“We don’t spend money on marketing”, said Alex Russo, the CEO of discount retailer B&M, last week. Responding to a question from Marketing Week following the release of results for its latest financial year, Russo was at pains to point out that he would rather invest in pricing rather than marketing, if faced with a choice. “The choice would be simple” – the customer value proposition, every time, he added. This, before going on to explain that it creates content “including using affiliates and influencers to “build momentum.” So, it does spend money on marketing. In creating content, in investing in pricing, in experience, in customer proposition. Far be it from me to interpret for him, but what I would suggest he means, is it doesn’t spend on above-the-line advertising. He is the second CEO of a discount retailer to be dismissive of advertising, or marketing as they put it, in the last year. At the end of last year, Iceland CEO Richard Walker trumpeted that they were not making a Christmas ad and were instead supporting customers through lower prices. I highlight both examples not to make a semantic point, but to underline the challenge that many marketers in many categories face. For many of you, your boss thinks what you do is frivolous. Not so the executive of N Brown. The owner of fashion brands Simply Be and JD Williams announced that it was ramping up investment to build awareness, consideration and acquisition, which it hopes will maintain and sustain growth after profits jumped in its last financial year. Elsewhere, Lululemon CEO Calvin McDonald was also looking to use marketing as a means to spur performance: “Investments in marketing and brand building [are] aimed at increasing our awareness in acquiring new guests, international growth and market expansion..,” he said after announcing quarterly results. Meanwhile, Monzo announced last week that it more than doubled its marketing investment to £58.5m in the year to 31 March, a 167% increase and all, as CEO TS Ansil, explained “deliberately” invested to drive growth. I know, arguably clumsy counter points to B&M and Iceland. Different companies, and contexts and categories in the case of Monzo. But they are, or should be, a reminder to all. With all the challenges that are being faced up to, marketing matters. There’s plenty more marketers can and must do to justify investment. But there are as many boadrooms as not that understand marketing's role in driving meaningful outcomes. Links to the all the stories in the comments below.
Ellen Carroll
5mo
Isn't pricing part of marketing and does the social media team work for free?
John Lyons
5mo
Bravo! So tired of both the lack of understanding of what marketing is and how important it is in business.
Helen Edwards
5mo
In violent agreement - especially on the point about 'marketing is more than advertising'. One the joys and challenges of marketing is that we have many levers at our disposal and the magic is in how we combine them, if we annex ourselves into advertising only we will never get taken seriously as business leaders. And we must work harder to link our proxy marketing metrics (awareness, consideration, brand appeal...) to actual business metrics - ability to hold a price premium, more buyers, more repeat, ability to launch innovation. In the Marketing Week Mini MBA with Mark Ritson in management, this always becomes a key point of debate and discussion around our two finance modules. Rant over, thanks for sharing Russell
I would ask if things have changed for the better since the 90s? Then with joint advertising and sales promotion campaigns there seemed to be a very close correlation between marketing and actual sales. Now I have it on good authority that for example, Christmas TV advertising for retail is not geared to increasing sales and hasn't been for ten years. Instead there are all sorts of fancy new marketing objectives, lingo and descriptions that marketing people discuss and debate over. If you want marketing and advertising to be taken seriously in the boardroom and weather storms then find a way of relating it back to an increase in sales. Anything else may be seen as detachment from reality and put off investment in marketing and advertising.
Trent Vora
5mo
For a low-cost no-frills brand like B&M, their ability to compete so aggressively on price is in itself a strong differentiator. In addition to that, their brick-and-mortar stores are located strategically and prominently in town centres, which have become landmark community hubs, offering limited-time parking to visitors into their stores or into the town. Their ability to integrate themselves so well into the very fabric of the local area, and the local communities they serve, is in itself great marketing!
Well said. Its a stark reality driven in my experience by the instant economy we live in. From instant noodles to instant results. And I suspect shorter tenures of leaders or shorter lead times to recoup investments as an investor is one big driver of such thoughts. All good things take time. And consistency. And patience. The power of compounding works as much in wealth creation as it does in building strong brands that have great resilience, staying power and price power. But you have got to start early. And not give up.
Catriona Cardie
5mo
I always feel professionally sad when the most senior marketers diminish marketing by conflating it with paid advertising (how does this happen?) coupled with a relief that what they’re actually saying is they’re investing more in brand marketing and positioning on their price and place. Great strategic marketing. But the renaissance of brand through product and performance is the more enlightened and evidenced by those doing it really well.
Theo Cooper
5mo
I think the crucial thing here also is time, no one needs to invest in marketing in the shortest of terms. You can always fudge results with sales tactics to boost short term revenue it's further down the line a lack of investment becomes challenging. B&M is a slightly unusual one though, because along with Home Bargains the cost of living crisis means it is simply one of the the only places many people can afford to shop for their families. That audience doesn't really need marketing to bring them in, like pound shops, or Wetherspoons. They are just 'the cheapest'..
Roxanne Nejad
5mo
These non-nuanced headlines make it so tough to justify spend distribution and contribution for marketeers. It depends how you want to build your business. B&M is no frills, the product (pricing) is what leads its differentiation. For other sectors for example fashion, tech - your marketing / brand can be your differentiator so investment here needs to be valued as such.
Editor-in-chief, Marketing Week and the Festival of Marketing at Centaur Media Plc
5moB&M story https://www.marketingweek.com/bm-marketing-price-retail-media/ Lululemon story https://www.marketingweek.com/lululemon-brand-awareness/ N Brown story https://www.marketingweek.com/n-brown-marketing-investment/ Monzo story https://www.marketingweek.com/monzo-marketing-spend-profit/