Friday, 20 November 2009

What Will Marc Bolland Do To Revive M&S Food Business?

Marc Bolland’s move to Marks & Spencer has sparked excitement in the City and attracted acres of coverage in mainstream news. The interest reflects M&S’s position as jewel of the High Street, leading purveyor of the nation’s underwear, and reliable backstop when looking for clothing basics - and Bolland’s success at supermarket giant Morrisons.

Marks badly needs someone who can revive it's £4.2bn turnover food business. Performance has been nothing short of dismal with falling margins and severe loss of market share, and the decline cannot be put down to difficult economic times. The problems arose well before the credit crunch, and continue despite a slight loosening of consumer purse strings, and recovery in its rival Waitrose.

Mr. Bolland's experience at Morrisons equips him well for the challenge. So what might he do?

First he has to understand what the problem is. Current management seems to think it is all about price, and has responded with hundreds of offers and deals such as “Dine in for £10”. This might help in the short term as Marks' food is expensive, but it is not a long term fix. Neither is the plan to introduce branded products such as Coca Cola, for Marks has neither the expertise nor the buying power to be a general grocery shop. What Marc Bolland must do is solve the basic problem which is this - as of today there is no compelling reason either to visit M&S on a regular basis, or to spend much when you get there.

How different it was a few years ago. M&S's initial success came because it offered outstanding quality which was unavailable from anywhere else. Then in a brilliant piece of market understanding and pioneering innovation it developed its range of ready meals, offering culinary delights which an increasingly widely travelled public encountered when abroad but had no idea how to replicate at home. Ready meal sales went from strength to strength as time pressed but affluent consumers bought a no-preparation evening meal, not giving too much thought to nutritional content or having to double up because portion sizes were tiny. M&S sandwiches were a leading development too, offering fresh and delicious lunchtime fodder at a time when the only takeaway food was a sausage roll and packet of crisps.

But then the world caught up with Marks. Supermarkets matched them on quality by introducing premium ranges, consumers shunned ready meals preferring instead to do some actual cooking at half the price and twice the goodness, and lunchtime options became available everywhere from the likes of Gregg’s the bakers, or coffee outlets such as Costa and Starbucks.

So Mr. Bolland, what is needed here is a return to the historical ability of Marks and Spencer to see the future with crystal clarity, to anticipate consumer trends, and give us what we want before we even realise we want it.

Supplier Relationships
On the supplier relationship side, we know that Morrisons supported British farmers under Bolland’s leadership, committing to stocking only British beef and lamb. Also that they set up Morrisons Farm, a 700 acre holding on the Dumfries house estate in Scotland where the objective is to be a “leading centre of excellence in applied farming research”. It is to be hoped that he will continue Marks’ constructive approach to farming relationships, and commitment to stocking only British beef, salmon, chicken, pork and turkey. He might even go all British on lamb. Whether he will bring a tougher negotiating stance generally to suppliers remains to be seen, but with slipping margins some changes are likely.

Wednesday, 11 November 2009

The 10 Most Motivating Advertisements on TV Now – And Why They Work

Businesses spend thousands and sometimes millions of pounds developing and making adverts, yet few ads actually do what they are supposed to – namely persuade people to part with cash to buy the product in question. So its interesting to see some research carried out by Mercury, an arm of TNS WorldPanel which names the top 10 most motivating ads of 2009 so far.

The top 10 are:
1. Dettol Antibacterial Spray
2. Walkers Crisps with Gary Lineker and Cat Deeley on the bike
3. Kelloggs free cornflakes
4. iPhone new version
5. Tesco where Fay Ripley is picked up by her husband in a hot air balloon
6. Premier Inn’s take off of classic film Psycho, starring Lenny Henry
7. Morrisons supermarket fresh fish
8. Compare the Market with the meerkats Alexander and Sergei
9. Currys fridge freezer recycling
10. Jacob’s Cream Crackers

Now why would these adverts work better than the other 190 tested?

The company who did the research say that the top 10 adverts work because “It’s one thing to have an ad that people enjoy, but if you are not addressing a need or feeling it is less likely that they will turn that enjoyment into a purchase”. Or, in other words, there has to be a strong reason in the ad for people to part with their cash. This is particularly true for a business which has limited money to spend on promoting their products.

After a happy half hour watching these ads, I’d offer some more thoughts about why they are especially effective.

Dettol heads the list. It’s an example of “problem/solution” advertising, and in Dettol’s case the problem is both big and topical, namely how to protect your family against swine flu. The advert not only solves a problem, it does so in a very vivid way, showing brightly coloured germs lurking in unexpected places, waiting to pounce on the vulnerable.

Curry’s advert for their fridge freezer disposal service uses problem/solution advertising too, illustrating the sheer hassle of carting the old appliance to the recycling centre, as does Premier Inns who remind viewers of the nasty surprises that can be found in some cheap hotels. Which leads to the next reason why these adverts work – both Currys and Premier Inns commercials get attention because they are funny. Very funny, in the Premier Inn case where Lenny Henry acts out all the parts with enormous enthusiasm.

Walkers Crisps raises a smile as Gary Lineker (a smug but seemingly likeable character) gets his come uppance at showing off. The Tesco advert also raises a smile and is a clever twist, but both of these, alongside Morrisons fish, and Compare the Market .com probably succeed through the sheer amount of money spent showing them on our screens.

It helps to have a big name. Lenny, Gary, Fay Ripley in the Tesco ad and Nick Hancock in the Morrisons ad are all very well known stars. Stars don't come cheap though - Richard Hammond of Top Gear is reportedly being paid £750,000 for his appearance in Morrison’s Xmas advertising. Fortunately stars are not mandatory, as Dettol have shown, and too often are used by advertising agencies as a lazy substitute for good creative thinking.

The last type of advertising represented in the top 10 is informational. This works best when the message is simple. Kelloggs is telling the world that just by collecting three tokens they can get free cornflakes forever, and iPhone is announcing the launch of its new version.

All businesses have to consider how they will tell customers about their products, and not many can afford multi million pound TV campaigns. Whether putting up a flyer in the local newsagents, advertising in the parish magazine, getting a mention in the town newspaper, or deciding what to say on a website, the rules are the same. Grab peoples’ attention, give them a concrete reason why they should buy, and make it as easy as possible to purchase the product.