M&s marketing case_study_hill

Managerial Marketing SUS6060

Marketing case study:

The Green Path to Gold: Did this work for M&S?

Jos Hill

10/04/2010

The Green Path to Gold: Did this work for M&S? Jos Hill

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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


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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.


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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.

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EsCmated UK retail sales of Fairtrade products by value 1998-‐2009 (£ million)


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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).


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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).


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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).


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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.


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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,


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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).


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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.

Figure 6: Google advance search of media mentions since 2000.

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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.


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• 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).

Figure 7: Net profit for M&S between 1996 and 2010.

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£ million

M&S Net Profit (£ million)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


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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?


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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_sustainabl

e_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


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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


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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_Clea

rout

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_ecol

abels

Populus (2007). Concerned consumers’ summary. Retrieved from

http://extras.timesonline.co.uk/tol/concernedconsumer/ccs_march2007.pdf


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Wilkes, C. (2010). Marks & Spencer Launches Solar Energy Products. Retrieved from:

http://corporate.marksandspencer.com/media/press_releases/company/Solar_Energy_Product

s_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

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