Managing The Commercial Communications Process - The Brand/Agency Report

Managing The Commercial Communications Process BRAND & AGENCY REPORT

Student ID: 21017802

(Charts/Tables/Figures/Appendices & References DO NOT Count for the Overall Word Count) Total Figures: 35. Total Tables: 11

Contents: Executive Summary: Page 3 About The John Lewis Own-Brand (Exploratory Research) -

Brief History: Page 4

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Financial Performance & AdSpend: Page 4 & 5

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The Target Audience & Customer Segmentation: Page 6 & 7

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The John Lewis Own-Brand: Page 7, 8 & 9

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The Market & Market Issues: Page 10, 11 & 12

Managing The Commercial Communications Process | Student ID: 21017802

John Lewis Branding Concepts

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The Five Forces: Page 13 & 14

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PESTEL Analysis: Page 14, 15 &16

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SWOT Analysis: Page 17 &18

John Lewis’ Brand Identity -

Ansoff Matrix: Page 19 & 20

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Boston Matrix: Page 20 & 21

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Push & Pull: Page 22

John Lewis Marketing/Advertising (Secondary Research) -

Creative Club Content (Previous Advertisements): Page 23 & 24

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Case Study Material: Page 25

Branding Theory (in relation to John Lewis) -

The Importance of Branding: Page 26 & 27

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Internet/Online Brands: Page 27, 28, 29, 30, 31 &32

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Brand Architecture/Added Values: Page 32 & 33

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Ashridge Management Model: Page 33 & 34

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Critical Success Factors Analysis (CSF Model): Page 34

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Brand Expansion & Umbrella Strategy: Page 35 & 36

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The Identity Pyramid Model: Page 37

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Kapferer’s Identity Prism Model: Page 38 & 39

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Benefits & Limitations of Branding (Evaluation): Page 41

About Rain Communications -

Rain’s Agency Positioning & Mission Statement: Page 42

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Organisational Structure & Working Practices: Page 43

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Praise for Rain and “The Rain Guarantee: Page 44 & 45

Primary Research -

In-Depth Interview with Emma Pengelly from Rain: Page 46

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The Client-Agency Relationship: Page 47 & 48

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PR Agency Issues: Page 49 & 50

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PR & The Department Store Industry: Page 50

Conclusions & Recommendations: Page 51 Appendices -

The Branding Process (B2B & Consumer): Page 52 & 53

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Primary Research (In-Depth Interview Script): Page 54 & 55

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PR Agency Issues: Page 56

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Video/Sound Content: Page 57

References: Page 58, 59 & 60

Managing The Commercial Communications Process | Student ID: 21017802

Critical Evaluation

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Executive Summary: “Advertising and PR agencies are closely connected to the overall development, promotion and protection of client brands” The aim of this report is to evaluate how Rain Communications (a London-based PR agency) works alongside the John Lewis Own-Brand and how the agency contributes to its overall success. Details within the report will look into the role of branding within the organisation and the benefits and limitations of this, how marketing and PR strategies are allocated to the brand in line with corporate objectives as well a thorough appreciation of how the agency services’ reflect in overall business results.

In-depth reviews regarding the client-agency relationship will be analysed throughout as well as previous successful marketing and advertising materials conducted by John Lewis. Both primary and secondary research has been conducted to gain an insight into how Rain contributes to overall success.

An in-depth interview with Junior Account Executive, Emma Pengelly from Rain PR was conducted during early February 2013 regarding the roles and responbilities the team take charge of to enhance John Lewis’

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brand image. Secondary research was also accomplished to achieve an understanding of the overall market

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sector and current issues affecting it, the organisation as a whole, how the PR industry affects retail etc.

Over recent years, the department store sector within the retail industry has become increasingly overcrowded and competitive. Although John Lewis are currently dominating the market (according to Mintel, 2012), it is important for the organisation to keep a close eye on any competition/consumer changes in order to maintain their strong brand position. Clear references to brand maps, concepts and theories (e.g.

Kapferer Prism Model, Push & Pull etc.) have also been investigated throughout to improve the brand’s position within the market.

Overall, John Lewis have led the way in their prospective sector for many years now and outshone and outperformance its main rivals. Report content as follows explains how.

About The John Lewis Own-Brand (Exploratory Research): Firstly, exploratory research regarding the John Lewis own-branded product range and the overall market were undertaken in order to collect preliminary data. In-depth research was conducted to help identify and understand the market and organisation itself as well as the brand’s financial performance, history and target audience. Findings are as follows;

Brief History John Lewis was first founded in 1864 with the first store opening in Oxford Street, London. The organisation is best known for its policy of “Never Knowingly Undersold” which has been in use since 1925.

They have also won many prestigious awards over the years including Multichannel Retailer of the Year, Best Online Department Store, Britain’s Favourite Retailer, Most Trusted & Reliable Organisation (as voted for by consumers) and more.

Overall the business offers its own-branded product ranges spread across numerous departments (as Waitrose, John Lewis Insurance and Broadband services. Many previous customers have praised John Lewis well as target audiences are appreciative of the fact the department store has everything you could possibly need all under one roof.

The brand likes to regularly “give back” to their loyal customers, thus offering a Partnership Card.

Customers can earn discount vouchers every time they spend within store, online or at Waitrose/Ocado.

The card also allows online security, access to exclusive cardholder events and early-previews to special offers/sales throughout the year.

As a whole, the John Lewis organisation is essentially owned by its employees (or partners) who have a strong say in how the business is the run and receive a share in its profits. Is John Lewis the best company in the UK to work for? http://www.guardian.co.uk/business/2010/mar/16/john-lewis discusses this further.

John Lewis’ financial data for 2008-2012 are shown below. The own-branded product ranges account for at least 30% of these overall sales. (Figure 1, John Lewis Financial Performance, Mintel)

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explained later) and “The John Lewis Partnership”. This includes a partnership with supermarket chain;

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Financial Performance & AdSpend According to Mintel (2011), Nielsen recorded that advertising spend by leading department stores advertisers increases by 10% each year. In 2011, the biggest ad-spend increases were seen by Debenhams and John Lewis, both up by more than 28% than the previous year. 2011 was also a year of high investment in major brand-building television campaigns by Debenhams, John Lewis and M&S. The table below shows main media advertising expenditure data for major department store chains;

(Figure 2) The next table (showed below) from Mintel (2010) shows “recorded advertising spending as a percentage of total turnovers for leading department store retailers”. “Although John Lewis grew

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its advertising expenditure substantially in 2010 and 2011, as a proportion of company revenues it

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remained steady”.

(Figure 3) Finally, the last table/figure 3 (as shown below) breaks down, by media channel, the advertising spend by the biggest department store retailers in 2011. As you can see, press and television remain the dominant channels by total expenditure. Online advertising also takes a great percentage, more so than radio or outdoor.

(Figure 4)

The Target Audience & Customer Segmentation Figure 5

John Lewis’ main target audience differs between their online webstore and physical high-street stores.

The results in figure 5 shown here reflect the online visitor demographics in the three month average to January 2012. As shown, the brand attracts a higher proportion of men to its online shop; Mintel suggests this may be because of its strong reputation in electrical goods, popular items amongst the predominantly male sector.

In Figure 6.1, Mintel research shows that relative to the average department-instore shopper, John Lewis shows a similar amount of male/female customers but are Figure 6.1

more geared to the over 55s age range.

They are also especially well represented of

the AB socio-economic group. “Regionally its relative strength lies with consumers in London and the South East where a higher proportion of its stores are located�, as shown in Figure 6.2 (Mintel, 2012).

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Figure 6.2

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A comparison of the target audience profile of John Lewis in comparison to other department stores within the industry sector is shown in the figure below. Mintel indicates that “Other” includes Harvey Nichols, Beales, Fortnum & Mason and Liberty which were original options as part of the research study but returned sample sizes too small to analyse in comparison to the overall results.

(Figure 7: Consumer profile by age and affluence in relation to department stores including John Lewis, Mintel 2012)

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The John Lewis Own-Brand

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The John Lewis Own-Brand product range was first established in 2001. During September, 2005 the organisation launched a trial range of own-branded household appliances which proved to be extremely popular amongst consumers. A limited edition range of electrical appliances including washing machines and dishwashers were introduced in stores and online to see how they would fair with customers. The demand for the products massively exceeded expectations and in the Peter Jones store along, the range accumulated £1m in sales over just seven weeks (Mesure, The Independent, 2005) Merchandise Director, Jill Little said: “It shows just how much trust and interest there is in the John Lewis own brand. There is a lot more of this to come”.

After its overwhelming success, the company decided to push forward with this and plan major productlines labelled with their own brand name. Implementing this mirrored moves of supermarket chain, Sainsburys who launched their own-branded items shortly before. Over the years, John Lewis has collaborated with numerous high-profile designers to help launch their own-branded lines of products from furniture and home wares, to clothing, to beauty. The business has produced a wide variety of affordable designer-ranges exclusive to their brand. In 2004 alone, own-brand lines account for 27% of overall sales, or £130m as has risen by more than 10% in recent years.

More recently, John Lewis unveiled “its biggest-ever own brand with the launch of a new home range online and instore” in September 2012 (Harrison, Retail-Week, 2012). The John Lewis Partnership Chairman Charlie Mayfield identified the own-branded range as a key strength of the overall organisation and the team has “upped the pace of product innovation”. “Developing products you cannot buy anywhere else has never been more important” he said.

John Lewis opened numerous own-branded “shop-in-shops” spread out over 3,000 sq ft. as well as a designated area to the range via the online webstore for their new line; “House by John Lewis”. To date, it is the biggest own brand launch for the retailer in terms of investment and number of lines. Continuous results have shown to be successful and customers are reminded to keep a look out for more John Lewis product lines to be released throughout 2013. In addition to the home ware and furniture ranges, the organisation also offers three own brand womenswear collections, two for men’s and children’s-wear. The John Lewis PR agency (Rain Communications) regularly works extremely hard to help promote these collections and additional information regarding Rain’s services for John Lewis is continued on page 39.

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“John Lewis Women”: A collection of everyday essentials

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“Collection”: Smart work-wear still suitable for heading out

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“Collection Weekend”: Casual-wear range of wardrobe basics

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“John Lewis Men”: Style essentials for work or play

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“John Lewis & Co”: A range of Heritage-focused seasonal pieces, with emphasis on craftsmanship

The John Lewis clothing brand also regularly launches limited-edition collections throughout the year forming collaborations with stylish, high-quality designers at an affordable price. Each collection build upon previous successful pieces, ensuring the elements customers loved the first time around are interpreted in a new and exciting way appropriate for different times of the year.

Overall, the John Lewis own-branded product ranges are going from strength to strength offering customers a wide variety of choice. The company are also proud to announce that they are the “only European retailer whose entire own-brand range of large electrical appliances are A-rated and above for energy efficiency” (johnlewispartnership.co.uk, 2012). As well as being extremely profitable to the overall business, the own-brand helps to set John Lewis apart from competitors. Head of Womenswear Buying Jo Hooper says;

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Own-branded womenswear and menswear currently include;

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“John Lewis are the only store that has its own range of jersey, cashmere and lingerie to rival our competitors, as well as powerful brands in clothing and accessories. That gives us our USP, making us more special and creating strong sales growth”.

Caroline Overton (Own-Brand Manager of Fashion) and The Brand Creative Team regularly support The Buying Team’s strategy by developing the right brand identity for each range, working across everything from labelling, to tags and hangers.

“With John Lewis & Co, we were tapping into that authentic look and feel, using attention to detail and provenance to give this segment its own identity and to flag up to customers that it's something new and different” says Caroline.

“In womenswear, we needed to segment the John Lewis Own Brand into three specific areas: our core, classic range, plus Collection and Weekend”.

“Collection has a sharper look – It’s mainly well-tailored so we used a monochrome, clean brand

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image. Weekend is more informal, so we used colour, stripes and ribbon to help support the range.”

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(Figure 8: About The John Lewis Own-Branded Clothing Range. Source: johnlewispartnership.com, 2012) According to Mintel, John Lewis is not only the market leader and most consistent long-term performer within the department-store industry; it is also the only full-range department store chain, though Fenwicks comes slightly close. “John Lewis’ commitment to the full range concept remains very much in place, on the basis that the integrated offer pulls in customers and leads to many cross selling opportunities”. (Mintel, 2012). The pie chart below reflects John Lewis space allocation for each of their departments (including their own-name brands) as of February, 2012;

Figure 9: Space Allocation

The Market (Industry Trends/Effects) The department store industry is an increasingly competitive market with many stores including House of Fraser, Debenhams, Selfridges, Harrods, M&S and John Lewis being key players. The market as a whole made a whopping ÂŁ84 billion in 2011 (approx.), up by 90% since and 2% on the previous year according to Mintel. As shown in the graph below, some departments (such as beauty for example) have been growing significantly faster than others in recent years. Department stores have capitalised this category by investing

(Figure 10: Total consumer spending on core department store categories, 2006/2011, Mintel) According to Mintel research, John Lewis currently dominate the online sector (online shopping through the webstore) with M&S closely behind, followed by Debenhams and House of Fraser;

(Figure 11: Online sales by leading department stores, 2009/2010 and 2010/2011, Mintel)

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in modernised beauty halls, selling a wider variety of brands and offering “add-on product sales�

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Some may argue that M&S are more of a “mixed-goods retailer” than a department store as the organisation does not offer all typical categories other department stores do. However, research found on Mintel considers the Marks & Spencer brand as a department store. The following graph illustrates that M&S effectively leads the market in regards to in-store. John Lewis was the major winner in 2010, and marginally missed out on the top spot to M&S in 2011.

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(Figure 12: In-store sales by leading department stores, 2009/2010 and 2010/2011, Mintel)

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The five leading department stores; shares of the industry stood at approximately £11.6 billion in 2010/2011. This time also saw M&S underperform via the online market (internet shopping), with John Lewis recording a strong outperformance across both the instore and online aspect of the marketplace. % of Market Share

Department Store Sector

Mixed Goods Sector

2010/2011

2011/2012 (est.)

2010/2011

2011/2012 (est.)

Marks & Spencer

36.4

34.8

18.6

17.7

John Lewis

23.8

23.1

12.1

11.8

Debenhams

15.5

15.4

7.9

7.8

House of Fraser

5.9

5.9

3.0

3.0

Harrods

5.0

5.1

2.6

2.6

Selfridges

3.8

3.9

1.9

2.0

Fenwick

2.5

2.5

1.3

1.3

Harvey Nichols

1.4

1.3

0.7

0.7

(Table 1: Leading department stores’ market shares within the industry, 2010/2011 and 2011, 2012, Mintel)

Results from Mintel have shown the market leaders within the department store retail industry are John Lewis, M&S, Debenhams and House of Fraser. During 2010/2011, these retailers alone were estimated to contribute over 93% of all department store online-sales. The dominance of “the big four� is due to their overwhelming size and slow development of other brands (for example, Selfridges only launched their online webstore in early 2010).

Figure 13

The table illustrated here indicates the number of visitors to leading department store online websites, as recorded by ComScore in 2012.

The data provided further confirmation that John Lewis dominates the online market. Although M&S has organisation is outranked by the number of online visitors they gain to the webstore.

Market Issues Figure 14

The London Olympics and Diamond Jubilee resulted in a highly positive impact on the department store retail sector during 2012 due to the large amount of visitors to the UK during this time. Overall, Mintel doubt the sector will manage to match all retail sales growth over the forecast period shown in the figure here. Iconic department

stores within the UK such as Harrods, Selfridges and Fortnum & Mason have also successfully courted high spending foreign visitors and tourists who have become an important contributor to these popular storebrands remaining at the top end of the department store sector. Mintel expect these trends to continue in the long-term for consumers visiting from around the world.

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nearly 11 times the number of physical stores as John Lewis and Debenhams with more than 5, the

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John Lewis Branding Concepts: The Five Forces The issues influencing brand potential and the future of brands are shown in the figure below (DeChernatony & McDonald, 2008, partly based on Porter’s original theory, 1979);

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1) Consumers/Buyer Power

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To consumers, purchasing a particular product from a brand is commonly known as a process of problem solving. They become aware of a problem (e.g. not yet bought summer clothing for an upcoming holiday), evaluate the information and then make a decision. Please see appendix 1 for in-depth data regarding the consumerbuying process. The extent of this concept varies according to purchasers’ characteristics, experience and the products being bought. As a result, marketers and PR companies as well as the company itself must identify all individuals and position to whom the brand appeals as well as formulate a “brand strategy” that communications the benefits the company has to offer in a way which is relevant to each group of the target market.

3) Macro-Environment The overall brand needs to scan their macro-environments continually in order to clearly identify future opportunities and threats for the business. The challenge is to essentially understand how the political, environmental, social, economic, legal and technological environments (also known as PESTEL analysis) could affect the brand.

2) Distributors/Suppliers Brand strategy cannot be effectively formulated without regard for distributors and suppliers of the John Lewis brand.

“Both parties strongly rely on each other for their success and even in an era of increasing retailer concentration, notwithstanding all the trade press hype, there is still recognition among manufacturers and distributors that longterm brand profitability evolves through mutual support”. Suppliers need to identify retailers’ objectives and align their brands with the retailer (e.g. John Lewis) whose aims closely match their own. As John Lewis offer a wide variety of individual brands within their company, it is crucial for them to regularly analyse what proportion of their sales go through each distributor.

4) Competitors/Substitutes/Threat of New Entrants (Rivalry Amongst Existing Firms) Brands are rarely chosen amongst consumers without being compared against other competitors/substitutes in the marketplace. Key staff members of John Lewis should undertake research with current and potential consumers to identify those brands that are considered similar.

For example, some of John Lewis’ main competition includes House of Fraser, Debenhams, Harrods and Selfridges. Once these substitutes have been identified, marketers should “assess the objectives and strategies of these companies as well as fully understanding their brand positioning and personalities”. It is also essential to gather enough information in order to anticipate competitive response and continuously update the strategic plan for brand protection. Past research has also shown that ROI (return on investment) can relate to market share. In other words, brands with bigger market share gain greater returns than those with smaller share of the industry and organisations with strong, popular brands perform better than those weaker. Competitors are a significant issue that will influence the ultimate success or failure of a brand in a given market. If the organisation ignores competition, the possibility of losing loyal customers and/or being taken over by a strong new product/service can be serious and create severe problems. Brassington & Pettitt (p.432, 2007) explain that “competition is not just about established direct competitors at endproduct level, but also about indirect and future competitors for suppliers etc.”

DeChernatony & McDonald (p.54-55, 2003) explain this aspect of the five forces is to “utilise brand assets through recognizing what is happening within the organisation and having realistic, quantified objectives set for what the John Lewis own-brand hopes to achieve in short-term and long-term values”. Some indication of the threshold target should be identified and set aims should be SMART (specific, measurable, achievable, realistic and time-managed). If the business aim is to “become the brand leader in the overall sector”, thorough and strategic planning must take place before the end result can be achieved. “Marketers should also audit how well brand, culture and market issues match one another. Has the brand made full use of its internal auditing to identify what its distinctive brand competences are, and to what extent do these match factors critical for brand success?”

(Figure 15: The Five Forces, DeChernatony & McDonald, p.54-60, 2003)

PESTEL Analysis

(Figure 16: Definition of PESTEL Analysis)

A PESTEL analysis is a technique used for identifying and listing the political, economic, social, technological, environmental and legal factors in the industry most relevant to the specific organisation. Ultimately, it is a useful tool for assessing and evaluating the external influences in a situation as part of the marketing process.

Each of the factors will affect or influence the business, its marketing plans or the situation that is being analysed (Evans-Pritchard et al, 2006).

Since the John Lewis was first founded in 1864, the brand has grown to become one of the UK’s leading department stores and enduring brands within the market place. According to the official website, John Lewis boasts “the only remaining traditionally English brand with a focus on quality, value-for-money and practicality.

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5) Corporation

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A PESTEL analysis of the John Lewis own-brand and the organisation itself is shown below.

Political 

Potential factors influencing the John Lewis brand politically can include; increasing globalisation (“the challenge to compete against unknown forces and source the best quality/financially viable products from the world over”, fair pricing strategies etc. Issues affecting the political division of the analysis can also include interest/exchange rates, monetary policies, government spending, tax policies, regulations and brand/consumer protection, political stability, enforcement laws etc.

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In addition, political features of the PESTEL analysis can also be partnered with/are similar to the economic and legal influences on the John Lewis brand (as explained throughout the remainder of the table).

Economic 

As competition can be stiff within the department store market, cost incentives can be implemented to increase revenue/customer base if possible (e.g. voucher codes, limited-time sale periods etc.)

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John Lewis delivers to a number of different countries around the world. As a result, it is important for the

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brand to offer alternative online websites for international customers/currencies so the brand image reflects

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one of the main business aims; to deliver high-quality customer service to all target audiences. 

The recent state of the economic climate within the UK had an increasingly negative impact on the department store sector. This was because consumers had less disposable income and therefore less money to spend in ‘luxury’ stores such as John Lewis, House of Fraser etc, causing them to only buy essentials, staying cautious. It is fundamental for the organisation to keep a close eye on economic trends in case of rising costs in purchasing, the need for product price increase, supply chain implications, changes to the business cycle, consumer confidence etc. This can also be related to the political aspect of the analysis.

Social 

It is useful for John Lewis to build close relationships with customers, manufacturers and other stakeholders via social media, face-to-face, email, telephone etc. By doing this, added values can be added to the overall brand equity/image. This is discussed further on page 32 (brand architecture & added values).

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One of the limitations of instore shopping is the queuing systems customers can often find themselves in Online (technological) shopping helps to eliminate this irritation and allow customers to find what they are searching for/“check out” their items quickly and easily. The brand also regularly contributes to charity; thus improving their brand image. “Social” can also influence change in target consumer behaviour (e.g. income, demographics, lifestyle/work or education changes, attitudes/opinions, living conditions etc.)

Technological 

The business world is ever-growing and becoming more technological. Therefore, it is important for John Lewis to keep track of any changes within the internet, mobile or information technology industry. This can essentially help to improve the online website, develop new website features, government research spending, industry focus on technological effort etc.

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Mobile/tablet marketing is another technological issue which has become essential in the retail market. A wide variety of the market now access the internet via their mobile phones, iPads, tablets, iPods etc. As a result, in addition with their online webstore, John Lewis also offers mobile apps and mobile-version of the website for new technology so customers can purchase while on the go straight from their handheld device.

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John Lewis mainly trade within the UK but now also delivers to numerous countries around the world. Due to this, alternative websites should be available for international customers to easily access and understand.

The website as a whole must also be easy to navigate around for the user to find what they are looking for in the case of any hearing/viewing disabilities (also known as ‘ease of use’ or ‘accessibility’ in digital marketing)

Environmental A lot of emphasis on the role of reducing carbon footprint and increasing energy efficiency (Bream, 2008).

For example, energy efficient electricity instore (lighting, central heating, air conditioning etc.) and ecofriendly vehicles (if possible) when delivering home orders to customers. 

Other important ethical issues, like the sale of food and drink products should be bought and sold in a safe, environmentally-healthy manner. (Some John Lewis stores include partnerships with supermarket chain; Waitrose; and can also relate to political and legal aspects of the analysis).

Legal

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As a strong retail brand, John Lewis must abide by numerous legislation laws including The Sale of Goods Act, Employment Rights/National Minimum Wage Act, Health & Safety Act etc.

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The John Lewis brand also offers financial services/insurance to their customers if they so desire. Therefore, there is ever more legal scrutiny in these operations and as a result, more responsibility regarding legal compliance and other risk measures. Signing contracts are also an integral part of this issue, the organisation need to ensure the contract is filled out correctly and safely at all times.

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Considering the wide range of products John Lewis sell instore and online, the brand should ensure all items sold have been fairly manufactured e.g. no child labour work, real fur etc. as this can cause a negative brand identity/image for the organisation.

(Table 2: PESTEL Analysis of John Lewis)

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

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SWOT Analysis A SWOT analysis researches the internal and external factors influencing a brand’s marketing and business activity. According to Brassington & Pettitt (p.436, 2007), it generates “a huge amount of material that has to be analysed and summarised to sift out the critical issues that will drive the marketing plan forward”. The critical analysis includes strengths & weaknesses (internal) and opportunities & threats (external).

Strengths & Weaknesses focus mainly on the present and past as well as internally controlled factors including the 4 P’s and marketing material (including customer service and public relations) offered to the target market.

These internal factors can also be compared amongst how competitors have performed.

Opportunities & Threats focus mainly on the present and future, “taking a more outward-looking strategic view of likely development and options”; (Brassington & Pettitt p.436, 2007). These external factors can be easily reflected in market situation, competition etc. Many other opportunities and threats emerge from the marketing environment, when shifts in demographic and cultural factors are taken into consideration.

Ultimately, strengths and weaknesses represent “where we are now” and opportunities and threats “where we

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want (or don’t want) to be” or “where we could be”, then the gap, representing “what we have to do to get

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there”, has to be filled by the John Lewis team, as justified and formalized in an effective marketing or business plan (Brassington & Pettitt p.437, 2007). A SWOT analysis of John Lewis is shown below;

(Figure 17: Definition of SWOT Analysis) Strengths (Positive Attributes)

Weaknesses (Internal Elements That Can Make A Brand Vulnerable)

John Lewis offers its customers “a strong brand of embodying qualities, practicality and value-formoney promoting its customer loyalty”.

As John Lewis launches a new Christmas television advert every year, this is extremely costly for the business and costs millions of pounds.

The brand’s promise is “never knowingly undersold” This is explained in greater detail on page 15.

The business has just announced that they are to expand into more global markets during 2013 after a £200m investment. This can be a risky strategy if they do not achieve the results they are hoping for after investing such a massive price figure.

According to Mintel, John Lewis is dominating the department store sector with steady profits growing since 2001. Successful annual Christmas adverts also see a large rise in sales in year for the brand.

Many popular celebrity figures have become brand ambassadors for John Lewis, improving their public presence and brand image.

As explained in “strengths” John Lewis offers its customers the “never knowingly undersold” promise. If for any reason the team were unable to offer this, the brand could look unreliable and result in negative brand image.

The John Lewis own-brand offers an extensive product range, suitable for all customers.

As all employees are essentially partners of the organisation, decision-making processes can be slow

Mintel studies shows John Lewis have a strong online presence and receive hundreds of thousands of website visitors on a regular basis.

Space allocation in terms of products instore can sometimes be an issue. The appearance of the store is essential for customers so it is important each department is clearly available and not too cluttered

There is a close relationship amongst employees or “partners” who also gain profit shares.

John Lewis offer incentives to their customers, for example “the partnership loyalty card” where they can benefit from special offers, discounts etc.

Threats (External Factors That Could Adversely Affect The Brand)

The John Lewis brand has the opportunity to expand John Lewis is less appealing in terms of an “iconic into global markets which is yet to be seen. They British” theme in comparison to Harrods and have recently announced plans to do this though.

Selfridges, for example. Tourists and visitors to the UK are more likely to shop at traditionally British As the target audience is mainly the middle to older stores while visiting. The business can sometimes age generation, the brand could design more lose out to competition here. clothing collections aimed to attract younger customers..

The uncertain state of the British economy could affect the brand (e.g. costs may have to be cut, cash The insurance/personal finance industry is flow problems may occur, pricing may increase etc.) progressively growing and John Lewis has taken this opportunity to offer insurance and credit card Via the online website, international customers can services to their customers. purchase brand products. Varying exchange rates can be a potential threat.

We are in a time where the internet and mobile/electronic technology is at its peak. John It is also important for the business to track what its Lewis has taken account of this opportunity and also competitors are doing to ensure they do not gain a offers customer their Broadband service. In addition competitive advantage over their brand. to this, online sales provide great opportunities for increase in profits. John Lewis should regularly Currently, John Lewis’ main target group are the promote the benefit of online shopping through over 45’s. This could cause younger customers to be their website to increase online traffic. reluctant to shop with the brand as they may feel the store has nothing relevant to offer them.

(Table 3: SWOT Analysis of John Lewis) (Of course, there are many other strengths, weaknesses, opportunities and threats in relation to John Lewis – these are just a few examples)

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Opportunities (Brand Potential)

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John Lewis Brand Identity: Ansoff Matrix Brassington & Pettitt (p.438, 2007) explains the Ansoff Matrix as “a useful framework for considering the relationship between strategic direction and marketing strategy. The overall concept considers various combinations of product-market options. Each cell within the matrix presents distinct opportunities, threats, resource requirements, returns and risks”.

Market Penetration – The aim of this is to increase sales volume in current markets, usually conducted by more aggressive marketing. In other words, using the full range of the marketing mix (4 P’s/7 P’s) to achieve greater leverage.

Market Development – This means selling more of the original, existing product to new markets, which may be based on either new geographic segments or new segments (e.g. age, product usage, lifestyle etc.)

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Product Development – This essentially means selling completely new or improved

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products into already existing markets.

Diversification – This happens when a business decides to move beyond its current boundaries to exploit new opportunities. It can be risky as it means entering familiar territory in both product and market aspects. There are two specific types of growth in relation to diversification; Concentric & Conglomerate. Concentric Diversification happens where there is a link (technological or commercial), between the old and new set of activities. As a result, the benefit is gained from a “synergy with current activities”. For example, John Lewis could add new, unrelated product lines to its portfolio, but still use the same sales and distribution network strategies. Conglomerate Diversification is when a business undertakes new activities in new markets. Again, this can be a highly risky strategy as there could be trouble in both the product development aspect as well as gaining acceptance within the market sector.

An Ansoff Matrix of the John Lewis brand and the department store retail sector is shown in the following table.

(Figure 18: Definition of Ansoff Matrix)

MARKET

PRODUCT Current

New

Current

Market Penetration

Product Development

New

Market Development

Diversification

(Table 4: Ansoff Matrix) During its business life cycle, the John Lewis own-brand has been staged amongst all aspects of the Ansoff Matrix. The own-labelled brand is currently at “Market Penetration”. John Lewis offer a variety of product ranges to suitable markets at any given time. For example, due to the time of year, its current products are being promoted as “SpringSummer 2013” pieces. “Diversification” was put into place when the organisation first launched its own-brand product lines. A range of new products at an affordable price were introduced under the John Lewis name to attract new target markets to the brand. After its overwhelming success amongst consumers, additional items and collections have been well received with the audience, John Lewis decided to expand their brand into newer markets (for example, children’s clothing). This was called “Market Development”.

Boston Matrix

(Figure 19: Definition of Boston Matrix)

The Boston Matrix refers to market growth and market share in a given industry. In this case, the BCG matrix will be looking into John Lewis and the department store/retail business. The first dimension looks at the general level of growth in the marketplace, while the second measures market share relative to the largest competitors within the industry. This type of analysis helps to provide a useful insight into the likely opportunities and threats associated with the particular brand (John Lewis).

Market growth particularly refers to available opportunities within the industry. It can also indicate the current competitive atmosphere. For example, high growth markets allow for plenty of room for business expansion and all organisations can make gains whereas low growth markets reflect intense competition where effective growth can only be achieved by taking some share away from competitors.

The matrix consists of “Stars”, “Question Marks”, “Cash Cows” and “Dogs” in relation to Market Growth and Market Share. A BCG Matrix of the John Lewis brand and the department store retail sector is shown in the table below.

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gradually added to the brand. This was the “Product Development” stage of the matrix. As the brand was becoming

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MARKET GROWTH

MARKET SHARE High

Low

High

STAR

QUESTION MARK

Low

CASH COW

DOG

(Table 5: Boston Matrix)

STAR – The current “star” within the department store/retail market sector is John Lewis. Previous research from Mintel (shown on pages 3-11) indicate the brand has been dominating the industry for the past two years (online and instore). The John Lewis own-brand also accounts for a vast percentage of the company’s overall sales and the product ranges are continually growing throughout 2013.

QUESTION MARK – The “question mark” brand within the industry could be M&S or Liberty.

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Some individuals do not consider M&S as a department store, but as a “multi-goods retailer” instead. Because

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of this, the brand has relatively low market share (as some disagree the company is even part of the market) but the business itself continually growing. In addition, there are few Liberty stores within the market (hence low share) but the department store is well-known as being “traditionally British” amongst tourists, UK visitors and customers so their market growth is medium-high.

CASH COW – The “cash cows” in the marketplace are House of Fraser and Debenhams. Both brands are highly popular with customers with numerous chains around the country and their online webstores.

However, they are not as successful as John Lewis; their growth is currently fairly low, indicating them both as “cash cows”. If the brands do not grow further, they are at risk of becoming “dogs”.

DOG – The “dog” of the market is TJ Hughes. In 2011, the chain was declared as “in administration” after both low market share and market growth. Numerous retail stores were shut down, although the online webstore still remains (although not very successful).

(Figure 20: The Department Store Market Boston Matrix)

Push & Pull The figure below depicts the “push-pull strategy” which emphasises two different lines of communication between a brand’s stakeholders. Firstly, with a push strategy, “the manufacturer chooses to concentrate on its communication with the distribution channel immediately below them. This means, in relation to John Lewis, the wholesaler producing the products on behalf of the brand has a warehouse full of products and thus an incentive to use communication to make a special effort to sell it quickly on to the retailer (John Lewis stores/online webstore), who in turn promotes to the end consumer” (Brassington & Pettitt, p.300, 2007). As a result, communication has flowed freely and the product has been ‘pushed’ down all channels from each member in parallel with the John Lewis ownbranded products. Overall, there is little or no communication between manufacturer and

(Figure 21: The Push-Pull Strategy, Brassington & Pettitt, p.301, 2007) In contrast however, there is the pull strategy in relation to other brands. This requires the manufacturer to create demand for the product through direct communication with the consumer. Brassington & Pettitt (p.301/302, 2007) explain this as “the retailers will perceive this clear demand and, in the interest of serving their customers’ needs, will demand the product from their wholesaler, who will demand it from the manufacturer. This bottom-up approach pulls the product down the distribution channel (in contrast to the push strategy which pushes the product down), with communication flowing in the opposite direction.

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consumer. In this case, John Lewis uses a “push strategy”.

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John Lewis Marketing/Advertising (Secondary Research): Creative Club Content (Previous Advertisements) Overall, John Lewis take enormous pride in their advertising techniques and the success of these is shown in its results. The brand launches a new Christmas advert every year during the festive period which is dubbed as some of “the greatest ever adverts”. Each Christmas advert last around 90-seconds and every year, they become a social media sensation and extremely popular with the Great British public. Strong sales of more than £500 million are taken during the Christmas build-up due to the organisation’s excellent advertising.

Successfully eye-catching television adverts from over the years from John Lewis have had tens of millions of views on YouTube, proving a real favourite with the public. The material is so well-known and popular; if you were to ask people on the street what is the first thing they think of when the name “John Lewis” is

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mentioned, chances are the majority of them will say the iconic Christmas adverts.

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Video content of previous John Lewis advertisements are shown in appendix 4.

Of course however, this is not the only successful advertising/marketing material John Lewis has produced in the past. Secondary research was conducted via “Creative Club” for previous work the brand has marketed in the past (including advertising via television, cinema, radio, press, internet, outdoor, direct mail and door drops). Just a few examples of the findings (in screen-shot format) from Creative Club are shown as follows;

DOOR DROPS

DIRECT MAIL (Clearance/Sale/Discount Offers)

(Billboards) OUTDOOR

INTERNET

PRESS

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RADIO

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Case Study Material John Lewis use “Rain Communications� as their main agency for all-things PR related. Please find in-depth information and data regarding Rain on page 39. The agency has worked closely with the brand for over 8

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years and two examples of John Lewis/Rain case studies are shown in the screenshots below.

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Branding Theory (In Relation to John Lewis): The Importance of Branding Ward et al. (p.88, 1999) define a brand as a “distinctive identity that differentiates a relevant, enduring, and credible promise of value associated with a product, service or organisation and indicates the source of that promise”. The brand’s promise can be based on a variety of things; for example, innovative technology or superior service and customer support. The promise is relevant to the intended customers of the brand, and may differ slightly between consumer groups in order to more exactly meet their needs. The credibility of the brand promise hinges upon persistence and consistency in its deliver; if is achieved, this represents a significant competitive advantage.

The importance of the John Lewis own-brand depicts not only the products, but the relationship with the customer. Successful brands helps profitability by adding value that essentially entices customers to buy.

They also provide a firm base for expansion into anything from product improvement, variants, added power of intermediaries within the market. They can also help “transform organisations from being faceless bureaucracies to ones that are attractive to work for and deal with” (DeChernatony & McDonald, p.18, 2003). Ultimately, all relative attributes of the brand will affect its overall strength and this in turn will be reflected in the financial value and success of the brand. The mode below reflects numerous dimensions to achieve/measure high quality brand equity/value.

Brand Attributes -

Awareness

Brand Strength

-

Image

-

Leadership

-

Perceived Quality

-

Price Premium

-

Perceived Value

-

Loyalty

-

Personality

-

Market Share &

-

Organisational

Brand Value

Distribution

Associations (Figure 22: “The Casual Nature of Brand Equity”, DeChernatony & McDonald, p.443, 2003. Adapted after Feldwick, 2002)

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services, to international trading. A successful brand helps to protect the organisation against the growing

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As shown below, Ward et al. (1999) demonstrate how the brand pyramid concept can be effectively used in order to build a powerful brand.

Level 5 What is the essential nature and character of the brand?

Level 4 What does ‘value’ mean for the typical loyal consumer?

Level 3 What psychological rewards or emotional benefits do customers receive by using this brand’s products? How does the customer feel?

Level 2 What benefits to the customer or solutions result from the brand’s features?

Level 1 What are tangible, verifiable, objective, measurable characteristics of products, services, ingredients or components that carry the brand’s name?

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(Figure 23: The Brand Pyramid, DeChernatony & McDonald, p.170, 2003. Original Source; Ward et al., 1999) The first two levels of the pyramid represent the elements of product competition, rather than that of brand competition. However, if the company can raise it’s offering to encompass level three, emotional rewards can result in competitive advantage. The top two levels of the pyramid represent the stages reached by powerful brands, where the brand is recognised in terms of its personality and values.

The importance of the branding process also relies on business to business (B2B) and consumer decision making processes. Both of these models can found in DeChernatony & McDonald (2003).

Internet/Online Brands As well as numerous stores around the country, the John Lewis brand also has an online webstore for customers as well as an additional website called “The John Lewis Partnership” for press purposes, corporate data and business to business information. The importance of the online brand experience is just as significant as offline. This will be researched further throughout this section of the report.

(Figure 24: Understanding the nature of a brand, DeChernatony & McDonald, p.291, 2003)

Promise Experience Emotional Values

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Rational Values

The brand triangle shown here enables the John Lewis own-brand to define the characteristics of their brand promise and its enactment can be appreciated from the elements shown in the following table.

Enacting The Brand Promise Online (Promised Experience, Emotional Values and Rational Values) The first challenge facing a potential website visitor is that of actually locating the

Locating The Brand & Speed Of Download

brand’s site via the internet. The online brand is essentially useless if no one can find it. This can be found through affiliate marketing, banner advertising, direct searches etc.; the list goes on. Implementing effective search engine optimization (SEO) and Google analytics can also allow the brand to be found much trouble-free. If the brand is easy to access/find, users then perceive the website to be credible and as a result, have more confidence to better appreciate the brand’s character-istics through searching further within the site. After the user has located this, speed of download becomes the next challenge. Consumers’ image of a brand’s site can be highly influenced by the speed of download. No user wants to wait a long time for website content to appear/download as they can become irritated and click the ‘x’ button.

DeChernatony & McDonald (p.297, 2003) reinforce the site’s appearance “engenders a view about the brand’s promised experience”. First impressions are extremely important as visitors will be rapidly scanning to decide whether to continue further through the website. For example, a warm welcome (“with notable emphasis on greeting the visitor”) is much more effective on the homepage rather than having information all company centred and biased to transmitting information/over-selling.

Everything from the style of writing to the “tone of voice” to colour is important as they can give clues about the brand’s characteristics. A dull site appearance is unlikely to impress visitors and ultimately, make them purchase.

A research study by Flood (2000) says navigation of a brand’s website “is like you’re

Navigation

alone and you are exploring a strange city without a map”. Navigating through a website is a “further array” of clues about the brand. The website must be easy to use and convenient for all aspects of the site to be found. If not, users can get frustrated and a negative brand image can be publicised.

DeChernatony & McDonald (p.297, 2003) explain “differential rewards should alert

Differential Reward

the brand’s team to consider why someone would want to their web-based brand, rather than have offline interaction”. As a result, John Lewis are recommended to give their users valid reasons to why they should shop online rather than instore e.g.

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Site Appearance

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What benefits does this give to them? (For example, quicker to find the specific items you’re looking for, delivery straight to your home/work etc.)

As Marshak (2000) explains “being able to contact support personnel can increase Personal Support

consumers trust in a brand. There are frequent instances where the presence of a helpline biases visitors’ preference in favour of using an online brand”. John Lewis offer a helpline telephone number, email and regularly updated twitter account to aid users and customers with help should they need it. This allows consumers to feel confident with using the brand as they know they have numerous speedy contact forms they can go to when shopping online. This could also relate to “differential award” (as above) as personal support may not be available as efficiently instore/offline as it is online.

Finally, the physical delivery and returns aspect of the brand’s online promise is also

Physical Delivery & Returns

tested. When shopping online, customers can have their orders shipped straight to their door. As DeChernatony & McDonald (p.299, 2003) explain, there is a “scope

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for competitive advantage here by ensuring the delivery staff are aware of the values

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of the brand being delivered in order to act in a way that reinforces the brand”.

Recently, users also have the option of ordering online and picking up their items from their local John Lewis store. For example, it is fundamental to ensure the delivery is on time and staff are polite and friendly at all times. This is useful for those who are unable to receive a delivery at their home or work address etc.

If this does not occur, consumers can view the brand as unreliable and frustrating and are unlikely to purchase the brand’s products again or recommend them to a friend, for example. Additionally, in regards to returns, if the customer is unhappy with an item they have purchased, they do not want to be put through a long, confusing process to return the products. As a result, the returns process should also be simple for customers to do, improving their online brand persona.

(Table 6: Enacting the brand promise online, DeChernatony & McDonald, p.294-299, 2003) However, with any type of brand architecture, online/internet branding does have its advantages and disadvantages, as follows;

Figure 25  Online Websites Can Build Consumer-Relationships As Dutta & Biren’s (2001) previous research has shown, online brands can help to build effective relationships with stakeholders. One efficient way of achieving this to offer pre-formatted pages that meet different stakeholders’ needs. For example, journalists and media contacts are particularly interested in current events; potential investors are keen to download financial data and company information whereas customers want to view the online webstore to purchase what they desire. As a result, John Lewis offers two separate websites for each of these stakeholders to easily find what they are looking for. DeChernatony & McDonald (p.299, 2003) explain that “if firms are to succeed through stronger relationships, they need to build an understanding of their visitors”.

This is achieved by John Lewis by implementing online surveys, social media platforms and customer alerts (e.g. sales, special offers, newsletters, email etc.)  Better Tailoring Offerings Are Available Online In recent years, the internet is “drawing marketers’ attention away from the idea of mass segmented markets to targeting smaller numbers of individuals” (DeChernatony & McDonald p.300, 2003). were to shop instore. For example, users can easily shop for specific departments easier and quicker or type a key word into the search bar; add items to their “wish list” to be notified if the product’s price changes etc. The majority of the tailoring offerings available online are beneficial to the target market as these cannot be achieved instore.  The Internet Has Greater Interactivity Navigating through the John Lewis website allows greater interactivity for its customers.

Consumers can “envisage being given options, making decisions and through their intentions with the brand, form opinions about its overall character” (DeChernatony & McDonald p.301, 2003).

Using the website can heighten their expectations regarding John Lewis customer service more than just those in a brick environment (in store). The internet has numerous benefits to the consumer including a wider variety of product information; additional product imagery, size guides, help & FAQ sections etc. John Lewis also particularly offer its users a “virtual personal advisor”, who learns about visitors’ specific needs as they navigate through the website and helps them guide to similar products or different alternatives that be appropriate.

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By having an online webstore available, John Lewis offer better tailoring offerings than if consumers

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Figure 26  Shifting Power As past research conducted by Dussart (2001) and Mitchell (2000) has shown, “the balance of power is beginning to swing away from distributors and manufacturers to customers instead” (DeChernatony & McDonald p.305, 2003).  Comparison Shopping As the internet has rapidly grown over the years, brands are ever-evolving and consumers are always looking for “the best deal”. As a result, they are able to easily and quickly search brand information and undertake what is called comparison shopping. An example of this includes similarsites.com; the online website offers its users a list of alternatives to the website they were originally searching for. This clearly illustrates the key competitors and customers are at the risk of choosing to buy with a competitor brand rather than their original decision.  Pricing Pricing is a similar disadvantage, as above. The internet is jam-packed full of information and it makes price-comparison sites also much easier to access. An example of this includes pricescan.com Managing The Commercial Communications Process | Student ID: 21017802

where they rapidly compare prices and brand characteristics of numerous categories. Sinha (2000)

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argues that the company is treated unfairly with “the resultant cost transparency can damaging brands’ reputation” and image through customers’ perception once they learn more about prices.  Service Finally, some customers do not enjoy online-shopping with John Lewis and would prefer to shop within a physical store to gain better staff service. Although help can be gained via online methods when accessing the John Lewis website, some customers prefer to talk further in-depth with a staff member face-to-face and perhaps ask more questions, gaining more useful information.

The benefit of online shopping versus physical in-store browsing/purchasing also has the benefits of: -

Brands are available at all times and from all over the world

-

Information and interactions are in real time

-

Consumers can choose between brands which meet their criteria, as a result of selecting information which is in a much more convenient format for them, rather than the standard catalogue or viewing format in a John Lewis store.

(DeChernatony & McDonald, p.392, 2003)

Overall, in order for John Lewis to succeed within the industry, they need to take good advantage of digital technologies and the power of the internet in order to stay one-step ahead of its competition. “Wellconceived marketing intelligence systems are critically important to brand success and can reduce the lead time needed to rapidly respond to changing consumer needs and trends within the market, minimizing any delays in the supply chain” (DeChernatony & McDonald, p.394, 2003).

Brand Architecture/Added Values Added values of the John Lewis own-brand is integral to the organisation as they help to “enable customers to appreciate their points of difference amongst competitors, the way they satisfy both functional and emotional needs, reduce perceived risk and make purchasing easy” (DeChernatony & McDonald p.366, 2003). Overall, brands succeed more because customers perceive them as having value over and above that of the ‘equivalent’ commodity (otherwise known as other competition within the marketplace). As a result, the brand-name become more noticeably differentiated with relevant and welcomed attributes by not just satisfying a core need, but also offering augmented benefits to the target market.

in mind. By adding extra incentives to the brand to consumer’s perceptions, the organisation need to recognise that value “is in the eyes of the beholder” and these extras need to be “greeted with joy by consumers” (DeChernatony & McDonald p.367/370, 2003). One main problem organisations face when adding values to their brand is that they “over-engineer the brand with non-relevant consumer benefits”.

Consumer’s perception of ‘value’ can mean anything like; -

“Value is low price”

-

“Value is whatever I want in a product”

-

“Value is the quality I get for the price I pay”

-

“Value is whatever I get for whatever I give”

Therefore, when adding extra value to a brand-name like John Lewis, the organisation’s marketing team must implement good consumer research which can help stimulate new ideas and strategies about providing this value. Then, in order for it to be successful, the firm will then need to have a crystal clear view about precisely what added values the brand will offer as well as understanding the relevance of these to different types of consumers within the target audience.

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However, no single customer is the same and it is important for the brand and parent company to keep this

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Successful added-value brands “should not stress one part of the brand asset” according to DeChernatony & McDonald (p.372, 2003) but should blend a variety of components together, ensuring a “coherent approach is adopted; with each component reinforcing one another”. Essentially, consumers look to brands as “problem solvers” and in doing so, need to be able to easily associate an instant brand name and specific added value when purchasing a product/service from that company. A holistic approach is recommended to be developed when adding brand value and this can include any of the following; 

Having added values which do not just satisfy functional needs but also meet emotional needs



Being perceived as low-risk purchase



Making purchasing easy through being presented an effective shorthand device



Being backed by a registered trademark, legally guaranteeing a specific standard of consistency etc.



Being differentiated from competition in such a way that the name is instantly associated with specific added values. The list goes on regarding added values; these are a few examples.

Brands can achieve added value through customization and building relationships. Overall, in order to

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develop the most appropriate kind of brand added values, marketers need to be aware of potential factors

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which can affect future performance. As a result, it is important to keep a keen eye on market trends and industry topics to prevent negative business performance. Although marketers should continually strive hard to add further brand value throughout the brand’s life cycle, competition should be regularly judged and their strategies tracked. By doing this, John Lewis can attract consumers by reinforcing that their ownbrand offers more than the competition.

Kapferer (p.75, 2004) demonstrate the “winning formula” for effective brand management/values is: Figure 27 “To seduce through shared values (putting the brand in the consideration set), attract customers regularly and repeatedly with innovations that are consistent with these values and develop customer loyalty by quality and price that need to be continually justified for mature consumers”

The Ashridge Management Model & Critical Success Factors Analysis (CSF Model) As explained previously, brands need to take numerous factors into consideration when building a successful brand name. John Lewis own-name brands are becoming more and more recognised as part of the company’s overall capital/brand equity and produce added benefits for the business.

Kapferer (p.11, 2004) reinforces “we live an attention economy; there is so much choice” particularly in the retail sector. The own-branded product by John Lewis must convey certitude, trust and brand power to influence buyers. This can be achieved effectively by incorporating the Ashridge Management and CSF model into marketers’ decision-making; PURPOSE Why does the brand exist?

Figure 28

EMPLOYEE VALUES THE

Employees’ Personal Values – These should

ASHRIDGE

be reflective of those of the overall brand

MODEL

COMPANY VALUES

STRATEGY

What does the company believe in? What

The competitive position of the brand

do they hope to achieve from the brand?

and distinctive competence STANDARDS & BEHAVIOURS The policies and behavioural patterns that underpin the distinctive competence and value system

CRITICAL SUCCESS FACTORS (CSF Model) Stakeholder Value Vision-driven Offers the right product Communicates value Cultivates profile Acquires market knowledge Builds productive relationships Remains grounded Learning & Innovation Nurtures people and team Entrepreneurial leadership Brings key business skills Constantly encourages innovation Develops a learning culture Ensures openness to change

Internal Business Processes Builds a board that leads Manages strategically Ensures operational excellence Finds the right structure Robust organisational infrastructure Manages quality and performance Finances & Resources Robust financial management A viable business model Achieves a sustainable scale Carefully controls cash Focuses on income diversification A culture of investment

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Table 7

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Brand Expansion Many brands such as Sainsburys and Philips obtain a wide own-branded product range but still use their store name as the “brand name” for the own-label items. This is because all companies must deal with this issue when they stop producing more than one type of product.

Over the years, John Lewis have launched many collections of their own-brand line (please see previous discussion page 6 for more details). Retailer own-brands such as John Lewis are a main competitor to manufacturer brands within the ever-growing industry. Own-brands have progressively become more sophisticate, and are now positioned in all three tiers of any given market; low-cost economy product, mainstream products, premium products, and even niche products. The key word ‘mega brand’ refers to capitalising on the overall brand architecture to support a wider range of products under one umbrella brand (Kapferer, 2005). Please read further for an in-depth discussion about how John Lewis implements the umbrella brand strategy for their own-branded product ranges.

With the disadvantage of high costs to develop new brands, John Lewis has taken the opportunity to Managing The Commercial Communications Process | Student ID: 21017802

implement line extensions which can ultimately attract a large group of repeat purchasers. In other words,

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since the John Lewis own-brand was first launched many years ago, the organisation has decided to build upon that and introduce many different own-line departments (including John Lewis clothing, electronics, home wares, furniture etc. additional information regarding the own-line is discussed previously on page 6.

As a result, the brand has developed a strong identity over the years and has resulted in an easy, low risk manner of leveraging overall brand equity for the business.

Before launching new brand extensions, it is valuable for the company to first conduct valuable consumer research in helping to decide what route to go down (for example, should the firm expand their existing men’s own-line or develop something new?). The use of extending the original own-brand can also appeal to different segments within the market if the company wishes to increase their potential customer-base.

The DeChernatony & McDonald (p.51, 2003) theory depicts that by developing “sufficiently differentiated brands that consumers desire under one ‘umbrella brand’, it may be advantageous to charge higher prices, as consumers pay less attention to price comparisons between different products because of the brand’s distinctiveness”. Overall, this clearly helps to enhance profitability. Retailers like John Lewis view their own-brands as being an essential part of their marketing strategies as: “Through marketing activity (e.g. advertising, point of sale material etc.), a fast turnover can be achieved.

Also, with a more sophisticated brand being implemented, the importance of long-term relationships with customers can be achieved. Many manufacturers and distributors of the products have cause to recognise that their future success highly depends on one another and therefore, a strong brand identity can effectively represent profit opportunities for the organisation’s future”.

The Umbrella Strategy In total, there are six structural models of the brand-product relationship including; The Product Brand Strategy; The Line Brand Strategy; The Range Brand Strategy; Source Brand Strategy; Endorsing Brand Strategy and The Umbrella Brand Strategy. However, the most appropriate strategic concept for the John Lewis own-brand is “The Umbrella Brand Strategy”. This is because the umbrella approach supports several products in different markets and each of them develops their own marketing communications yet each product is underlined by the generic brand name. This relates to the John Lewis own range as the firm have a wide variety of product collections (ranging from menswear, womenswear, children’s clothing, home & furniture goods and electronic items) so target different markets but are all under the John Lewis own-

Figure 29

Brand (John Lewis)

Products (John Lewis Women/Men/& Co, Collection, Collection Weekend, Furniture/Home Ware, Electronic Goods etc.)

Specific Communications by Product/Service (John Lewis Marketing/Advertising/PR Strategies) One benefit John Lewis can gain from using the umbrella strategy is “the capitalization on one single name the economics of scale on an international level”. The concept can also allow the core brand/overall business to be “nurtured by association with products with which it was not previously associated” as new product lines are launched. Overall, effective use of the umbrella model can add to the public awareness of the brand and gain the organisation a positive reputation and high-quality brand image. “As a result, this allows the business to capitalise on the already well-known brand identity and on the reputation to enter markets where the company is not existingly present. On the whole, the awareness gives rise to nearly instantaneous goodwill on part of the retailers and public concerned.” (Kapferer, p.302, 2004).

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brand. An illustrative version of this is shown below. (Figure: The Umbrella Brand Strategy, Kapferer, p.302, 2004)

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The Identity Pyramid Model Kapferer (p.222/223, 2004) illustrate the concept that a brand is made up of three layers; kernel, codes and promises. Each of these theories (“source of inspiration, statement, codes and communication themes”) work together in a pyramid model which is used to aid managing the John Lewis own-branded identity. The pyramid consists of three separate tiers as follows; At the top of the pyramid, is the kernel of the brand – in other words the source of the brand.

For example: Where did the John Lewis own-brand come from? How did it start? How does it work? “It must be known because it imparts coherence and consistency” At the base of the pyramid, are the brand’s themes/acts/products/services – this is known as “the tier of communication concepts and the product’s positioning, of the promises linked to the latter”. For example: What products does the John Lewis own-branded range offer its customers? What recurring theme is imminent across the ranges? How are these products

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positioned within the marketplace? What aims does the product range hope to achieve?

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Finally, the middle level relates to the “stylistic code – how the brand talks and which images it uses”. It is through the organisation’s style that the theme is decided and helps to reflect the firm’s overall image. Overall, there is a close relationship between the facets of the three tiers within the pyramid (as shown below) as with the identity prism.

(Figure 30: About the Identity Pyramid Concept)

Brand Kernel

Personality Culture & Self-Projection

Brand Style

Physique, Relationship & Reflection (Figure 31: The Identity Pyramid Model)

Brand Themes, Acts & Products

Kapferer’s Identity Prism Model Sender Physique

Personality

Externalization

Internalization

Relationship

Culture

Reflection

Self-Image Receiver

According to Kapferer (2003), effective brand identity of the John Lewis own-label products can be defined by answering the following questions; -

What is the aim and individual vision of the brand? What makes a brand distinguished?

-

What is the brand’s equity/image? What are the brand competence, validity and legitimacy? What are the features of its recognition?

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How can customer satisfaction be achieved if they were to purchase the brand?

It can also be argued that the theory includes the uniqueness, meaning, aims, values and personality of the overall organisation to potentially positioning the brand name more efficiently, and thus, achieve higher competitive advantage. The following table explores how the prism can be used to help improve the John Lewis brand.

“Physique” Firstly, the “physique” aspect of the pyramid combines salient objective features (e.g. what immediately comes to a consumer’s mind when they hear the John Lewis brand-name mentioned) and emerging brand identity. It is also commonly known as the brand’s “backbone and its tangible added value”, focusing on know-how and classic brand positioning, relying on key product and brand attributes and benefits. The main step in developing an effective and positive brand identity is to define its physical aspect: What is it concretely? What does it do? What does the brand look like to the audience? The physical facet essential compromises the brand prototype: the products the brand entails and how this is representative of the overall business qualities.

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(Figure 32: The Brand Identity Prism, Kapferer, p.107, 2003)

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“Personality” A brand personality is essentially the way in which the business communicates with its audience, gradually building up brand characteristics. The easiest way to achieve this to create an “instant personality”. For example the John Lewis “personality”/tagline is “Never Knowingly Undersold”. The personality facet within the prism essentially means the overall brand identity. The business explains this as; Quality – “You can trust that we will always stock the best quality products, responsibly sourced. Sustainable materials and methods are used wherever possible, and trading ethically at all times. We have the very highest standards when it comes to product quality, plus we regularly benchmark John Lewis-branded products against the competition to ensure we're not just market-leading in quality, but also on price”.

Price (Brand Price Match) – “We set highly competitive prices for all our products, with a dedicated team regularly checking them against other high street competitors. If we find a national high street competitor offering a better nationwide price for the same individual product, sold with the same service conditions, we'll lower our price to match in all our shops and on our website, including when a competitor is having a sale”.

Service – “John Lewis staff are Partners in the business, and are highly trained to offer helpful, impartial advice on all products. Our service doesn't end with your purchase – we provide excellent after-sales and a great choice of expert services to help you, from delivery to installation. We offer many specialist services (some at no extra cost), delivered to the highest possible standard”. (johnlewis.com, 2013).

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“Culture”

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Next, Kapferer (p.108, 2004) explain brand culture as “from which every product derives. The brand’s products are not only a concrete presentation of the overall culture but also a means of communication”. In relation to John Lewis, culture means “the set of values feeding the brand’s inspiration. It is the source of the brand’s aspirational power. The cultural facet refers to the basic principles governing the brand in its outward signs (product and communication).

This essential aspect is at the core of the brand”. As the John Lewis own-brand bears the same name as the overall organisation, culture is what helps link the two. Overall, it also helps to differentiate the brand from its competitors within the market and stand out from the rest with innovative ideas and effective set of values.

“Relationship” Fourthly, the secret to obtaining a strong brand is a relationship. Although brands are “at the crux of transactions and exchanges between people”, retailers like John Lewis must build relationships with its customers, suppliers and other stakeholders. The relationship aspect of the prism is crucial for John Lewis. Effective relationship building and maintaining can “define the mode of conduct that most identifies the brand”. In the long-term a wider customer base can be gained (through recommendations/word-of-mouth, for example) and essentially an increase in revenue.

Overall the relationship facet has a number of implications for the way the brand acts, delivers services and relates to its target consumers.

“Consumer Reflection” Kapferer (p.110, 2004) also quote that “a brand is customer reflection”. This means when a customer is asked for their views on a certain brand (e.g. John Lewis), people immediately answer in terms of how the brand is perceived in the public eye; for example ‘they target a lot of elderly customers’ or ‘they have a great Christmas TV advert every year’ etc. (please find additional information regarding John Lewis television adverts in appendix 4 or on page 23). As a result, it is important for the business to communicate its brand effectively and build-up/promote its most striking products over time and the brand will be able to create a positive reflection/image to the audiences.

Additionally, consumer reflection refers to how consumers easily define what products are particularly suited to specific markets; for example, is this product right for me; what can I gain from purchasing this brand etc.? The John Lewis own-branded range target many different consumers including men, women, children and those who are interested in home/furniture goods and electronic devices. “Brand communication and goods aim at reflecting a consumer, from whom those goods are addressed. A consumer has to be reflected in such a way which would show how he or she could image themselves consuming a particular good”. All brands (including John Lewis) must effectively control their customer reflection for success.

“Self-Image” Finally, the self-image of a brand is similar to the customer reflection. “If reflection is the target’s outward mirror (they are...), self-image is the target’s own internal mirror (I feel I am...)”. Understanding the consumer self-image is that “the features with which consumers identify themselves with are the very same features they would like to be reflected in the John Lewis own-branded products”. Self-image is also important in the concept of consumer behaviour (the consumer buying process is shown in appendix 1) as they purchase goods, corresponding to their self-image (as explained above). FMCG Marketing (2007) explains this facet as “the conception of consumer self-image is developed within timeframes and is based on what they see around themselves and how other consumers evaluate and respond. The conception is a set of beliefs about oneself, retained in memory. The conception of consumer self-image can be determined and strengthened by examining purchase and consumption. Overall, consumers acquire the reconciliation of oneself having positive attitude towards a certain good of that brand”.

(Table 8: Definition of Kapferer’s Brand Identity Prism)

the John Lewis own-brand. It helps to build relationships amongst stakeholders and conveys its key messages towards them. It truly is a building process.

Kapferer (p.110/111, 2004) summarises the overall prism as; “The six facets within the prism define the overall identity of a brand as well as the boundaries within which it is free to change or to develop. The brand identity prism concept/map helps to demonstrate that these facets are all interrelated with one another and form a wellstructured entity. The content of one facet echoes that of the rest. The identity prism originally derives from one basic theory – that brands have the gift of speech. Brands can only exist if they communicate well.”

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In conclusion, communication of the brand identity prism helps to build a successful identity and image for

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Benefits & Limitations of Branding (Evaluation) Since John Lewis launched their own-label lines many years ago, a number of advantages have been achieved for the overall organisation. However, with any type of marketing strategy, there are also a few disadvantages. A list of the benefits and limitations of branding are shown in the table below.

Benefits  The Consumer -

Easier product identification

-

Communications features and benefits

-

Helps product evaluation

-

Establishes products’ position within the market

-

Reduces purchasing risks

-

Creates interest/character for product

Limitations  Complex The branding process is complex, especially for John Lewis which offers a range of products and services. The process entails extensive research and strategic plans.

The brand identity will only become successful when customers closely identify with the company.

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 Expensive

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 The Manufacturer

When designing and creating a new brand identity as

-

Helps build relationships/create loyalty

well as new products within the range, it can be

-

Defends against competition

expensive and time-consuming.

-

Creates differential advantage

-

Allows premium pricing

-

Helps targeting/positioning

Overall, it can be time consuming for a brand to build a

-

Increases power over retailer

successful public image, improve relationships with

 Time-Consuming

stakeholders etc.  The Retailer -

Benefits from brand marketing support

-

Attracts customers

(Source: Brassington & Pettitt, p.188, 2007)

 Difficult To Maintain It can be difficult for the brand to maintain a successful brand image; this may be because of changing customer preferences, product or service diversification, company expansion etc.

(Table 9: Advantages & Disadvantages of Branding)

About Rain Communications (“The News Generation Agency”): “A track record worth shouting about” Rain Communications is an independent PR agency which specializes in news, features and content generation – “with consistently outstanding results” (raincommunications.co.uk, 2013). Rain take pride in delivering innovative and compelling story angles and packages that cut across all areas of the media including print, online, social and broadcast.

According to prweek.com (2012), Rain Communications is currently not one of the Top 150 PR Consultancies. This could be due to the fact that they are a fairly small, independent agency, potentially looking for expansion in the near feature to increase their agency positioning. However, the organisation does maintain many successful household name brands including Avon, Slimming World and John Lewis.

With offices based in London Victoria and Oxford Street, Rain’s organisational structure consists of a strong team of 30-40 media professionals.

in 2003 by PR professional, Delia Hyde. Delia brings her wide range of experience and expertise to every client, campaign and business manageable.

Rain Communications has flourished to become one of the most successful “news generation agencies” in the UK, achieving ambitious but sustainable business growth – with an impressive client retention rate. Many clients have worked with Rain for more than eight years to date. (raincommunications.co.uk, 2013) The agency particularly takes control over the PR for John Lewis regarding fashion, advisory services and the brand’s flagship Oxford Street and Peter Jones stores. Rain offer a variety of PR services for the brand including; News Generation, Crisis & News Management, Public Affairs and Digital. Members of the Rain team regularly build effective relationships and work alongside media contacts, partners, clients and other third-parties to produce a positive brand image for John Lewis. Further in-depth analysis of how these methods are used to help achieve the client’s needs and objectives as well as the key roles, responsibilities and inter-relationships between the client, agency and other third parties involved can be found on page 44.

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Rain is proud to celebrate its 10th birthday this year as the agency was first set up

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The John Lewis Rain PR Team (Organisational Structure): Fiona O’Rorke (Associate Director): Women’s Fashion Emma Pengelly (Junior Account Executive): Men’s Fashion, John Lewis Oxford Street India Smith (Junior Account Executive): Women’s Fashion, John Lewis Oxford Street Caroline Lay (Junior Account Manager): John Lewis Oxford Street Lucy Hemelryk (Junior Account Manager): John Lewis Peter Jones Olivia Cordwell (Junior Account Executive): Specialising in Images & Product Placement for Women’s Fashion

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Fiona Campbell (Account Executive): Specialising in Lingerie

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As business-savvy professionals, the Rain team ensures all PR campaigns have clear commercial goals.

Agendas can vary from sales generation and business development to CSR and reputation enhancement.

Supporting the news generation tagline and mission statement, Rain Communications also deliver public affairs campaigns, news & crisis management and fully integrated digital PR programmes for clients.

Rain’s professional services including news & crisis management/consultancy and digital marketing are both headed up by Delia Hyde (Managing Director) and Lizzie Costelloe (Senior Account Executive). Together they have over 20 years experience in advising and supporting clients on sensitive media issues. Rain PR’s aim is to “minimize negative impact and reporting of inaccurate information whilst offering a 24/7 advisory service to fully support clients and consistently deliver and excellent service to the media”. Additionally, Rain Digital mainly creates and manages “sophisticated, cost-effective and fully integrated online PR and social media campaigns” all specifically tailored to clients needs. Through strategic planning, unique rich media and promotional content, Rain ensures clients shine in all the right places. By utilising the full potential of social media platforms, dynamic relationships for client’s existing and potential customers can be formed. (Please see page 44 for more details regarding Rain PR’s additional services with John Lewis)

“Professional, creative, passionate – with some of the best contacts in the business community”

“Every task with Rain is an adventure, it just so happens that most of those adventures get published in National newspapers. Always efficient with a human approach it’s clear to see why they get results and clients keep coming back. I’d hate to be without them.”

“You can always count on the Rain team for enthusiasm and energy.

They will always go the extra mile to meet your demands.”

“Rain are on the button when it comes to understanding how broadcasting works.”

“Working with Rain is always a pleasure. They really are and make it easier to deliver the results the client is hoping for.”

“On trend, on time and able to understand what a journalist really needs, Rain is one of my favourite PR firms to work with.”

“The whole team is such a joy to work with. They are all so innovative, imaginative and efficient. Always brimming with great ideas and ways to promote things, they are then super adept at turning those ideas into reality.”

“Rain have guided, supported and facilitated the creation of our press profile.

We are extremely impressed with the quality of press coverage which they have delivered.”

“They just deliver time after time – a rarity.”

(Figure 33: What Rain’s Clients, Suppliers and Media Say) Quotations (from right to left) from Hannah O’Sullivan (Managing Director, Host Media Consultants), Jason Alden (Photographer), Margaret Hussey (Deputy Editor, Daily Express), Andrew Lynch (Assistant Business Editor, The Sunday Times), Jane Hamilton (Consumer Editor, The Sun), Marie Butler (Founder, Penninghame House), BBC Business Team, Clare Lazaro (Fashion Editor, The Times Magazine) and Linda Ewing (Managing Director, Media Circus Ltd).

Rain PR has won many successful pitches in the past as well as various praise from past clients, media correspondents and suppliers. Rain Communications are extremely passionate about what they do and are committed to offering all clients their gold standard “Rain Guarantee” as follows;

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Praise for Rain Communications

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Chutzpah! – Knowing media territories inside and out with excellent contacts with key media correspondents is a PR must. Rain excels at constantly seeking out new opportunities, knocking on doors, developing profitable relationships and quite simply, “making it happen”.

Flair – Whether clients require sparkling copywriting or a ground-breaking stunt, Rain knows how to deliver successful content and campaigns that really do raise the bar and stand out from the rest.

Energy – The talented media experts from the Rain team have an “inexhaustible appetite” for story creation and developing features and packages without gaps. “Rain are in it for the long haul!”

Gumption – What’s the point in monitoring trends 24/7 if you don’t know how to play it? Rain know when a news story is begging for the hijacking and when less is more.

Sensitivity – When handling complex media stakeholder environments or sensitive information, Rain reassure their clients they can always be sure that they are in very safe, professional hands.

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Innovation – Rain don’t deal in “off the shelf” tactics and instead tailor every activity to meet the

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specific objectives of every clients needs and stay one step ahead of emerging trends.

Integrity – Rain conducts themselves courteously and professional at all times when dealing with clients, business partners, stakeholders and media representatives on behalf of the brand.

Courage – Rain pitch stories directly at all levels and never hide behind technology. Rain strongly believes in if you know you’ve got a great idea carefully targeted to a specific readership or audience, why be shy?!

Honesty – The Rain PR team never seek to “up sell” a product, service or brand unless the agency is confident it will deliver the goals of clients. Rain are also transparent regarding all costings for proposals and budget management.

Friendship – Finally, Rain are extremely proud of every valuable member of the group. The team extends far beyond the walls of Rain Towers and the commitment to nurturing strong relationships with all agency partners and suppliers (from everything to professional designers, to photographers, to journalists), continues to reap priceless rewards.

(Table 10: The Rain Guarantee)

Primary Research: A face-to-face in-depth interview was conducted with Emma Pengelly (Junior Account Executive, John Lewis; Oxford Street). The interviewer was Erica Wenham who is due to start a work placement with Rain Communications during the Easter period. The interview lasted around 30-45 minutes and all answers given were recorded. The aim of the interview was to gain a further insight into how Rain PR works and how the team creates a positive perception of the John Lewis brand. A written script of the interview is shown in appendix 2.

As with all qualitative research, in-depth interviews are conducted to achieve a deeper understanding of an individual’s attitudes and the reasons behind specific behaviours/tasks. This understanding is achieved through responding to an individual’s comments with extensive probing. Although an agenda of topics need to be covered throughout the discussion, the interviewer will use knowledge of the research objectives to help gain as much useful information and results as possible.

The interview was located within the premises of the Rain PR office in Oxford Street, London. Using the files, brochures, magazines etc. in the office. It also helped the interviewee to feel more at ease and comfortable when answering questions. This can also be known as the development of rapport. This is fundamental to the success of an in-depth interview as the respondent will then express their true feelings and answers if they feel comfortable with the interview. As a result, before the interview was due to begin, the interviewer and the respondent took some time to have an informal conversation to “break the ice” before the discussion to create a more relaxed atmosphere.

“Overall, the flexibility of the depth-approach means that the skill of the interviewer is critical to the quality of information obtained from the interview” (Wilson, p.105-107, 2010) As a result, the interview with Emma took an unstructured, informal and flexible approach throughout. On the whole, the discussion was a success and helped to achieve the initial aims that were set previous to the interview taking place. The results/script of the interview are shown in appendix 2.

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respondent’s premises also allowed the researcher to access additional materials to aid the interview such as

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Critical Evaluation: The Client-Agency Relationship (Roles, Responsibilities & Inter-Relationships) How does Rain contribute to the current position of John Lewis? How does the agency connect to the development, promotion and protection of the brand? What tasks does Rain carry out for John Lewis? How does this reflect in results? What impact has it had on business?

Rain Communications are extremely passionate about working alongside John Lewis as one of their main clients and are dedicated to offer many vital services including features creation, product placement and fashion consultancy. Past campaigns worked on with the John Lewis brand include strategic partnerships, designer identification, collaboration and alliances, expert endorsement and recruitment; a whole assortment of initiatives that are rewarding from both a communications and commercial perspective for

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the company (raincommunications.co.uk, 2013).

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The PR agency also helps to positively contribute to the current market position of John Lewis by regularly hunting down market trends, putting together effective news releases with attention-grabbing headlines, engaging features and digital content packages which result in exciting national coverage, get the market talking and hitting the client’s communication targets. John Lewis also benefit from Rain’s comprehensive digital services, headed up by Rain’s Senior Account Executive Lizzie Costelloe. The PR team creates and manages social media platforms, online PR strategies/campaigns, content creation, website design and SEO specific to the brand’s needs. By harnessing the full potential of these, quantifiable results can be formed.

In addition, managing director and founder Delia Hyde take charge of crisis & news management to help protect the John Lewis brand. With her 15 years’ experience in advising and supporting clients on sensitive media issues, Rain’s aim is to “minimise negative impact and reporting of inaccurate information”. Rain offers the following regarding crisis communications; 1) 24/7 news management advisory service to fully support John Lewis and consistently deliver an excellent service to the media to reflect a positive brand image; 2) Crisis management strategies and communication plans; “First Dial” media responsibility and press office support; 3) Training of spokespeople and board directors and 4) Full feedback and crisis response reports. (raincommunications.co.uk, 2013)

In order to achieve this, Rain undertakes a wide variety of PR roles for John Lewis which reflects in overall results. The following tasks help to result in a positive impact for John Lewis’ brand identity and connect to the development, promotion and protection of the brand;

Smart Product Placement – e.g. press/trade show management, broadcast, tactical desk drops etc.

First-Class Fashion Connections – Rain help to raise the John Lewis fashion profile by showcasing the brand to the most influential industry and media professionals.

High Calibre Fashion Shoots – Rain work with experiences and leading fashion photographers, models and stylists (on a third-party/supplier basis), to help enhance the overall brand image.

Fashion Event Management – This includes press breakfasts/conferences in boutique hotels or venues, high-profile fashion shows, product launch events etc.

Brand Strategy – Rain helps to offer vision and guidance for brand positioning, successful campaigns for every aspect and stage of John Lewis’ brand development.

“Talent Spotting” – Rain regularly seek out and secure effective and long-term relationships with top Gaining Coverage – Rain reinforce they have a “consistently impressive track record worth shouting about” and as a result, secure high profile news and features coverage in national & broadcast media, supplements and online.

Monitoring Relationships & Trends – Improving long-term relationships with influential media contacts, industry leaders, customers and other stakeholders. The Rain PR team also frequently observes media and retail-trend patterns to gain opportunities for news coverage for John Lewis.

Digital – The PR team take control of social media and online PR strategies & management for long-term campaigns or special events. This also includes “content creation” where third-party talented and professional team of experienced journalists and SEO copywriters can improve website/newsletter design and produce news, blogs, features, guides etc. online.

Public Affairs – On the Rain Communications official website, they state their aim is to “provide clients with a 360-degree public affairs operation with strategic campaigns supported by high-level stakeholder engagement and tactical media coverage”. Rain Public Affairs are taken charge by third-party Public Affairs Consultant, Paul Barnes and Rain’s in-house Senior Consultant, Hannah Walsh. These roles are distributed to all aspects of the John Lewis brand (including individual products and services) in-line with corporate objectives and needs.

(Figure 34: “The Client-Agency Relationship”; Rain PR Tasks. Source: raincommunications.co.uk, 2013)

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designers and emerging talent to help John Lewis to attract new markets and audiences.

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PR Agency Issues Issues within the PR agency sector have changed numerous times throughout the past 10 years. The graph below shows how the fee income of ten key agencies (shown below) has changed over the past decade; Colour Code: Bell Pottinger Group Citigate Dewe Rogerson Edelman College Hill The Red Consultancy Lansons Communications Munro & Forster Managing The Commercial Communications Process | Student ID: 21017802

Brands2Life

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Eulogy Frank Public Relations (Figure: A decade in PR) Please find a more detailed timeline regarding PR issues over the past decade in appendix 3.

More recently, PR Week state that 2012 was a tough year for the agency sector, but 150 consultancies have grown by 9%. “The industry’s total fee income jumped to £900m in 2012, up from £839m in 2010 and 2009’s figures of £814m. It now exceeds the pre-recession 2008 figure of £858m. Overall growth has been boosted by a series of acquisitions.” (prweek.com, Magee, 2012).

Francis Ingham (Chief Executive, PRCA) has said that 2011/12 were great years for the PR industry.

Despite some of the most uncertain trading conditions to have been seen within the market, the industry still managed to grow by an average of almost 10%. He was also quoted as saying “an industry growing at 10% a year doubles in size over seven years – this is the kind of economic powerhouse any country would die for”. It is also a well-known fact that London-based agencies perform the best and dominate the industry so it can be difficult for those based elsewhere within the UK.

Matthew Freud (Chairman, Freud Communications) added “the PR industry is growing whilst those around it are largely in decline. The basic economic model for media and marketing is broken. The consumer or client is no longer willing to consistently pay for content and media owners are no longer able to guarantee the attention of their audience to advertisers”. Take “The Daily Mail” for example, two million copies are sold every day at the price of 50p but 100 million visitors use The Daily Mail online website. These 100 million do not pay directly for the product and “the advertising yield for audience is 50 times greater than the print equivalent. That’s why PR is so important” (prweek.com, 2012). Kingston Smith W1 partner; Esther Carder agrees with Matthew saying “given the UK economic climate, and government cuts, this is quite an achievement for the PR industry. Agencies are in a good place compared with other marketing disciplines and as a result, have taken advantage of their ideal positioning to grab social media budgets and delivering good profit margins for clients” (prweek.com, 2012).

Video content regarding the best chance of a brand message being relayed through the media in the best possible light can be found in appendix 4. The video includes PR Week’s first ever “Question Time” style online TV show known as “The Message in the Media”. This is an on-going multimedia project as part of PR specifically the role of PR and of social media platforms. PR professional Stephen Waddington quotes “the public relations industry is more confident than ever before in its proposition thanks to disciplines such as planning and measurement. It’s embracing new opportunities to sell integrated solutions, comprising creative, production and technology”.

PR & The Department Store Market Department stores within the retail industry face a tremendous amount of competition, more than ever before according to Bryant (TRCB.com). Because of this, the need to achieve effective PR methods and marketing strategies is also becoming increasingly competitive to gain. Internet public relations can particularly increase sales revenue and increase marketing resources and widen the customer base. The internet has revolutionised the overall success of brands and Stephen Waddington also recommends “social media is no longer a specialism within public relations; it is public relations” (prweek.com, 2013). The success department stores like John Lewis are also to competing with one another in the sense of aesthetics.

“In these highly competitive times, retail chains are embracing aesthetics and design (online and offline) with renewed emphasis” (Bryant, TRCB.com). More video content regarding the role of PR and marketing in a branded market is shown in appendix 4.

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Week, devoting its readers to useful information regarding exploration crisis communications and more

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Conclusions & Recommendations: In the competitive department store sector, the John Lewis own-name brand is a logical stage within the overall growth of the organisation. In conclusion, Kapferer (p.128-130, 2004) recommends the first stage to aid effective brand growth for John Lewis is to take market share “from the big brands by allocating more space to one’s own distributor brand (if possible) and increasing the average price of the major brands to attract consumers to the own-brand” (Paulwels and Srinivasan, 2002). The second stage to achieve the goal of retail growth is to secure market share from the competition. This then “becomes a genuine instrument of strategic differentiation, expressing the identity, values and positioning of the company name itself”.

By implementing a ‘push’ promotional strategy, John Lewis can make advantageous use of their company’s sales force and trade promotion activities to create consumer demand for their own-branded products. The John Lewis own-brand produce high-quality, designer, but affordable goods more than any other department store on the market. This is the brand’s unique selling point and marketers should reinforce this to reach wider audiences and sell higher volumes of stock. With this strategy, directing selling to the target

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consumer, consumer promotions and effective advertising are the most likely/recommended promotional

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tools to enforce to help achieve this.

The John Lewis own-branded product line is of key importance; its contents express the entire values of the parent company. Appropriate and professional staff must control the way the brand is marketed, advertised and received by the target market via effective communicated messages. Kapferer (p.130, 2004) explain that is “no longer simply a way of filling a gap in the markets; it needs to offer one or more components of added value based on its products/service”.

Overall, according to Retail Week (2013), “everything from its branding to its financial figures” has been such a success for the brand. As the UK’s economic climate continues to remain uncertain, some big retail names have fallen at the credit-crunch hurdle but John Lewis has “never looked more confident”. The retailer has led the way in crucial marketing areas whilst still meeting fashion trends and consumer wants and needs. The reason behind the brand’s overwhelming success is ultimately down to its unique positioning. The business identity is “resolutely British; almost comforting presence on the high street”; attractive to their target market as well as tourists and UK visitors. Although the recession was a difficult time for many businesses, John Lewis has maintained their strong brand image, innovative ideas and firstclass customer service; ultimately making them Britain’s leading multi-channel retailer.

Appendices: Appendix (1) – Business to Business (B2B) & Consumer Marketing DeChernatony & McDonald (p.160, 2003) reinforce a distinctive difference is drawn between both consumer marketing and organisational (otherwise known as business to business). “Consumer marketing is principally concerned with matching the resources of selling organisation with the needs of the consumers. It focuses heavily on those people at the end of the value chain who purchase brands to satisfy either their own personal needs, or those of a friend/family member. By contrast, organisational marketing is concerned with the provision of products and services to organisations. They are not the final consumers”.

The Consumer Buying Process (DeChernatony & McDonald, p.72/73, 2003) In reality, consumers face a complex world; they are exposed to over 11,000 advertisements a day but only remember 2% of them. Therefore, in order to meet corporate aims and objectives, John Lewis needs to put into place strategic and effective marketing plans to attract customers. helps them search and interpret new information. They are also limited by both “economic resources and by their ability to seek, store and process brand information”. The figure here shows the consumer decision process occurring as a result of consumers seeking and evaluating small amounts of information to make a brand purchase. Firstly, the process begins when the consumer becomes aware of a problem (e.g. suitable clothing is needed for a summer holiday). The recognition would trigger a need to resolve this problem and begin to scan the external retail environment. DeChernatony & McDonald (p.73/74) say; “Thus, the brand marketer has to overcome, among other issues, three main problems when communicating a brand proposition. First, they have to fight through the considerable ‘noise’ in the market to get their brand message noticed by consumers. If they can achieve this, the next challenge is to develop the content of the message in such a way that there is harmony between what is in the message and what the consumer takes out of this. Having overcome this, the message should be designed powerful enough to be able to reinforce the other marketing activities put into place to persuade the consumer to buy the brand. The consumer will then mentally process the message about competing brands and evaluate them against each other, deciding which is the most important. Brand beliefs will then be formed and will begin to mould into a positive attitude, therefore creating a greater chance of a positive intention to buy that brand. Once the brand has been bought, the consumer will discover its advantage and how well their expectations have been met.

Overall, customer satisfaction with different aspects of the brand will strengthen positive beliefs and attitudes towards the brand. The consumer is also more likely to praise its attribute to their friends and family, thus creating a high level of satisfaction, a wider audience base will be targeted and the consumer will look favourably at the brand for future purchases”

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Consumers’ perceptual process protects them from information overload and

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The Organisational Buying Process (DeChernatony & McDonald, p.176/177, 2003) Similarly to the model of consumer buying behaviour, as a process, starting with problem recognition and progressing through to post-purchase evaluation, the same logic applies to organisational buying. The seminal work of Robinson et al. (1967) resulted in the model below which charts the organisational buying process as an eight-stage process; 1. Anticipation/recognition of problem 2. Determine what item is necessary 3. Describe characteristics & quantity of item needed 4. Search and qualification of potential suppliers 5. Acquisition of proposals 6. Proposal evaluation and supplier selection 7. Selection of order routine 8. Performance feedback and evaluation

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The organisational buying concept begins when a company becomes aware of an arisen problem, e.g. a

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product has become outdated and an opportunity can become available for a new line to be added. This can also relate to John Lewis summer collection changing to their winter collection as the year goes on for example. Someone within the organisation will recognise this issue and will start to involve others such as the buying and PR team. This stage should consider how the particular problem should be solved. A detailed specification will then be drawn up at the third stage of the process and following internal discussions and this would then be redrafted until it reflected a consensus view. At the fourth stage, the organisation will then search for potential suppliers and qualify these. Chosen suppliers should then be invited to submit their brand proposals to John Lewis. This normally involves a series of meetings to ensure that the supplier fully understands the company’s needs. All proposals are then analysed against the agreed criteria for the business and a brand purchase decision is made. The purchasing/buying manager is then given the authority to place the order and undertake any negotiations or agreements regarding terms, deliveries etc. for the products to be sold on behalf of John Lewis instore. Finally, after the individual brands have been employed by John Lewis, the overall company will stage an internal review and assess how well the brand and the supplier have been performing against the evaluation criteria. The brands will be viewed on performance and capability for future-use within John Lewis.

Appendix (2) – Primary Research: In-Depth Interview Script Please find introduction to the primary research on page 43. (Abbreviations: EW – Erica Wenham; Interviewer. EP – Emma Pengelly; Interviewee/Rain JAE for John Lewis, Oxford Street) EW: Good morning, Emma. Thank you for taking your time to talk to me regarding your role at Rain Communications; your answers may be recorded for future use, is this okay?

EP: Good morning! No problem.

EW: Thank you. How long have you been working for Rain PR? What do you enjoy most about working within the agency?

EP: I’ve been working alongside John Lewis with Rain for over 4 years now. They are one of my favourite clients to work with and I am extremely passionate about the brand. I love coming into work every day. I’m naturally very creative so I enjoy strategically planning and creating imaginative campaign development. I’m also on the phone to journalists and other media correspondents on a regular basis, securing high profile

EW: That’s great. What do some of your daily PR tasks include?

EP: Every day in PR is different in some way, shape or form, I like a challenge. I consistently improve longstanding and flourishing relationships with influential media correspondents, industry leaders and stakeholders via the telephone; email and face to face. I also regularly monitor news streams and trend patterns within the retail industry to source high-profile opportunities for news generation and coverage for John Lewis. Along with the rest of the team, I also frequently manage personalised social media and online PR strategies in relation to long-term campaigns, special events, improving relationships with the target market etc.

EW: How many people are currently working as part of the Rain PR John Lewis team?

EP: At our Oxford Street office, we have a team of about 4/5 professionals, including myself. We also possess our chief office based in London Victoria where the team is about 30-strong. Our Victoria team mainly focuses on crisis and news management and public affairs for all current clients.

EW: How long has Rain been working with John Lewis? Is there anything you are personally particularly proud of since you started working alongside them?

Managing The Commercial Communications Process | Student ID: 21017802

news and features coverage for John Lewis.

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EP: Rain have had John Lewis as a main client for over 8 years now which we are all extremely proud of, they are a joy to work with. I’ve produced numerous news releases in the past which have grabbed the attention of many journalists and readers, gaining John Lewis high-quality coverage across all media aspects.

EW: Could you tell me a bit more about work you’ve done for John Lewis in the past? Have you achieved any ground-breaking coverage or successful campaigns, for example?

EP: Rain worked closely with John Lewis to help promote their Size 12 Campaign a few years ago. Our mission was to secure maximum exposure and media coverage for the John Lewis own-label swimwear which resulted in one of the most celebrated and talked about successful campaign we’ve ever delivered.

Our client is strongly against promoting size zero models and so instead, shot marketing images on a size 12 model, hence the campaign title. I played an active role during this time and the story made numerous national and consumer headlines running for over a month. It was an extremely proud moment in my PR career as the overall campaign generated high profile exposure and reached an audience of 30 million.

EW: Brilliant! Thank you for your assistance Emma. It’s been a great help. I look forward to working with Managing The Commercial Communications Process | Student ID: 21017802

you over Easter and best wishes for your future at Rain.

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EP: Thank you Erica, it’s been a pleasure. We look forward to having you in for work experience and good luck with the rest of your studies.

Appendix (3) – PR Agency Issues How the Fee Income of The Top 150 PR Agencies Has Changed Over the Past Decade (Timeline) 2002

2002 was a tough year for many agencies. The Top 150 PR Agencies in 2002 resulted in 49 of these showing a decline in revenues and 63 cut staff.

2003

2003 showed an improvement with 70% of The Top 150 reporting a rise in fee income and smaller agencies performed particularly well.

2004

The PR industry began an upward curve during 2004 with 88% of The Top 150 report an increase in fee income with only 3 of The Top 25 suffering a slight income drop.

2005

The following year showed another improvement with 90% of The Top 150 reporting a boost while only 14 agencies saw a decrease. 140 agencies in 2005 had a fee income of at least £1m.

PR Week stated that 2006 was “no doubt, a boom year”. The average income growth was 21%.

More than half of key PR agencies grew by more than 15% with 35 achieving growth of 30% or more and 11 surpassing 50%.

2007

The “boom year” continued into 2007, with average growth of 22%. Total fees for The Top 150 Agencies were £779m.

2008

2008 was the first year where figures began to show the impact of the credit crunch and the UK’s economic climate. Overall fees still saw double-figure growth with total fees for The Top 150 more than £858m.

2009

2009 really showed the impact of the credit crunch, resulting in a tough year for the PR industry which managed less than 1% growth on average.

2010

The PR industry returned to growth in 2010 where the economic climate started to improve.

There was an average growth of 9.24% during this time. However, agencies that strongly relied on financial PR or public sector business suffered large declines. Total fee income was £839m.

2011

PR Week stated that 2011 was a year of “mixed fortunes” for the PR industry. The Top 150 had an average growth of 9% and total fee income jumped to £900m.

Managing The Commercial Communications Process | Student ID: 21017802

2006

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Appendix (4) – Video/Sound Content & Useful Links The links below include useful video & sound content regarding issues impacting the PR industry and how effective Public Relations is for any organisation.

1) PR Week Question Time (A Message in the Media, Part 3 – PR & Social Media): (Page 49) – Link: http://www.prweek.com/uk/go/messageinthemedia Featuring panellists including Lord Tim Bell (Chime Communications Chairman), John Sauven (Greenpeace Executive Director), Nick Hindle (Vice President Communications, McDonalds), Guy Esnouf (Head of PR & Public Affairs, E.ON), Andrew Caesar-Gordon (Managing Director, Electric Airwaves) and John McAndrew (Associate Editor, Sky News) 2) John Lewis Christmas Television Adverts (2010/2011/2012) Links: http://www.youtube.com/watch?v=mpV-xagkTDU http://www.youtube.com/watch?v=pSLOnR1s74o

Managing The Commercial Communications Process | Student ID: 21017802

http://www.youtube.com/watch?v=0N8axp9nHNU

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3) John Lewis To Expand Overseas During 2013 (£200m Investment) Link:

http://www.retail-week.com/companies/john-lewis/video-john-lewis-to-invest-arecord-200m-as-it-plots-overseas-expansion/5047069.article

4) The John Lewis “Never Knowingly Understood” Advert (The Brand Promise) Link:

http://www.johnlewis.com/inspiration-and-advice/never-knowingly-undersold-tvadvert

5) PR Week TV (How does PR work? How is it effective for particular markets? etc.)

Link:

http://www.prweek.com/uk/go/video

Retail Week: The Overwhelming Success of John Lewis Useful Links:

http://www.retail-week.com/data/john-lewis-weekly-sales/ http://www.retail-week.com/oracle-retail-week-awards-how-john-lewis-led-the-way-andoutperformed-its-rivals/5047216.article

References: Beam, R. (2008). “Use less power to cut emission”, Financial Times, London Brassington, F. and Pettitt, S. (2007). Essentials of Marketing. Essex, England: Pearson Prentice Hall.

Dussart, C. (2001). Transformative power of e-business over consumer brands. European Management Journal.

DeChernatony, L. and McDonald, D. (2003). Creating Powerful Brands. 3rd ed. Oxford, UK. ButterworthHeinemann Feldwick, P. (2002). What is Brand Equity Anyway? Henley-on-Thames: World Advertising, Research Centre.

FMCG Marketing Blog (2007). “Brand Identity Prism (Kapferer)” [Online] Available at: <http://fmcgmarketing.blogspot.co.uk/2007/10/brand-identity-prism-kapferer.html> [Accessed 15 March 2013] John Lewis, Official Website. “Never Knowingly Undersold” [Online] Available at: March 2013] John Lewis Partnership, JLP e-zine (Emma Cole, 2011). “A-Rated Ranges” [Online] Available at: <http://www.johnlewispartnership.co.uk/media/e-zine/hot-products/jlp-e-zine-1-april-2011-a-ratedranges.html> [Accessed 11 March 2013] John Lewis Partnership, JLP e-zine (Amelie Skoda, 2012). “Own-Brand Brilliance” [Online] Available at: <http://www.johnlewispartnership.co.uk/media/e-zine/hot-products/jlp-e-zine-2-march-2012-ownbrand-brilliance.html> [Accessed 11 March 2013] John Lewis Partnership, JLP e-zine (Amelie Skoda, 2012). “Style and Substance” [Online] Available at: <http://www.johnlewispartnership.co.uk/media/e-zine/features/jlp-e-zine-2-march-2012-style-andsubstance.html> [Accessed 11 March 2013] Kapferer, J.N (2004). The New Strategic Brand Management. 3rd ed. London, UK. Kogan Page Limited.

Mitchell, A. (2001). Right side up. London: HarperCollins Business.

Managing The Commercial Communications Process | Student ID: 21017802

<http://www.johnlewis.com/inspiration-and-advice/never-knowingly-undersold-policy> [Accessed 15

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PR Week (Kate Magee, 2012). How PR agencies’ fee income has changed in the past 10 years. [Online] Available at: <http://www.prweek.com/uk/news/1129888/how-pr-agencies-fee-income-changed-past-10years/> [Accessed 15 March 2013] PR Week (Kate Magee, 2012). PR Week’s Top 150 PR Consultancies grow 9% despite tough year. [Online] Available at: <http://www.prweek.com/uk/analysis/1130243/prweeks-top-150-pr-consultancies-grow9-despite-tough-year/> [Accessed 15 March 2013] PR Week (2013). The Message in the Media. [Online] Available at: <http://www.prweek.com/uk/go/messageinthemedia> [Accessed 15 March 2013] PR Week Blog (Stephen Waddington, 2013). Public relations is on the march [Online] Available at: <http://prweekblog.prweek.com/2013/03/08/public-relations-is-on-the-march/> [Accessed 15 March 2013] Rain Communications (2013). “About us” [Online] Available at:

Managing The Commercial Communications Process | Student ID: 21017802

<http://www.raincommunications.co.uk/agency/about-us> [Accessed 9 March 2013]

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Rain Communications (2013). “The Rain Guarantee” [Online] Available at: <http://www.raincommunications.co.uk/agency/the-rain-guarantee> [Accessed 9 March 2013] Rain Communications (2013). “News Generation” [Online] Available at: <http://www.raincommunications.co.uk/services/news-generation> [Accessed 9 March 2013] Rain Communications (2013). “Crisis & News Management” [Online] Available at: <http://www.raincommunications.co.uk/services/crisis-news-management> [Accessed 9 March 2013] Rain Communications (2013). “Rain Public Affairs” [Online] Available at: <http://www.raincommunications.co.uk/services/rain-public-affairs> [Accessed 9 March 2013] Rain Communications (2013). “Rain Digital” [Online] Available at: <http://www.raincommunications.co.uk/services/rain-digital> [Accessed 9 March 2013] Rain Communications (2013). “Features, Fashion & Tourism” [Online] Available at: <http://www.raincommunications.co.uk/services/features-fashion-tourism> [Accessed 9 March 2013]

Retail Week (Nicola Harrison, 2012) “John Lewis launches biggest own brand” [Online] Available at: <http://www.retail-week.com/sectors/home-and-diy/john-lewis-launches-biggest-ownbrand/5038898.article> [Accessed 8 March 2013] Retail Week (Rebecca Thomson, 2013) “How John Lewis led the way and outperformed its rivals” [Online] Available at: <http://www.retail-week.com/oracle-retail-week-awards-how-john-lewis-led-the-way-andoutperformed-its-rivals/5047216.article> [Accessed 8 March 2013] Sinha, I. (2000). Cost transparency: the net’s real threats to prices and brands. Harvard Business Review.

The Guardian (John Henley, 2010) “Is John Lewis the best company in Britain to work for?” [Online] Available at: <http://www.guardian.co.uk/business/2010/mar/16/john-lewis> [Accessed 8 March 2013] The Independent (Susie Mesure, 2005) “John Lewis to push own-brand range of products” [Online] Available at: <http://www.independent.co.uk/news/business/news/john-lewis-to-push-ownbrand-range-ofproducts-517171.html> [Accessed 8 March 2013]

[Online] Available at: <http://www.trcb.com/business/sales/how-is-the-internet-affecting-retaildepartment-stores-348.htm> [Accessed 14 March 2013] Ward, S., Light, L. and Goldstine, J. (1999). What high-tech managers need to know about brands. Harvard Business Review, July-August, 85-95.

Wilson, A. (2012). Marketing Research: An Integrated Approach. 3rd ed. Essex, England: Pearson Prentice Hall.

Managing The Commercial Communications Process | Student ID: 21017802

The Red Carpet Broadcast, TRCB (Daryl H. Bryant). How is the Internet affecting Retail Department Stores?

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