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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jos
Hill

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S.
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the
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S.
(2006).
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is
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Jos
Hill

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18

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