Legacy retailers trying to adapt

Legacy retailers like Marks & Spencer and Debenhams continue to announce store closings and changes to merchandise mix strategies. They need to adapt to changes in consumer behaviour and in the economic environment (meaning both the UK and the global marketplace).

Non-food purchases in UK stores are down, and in addition, competition from store-based and online retailers is putting pressure on the entire industry.

Now M&S is closing some stores, reducing the focus on apparel products (which typically have good profit margins) in favour of food products (not always as profitable, but purchased much more frequently).

M&S recognises that consumer behaviour is changing: 'Picking up food for now or tonight rather than doing one big shop or browsing and shopping online and collecting in store are great examples of this, and we are committed to adapting our business so that we stay in tune with our customers,' says chief executive Steve Rowe. At the same time, M&S is opening new stores in areas that hold market promise. Otherwise, the retailer may have difficulty achieving growth.

Debenhams is also closing stores amidst its ongoing turnaround effort. The retailer has a plan for targeting younger shoppers, with three main pillars: destination, digital,and different.

The retailer plans a sharper focus on in-store 'experiences' like cafes and more digital/social/mobile purchasing: 'We will be a destination for social shopping, with mobile the unifying platform for interacting with our customers', explains chief executive Sergio Bucher.

Adapting is a challenge, yet with consumer behaviour evolving, Debenhams and M&S must find distinctive and appropriate strategies for meeting needs in a profitable way.

What about Weetabix?

Weetabix has undergone a series of ownership changes as the packaged cereal marketers of the world try to change consumer behaviour regarding breakfast. In fact, the Weetabix UK website has a section titled 'Why bother with breakfast?' That sums up the marketing challenge for Weetabix at a time when many people skip breakfast or buy on the way to work/school or prefer handheld foods to cereals in a bowl. It's also a challenge gaining brand fans in markets where breakfast cereals aren't traditional.

Headquartered in Northamptonshire, Weetabix is the UK's largest cereal producer, and the wheat used in Weetabix is grown close to the company's home base. That's a plus, both for UK customers and others worldwide who like to know where their foods come from.

Weetabix was sold to a private equity firm in 2004, then resold to another private equity firm before Bright Food, a Chinese company, bought a majority stake in 2012.

Despite boosting Weetabix sales in the burgeoning market of China, consumer behaviour is slow to shift and traditional breakfast foods continue to be more popular than packaged cereals. So Bright Food decided to sell. And the buyer is US-based Post Holdings, which has a complementary set of packaged cereal products.

Weetabix's CEO says: 'The past five years have seen us increase our branded sales at home and overseas. I’m confident [Post] will help us open doors for continued expansion'.

With 611k Facebook followers, 19k Twitter followers and 11k Instagram followers, Weetabix is going social to keep its brand in the conversation and encourage consumption of packaged cereal. The Instagram description requests: 'Tag us is in your brekky snaps using #NeverendingBreakfast.'

Happy 8th Blogiversary

This blog was born in April, 2009, and has continued through 760 posts in 8 years.

Happy blogiversary!


The all-time most viewed blog posts are:

• Yes, competitors are stakeholders (from 2012)
• Updating Tesco's marketing plan (from 2013)

Clearly, competitors as stakeholders continues to be a topic of great interest. As my posts over the years have noted, many countries outlaw certain types of collaboration among competitors (specifically, coordinating prices, for example).

However, research shows that participating in non-market activities with competitors is a good way to implement certain strategies for mutual benefit. Industrywide initiatives are a good example of competitors working together for a common goal. The fashion industry could collaborate on eco-friendly activities for a cleaner planet, for instance. Some are already working with recycled materials to keep items out of landfills.

As for Tesco's latest marketing plan, the UK retailer's strategy currently focuses on four key areas:

- value and sustainability (marketing goal)
- reducing food waste (societal goal)
- healthy living (societal goal)
- local communities (societal goal)

Coca-Cola's changing product mix

Coca-Cola Life, introduced in 2014 as a low-cal alternative to traditional Coke, will reportedly be delisted in the UK from June, as the company emphasises zero--meaning zero sugar. (Coke Life will remain in the product mix for other markets.)

Sales of Coke Life had dwindled, and now Coke wants to more clearly define its soft drinks and their benefits.  'As we look to drive no-sugar sales even more and make it clearer for consumers to differentiate between sugar and no-sugar options now feels the right time to phase out Coca-Cola Life from the UK market and focus on our three leading and iconic cola variants', says the GM of Coke GB.

Coke may also have been looking ahead to 2018, when a UK sugar tax is supposed to go into effect for sugary soft drinks. Such legal and regulatory changes make a difference in how Coke and its competitors develop and adjust marketing plans for today and tomorrow.

To introduce more UK consumers to Coke Zero, there has been an ongoing campaign featuring billboards and transit ads, TV adverts and other brand communications. This summer's campaign will include extensive sampling to induce 'try and buy' consumer behaviour.

The iconic Coke brand has more than 103 million Facebook likes, more than 2 million YouTube followers, 140k Twitter followers and thousands of other social media fans, giving it a popular platform for dialogue with consumers.

Reckitt Benckiser Reassesses Strategy

Updating Chapter 1 of my new Essential Guide to Marketing Planning, take a look at Table 1.3, which illustrates levels of strategy for Reckitt Benckiser.

Corporate strategy covers decisions about long-term direction, value creation and priorities, as well as purpose and focus.

Business strategy covers decisions about each unit's scope, competitive approaches, markets, and resource allocation.

Marketing strategy covers decisions about products/brands, communications, channels/logistics, pricing, and marketing support.

Now Reckitt Benckiser is reassessing its corporate and business strategies, considering whether to sell off its food unit, which includes French's mustards and sauces. Although this unit contributed £400m to RB's revenues in 2016, the company doesn't consider food to be a 'core business' according to this statement:

'Food is a truly fantastic business with great brands, people and a history of outperformance. It is nevertheless non core to RB. We have therefore decided to initiate a strategic review of Food where we will explore all options for this great business'.

Reckitt Benckiser recently reached agreement for acquiring Mead Johnson Nutrition, an expensive deal that would require funding and focus. Thus, RB's decision to consider leaving the food business, which would allow the company to reallocate resources and focus on the remaining business units plus the new infant nutrition unit. 

On the level of marketing strategy, RB is looking at ways of using Big Data across multiple media (traditional and digital/social/mobile) to reach consumers in a more personal way via communications. 'As a brand, data ownership is your most valuable asset. It drives insights, it drives sales, and helps to know your consumer', says the Global Media Director.