Brand Extension Strategy for Marks & Spencer: An Analysis

This report analyzes the brand extension strategy for Marks & Spencer, including market share, trends, visual examples, new product development using Ansoff model, target market, PESTEL issues, and competitive analysis.

Principles of Marketing

Principles of Marketing

INTRODUCTION
Marketing is a tool for promoting company's product or service as effective marketing
strategy is important to make a business successful. To introduce or launch a product in the
market company use different principles of marketing. To carry forward this report, Marks &
Spencer is considered which is a British multinational retailer, headquarter in London, UK.
Company deals in selling clothes, home, food products and also founded in 1884 by Michael
Marks and Thomas Spencer. The report outlines market share, market size and trends of the
respective brand. The new product development strategy is discussed using Ansoff model. The
report also outlines the target market for new brand and using Pestle framework issues are
discussed. In the end the report covers competitive strategies and visual image of brand
extension.
MAIN BODY
Background on the chosen brand include useful data such as market share, market size and trend
in sales.
Market share
Marks and Spencer market share is around 3.2% in the grocery market of UK. It has 1000plus
stores in UK and 472 stores across the world.
Market size
Marks and Spencer has 1037 stores located in UK and they serve their products to about 32
million customers all over the world with their quality products.
Trends in sale
In the recent years, Marks and Spencer has gain strong brand quality which attract people to
increase their customer loyalty. There is a huge trend in the sales of the company because of
producing good quality products. The company generated over nine billion pounds of revenue.
Most of the revenue of company is made from the sales of food in UK whereas small part of
revenue is generated from international and franchises operations.
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Coverage of the existing brand values supported with use of visual examples. eg advertising
campaigns, company’s web site, sponsorship activities etc.
Brand is a value of a product that differentiates it from other products in the marketplace. Brand
extension also known as brand stretching, which means using of existing brand name to
introduce new or existing product in the market to expand customer base. Currently used strategy
for brand value is advertising Campaigns.
Marks and Spencer has adopted advertising campaign as a tool to promote their products for
attracting customers. The company has done its advertising by launching 'Rethink' campaign to
strengthen the connection with the local customers. This campaign is designed to attract and
inspire the customers to change their wardrobes with something new which gives confidence to
them. The advertising series shot on the street that challenge customers to 'Rethink' about the
latest trends with a wide range of styles for both men and women. The company advertises their
products to acquire new markets and gain customer loyalty to increase the sales of the company.
This campaign was launched to capture Indian markets for wide market size and to increase their
brand value all over the world. According to Marks and Spencer style builds confidence to try
something different and unique. For promoting, the company spent around £45m on advertising
to strengthen the brand image in the minds of customers.
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Illustration 1: ETbrandequity.com

A brief explanation of the new product with reference to what growth strategy the brand is
adopting. (Ansoff).
Ansoff model is helpful for marketers to identify the market opportunities to increase
revenue in a business by innovating new products and services. This model is also referred to as
the 'Product market matrix' because of its grid pattern. It is one of the most important marketing
tool used by companies to grow in the market and to determine opportunities to increase sales.
Product development – Marks and Spencer use this strategy to innovate new features in the
existing product for the present market to increase their sales. They promote their products
through advertising, promoting sales by media, advertising on TV, internet or magazine. The
company could think of rendering a new service by introducing larger spaces for restaurants,
cafes and facilities to take up online purchases.
New product
With the help of the new product development strategy, Marks and Spencer has come up with
organic product in their food segment to capture new market segments. Organic food is free from
chemicals and are good for health. It includes fresh dairy products, meats and processed foods.
Organic foods contain beneficial nutrients and vitamins to improve the health of the people and
in strengthening immune system. This product will attract more customers as many people are
facing health issues because of unhealthy diet.
Clear identification of the proposed target market for the new brand extension ( include any
primary data results if undertaken)
STP
Segmentation – According to the market scenario, M&S divides the market into small segments
to target right customers. To attract customers for organic product, Marks and Spencer will target
high income group, people having allergy and educated people who are aware of the healthy
products.
Targeting – Marks and Spencer is a successful business in the market. It does not focus on
specific markets to target, instead they chose to target different types of individuals with their
products. To promote organic product the company will target customers of age group between
18 to 30 as they are more health conscious.
Positioning – Marketing mix helps Marks and Spencer to position their products in the market.
M&S needs to execute their products on the basis of the customers needs and values. To position
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organic products in the market the company needs to understand the customer preferences and
taste of the target market.
Any key trends and PESTEL issues that have influenced your choice of brand extension idea.
Political – The company believes that it is important to work in favour with the government to
protect the organization legal interests. Political stability and taxes are the two important factors
that affect the company.
Economic – There are several economic factors which affect the company such as inflation
rates, interest rates and economic growth patterns. Because of recession the company will face
problem in acquiring new markets.
Social – To expand the brand of the company it has to cope up with the changing trends of the
market. The purchases of the consumer are affected by cultural, psychological and social
changes in the market.
Technological – As the technology is changing the company has to adapt according to the new
technology trends. Marks and Spencer have launched self scanning technology in their stores.
Legal – Marks and Spencer has also faced legal issues in their company. Because of legal
disputes the image of the brand of the company loose its existence in the market.
Environmental – Marks and Spencer is a luxury brand in the market of UK, due to this the the
company care about the environmental effects that the brand will leave. This will help the
company in improving their brand image in the market which will open new markets for them to
expand.
A comparative analysis of your suggested brand extension with any key competition identified in
the new market sector.
Competitors Description
Tesco Tesco produces its grocery products in their
own factories from a long period of time.
Because of this the company offers products at
lower prices and high quality as compared to
other brands, this enables them in capturing
more market share of UK.
Asda Asda is a leading supermarket retailer in the
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market of UK, provide quality food products to
its customers. This company positions its
products in the market by promising their
customers by providing products at affordable
prices as compared to other brands.
A Visual Image of the Brand Extension showing brand name, packaging design and logo. You
also need to consider how your brand extension will be distinct from competing products
Brand name- “Earthy organics”
Packaging design and logo
CONCLUSION
The report concludes that for the organisation to gain the growth and profitability it is essential to
enter into brand extension. The company further choose product development strategy to
diversify its product in the market as per the customer needs. To target large market share from
the new product the company adopted STP model to divide the market in different segments
according to the customer preferences. For the development of the new product pestle analysis is
necessary for determining the factors affecting the growth of the product. It is analysed that for
the introduction of new product the company has to focus on unique brand name, packaging and
logo to attract more customers.
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