January 14, 2025

Morality, mendacity and marketing

In discussion with an old friend recently, he noted that in this geopolitical era telling lies had become a badge of honour. He works in areas of business strategy, and it his job to note these trends and worry about their implications.

Marketing has often been put into this category. Certainly, it is often used to exploit consumer vulnerabilities by targeting minors, making false claims or creating needs that do not exist. This is, of course, a matter of marketing communications and the thinking – perhaps the morality – behind it.

These need to be separated from marketing strategy, which is about the what and the why, with long-term thinking about direction within an evolving world. Communications are much more short term and relate to the where and the how. Both will clearly struggle if the underlying motivation is based only on greed.

Companies have always wanted to succeed, make profits and out-compete their competitors but over the past 50 years – perhaps since the beginning of the “Chicago School” concept of shareholders always being first – the amounts of wealth pulled from the community into the hands of the few has been excessive. The collapse in workers’ pay from 1/60^th to 1/60000^th of the bosses has been excessive, which the Indian Economist Abhijit Banerjee described to Lunch with the FT (Financial Times) as a “shift in norms” over recent decades.

Barrow Hepburn and Pittards

In the leather trade, although we have seen the risk of sliding into greenwashing, the leather industry’s strategic errors have been mostly the outcome of not understanding what marketing truly is, not hiring professionally trained staff and making decisions based on gut instinct rather than with analysis and calculation.

Early in my career, I watched Barrow Hepburn steadily acquire as much side leather capacity as possible in the UK in the belief that if they controlled the supply they could force prices up and make a better margin. When they looked up at last, they discovered that the major buyers of footwear leather were instead buying perfectly good leather at a lower price in Poland and Brazil, where the buyers thought the hospitality was also better. Soon, Barrow began closing plants and would never recover.

Two decades later, Pittards made a similar mistake in overestimating the relevance of the UK. It had a highly profitable glove leather business based on imported pickled hair sheep, but still decided to embroil itself in a battle that involved Garnar-Booth, Strong and Fisher and the much richer Hillsdown Holdings. It was hard from either inside or the outside of the business to comprehend the purpose of buying Garnar-Booth, as it had almost no overlap with Pittards and struggled to break even. The explanation I was given was that Pittards did not want to be dependent on oversees sheep. Since UK domestic sheep could not be used for high quality gloving, the logic escaped me. One outcome escaped no one. The merger brought with it a huge debt, totally wiping out all Pittards’ cash reserves, and creating levels of debt that it never escaped from.

Pittards’ final closure in 2023 was 35 years on, but the indebtedness, cost of closing many plants, underfunded pension scheme and absence of thought regarding the future of the highly successful glove leather business was fundamentally what brought the company down in the end. Hopefully, it will be successful with a resurrection in Ethiopia, which is where strategy should have taken the business when invited by the post-Mengisto government in 1992.

El Salvador

Not all the companies I have worked for have got it so badly wrong. In El Salvador, the footwear business ADOC has steadily passed through the generations, and a long civil war (during which the founder and owner was the subject of a kidnapping attempt, shot three times and only saved by a quick-witted young policeman) keeping quietly and steadily on track.

Three decades after leaving El Salvador, I was still keen to spend time with him and learn from his thoughts about business and events. A lot of analysis went into the company’s planning and associated choice of partners to develop a business that mixed local retail with a large footwear export business. Having the opportunity early in my career to run its tannery with a fine group of people was a privilege as it has been to observe a successful developed and implemented strategy still working 50 years on.

Another company with good planning is the family owned Ecco. Another family-owned footwear business with tannery capacity, Ecco was also founded in the 1960s. Frustrated by the poor record of on time delivery and innovation from tanneries, Ecco decided to make its own leather, stamping demands upon them from the start. New thinking about how tanners should really make the identical leathers in different parts of the globe was demanded. If two pairs of the same style, in the same colour, were to be in a store window in Berlin, they must look identical, regardless of where the leather or the shoes were made.

Having succeeded at that, Ecco then decided to test its leather value proposition by selling to third parties. No easy task since large sectors of the footwear markets ended up out of bounds. Also, the company wanted to produce signature leathers under the Ecco Leather brand and not lose time copying the signature leathers of others. Not easy tasks in a leather industry determined to fight off synthetics by sliding into commodity priced segments instead of innovating.

But, determined management has shown all these strategies as valid and successful. Ecco Leather is one of the most recognised leather brands in the industry and its annual Hot Shops are highly sought-after events. If anyone had suggested in the year 2000 that designers would be queuing up to attend a four-day tannery event to make new leathers, they would not have been believed.

So, remember that marketing strategy is vital, and do not mix it up with marketing communications.

Michael Redwood

Leather chemist, writer, and advisor on responsible leather manufacturing and material strategy. This article was originally written for ILM.