Last week, the supermarket chain Morrisons announced that it was putting its 拢30 million advertising account into review.
The Bradford-based company is making a bid to establish itself as a national brand, extending its Northern credentials to the South of England following its purchase of Safeway two years ago.
Since the 拢3 billion acquisition, the company has failed to deliver the sales it expected. In March 2006, after issuing five profits warnings in 15 months, the company posted the first annual financial loss in its 107-year history, reporting a pre-tax loss of 拢313 million.
In January this year, the supermarket's agency, BDH\TBWA, which has held the account since 2003 and will repitch for the business, produced Morrisons' first TV campaign for more than two years.
The work used the "more reasons to shop at Morrisons" strapline, first created by Gold Greenlees Trott in the 80s, and attempted to launch the brand in the South of England while turning around its faltering sales.
However, the campaign has failed to deliver. The company is still struggling to find a foothold in the South, build a recognised national brand or increase its profits.
Graham Hales, the executive director at Interbrand, says: "Morrisons' recent communications focused on the strength of its value-for-money offering, but consumers have come to expect more than this. The advertising is very one-dimensional and didn't give the brand a great deal of depth."
The company has succeeded in its traditional Northern heartland by concentrating on its value-for-money offering and its advertising has always reflected this, but with the likes of Tesco and Sainsbury's offering much more than low prices in their advertising, Morrisons has been losing customers.
In addition, Morrisons' low-priced competitors, Iceland and Asda, are well-established in the South.
It has also suffered because of its decision to move most of its talented area managers to the South and concentrate its efforts on that area, leaving the Northern sectors under-represented.
"It's no use swapping a bias to the North in favour of a bias to the South. That won't get Morrisons anywhere. Any strategy needs to treat the country as a whole," Richard Hyman, the chief executive of Verdict Research, says.
He adds: "Another problem the company is facing is that the Safeway customer base is very different from Morrisons - they are more cosmopolitan and affluent. The company has already alienated some Safeway customers and this has been shown by the poor sales figures and the number of profit warnings. The advertising needs to address all of these problems, and very quickly."
George Bryant, the managing partner at Abbott Mead Vickers BBDO, which is responsible for Sainsbury's ads, says: "Morrisons' 'reasons' campaign means little in the South and it is in desperate need of a new brand idea and philosophy to repair its split personality and give it a reason to exist.
"Advertising will not help, but an advertising agency might - provided it has the vision to look well beyond the ads."
Agencies are already fighting to get on the shortlist. Not only is the spend far from insubstantial, but it's the kind of brief that invites IPA Effectiveness Award-winning strategies. Morrisons favoured a Northern-based agency last time; it will be interesting to see if this time it decides a London agency will be better able to communicate to its broader target audience.
- Leader, page 18
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RETAIL CONSULTANCY - Richard Hyman, chief executive, Verdict Research
"To use the phrase 'image problem' is over the top, but Morrisons does have a position that is very inflexible. It's very focused. It has a product offer tailored to its traditional trading heartland.
"It needs a balance. It needs to keep its brand values - consistency and value for money - but give them a different approach. In order to address both, Morrisons' advertising needs to be flexible and recognise the fact that its has become a different business.
"However, the question that needs to be asked is why is it doing it now, and not 15 months ago."
BRANDING CONSULTANCY - Graham Hales, executive director, Interbrand
"At the moment, the advertising focuses on its value. What it needs to be doing is putting out a clever, articulate point of difference about the brand. Any brand programme it instigates needs to be distilled into an idea that is credible, relevant, different and stretching.
"The brand is well understood in the North but less so in the South. It is part of the community up North, but it is difficult to transplant a brand into a different region.
Most supermarkets have a congregation of different people that visit them so the advertising has to appeal to every one of these.
"The size of the business means that we should be able to easily articulate the brand, but we struggle to do this."
ADVERTISING AGENCY - George Bryant, managing partner, Abbott Mead Vickers BBDO
"You can't be two brands at the same time. Morrisons' key problem is that in the North, it's a more accessible Waitrose, famous for fresh foods and counters, yet in the South it's a grungier, cheaper Asda, famous for shabby stores and poor service. It does not need an advertising agency, it needs a psychotherapist.
"In the South, Morrisons is also suffering from a market where the centre of gravity has now moved decisively back to quality. Now it looks like low prices simply aren't enough to compete any more."
MORRISONS - Michael Bates, marketing services director, Morrisons
"For many customers in the South we are a relatively new brand and we continue to work hard to ensure that the quality and value message of the Morrisons offer is getting through. It will take time to fully establish ourselves in new areas.
"We are now a national brand and have been since the completion of the integration of Safeway in November last year.
"The main change we have faced is scale - more people are nearer a Morrisons and we need to make sure that our quality, value and service messages cut though to these new customers."