Alignment of Brand-Rebuilding at Marks & Spencer - Case Study Example

 Alignment of Brand-Rebuilding at Marks & Spencer Introduction The current strategy for Marks & Spencer in relation to sustaining or improving their competitive position in the retail and foods market has been a road of difficulty at the competitive level and in terms of identifying with desired target segments. Some of the largest problems are socio-cultural in nature, internally and externally, requiring a repositioning of the company in order to differentiate its current efforts from that of competition. Competition in the retail and foods industry is intense for businesses that follow similar models and offer similar products. Its largest competitors have been identified as NEXT, House of Fraser, Gap, BHS, Debenhams and Alders. Most of these competitors have well-established consumer following and very strong brands, making differentiation a necessity for Marks & Spencer. In order to build an entirely new brand image, it is necessary to align strategy with resource capabilities in a way that positions this company with a new focus that would be perceived as important to its customer base. What is the strategy? Marks & Spencer tends to hold onto some of its more traditional values related to company image in terms of quality and often adjusts their pricing model to reflect perceived consumer loyalty. One weakness has been identified as having more expensive products than other competitors on the high street and has made pricing transparent in their marketing efforts. In a time where economic uncertainty is present in multiple industries, pricing focus should be replaced with a more contemporary image of the business that includes environmental initiatives and improve its focus on relationships and then using promotional tools to build this new brand identity. This is an incremental change strategy that aligns information, technology, people, and finance as suggested by the following model: Source: ?? Enabling success Currently, the company is achieving unparalleled gains in areas of ecology and environmental protectionism in areas of reducing carbon footprint and sustainable development. Palmer (2010) describes some of these efforts to include a plan that targets sourcing most of its clothing, home and food products from ethical sources or those working on sustainable development practices. “Eighty percent of Marks & Spencer’s customers have indicated they are concerned about sustainability, however only 10 percent are willing to pay for these efforts” (Palmer, 2010, p.20). This again reinforces that any effort toward environmentalism cannot be reflected in the retail price tag, at least with any consumer transparency to these efforts. The company’s social responsibility plan outlines how to improve waste reduction, use sustainable raw and building materials, and also promote health in fair trade practices (Nagappan, 2009). These are more than just compliance efforts to regulatory demands, it is a business improvement that involves key market players such as suppliers and certain B2B clients. The issue is that Marks and Spencer does not actively promote these efforts using appropriate marketing tools and this should be the focus for improving brand position among competition. Offers one representative of the company, “We are well aware of M&S’ pricey image. There is an urban myth that Marks & Spencer is all posh, expensive” (Bokaie, 2008, p.4). Because recent price reductions have not brought the type of return that the company has been looking for at the profit perspective, this provides unique opportunity to use environmentalism in a way that makes the company stand out considerably high from competing retailers. They key is to conduct environmental scanning, under the SWOT model of analysis, to identify Marks & Spencer’s strengths as well as those of allied partners, suppliers or B2B clients related to environmental initiatives. To make this happen, the company will need to designate a change initiative and assign certain key leaders to becoming strategic change agents to improve the organisational climate (internally) to build a more environmentally-friendly atmosphere that moves vertically from the top to the employee population. There is considerable feasibility in this plan since the business is already moving toward achieving environmentalism objectives and it just requires adjustment of the internal culture to make this a reality. In order to successfully manage the change strategy, people need to be considered as a key resource. As illustrated by the following model, personal behaviours and collective behaviours are strategic issues (at the human resources level) directly related to culture and getting all members of staff to be unified toward environmental practices. As illustrated by the following model, HR managers and line managers must be organised toward meeting environmental needs. People are a key resource in supporting this effort at all levels of the business. A performance management system, including a regular employee appraisal guideline, is one method of ensuring compliance to this new strategy. Source: ?? When determining resources, leadership in environmentalism needs to be established. “Leaders need to model the desired behaviours of the preferred culture, teach others how to enact such behaviours, and ensure that appropriate formal and informal practices required to embed such behaviours in daily work life are established” (Levin & Gottlieb, 2009, p.32). Leadership is the fundamental resource that requires development in order to create a strategic goal of brand repositioning through environmentalism. Senior managers should first develop, in the planning stage of management, exact performance standards that should be met by the internal staff, from marketing all the way through to support services. The development of a compelling vision that can be promoted should occur in this stage for media release and also to build unity at the cultural level. This requires adopting the model of the systemic approach, where learning and trust toward meeting change goals improves perceptions of goal attainment with the entire learning organisation (Sackmann, Eggenhofer-Rehard & Friesl, 2009). The development of the environmental vision satisfies issues of budget, since this is not an expensive tactical objective, however its impact on the organisational culture can be intense if a change champion is identified to follow this process through from conception to implementation. Another advantage is that this effort does not have to change the core processes of the firm or detract from certain core products since this is already being built as a separate function from current strengths in retail expertise. Therefore, no change to the current business paradigm. Under certain risk management models, span and depth of a new objective need to be considered to determine the potential outcomes, either negative or positive, on the organisational environment to determine whether these are feasible, functional strategies. Span measures change in the entire value chain whilst depth measures how much actual change will occur (Castello & Lozano, 2009). Since the company has the tangible and intangible (human relations) resources available, the depth of this change effort does not require any instant transformation at the operational levels. Part of the change could involve simply reinforcing the importance of energy and water conservation or waste reduction, by using the change champion, to build more of an organisational commitment to the effort; an organisational culture issue. Culture is defined as “a pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration” to teach individuals to perceive, think and feel in relation to those problems (Hurtado, 2009, p.205). The main resource is at the organisational and cultural levels that can be addressed over time through internal promotional efforts, such as pamphlet and vision creation, and then monitored for areas of compliance and support from all levels of the business support staff. In an environment where pricing is already being discounted to ensure higher sales levels from customers, this is an inexpensive effort that relies on already-dedicated talent to make it an internal success. This will also involve ongoing discussion and coordination with internal marketing teams to develop the literature necessary for internal distribution. In order to understand what drives the cultural makeup at Marks & Spencer, the culture web model helps as a template to understand the social condition at the company. Before any changes can be made that are expected to bring positive gains, the six elements driving cultural beliefs need to be identified. The Culture Web Source: Schein (1995). Once the change effort has been successfully launched and monitored for success, the external process of changing the brand can be supported without interruption to the current retail business model. This promotional strategy contains virtually no risk at all to the business, however its gains in providing and sustaining support can ensure long-run success at the new brand repositioning effort. The process of brand building Though Marks & Spencer already has a well-known brand, the idea is to reposition the company, strategically, to offer innovation in environmental practices. Brand-building involves a series of well-blended communications strategies, the ability to create consumer perceptions of credibility, contain quality, and have a long-term perspective (Gerber, 2008). At the external level, the company has several key options for improving its consumer image to many different segments who are not necessarily current loyalists for Marks & Spencer and also recruiting the attention of new prospective customers. “Successful brand-building takes time. Reputation is something that can be developed over months or even years and must be worked on continuously” (businesslink.gov.uk, 2009, p.1). Though this is often true for companies that are in the launch phase, Marks & Spencer already has strong brand awareness and the talent necessary to support ongoing change efforts. The systematic approach to this new strategic effort simply involves using well-timed communications with different sources to continue to build on what is already a mostly positive market image. The largest challenge is living up to what is being communicated and creating a sense of value for these efforts in key target groups. The first step of this strategic change effort at the external level is to make better use of media tools, such as the press release. Each time a new environmental initiative has been achieved, any Internet or multi-media organisation can be informed of these accomplishments that will only serve to show how the company is living up to their new environmentally-friendly brand. This does not require any measurable operational changes, only having more of a relationship focus that makes internal efforts more transparent to the general public. The entire value chain at the company is well-established and no labour intensive efforts are required other than ongoing discussions to improve supplier efficiency that are already a part of the management model at Marks & Spencer. Simply making these efforts transparent is the low-key implementation needs for this branding strategy that involves more media exposure. The company can recruit the talent and expertise of different public relations experts or rely on their internal marketing expertise to make media contact more ongoing. In most cases, this costs virtually nothing (unless considering outsourcing support help) but could make tremendous strides in offering a new type of value to unrelated market segments in general society. It could also improve supplier motivation to comply with new environmental initiatives, therefore improving strategic relationships with suppliers, when they witness positive financial gains or media attention at Marks & Spencer. Leading by example can be accomplished in even greater proportions with media support and exposure. Marks & Spencer can even consider the possibility of expanding its resource capacity by planning different strategic alliances with certain environmental groups or with suppliers that are actively working on environmental initiatives. Rogers (2008) describes the strategic alliance as a tool that can unlock company value and is a serious option for achieving common purpose. Marks & Spencer can identify, through environmental scanning, different agencies or companies that have a solid brand reputation in the retail market and explore partnering to show diversity and unification to the broader public or B2B markets. Many different retail products find sales success by adding another company’s logo to their packaging or promotional literature and Marks & Spencer can accomplish this same type of short-term alliance during all phases of the environmental transparency effort. Through this, other firms that have not yet achieved similar gains as Marks & Spencer could benefit from the competitive advantage it gives them, along with being able to promote themselves along a powerful retailer name that supports their ongoing environmentalism efforts. The idea of relationship management in all areas of the company value chain will only improve how Marks & Spencer conducts business and give more credibility to their eco-minded efforts to build more consumer support. Where it was identified that some competition use overseas suppliers to reduce costs, by adopting different strategic alliances or dual branding efforts Marks & Spencer can overcome this weakness by reinforcing the importance of procuring domestically especially when suppliers are on board with new environmentalism efforts. This could have a positive impact on the domestic economy as well if this new strategic alliance has the media coverage necessary to elicit change in supplier behaviour. This would represent yet another opportunity for Marks & Spencer to develop a stronger reputation in multiple market segments as a champion for economic development through support of local procurement. This could, if promoted properly, give the business much more competitive edge that merely took the consultation with different entities for co-branding strategy development. This does not put a large strain on the budget nor interfere with current operational processes or standards. Successful repositioning of the brand involves first defining the specific qualities that you want to express to customers, assessing how these efforts might be perceived by the segments, and then working toward enacting this image (businesslink.gov.uk). The alliances would give Marks & Spencer more exposure in global markets as well if foreign media sources were contacted on an ongoing basis with different achievements and other press releases made public at the international level. Since ecology and the environment, in areas of sustainable development, are common in most industrialised countries, this is another advantage that poses little cost to the company at a time when pricing is a significant predictor of ongoing customer support. In less-developed countries working with major manufacturers to build their own sustainable products, it could give Marks & Spencer new brand exposure for the strategic goal of new market entry without complication as relationships have already been built in new market environments. The key is to identify potential alliances that have processes or knowledge that can be benchmarked, using the following model: Managing the change effort Strategic human resource management is recognised as being an important factor for improving competitive success in new strategy development and implementation (qub.ac.uk, 2008). Aligning strategy with personnel will be a major consideration, which involves training managers to work with diverse supplier groups in a way that provides benefit from the interaction. Not all managers at Marks & Spencer are going to be knowledgeable about working with domestic and international organisations related to environmentalism and there should be a knowledge champion designated to make this possible. The flexible and ongoing exchange of cultural knowledge is something found in the current human resources division of the company, and this will put additional responsibility on their job roles to assist in the change process. It is probable that the human resources division at Marks & Spencer maintains cultural knowledge and improving diverse relationships and these should be reinforced as part of the planning phase so that implementation achieves success. In regards to the consumer, there will be systematic changes to marketing philosophy and transformation will need to occur. The first effort, after launching more publicised releases about the environmental efforts of the company, is to consider changing the consumer perception of traditionalism to that of contemporary business strategy. One retailer in the UK has a similar perception of being posh and pricey, but tends to provide retail fashions that are comparable to that of Marks & Spencer. This company is Liberty and their reputation is often described as being too aristocratic and the “dowager duchess” of London department stores (Murray, 2002, p.114). Marks & Spencer should use promotional literature, during the time of initial public releases of environmentalism, to reinforce that it is no longer the Marks & Spencer of yesterday that does not cling to the crown and has shed any conceptions of aristocracy in favour of a more balanced, global perspective. Combined with new emphasis on procurement of environmentally-friendly merchandise, consumers will perceive the company as a transformative business entity that is adaptable and flexible in all areas pertaining to consumer needs. As identified by the following model, this is a revolution change that does not impact the current business paradigm, but involves incremental changes toward culture, the environment, marketing, and other support functions. This effort is mostly a realignment issue and not a radical transformation. Source: Balogun & Hailey (1999). Conclusion Marks & Spencer has much knowledge about their external markets that is well-developed over years of ongoing consumer research and generic PESTLE analyses that describe the forces that continue to enhance or detract from business success. Since these resources are already available, the cost issues are minimal for this new effort. The majority of building the new brand focuses on credibility and removing price transparency from buyers to focus their attention on change rather than economic situations related to brand identification. The key for the company is to focus on enhancing socio-cultural perceptions of the company through strategic alliance development and giving the business a new attitude that encompasses sustainability at multiple levels, even in areas of retail product. There is a rising awareness at the consumer level about environmental issues and these attitudes pervade basic conceptions of business social responsibility. Efforts such as these will only improve the total worth of the value chain and give the company an even stronger global and domestic network without very little strain on current operational standards and processes. Some of the company’s long-standing customer segments are getting older every year and they will eventually be replaced with younger consumers at the end of their life cycles. It makes strategic sense, as a long-term focus, to begin working on attracting these customers as they will represent the future profit potential of the company. This trend in environmentalism does not seem to be a short-term trend and it is expanding in areas of commercial development and basic consumer demand. There is no significant need to conduct extensive demographic or psychographic research since this trend involves many different segments and is becoming a universal need in consumer groups. The low-cost effort, combined with modifications to internal organisational culture, can make this effort a profit and relationship success for Marks & Spencer at many levels. References Bokaie, J. (2008). A thorn in the side of negativity, Marketing, London. July 23, p.4. Businesslink.gov.uk. (2008). Business link in the South East. http://www.businesslink.gov.uk/bdotg/action/layer?site=210&topicId=5000802291 (accessed March 27, 2010). Castello, I. & Lozano, J. (2009). From risk management to citizenship corporate social responsibility: Analysis of strategic drivers of change, Corporate Governance, 9(4), pp.373-385. Gerber, M. (2008). Building brand and consistency. http://www.fpadvance.com/media/pdf/TAO%20August%202007%20-%20Building%20Brand%20&%20Consistency.pdf (accessed March 26, 2010). Hurtado, P.S. (2009). On culture and strategic change: Contrasting the orthodox view with Bourdieu’s concept of habitus, Competition Forum, 7(1), pp.205-214. Levin, I. & Gottlieb, J. (2009). Realigning organisation culture for optimal performance: Six principles and eight practices, Organization Development Journal, 27(4), pp.31-47. Murray, I. (2002). It’s curtains for clergy girls at new and groovy Liberty, Marketing Week, London. October 10, p.114. Nagappan, P. (2009). Walking the talk: Marks & Spencer’s commitment to CSR, Apparel, 50(6), p.10. Palmer, M. (2010). M&S extends ‘eco-plan’ after pounds 50m savings from previous scheme, Financial Times, London. March 1, p.20. Pkukmweb.ukm.my. (2002). What is benchmarking, Universiti Kebangsaan Malaysia pkukmweb.ukm.my/~iha/bench.doc (accessed March 30, 2010). Qub.ac.uk. (2008). Managing Strategic Change. http://www.qub.ac.uk/schools/SchoolofEducation/filestore/cipd/yr1/LectureNotes/Filetoupload,39262,en.pdf (accessed March 28, 2010). Rogers, B. (2008). Contract sales organisations: making the transition from tactical resource to strategic partnering, Journal of Medical Marketing, London. 8(1), pp.39-48. Sackmann, S., Eggenhofer-Rehart, P. & Friesl, M. (2009). Sustainable change: Long-term efforts toward developing a learning organization, The Journal of Applied Behavioral Science, 45(4), p.521. Read More