UFO Info Week-End

Sainsbury the most likely buyer for the 238 Texas stores is thought to be discussing a £250m deal with Ladbroke

Sainsbury, the most likely buyer for the 238 Texas stores, is thought to be discussing a £250m deal with Ladbroke. But the combatants will have little time to establish market dominance before facing a likely threat from a US invader – Home Depot. LADBROKE’S decision to sell Texas Homecare, possibly to J Sainsbury, could spark a new war in the do-it-yourself sector, analysts said at the weekend. The theme, “We’re getting there”, naturally prompted the query: when?. When Rowntree went on the offensiveagainst a bid from Nestle it did not help that many of its products were so well-known: the public had never connected Aero, Kit-Kat and the like with Rowntree.British Rail’s attempts to avoid break-up after privatisation with ads costing £600,000, made by Hugh Hudson of Chariots of Fire fame, were too late and not credible. The Woolworth commercials featuring the chairman plugging the “Wonder of Woolies” did not conceal underlying problems. Similarly, BA’s high profile has not been of any use in its battles with Virgin, and Hanson’s own ads did not prevent Lord White from getting into trouble over the racehorses owned by the firm.Moreover, corporate ads are useless if they are used as an alternative to corporate reorganisation.

As a result, the total cost is probably not more than £2m, a pinprick in the company’s £1.3bn profits.Campaigns such as these have their limitations. The long-running and highly effective British Gas campaign did not help when Cedric Brown, the chief executive, had a whopping pay rise. Indeed, a subsequent advertisement based on Orson Welles’ film, Citizen Kane, emphasised the permanence of the Hanson empire: “here today, here tomorrow”.Characteristically, Hanson gets good value by advertising in the dog days after Christmas, conveniently between its results and AGM in early February. The next featured Glenda Jackson, and in 1988 Hanson made a mock newsreel showing the relentless growth in the company’s earnings per share over the previous 25 years by “investing in basic industries” It is the theme that has dominated the ads ever since. It said, for example, that Hanson made 250 million batteries a year.

All except one of the companies mentioned has since been sold. The basic theme – “a company from over here that’s doing rather well over there” has not changed, but there has been a subtle shift in emphasis over the years.The first advertisement starred Denholm Elliott and was full of figures. The aim was two-fold: to “position Hanson as a company of which Britain and the Brits could be proud at a time when anyone who could take on the Americans was a source of great pride”, as Cooper puts it; and to blunt the accusation that Hanson was merely an asset-stripper.The campaigns, Cooper says, are “all in Lord Hanson’s own image: ads of stature; six-feet three commercials”. As one media consultant puts it: “It’s not good for employees to think that they’re working for a shark.”It is also aimed at the employees of potential target companies, to reassure them that there is life after Hanson.The idea of a regular campaign goes back to 1986, when Sir Tim Bell, then working with Frank Lowe, suggested the idea to Lord Hanson.

Inthe commercial, as in the film, an older man advises the graduate to get into plastics.But the campaigns have always been aimed beyond the narrow professional audience, “all of whom read the FT anyway”, according to Mr Cooper The potential audience includes Hanson’s employees. It echoes a famous scene in the 1968 movie, The Graduate, starring Dustin Hoffman, which Mr Cooper says “has a legendary status amongst ’60s kids – Bill Clinton’s generation”. The theme of the ad, a graduation party at which the successful student is bombarded with advice over his future career path, is a particularly American phenomenon. “After ICI, Hanson became aware that you have to carry the public with you all the time.”There are hints that the campaign could be designed to soften up an American audience in particular: it is running on selected US channels, including CNN. “If they’d advertised, the bid would have been better understood,” says Steve Cooper, the account
director at Lowe Howard Spink, which has produced Hanson’s commercials for nine years.