone  else  is  doing,  M&S  clarified  to  their  audience  that  while  current  activities  regarding  sustainability  are  going  in  the  right  direction,  no  businesses  are  there  yet.     The  way  that  M&S  profits  bounced  back  along  with  significant  media  attention  demonstrates  the  success  of  their  campaign.  After  analyzing  the  campaign  I  recommend  M&S  continue  to  invest  in  campaign  tracking  and  continue  to  listen  and  respond  to  their  customers.  However,  M&S  already  identified  a  weakness  in  their  strategy  is  that  the  company  must  keep  innovating  and  increasing  their  sustainability  along  the  path  they  have  identified  (Figure  4)  in  order  to  maintain  their  market  of  ethical  shoppers.  So  the  question  should  not  be  “did  this  work  for  M&S?”  but  rather  can  they  continue  to  make  it  work  for  them?       14  
  15. 15. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    Resources  Anderson,  C.  (2010).  Chris  Anderson:  How  web  video  powers  global  innovation.  TED  Talks.  Retrieved  from  http://www.ted.com/talks/chris_anderson_how_web_video_powers_global_innovation.html    Barry,  M.  (2009).  Marks  and  Spencer’s  Consumer  Education  and  Empowerment  Strategy.  Sustainable  Brands  ’09.  Retrieved  from  http://www.sustainablelifemedia.com/video/06012009/mike_barry_marks_spencer_sustainable_retail_plan_a_communications    BBC  News  (2006).  M&S  set  to  launch  Fairtrade  range.  BBC  News.  Retrieved  from  http://news.bbc.co.uk/2/hi/business/4660410.stm    Brady,  K.,  Hendry,  J  and  Kanchwala,  S.  (2010).  Retail:  A  Sustainability  Benchmark.  GreenBiz  Reports.  Five  Winds  International.  Retrieved  from  http://www.greenbiz.com/business/research/report/2010/04/23/retail-­‐sustainability-­‐benchmark    British  Brands  Group  (2010).  Consumer  needs  not  being  met  by  UK  grocery  market.  British  Brands  Group.  Retrieved  from  http://www.britishbrandsgroup.org.uk/upload/File/Grocery%20needs%20summary%2097.pdf       15  
  16. 16. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    Butler,  S.  (2007).  Shoppers  look  behind  the  label  to  vote  M&S  the  greenest.  The  Times.  Retrieved  from  http://www.timesonline.co.uk/tol/money/consumer_affairs/article1577339.ece    Carrell,  S.  (2006).  Greenpeace  says  M&S  is  best.  The  Independent.  Retrieved  from  http://www.independent.co.uk/environment/greenpeace-­‐says-­‐mamps-­‐is-­‐the-­‐best-­‐404500.html    Esty,  D.  and  Winston,  A.  (2006).  Green  to  Gold:  How  smart  companies  use  environmental  strategy  to  innovate,  create  value  and  build  competitive  advantage.  Yale  University  Press.    Fairtrade  Foundation  (2010).  Facts  and  figures  on  Fairtrade:  Sales  of  Fairtrade  certified  products  in  the  UK.  Retrieved  from  http://www.fairtrade.org.uk/what_is_fairtrade/facts_and_figures.aspx    Fibre2fashion,  (2006).  A  look  behind  the  label  sends  M&S  Galloping.  Retrieved  from  http://www.fibre2fashion.com/news/company-­‐news/marks-­‐and-­‐spencer/newsdetails.aspx?news_id=22352    Fibre2fashion,  (2010).  Marks  &  Spencer  to  be  greenest  retailer  by  2015.  Retrieved  from  http://www.fibre2fashion.com/news/company-­‐news/marks-­‐and-­‐spencer/newsdetails.aspx?news_id=83058    FTSE  (2010).  FTSE  100  Index  Constituents.  Retrieved  from  http://www.ftse.com/objects/csv_to_table.jsp?infoCode=100a&theseFilters=&csvAll=&theseCol   16  
  17. 17. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill    umns=Mw==&theseTitles=&tableTitle=FTSE%20100%20Index%20Constituents&dl=&p_encoded=1    Glover,  A.  and  Himsworth,  D.  (2010).    M&S  Calls  on  customers  to  clear  out  their  wardrobes  to  help  raise  £1  million  for  Oxfam.  Retrieved  from:  http://corporate.marksandspencer.com/media/press_releases/planA/One_Day_Wardrobe_Clearout    IGD  (2010).  Retailer  CSR  Reports.  Retrieved  from  http://www.igd.com/index.asp?id=1&fid=1&sid=5&tid=127&cid=820#Tesco    Kotler,  P.  &  Keller,  K.  (2006).  Marketing  Management,  12th  edition.  New  Jersey:  Prentice  Hall.    Mesure,  S.  (2006).  Ethical  shopping  campaign  ‘is  most  successful  in  M&S  history’.  The  Independent.  Retrieved  from  http://www.independent.co.uk/news/business/news/ethical-­‐shopping-­‐campaign-­‐is-­‐most-­‐successful-­‐in-­‐mamps-­‐history-­‐412899.html    Milner,  T.  (2010).  “Which?”  asks  Governments  for  ecolabel  simplification.  Sustainable  Life  Media.  Retrieved  from  http://www.sustainablelifemedia.com/content/story/brands/which_ask_govt_to_simplify_ecolabels    Populus  (2007).  Concerned  consumers’  summary.  Retrieved  from  http://extras.timesonline.co.uk/tol/concernedconsumer/ccs_march2007.pdf     17  
  18. 18. The  Green  Path  to  Gold:  Did  this  work  for  M&S?       Jos  Hill      Wilkes,  C.  (2010).  Marks  &  Spencer  Launches  Solar  Energy  Products.  Retrieved  from:  http://corporate.marksandspencer.com/media/press_releases/company/Solar_Energy_Products_Launch    Wilkes,  C.  (2010b).  Marks  &  Spencer’s  ‘Your  Green  Idea’  competition  open  for  entries.  Retrieved  from:  http://corporate.marksandspencer.com/media/press_releases/planA/Your_Green_Idea     18  

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