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Current Marketing Strategy - Marks and Spencer

University: UK College of Business and Computing

  • Unit No: 12
  • Level: Undergraduate/College
  • Pages: 16
  • Words: 4000
  • Paper Type: Assignment
  • Course Code:

    M/508/9985

  • Country: UK
  • Downloads: 0
Question :

This unit is based on critical evaluation of essential conditions by which customer loyalty can be sustained and achieving customer experience for market segments.

  • Develop background statement to outline industry, market positioning and unique proposition of the company.
  • Develop marketing audit outlining market attractiveness and analysing potential growth of firm.
  • Execute competitor analysis of main players of the industry
  • Develop marketing mix action to analyse gap between company current marketing strategy and external business environment.
Answer :
Organization Selected : Marks And Spencer

INTRODUCTION

Marketing managementis all about directing the overall resources of organization in order to develop as well as implement strategies so as to reach at desired consumer base. This is done with an aim to enhance the sales of company with respect to the product and service offering. The scope of marketing management of the company is dependent on the business size and the industry where it operates (Walters, 2014). The marketing management is said to be effective when the company utilizes resources to enhance consumer base; improve opinions and also increase the perceived value of business (Papasolomou and et.al., 2014). The present study has thus made an attempt to study the retail industry of UK and the operations of Marks and Spencer with respect to its market positioning; unique selling proposition; market attractiveness and potential for market growth. Emphasis of the report will further be on carrying out competitor analysis of the main industry players in retail market of UK.

1) A background statement to outline the industry, market positioning as well as the present USP

Outline of retail industry

The retail industry of UK is quite dynamic, diverse as well as innovative in nature as it provides product and services as per the need and preferences of consumers. The country had further been found to leading in the western world with respect to varied offerings (Vilkey and Dehbid, 2016). In more specific terms, London has been acting as a magnet for new brands on account of its market size, maturity as well as presence of increased transparency with respect to the operations. It has also shared a good history of success on account of locals and tourist population who consider London to a shopping hub which has resulted in booming of many retail firms in the city and all over UK (West, Ford and Ibrahim, 2015). Structural changes are also taking place within the industry on account of advancements in electronic commerce as well as technology followed by an increased demand for right physical space which is also prevalent in the good location.

The industry has also been considered to be vital for the overall UK economy as just in the year 2016 the company generated around £358 billion of retail sales. It has further been known to be the largest private sector employer and has a presence of around 290315 outlets all over UK. On a negative note, with the onset of 2017 the retail sector of UK has presented a huge competitive scenario on account of various well-known brands such as Debenhams; Next; Primark; H&M etc that are in fight with each other for grabbing the overall market share. There has further been a constant shift in overall preferences of consumers such as online and mobile shopping followed by the presence of brexit issue which is creating a challenging journey for almost all the retailers including Marks and Spencer.

Positioning in market

Marks and Spencer has been in this industry since 1884 and in a time span of more than a century the company has changed the way people think and feel about retail world in UK (Cazzura, 2011). It is further true that the company has faced a few hurdles in the past times but it has also shown itself as a brand that remains true to its values and has also maintained consistency with corporate image followed by continuing to evolve itself (Schlegelmilch, 2016). As of now the company is known as one of the premier brands and has also been able to survive recession, dry times, certain controversies such as segregating toys by gender as well the words ‘gay’ and ‘Jesus Christ’ in gift messages among others. In spite of all this it has been able to maintain a good presence in the UK market and has an existence of more than 300 stores within Britain alone. Jones, Forsythe and Kemp, (2015) has also added that marks and Spencer is quite devoted towards its brand purpose being making every moment special for the consumers. This has helped the company to hold the overall position in the market in spite of the difficult trading environment.

The company has further kept itself committed to the overall mission being providing aspirational quality that is accessible to all. The firm has thus made an attempt to evolve itself with the needs and preference of consumers but still has not lost the sight of its heritage (Manuel Martínez-López and Vargas-Sánchez, 2013).

Present unique selling proposition

Marks and Spencer during the era of 60s were known to be a solid old fashioned store that sold underwear but now they are one of the most popular stores of UK (Papasolomou and et.al., 2014). From a long time, Marks and spencer was known to provide good clothing that was also regarded as its USP. According to Espiner and Atkinson (2016) the best thing about Marks and spencer was about beautiful basics; quality knitwear, well-tailored clothing and good hosiery and underwear. But now they have entirely lost on their USP as the designs are quite terrible with a presence of strange sizing and badly cut styles.

In the present times, there USP is with respect to provision of good consumer service. In this respect, the company is trying to cover an extra mile so that new ideas can be shared and better consumer experience can be delivered. It has further be said by Moran (2014) who is the consumer service division in Marks and Spencer that the company does not just listens to the customers but turn the comments into action as well which aids in bringing continual improvement (West, Ford and Ibrahim, 2015).One more strategy undertaken by the company to boost its USP of consumer service is by investing in store staffing. This has been done by increasing the basic wage from £7.41 to £8.50 out of London and to £9.65 within London. This has motivated the consumers and they are always present on the shop floor to help the consumers when the need arises (Davis, 2016).

2) A marketing audit for overall market attractiveness and potential for market growth.

Marketing audit can be defined as a systematic and comprehensive examination of the marketing environment, objectives, goals and strategies of a firm to assess the problem areas and recommending a plan of action to improve performance. The current section has focused on discussing the marketing audit about Marks and Spencer in UK so as to assess the market attractiveness and its potential for market growth in the future (Kotler and et.al., 2015).

Overview of Marks and spencer

Marks and Spencer is a multi-channel retailer that has a global presence and is known for high quality products and great value deals in the area of food, clothing and home accessories. The company has a presence of about 979 stores in UK and is market leader within Women’s wear, Lingerie and Menswear (M and S Today, 2017). The group revenue of the company for the year 2017 was of 10.6 billion pounds which consumer number was of 32 million (Vigneron and Johnson, 2017).

SWOT analysis

As per the SWOT analysis, the strengths of Marks and Spencer in UK market are with respect to high brand recognition that has been gained by the company over the years. It further provides a wide variety of services that range from clothing, food to even banking. The outlets are also large in number which covers the entire United Kingdom. The company has also got a reputation of providing good consumer service and it has been stribghard to maintain good relation with the consumers. On a negative note, it is being recognized as a non-trendy store which is providing old fashioned designs and improper sizing. Overall the company has been quite slow in terms of changing with the market trends by which the consumers consider it as a brand that does not have anything new to offer (Stierand, DÃrfler and MacBryde, 2014). This is followed by threats that are being faced from competitors such as Next plc. Primark, H and M among others that are affecting the overall market share of Marks and Spencer. It is further required to protect its brand from being misused on account of fake imitation products. The opportunities that lie in front of the company are in form of developing trendy designs and capturing new market segments within UK.

Consumer analysis

Marks and spencer has focused on large number of consumer segments so as to sell its product and services. These are inclusive of male and female; belonging to all age groups starting from new borns to 60 plus (Papasolomou and et.al., 2014). They belong to all the occupation groups as well as income range. Hence the company is required to meet the needs and preferences of consumers at varied levels. The analysis has further found that consumers of Marks and Spencer need a trendy clothing range from the company which is somewhere lacking in the company. The Company further made an attempt to analyze its consumer base and it was found that around 54 percent of its consumers are over 50 years of age (Rigby, 2017). The need is to focus on present day consumers so as to keep in pace with the modern living.

Competitor analysis

The retail clothing market of UK is a very competitive one and there is a presence of many firms that are acting as rivals for the company. These are in form of Primark, H and M, Debenhams Tesco, ASDA among others. There is further an existence of small and local fashion brands that are competing with the company on a fierce level (DANIELS, RADEBRAUGH and SULLIVAN, 2013).

Market analysis

Marks and Spencer has captured a huge market of United Kingdom as there is a presence of more than 900 stores in UK itself. The product and service range of the company is also highly diversified in areas such as clothing, food and drink, home ware products, banking among others. UK has been acting as a main source of revenue for the company out of which half comes from UK food segment and accounts to 5.5 billion British pounds. A revenue growth has also been observed in its online platform since the year 2011 (Marks and Spencer - Statistics & Facts, 2018). However lack of trendy clothes by the company, Brexit issue, and decrease in the buying power of consumers has negatively impacted the overall sales growth. The latest reports have further revealed towards a downfall in the sales figure of the company in the 3rd quarter of 2018 by 0.1 percent. The overall UK sales have thus fallen down by 1.4 percent and Clothing and home sales are down by 2.8 percent (Grut, 2018).

Environmental analysis

An Environmental analysis of marks and spencer has been carried out through the usage of pestle technique which is as follows. The political factors showcase that the exit of EU from Britain has resulted in political and economic chaos for UK that has negatively impacted operations of Marks and Spencer (Vigneron and Johnson, 2017). Same is the case with economic scenario as UK is moving towards inflation which has seen a shrink in spending capacity of people. In terms of social trends, the consumers prefer trendy clothes which are not being offered by Marks and Spencer which is acting as threat for the company (MacLennan, 2011).

Things are good on Technology front as the company has provided options for online shopping, paperless operations to the consumers which has resulted in increased online sales for the company to 16 percent (Vilkey and Dehbid, 2016). The company is further in tune with environmental friendly norms as it focuses on the usage of ecofriendly fabric and raw materials that has impacted the operations of company in a positive manner. Various laws have further been enacted by UK government on retail industry such as consumer protection, privacy act, minimum wages act among others. The firm is adhering with most of them which is thus positively impacting the operations of company.

3) A competitor analysis of the three main industry players.

Competitor analysis can be described as a process by which information can be collected about the competitive firms that are acting as rivals for any company. The three main industry players of the company are Primark, ASOS and next plc.

Marks and Spencer is a big name in clothing retail sector of UK but is facing huge competition from Next plc which is a multinational firm that specializes in selling of clothing, shoes as well as accessories for females (West, Ford and Ibrahim, 2015). As a competition to Marks and Spencer, Next plc is providing a wide range of endless choices to its consumers not only in terms of product but also by delivering a perfect shopping experience. However the clothing range of Marks and Spencer is still stuck in past trends; ageing customers; dull clothing range and is way behind than Next plc.

In terms of expansion, both the firms have been competing with each other. This is as Next has expanded itself in every direction such as furniture and home ware; has entered into internet shopping and also has an international presence in countries like Asia; Africa, Europe and America. Marks and spencer is however different from Next as it has a presence of steady food business as well that is showing good signs of growth and revenue for the company. It also has many stores outside UK in 55 international territories (Papasolomou and et.al., 2014).

As of now Marks & Spencer has been known to hold the title of being the second most valuable brand within UK. However its sales have been falling on a continual basis which makes it clear that the company could be overtaken by next plc as the largest clothing retailer with respect to revenues in the near term future. A report by credit rating agency Moody has also revealed that Next is most likely to outperform Marks and Spencer in clothing retailing business. The company further has an advantage over Marks and Spencer in terms of brand recognition, online sales and cost control. Marks and spencer have however closed the gap on profit figures by buying materials at cheap rate from suppliers. Moreover the rising food sales of M&S have helped to counter the weak sales in clothing sector. It has also been said that Next is considered as the well-run fashion retailer within UK however the sales at Marks and Spencer are falling down on a constant basis for the years.

Primark is a Dublin based clothing and accessories company that has a good presence within UK. Marks and Spencer has been dominating the UK clothing market since a decade but its position as a number one retailer is going to be lost to Primark in the coming years (West, Ford and Ibrahim, 2015). This is as the studies have revealed that Primark could take over marks and spencer with respect to market share after its announcement to bring closure of 100 stores by 2022 as a part of its turnaround strategy. This will led to a loss of decade long position of being a top retailer if it is not able to convert sales from the stores. It has also been found out that market share of marks and spencer has fallen from 9.7 during 2008 to 7.6 percent in the year 2018 while the sales of Primark has surged from 4.4 percent to 7 percent (Clark, 2018).

Studies have further revealed that there has been a 10 percent rise in UK sales of Primark by the end of year 2017 especially for 16 to 24 year old youngsters and females. This is on account of the overall ability of Primark to react as per the trends in a quick manner which is not there in case of Marks and Spencer. Although both of them offer value for money products but still the products of Primark are far ahead with respect to fashion trends.

It is also true that Marks and Spencer will not make it easy for Primark to steal the crown as it is already investing in prices and has made improvements in design and style. But the closure of clothing space in marks and spencer may lead to decline of its clothing shares in next two years.

Along with the above two competitors, ASOS has also been acting as huge source of competition for the company. Reports have revealed that the market value of ASOS is just a 100 million pound below marks and spencer which is of £4.98bn and £5.08bn respectively. However it is also true that ASOS has to catch marks and spencer with respect to total sales and profit figures but still it is acting as a tough competition for the company (Monaghan, 2017). It has further been found that Marks and spencer is still adhering with age old methods such as asking its 70 year old shareholders about color cardigan to feature while ASOS is working with many social-media groups so that new ways can be devised for getting the consumers what is wanted by them. It has further been found that ambitious growth has also been set by ASOS in the future which can led to a triple revenue growth in the next 4 to 5 years. Studies further reveal that prime target of ASOS is young adults while marks and spencer has aimed itself at woman in 50 years of age who prefer contemporary clothing. It is however true that Marks and Spencer has been selling online long before ASOS was born but still the firm has been criticised for losing touch with the consumers (Papasolomou and et.al., 2014).

Overall it can be said that although Marks and Spencer has made a big attempt to bring changes in its product offering with respect to clothing in the last few years. This is being done by making an attempt to find the right formula which can appeal to all the demographics who are the consumers of the company. But still it is true that its main competitors have also been improving the offering and that too at a faster pace than marks and spencer (West, Ford and Ibrahim, 2015).

4) Critically defended new marketing mix actions to achieve gaps between the company’s present marketing strategy and external environment.Varied marketing mix actions can be undertaken by the company to attain the gap that are there between present marketing strategy of the company as well as external eniovrnment as studied by Pestle analysis.

Product

The most important change that the company should be doing is with respect to the product offering. The above mentioned sections clearly reflect that the company has been tagged as the one that is selling old fashioned clothes that are usually preferred by people over 50 years of age (Vilkey and Dehbid, 2016). Hence it is required to introduce those close that are trendy and in style. It must stop focusing on poor and outdated design followed by working on providing clothes that are of proper size and fitting. It is further required to spend some money on consumer shopping experience research as to what kinds of clothing designs; fabrics etc. are preferred by them. This will help the company to get rid of not so trendy products.

Price

Certain changes are also required to be done by Marks and Spencer with respect to its pricing strategy by ensuring that the clothes are not too expensive than the ones offered by competitors but should also be of good quality. Competitive pricing can further be made by the company through improving the supply chain so that cost can be reduced.

Place

Seeing the high amount of competition from other brands the need is to open stores in those locations that are easily accessible by consumers. Small stores can be opened by the company that are just meant for clothing so as to catch low volume buyers who do not wish to waste their time by going to a mall for some purchases. This will help to boost up the sales of clothing which is lagging behind (West, Ford and Ibrahim, 2015).

Promotion

It is further required to work in the area of online promotion by focusing on adding new features to the website in form of visual search that may allow the consumers to upload photos from the social media so as to search for a similar outfit. The company is further required to focus on rebranding strategy as it has been facing negative press and public reviews about lack of trendy and wrong sized clothing. The logo should be redesigned so as to bring a sense of newness and the signboard accords the shops should also be such that it is able to grab attention of the consumers.

Physical evidence

In order to remove the negative public and press reviews the need is to bring changes in its store makeup as well. This can be done by utilizing colors and designs that create a feeling of freshness for the consumers. Window displays must also be given a creative touch by dressing the mannequins with vibrant colors as well as innovative designs. The arrangement should be such that it is able to grab the attention of passerby’s. Overall the store recreation should be such that the consumers are not reminded of the old stores (West, Ford and Ibrahim, 2015). The future stores should also be made in such a manner so as to help in easy movement of pedestrian and vehicular traffic; non parking and transport issues. It should further focus on the compatibility aspect with the nearby stores to make sure that it complements them so as to draw consumers fo everyone.

People

Marks and Spencer has been investing a lot in the people aspect where it provides equal opportunities to the employees and focuses on employing diverse workforce. Focus is also given on rewards and benefits in form of pension schemes, bonuses, employee discount among others. However it is required to work on the issue with respect to gender pay gap where less salary is given to females who are working on the same post like that of males.

Process

In this arena marks and spencer utilizes several techniques known as Empower to improve which includes, agile, six sigma tool as well as design thinking in order to empower the employees. An application known as stock finder is also introduced by the company that helps the employees to check the availability of specific items in the store. It has also constructed a distribution center of 900,000 sq ft so as to electronically tag items in the warehouse every week (Papasolomou and et.al., 2014).

Overall it can be said that the company is required to give a huge emphasis on product and pricing segment to gain loyalty of consumers and increase the sales. As per the promotional strategy the firm is required to rebrand it and also bring changes in the store design to add freshness.

CONCLUSION

From the above report it can be concluded that the retail industry of UK is quite innovative and dynamic in nature and has shown a huge growth since past few years. There is a presence of many brands in retail clothing segments and one such is Marks and Spencer that has got a strong presence in UK market. It is that brand which focuses on providing aspirational quality to the consumers at value for money pricing. However it is still regarded as a brand that has not changed its clothing rang with the passing time and has not been able to provide trendy clothes just like its competitors being Primark, ASOS, and Next plc among others. The pestle scenario has presented good growth aspects for the company hence it is required to make certain changes in its marketing mix so as to attain its objectives and get a hold over the market.

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