Asda’s appointment of its fourth marketing director so far this year signals a renewed offensive aimed at reinvigorating the chain’s brand image.
The announcement last week that it is hiring ad man Rick Bendel as board-level marketing director is part of the supermarket’s fightback under chief executive Andy Bond, who has promised to turn round the chains poor performance.
Luring Bendel, who joins next month from Asda’s ad agency Publicis Worldwide, where he is chief operating officer, is seen by the chain as quite a coup. He is the chain’s third board-level marketing director after Allan Leighton, who held the post in the early 1990s, and Richard Baker, now chief executive of Alliance Boots.
Bendel says he is leaving Publicis because he has had enough of “departure lounge life” and wants to spend more time with his family. He will not relocate to Leeds, where Asda is based, but will spend three days a week there. “The business is in the stores, not in Leeds,” he says.
Bendel has vowed to return the supermarket chain’s marketing to the glory days of the 1990s when it crashed onto the UK retail scene after a relaunch under Archie Norman.
Norman seconded Bendel from agency Greers Gross to join the original crack management squad that drove Asda to the position of number two after Tesco. Bendel joined Leighton, now chairman of Royal Mail, Richer Sounds boss Julian Richer and Crispin Tweddle, the man behind the Pitcher & Piano chain, to create a uniquely off-beam challenger brand that inspired loyalty from customers and staff.
“If you look at the case study of Asda in the 1990s, it is one of PR and campaigning causes,” says Bendel. “Its charismatic personality created a different type of retail marketing with this frantic energy of campaigning, with people dressing up as bottles of vitamins outside Parliament.”
Asda launched a constant stream of campaigns against what it claimed were price-fixing monopolies working against the consumer interest, whether it was the Net Book Agreement or the high price of vitamin pills and over-the-counter drugs.
Bendel says: “You only win by leading and we set the agenda 12 years ago. Even Sainsbury’s tried to copy us with its John Cleese ‘Value to shout about’ campaign.”
However, Asdas fortunes faded after it was acquired by Wal-Mart in 1999 and the subsequent upheaval within the management, which was further distracted by its failed bid to take over Safeway. Its recent marketing has been called functional and rather tedious.
Tesco has since pulled away and commanded a 31.4% share of spending through grocers in the 12 weeks to September 10, while Asda had 16.7%, down from 16.8% in the previous year’s period, according to TNS Worldpanel. Sainsbury’s was up to 15.9% from 15.6%.
Some believe that being a distant second gravely undermines Wal-Mart’s strategy, which works in the US by using market domination to force through price cuts and corral suppliers.
Being only half the size of the UK market leader gives Asda/Wal-Mart considerably less leverage on price, and suppliers can play it off against Tesco and Sainsbury’s.
Some believe Wal-Mart’s formula only works if it is market leader. In July, it sold its German business with a $1bn (530m) loss and admits that Asda has missed its profits targets in the UK.
Last year, Bond predicted that Asda could cede the number two position to a revitalised Sainsbury’s, which is now less than one percentage point behind on market share. But over the past six months, Asda has slowed the loss of market share with a new round of price cuts and is still ahead of Sainsbury’s.
A Strong Heritage
The challenge for Bond and Bendel is to widen the chain’s appeal from simply being the cheapest supermarket. With its famous “pocket tap” and the George brand attracting customers, Bendel has a strong marketing heritage to draw on.
Asda launched the “More for you for less” campaign in the spring, emphasising product quality. The chain says the recent press and TV ads for George, featuring Coleen McLoughlin, have been “enormously successful”.
Bond says: “We are nine months into our two-year recovery programme and firmly back on track. A fresh and invigorated approach to marketing is critical to the next stage of our recovery plans.” He has pledged to improve customer service and add more premium products, but still to keep costs down. However, Asda is playing catch up with Tesco and Sainsbury’s in a number of areas, and is stepping up its organic offer and extending its online service.
Asda’s marketing department has seen a number of comings and goings this year. Marketing director Chris Pilling checked out in January to become chief executive of First Direct bank and his replacement Richard Hodgson left just five months later to become buying director for Waitrose. His responsibilities were handled by retail marketing director Katherine Patterson before Bendel joined.
Bendels appointment brings stability to the marketing department. He will lead the Asda brand team that develops own-label ranges and take responsibility for Asdas 40m advertising account, as well as looking after brand development for Asda and the George clothing range. He will also be in charge of store formats.
However, apart from the spell seconded to Asda in the 1990s, Bendel has never worked for a retailer. But he has been closely involved with retail clients during his 30 years working at ad agencies. He has excelled in the world of media buying and planning. One friend says: “He is a media man, he has got a trading DNA, and retail and media trading fit naturally together.”
Bendel believes his skills lie in understanding customers. But he plays down suggestions that he will take a wider marketing role within Wal-Mart. “I am not swapping one aeroplane for another,” he says.
His appointment came as something of a surprise to the advertising world. Some thought he was destined for greater things within Publicis Worldwide, the French-owned advertising network that is part of Publicis Groupe, which also owns Leo Burnett and Saatchi & Saatchi. He was expected to take over operational control of the network from Maurice L?, who is also boss of Publicis Groupe.
Perhaps a testament to Bendel’s tremendous capacity for hard work, L? has hired two executives to replace him at Publicis Worldwide. Olivier Fleurot, a former chief executive of the Financial Times, joins as executive chairman.
This is considered a coup as Fleurot is thought to have extensive contacts with clients from running newspapers. He is likely to have a sophisticated understanding of the online world, an area of weakness for ad agencies, since newspapers have been forced to address the online threat before others and he is French.
However, Fleurot is inexperienced in advertising agencies and L? has also hired Richard Pinder, president of Leo Burnett for Europe, Middle East and Asia and a seasoned ad man, as chief operating officer.
One source wonders whether Bendel was ever really in contention to take the top job at Publicis Worldwide. “At heart he is not an advertising guy. He would sell his grandmother for the clients, but that doesn’t necessarily marry with the need to spend time crafting beautiful ads.”
Crafting beauty will not be top of Bendel’s agenda at Asda, where he needs to persuade a wider range of customers to visit the stores. Whether the Bendel/Bond action squad can rediscover the excitement and quirkiness that characterised Asda in the 1990s, especially with exacting Wal-Mart targets to be met, will be interesting to watch.