Marks & Spencer's Ethical Business Strategy

This assignment examines Marks & Spencer's (M&S) ethical business strategy and its potential impact on consumer purchasing decisions and brand loyalty. It delves into various aspects of M&S's operations, analyzing their marketing strategies, corporate social responsibility initiatives, and the overall perception of their ethical practices among consumers. The assignment utilizes relevant theories and frameworks to assess the effectiveness of M&S's strategy in influencing consumer behaviour and building sustainable relationships.

INTRODUCTION TO MARKETING

CONTENTS
INTRODUCTION .....................................................................................................................................4
Company profile (Marks & Spencer) .................................................................................................4
Marketing objectives and goals ........................................................................................................5
Market Environment .........................................................................................................................5
Competition ......................................................................................................................................7
Market research and consumer behaviour .......................................................................................7
Market segmentation .....................................................................................................................10
Target market and positioning strategy...........................................................................................11
Marketing strategy..........................................................................................................................11
CONCLUSION ......................................................................................................................................12
REFERENCES ........................................................................................................................................13

INTRODUCTION
Marketing is referred as a set procedure through which value of the product and
services is communicated or socialized to the customers with a sole aim to sell the
merchandise. It is being regarded as a critical function of business that pays attention towards
attracting the clients. Better results in the form of increased brand image, sales and higher
revenues can be attained if marketing is properly planned and executed within the
organization (Kotler, 2009). Pertaining to this, the current research report also aims to
understand different areas of marketing, their relationships and application in international
business organization. Concerning this, Marks & Spencer is being taken under consideration.
It is one of the leading UK’s retailer of clothes, food, financial services and home products.
The company has a record of profitability and success since its establishment. As a worker in
the marketing department of M&S, marketing audit of the current performance of the firm
will be carried out. Current marketing strategy as well as position of the company will be
evaluated significantly. Further, market research will be performed to determine two sets of
market segments and target market and buying behaviour will be comprehended in the later
part of the research.
MARKETING AUDIT
Company profile (Marks & Spencer)
Michael Marks in the year 1884 has set up Marks and Spencer, which is a leading
multinational retailer of UK today with around 1382 stores all across the world. They deal in
clothes, food services, financial services and home products both in store and online. They
have around 33 million customers in two divisions i.e. food and general products (Marks &
Spencer, 2015). Talking in reference with the market of United Kingdom, it is a market
leader in lingerie, womenswear and menswear. M&S has 468 wholly-owned, franchised and
jointly-owned stores in Europe, Middle East and Asia. At the time of financial crisis,
company continuously focused on its strong brand momentum through maintaining premium
pricing and investing huge in advertising. In the year 2008, there were slight decline in the
sales and share price of the firm and thus, many other competitors’ retailers grabbed the
market of M&S. in addition to this, the social, ethical as well as environmental business
commitments also supported the organization to create a string brand image and positioning
in terms of waste reduction, responsible sourcing and community care (Sinkovics and Ghauri,
2009).

Marketing objectives and goals
The main aim of Marks and Spencer is to drive like-for-like growth in UK and
expanding in the international market.
Figure 1: Corporate Objectives
(M&S Annual Report, 2013).
The food business of the company has delivered good performance regardless of the
fall in the revenue of general merchandise in the year 2013 by 2.4 percent and market share
losses in the clothing business. Thus, the main emphasis of M&S is on clothing business and
achieve long term growth in this sector. The most of the revenue of the firm comes from UK
though it is expanding in international market and thus, the current focus is increasing their
sales volume and revenue in the clothing sector in UK (Wheelen and Hunger, 2008).
Market Environment
The down turn of the company in the year 1990 and 2008 was mainly because of the
external factors in the market environment and the inability of the firm to adapt them. Thus, it
is very essential to analyse the external market environmental factors that affects the
functioning and operation of Marks and Spencer and these are as follows: Political – The Company is being influenced by European Commission free trade
agreements, as they can import their products easily. However, the sales of the firm
was decreased due to run-up and outcome of British SY referendum in the year 2016.
Further, because of comparatively higher cost structure, the market share of M&S was
also reduced and they have faced losses at the time of entering into new market
(Makos, 2014). The overseas operation of the firm was also affected by geopolitical
unrest, uncertainties and substandard infrastructure. Economical – The competitors of M&S like Aldi, Tesco and Morrisons considered
the strategy of discounted pricing at the time of financial crisis of 2008 while M&S
focussed on satisfying the customers through high quality products and services.
Because of this strategy, there were short term decrease in the sales of the company
but there is increase in the confidence of the British customers in long term.

Pertaining to this, the firm was able to maintain their share in the market and has
achieved strong sales in key owned market like India and Hong Kong (McDonald,
2001). Other than this, the past macro-economic crisis like pound fluctuations, falling
price of commodity and Brexit has decreased the confidence level of the people.
Further, decrease in the oil prices has also negatively influenced the performance of
the stores in Middle East. Social – There are manly two factors that influence the retailer i.e. changing value of
the population and shift in the generation with retiring of baby boomer generation.
This has redirected the focused of Marks and Spencer’s towards Millennial and
generation X. Further, preferences of the customers in regards with the fashionable
items and growing perception that British produced is of low quality highly affects the
demand and supply of the products. Nowadays, growing ethical concerns green
consumerism is contributing a lot in the development of sustainability reporting of the
firm and thus, M&S has placed considerable emphasis on social agenda (Hasson,
2005). Technological – The Company is in a good strategic position where they are enjoying
the advantages of changing media landscape, propagation of social networks and
increasing mobile waves. Talking in reference with the fashion business of Marks and
Spencer, the speed of transportation has increased and so as the speed of
communication of latest trends to designers has increased. Further, the experience of
shopping nowadays is seamless by the integration of tablet, mobile, online and
physical experience in the shop. Company is making use of digital technology using
mobile first approach by satisfying the needs of the clients who are accessing the
latest trends via mobile. Environmental – It is important on the part of major international retailers and brands
to analyse the life cycle of their products and services from cradle to grave due to
strict rules and regulations related environment both at the global and European level.
They need to be completely transparent in relation with their strategic as well as
tactical environmental practices (Newman and Cullen, 2002). M&S has adopted
efficient environmental and ethical plan which has served as a backbone to the
manner in which the business is being carried out within and outside the firm.
Because of this, Marks and Spencer was able to stay ahead of the curve through
reducing waste, helping stakeholder, sourcing responsibly and community care.

 Legal – The operations of M&S is largely influenced by consumer rights, health and
safety regulations, environmental antitrust and many other legal factors. Considering
this, the firm has started an initiative known as ‘Behind the Barcode’. This provides
the consumer an Omni channel experience by allowing them to order their products
through online mans for home delivery by scanning a product in store. This is the
perfect illustration of high standards which is being followed by Marks and Spencer.
In addition to this, the firm also need to make sure that all laws and regulations in the
home as well as international markets is being followed and no rules is obstructed
(Dentons, 2016).
Competition
The down turn of the company is mainly because of the above defined external factors
in the market environment and the inability of M&S to adapt to these factors. The exiting
players in the market of UK has changed their pricing policy and quality and became the
competitors of the company (Hamel, Doz and Prahalad, 2011). New retailers such as H&M
and Zara has also captured the rising amount of the market and discount players like Primark
as well as Matalan have also expanded a lot. In addition to this, the older departmental stores
such as Debenhams also started re-investing themselves as a brand led boutique. Because of
the expanded manufacturing capacity in Asia, there is an influx of high quality and cheaper
goods into western retailers. At the initial level, Marks and Spencer were quite reluctant to
alter their buy British policy. However, when the organization was compelled to do so for the
purpose of competing in the market, it became a public relation disaster. Further, change in
the technology removed the competitive edge in the supply chain front of M&S. the
unwillingness of the company to react to these external factors and to management driving
for profit has resulted in loss in the market share and the brand was also damaged
considerably (Mellahi, 2002).
Market research and consumer behaviour
According to the market research being performed by Mintel, it was revealed that the
spending of the customers has fragmented the midmarket retailers like M&S and Matalan and
those who were the value retailers having strong fashion authorizations were champions
midst the top retailers in the year 2012. The high performers who have gained the share in the
market were Primark and TK Maxxeach (Marks & Spencer, 2016). As per the research, there
has been a steep decline in the womenswear performance in the year 2013 with 9.9 percent
decrease in the market share. At the same time, retailers like Debenhams as well as John

Lewis were started investing huge amount in womenswear and thus, Marks and Spencer have
lost share to all these competitors.
Figure 2: Clothing retailing market share by consumer spending
(Mintel, 2013).
However, the brand research being carried out by Mintel also highlighted that Marks
and Spencer remains the trusted brand when comparison is being made with the other
retailers. This is being regarded as the most important factors that helps in keeping the
consumer buying some of the clothes from the firm irrespective of the problems related to
quality in some of the garments.
Factors affecting the consumer buying behaviour
There are numerous factors that affects the buying behaviour of the consumers and these are
as follows: Durability of the clothes – This is the most vital factor that influence the behaviour of
the consumers towards the products and services of M&S (McDonald, 2001). The
quality of the clothes being offered by the store directly affects the sales volume and
revenue of the company.
 Return policy – If the firm has easy return policy than the customers are more willing
to make purchase from the stores of Marks and Spencer and vice-versa. The switching
costs of the customers is also low and if they found trouble exchanging or replacing
their products than they are not likely to make purchase to the same store next time
(Islam, 2016).
 In store environment – This is also very crucial, as it can influence the buying the
behaviour of the consumers. For example, the layout of the Marks and Spencer store

is organised and managed. Further, the trial rooms and fitting rooms are also arranged
and designed concerning the needs and wants of the customers.
 Ethical treatment of workers – Nowadays, this is being regarded as the significant
factor in impacting the behaviour of the consumers. Companies or retailers who are
not adhering the norms and regulations being prescribed by the respective government
and authority are less preferred by the consumers as they are now becoming more
ethical and showing concern towards any type of discrimination (Winer, 2009).
Figure 3: Factors affecting consumer Behaviour
(Mintel, 2013).
 Low price – Price of the product is quite crucial, as customers are more willing to step
in the store which are offering high quality products and services at lower prices. The
main aim of the firm is to satisfy the needs and wants of the customers by offering
high quality merchandise. However, by keeping the prices low, M&S has significantly
the grabbed the larger market share in comparison with other retailers in UK.
 Latest fashion – Latest fashion is another factor that affects the buying behaviour of
consumers. Preferences and taste of the consumers changes with the passage of time.
Latest trends keeps on coming in the fashion world and those who adapt these trends
effectively are more likely to have more footfalls in comparison with the other fashion
retailers. The market research of M&S is quite strong that trends are incorporated
within the stock quickly to serve the needs of the consumers (Neal, Quester and
Pettigrew, 2006).

Market segmentation
Segmentation is the process that helps the firm in determining that which market
should be reached for building brand relationship. Today, marketing is in the name of
effectiveness as well as efficiency. It is more concern towards becoming focussed on smaller
however profitable segments of the market. It is important on the part of M&S to carry out
market research and conduct extensive investigation regularly so that needs, latest trends,
different trade channels and opportunities can be identified effectively (Howell, 2015). Thus,
market segment of Marks and Spencer for their clothing sector can be grouped into two
segments and they are as follows: Geographic – In this segment, people those who are living in the inner as well as
greater London are reached as they buy more clothes from mid-market high street
fashion retailers like Tesco and Zara. Further, those who are living in South East and
East Anglia as well as West Midlands prefers to buy from Primark, supermarkets and
Matalan.
 Demographic – Around 57 percent of the shoppers of M&S are women and thus they
need to be reached by the firm. Further, the company is also beginning to attract
younger customers in the clothing sector. Other than this, the company appeals to the
affluent upper-middle and middle class people (Gerhardt, Hazen and Lewis, 2014).
This particular group of customer is being chosen by the company as people living in
inner as well as greater London tend to purchase more clothes and this will help in increasing
the sales volume of M&S. further, by carrying out marketing research, it was analysed that
most of the shoppers of the company are women and thus, targeting this group will enhance
the revenue and sales of the firm. Younger generation are now fashion conscious and needs
latest fashionable clothes to glam up their personalities. Thus, targeting this customer group
will aid in the growth of the business in retail industry.
Target market and positioning strategy
Marks and Spencer desires to attain a competitive edge with its Sustainable Living
Plan. By analysing the factors that affects the consumer buying behaviour stated in the above
part of the research report, it can be said that around 88 percent clothing retailing consumers
says that durability of the customers is most vital factor for them. Further, 87 percent of the
consumers values quality of the products. Thus, quality of the products can be used as a point
of difference for Marks and Spencer. However, this has also being in questions due to quality
issues in its autumn range. All this reflects that the company has issues with its supply chain

management and they must strengthen their positioning in this market segment by advising
for better quality and operational management (Goldberg, 2007). Further, Marks and Spencer
should also start delivering their quality promise in order to catch up the competitive points
of parity in relation to fashion. For better responding to the greater demand of people for
updated collections, Marks and Spencer has launched rotated collection changing every
weeks in some of its ranges. In this regards, the company is moving ahead in the right
direction. In addition to this, the organization can also differentiate itself in the market by
targeting those customer segments which are demanding ethically manufactured products and
clothes in Britain. Their core target market is women over 45 years of age and younger
customers of 16-24 years of age and falling in upper middle and middle class group. Marks
and Spencer will also strengthen their position in the quality goods segment by increasing the
opportunity to augment their brand image by public relations. They also need to make sure
that keeps on starting next generation of loyal customers by alluring younger customers into
their stores (Lynch and Lynch, 2008).
Marketing strategy Product – The major strength of the firm right from its inception is quality of its
goods. Irrespective of many issues and problems related to quality, customers still
have an association with the M&S brand in terms of quality. The firm is making
efforts in strengthening the brand image of its products in its latest autumn winter
collection. Further, the firm has an opportunity to underpin their strategic position in
the quality goods markets and target the people who are now interested in clothes
which are made in Britain that too with ethical practices. With the British clothes line
the company wasn’t to bring back the famous St Michael brand by possibly
combining with a warranty policy. To target younger customer group, M&S need to
stock updated fashion clothes (Spencer, 2015). Price – The major customers of M&S falls in the category of affluent upper middle
class and middle class and thus, quality of clothing is more significant over prices.
They can make use of value based pricing by offering quality goods with slightly
higher prices in comparison with other retailers such as H&M and Primark. But for
having like-for-like growth, promotional discounts should be offered for the products
which are not picking up demand. Place – The products of the firm are being sold through 766 stores all across United
Kingdom including high street and out of town retail parks. M&S is now trying to

attract younger customers, even though this is not the core target group of the
company, a new store concept is being introduced in the store. For the purpose of
attracting younger customers, smaller specialist’s stores should be opened (Duncan
and Everett, 2003).
 Promotion – The sales of the firm can be strongly impacted by advertising campaign
for autumn and winter womenswear ranges. Further, celebrity should be used for
endorsing the clothes of the company. This potential public relation will enhance the
brand image of the firm. Direct as well as online marketing by using social media
such as Facebook, Twitter and You tube can be used. Other than this, sales promotion
such as discounts, coupons, price cut and free gifts can be adopted under their new
promotional campaign (Gilly and Wolfinbarger, 2008).
CONCLUSION
Therefore, from the above research it can be said that Marks and Spencer is the
leading retailer of UK. Since its establishment, the company has increased their investment
towards product innovation, quality and style. Despite of their successful positioning in the
UK market, they have faced downturn in the year 2008 due to global economic crisis. It was
found out in the research study that through M&S strong brand and positioning and ongoing
digital transformation of its operations they have preserved its spot as a successful and
leading clothes and food retailer in the market of United Kingdom. With great marketing
efforts, M&S need to deal with the lost market share and customers.

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