Introduction to Marketing: Case Study of Marks & Spencer

Explore the marketing audit and current performance of Marks & Spencer, analyze market segmentation criteria, and justify chosen strategies. Understand how demographic and behavioral segmentation can grow the business.

INTRODUCTION TO MARKETING- CASE
STUDY OF MARKS & SPENCER
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Table of Contents
1. Introduction............................................................................................................................3
2. Marketing audit of current performance of Marks and Spencer............................................3
3. Position in the market.............................................................................................................4
4. Proposal of two sets of market segmentation criteria............................................................5
5. Explain how these chosen customer groups will grow the business......................................6
6. Justify your chosen marketing strategy to meet the requirements of the suggested segments
....................................................................................................................................................8
7. Conclusion............................................................................................................................11
References................................................................................................................................12
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1. Introduction
The organization Marks & Spencer is a British multinational retail organization
headquartered in the city of Westminster, London. This organization is public limited
company and traded as constituent of FTSE 100 Index. This organization was founded in the
year 1884 by Sir Michael Marks and Thomas Spencer. Presently, this organization serves
worldwide area and has revenue £10,622.0 million as per recorded in the year 2017 (Marks
and Spencer, 2018). There are approximately 84,939 employees serving for this organization
worldwide. Marks & Spencer has 979 stores across United Kingdom and about 454 stores
located internationally. This organization is counted in top 6 retail organization of United
Kingdom (Marks and Spencer, 2018).
In this assessment, the reader will be able to identify the major elements required for an
effective market evaluation. This assessment will provide a brief overview of the
organization Marks & Spencer and analyse its current marketing strategy. This report will
enable the reader to identify current position of this organization. The reader will recognize
two market segmentation criteria in order to lead the organization in attaining maximum
number of customers in minimum period of time. Within marketing audit, the reader will be
able to identify current performance of the organization during evaluation of its marketing
strategies and customer segments.
2. Marketing audit of current performance of Marks and Spencer
Marketing strategy is determined as an outlined path by which the organization approaches to
attain its organizational goals and objectives. As stated by Baker (2014) marketing strategy is
the basic procedure of any organization to attract huge number of customer for purchasing its
products and services effectively and efficiently. From this statement, it is deduced that
strategic marketing concerns the selection of policies that would lead in improving the overall
competitive position within the organization, accounting major challenges and opportunities
proposed within competitive environment. Marks & Spencer implement various attributes of
strategies that directly lead the organization to attain its objectives in an effective manner.
The organization Marks & Spencer use situation analysis in order to understand and identify
the collection methods for an appropriate analysis of both internal and external factors. This
leads the organization to identify various challenges and opportunities that might divert the
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organization from its determined goals and objectives. This organization uses PESTEL
analysis in order to identify various internal and external factors that might directly impact
performance of the organization. This organization also uses SWOT analysis for
identification of its strengths, weaknesses, threats, and opportunities. By using SWOT
analysis, the organization is able to identify the areas that need to be improved or changed in
order to attain its organizational objectives effectively. Based on present scenario, main
strength of this organization is that it provides a wide range of products and services that
directly leads the organization to enhance its future scope and opportunities. This
organization is one of the topmost retailers of United Kingdom and thereby aims to increase
its brand awareness and overall turnover through various marketing activities (Marks and
Spencer, 2018). With the help of Porter’s Five Forces, this organization analyses its basic
requirements and propose an appropriate marketing plans. This directly leads the organization
to develop new opportunities and increase its buyer’s power.
Segmenting of loyal customers is another strategy, which is implemented by the organization
Marks & Spencer in order to provide extra discounts and offers to loyal customers, therefore
lead in retaining them for longer period. In order to expand its overall network of operations,
this organization uses Expanding to multiple channels. This organization focuses on
targeting attitude of customers rather than age or gender, as it enables the organization to
standardize and rebuild their fashion businesses. This strategy leads the organization to target
customers based on their nature towards purchase of its products and services.
This organization uses Data Based Marketing as another strategic step, this strategy directly
leads the organization collate and record data of customers through market research and
based on their choices and demands, variety of products and services are availed to them.
This enables the organization to effectively understand its customers and build up a strong
bonding.
3. Position in the market
There are multiple factors based on which overall position of organization in the market is
determined like, customer’s requirements, demands, expectations, etc. Based on effectiveness
of strategies of the organization Marks & Spencer, it is determined that it has high level of
growth potential. On considering present market situation, the organization Marks & Spencer
need to increase its overall sales productivity by 3% every year. On considering population of
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United Kingdom, the organization needs to increase its overall number of stores in United
Kingdom so as to meet the requirements and demands of customers. By segmenting the
market as per geographical criteria, this organization is able to avail its products and services
on the basis of age groups, social status, etc. This would directly lead the organization by
positioning as highest brand in the market globally.
4. Proposal of two sets of market segmentation criteria
Market segmentation is one of the most effective processes in dividing broad range of customers
or business market in order to effective carry out marketing operations, which would lead the
organization in attaining its organizational objectives and goals. In words of Alt and Iversen
(2017) market segmentation is a process of segmenting huge mass of population or market into
several groups having similar choices and demands. Main reason behind segmentation of market
is to attain competitive advantage and effective performance within the organization. Similarly,
the organization Marks & Spencer need to focus on segmenting the market under following two
criteria:
Demographic market segmentation criteria
Demographic market segmentation is defined as market segmentation based on age, religion,
gender, family size, race, income, ethnicity, and education (Cooke et al., 2018). Demographic is
one of the most critical segmentation types that enable the organization to target customers more
accurately and effectively. This type of market segmentation would enable the organization
Marks & Spencer in dividing the market on the basis of age, religion, gender, family size, race,
income, ethnicity, and education. Segmentation of demographic market can be carried out by the
organization Marks & Spencer on the basis of products and services. For example, in case of food
items, this organization can divide the market according to age of customers. This organization
can propose food items differently for both young age and children. Due to generation gap, life
style for purchasing food items is different of different age groups. Income is another factor in
relation to clothing products that need to be considered by the organization Marks & Spencer in
order to provide huge variations in its pricing. This would enable the organization to target
individuals having all range of income. This organization need to design its products depending
on the buying capacity of different classes of chosen customers in the society. People of different
religion and nationality have their needs and requirement different regarding products and
services. Therefore, based on religion, the organization Marks & Spencer can divide the market
and provide products to customers on the basis of their requirements and demands.
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Behavioural market segmentation criteria
Behavioural market segmentation is defined as segmenting the overall market into two small
homogeneous groups on the basis of consumer purchasing nature. As stated by Agudo-
Peregrina et al. (2018) behavioural segmentation is carried out by organizations based on
different purchasing nature of customers like, brand loyalty, purchasing benefits, occasional
benefits, etc. The organization Marks & Spencer can develop various purchasing patterns in
accordance to which the customer would be liable to purchase its products eagerly. The
patterns on which this organization can effectively segment the market are, occasion oriented
and usage oriented. This organization can use occasion oriented market segmentation by
providing categorised products and services to its customers with occasional discounts and
offers. This would directly lead the organization in attracting huge number of individuals to
purchase its products and thereby lead to increase in its overall sales. The organization can
also segment and target the market on the basis of usage oriented, as different customers have
different responses towards selection of products and services. This would enable the
organization in increasing its overall sales as the organization would be able to provide the
products that are mostly used by customers.
5. Explain how these chosen customer groups will grow the business
According to Wilson et al. (2016), customers are one of the major sources in any business
organization. It is the main source of sales and profit of the company. The chosen customers
of a company is the customers who have been the customers of the company for a long time
and who are the profitable customers of the company. Here in this context the two market
segments have been selected and they are on the basis of demographical aspect and the other
is the behavioural aspect respectively. For the explanation, the two classes of people have
been selected in the society and they are the Adult group and the kids group.
Demographic effects
The demographic segmentation has worked in the five fields to make progress in the market
of Marks and Spencer.
 For the food items of Marks & Spencer, the choices of chosen customers have varied
according to the age of the young persons and the child respectively (Riggs et al.,
2015). Marks & Spencer has made the food items differently for both the classes. The
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life styles of both the young people and the children have influenced differently the
market of Marks & Spencer. The cloths of Marks & Spencer have been designed
according to the gender for men and women respectively. Income is a major factor.
Different chosen customers of different income have given feedback to the company
as per their needs and Marks & Spencer has designed its products depending on the
buying capacity of the different classes of chosen customers in the society. Different
people depending on the different religion and nationality have expressed their needs
and requirement and Marks and Spencer has designed the cloths and other products as
per their needs. Thus, from time to time, Marks &m Spencer has changed and
modified the products to grow its business.
 Change in a society day by day is a very common thing. Culture improves and makes
everything change in the society. With the change in the society and development of
culture, the tastes and requirements of customers have changed. The need for food-
items has been changed. The adults have been very conscious of health and so health-
food has been discovered by Marks & Spencer as per the need of the adult persons
(Prange, 2016). The guardians of children have been conscious of the health of their
children and hence the food items of children have been changed. For cloths, changes
in the tastes of young people and children have brought many changes in the society
and Marks & Spencer has changed the variety of cloth-products accordingly keeping
in mind the tastes of the chosen customers. Thus Marks & Spencer has modified its
products in the market.
Behavioural effects
There are behavioural effects on the sale of the goods of Marks and Spencer. The parameters
are the following:
 Buying Capacity of customers is a very important thing. Various types of customers
have expressed their view depending on the buying capacities of theirs. The young
persons, according to their buying capacity have selected the products and Marks &
Spencer has designed its food, cloth etc. items. The guardians of children have also
selected the products of children according to their buying capacity (Worthington,
2015).
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 Usage factor is the second factor of behavioural effects. Different types of customers
have different usage of products as per their family size, and requirements. So those
chosen customers have effectuated Marks & Spencer for production accordingly.
 Media usage is the third factor on behavioural effects of the customers. Today is the
age of social media. Both the adult persons spend maximum time in various social
media and in company websites. So they have been influenced by the online
advertisements of Marks & Spencer and have bought a lot of products from Marks &
Spencer. Even the children spend times today in social media and in various websites
and thus they have also been influenced by Marks & Spencer’s advertisements. Apart
from online media, both the adults and children have been influence some other types
of media-advertisement in Television, radio etc (Hudson et al., 2015).
 Technology is a major source of advertisement today. Various technologies including
information technology has made every organization advanced. The information
technology has made advanced both the youth class and the kids of the society. The
both classes have used technology to know the products and services of Marks &
Spencer and the sale volume of Marks & Spencer thus has increased. The young class
of the society are in the present days are doing online marketing and getting online
delivery from the other companies. So Marks & Spencer has also updated itself with
such technology (Esposito et al., 2015).
6. Justify your chosen marketing strategy to meet the requirements of the suggested
segments
A marketing planning is a part of business plan that outlines the overall business plan in an
organization and also attracts the clients or customers in a business. a marketing strategy
defines what an organization wants to achieve and a marketing plan defines how the goal of
an organization will be achieved.
Here Marks Spencer has selected the Digital Marketing strategy to effectuate both the market
segments of kids and adults for all its products.
Today it is the era of digital technology. Here, in this context the two segments – kids and
adults have been selected for spreading the market of Marks & Spencer. From children to
adult, everybody today uses the digital technology in many fields. The children use digital
technology in schools the students use digital technology in the colleges and the adults are
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using this digital technology in homes and in offices. So the digital technology will be the
best means for spreading the market of Marks & Spencer. Adults and the children can view in
various social media and in the website of Marks & Spencer the products and services of
Marks and Spencer and they will be influenced by it. Apart from this, they can share their
feedback online in the website of Marks & Spencer and in social media also. Marks &
Spencer can view those feedbacks in its website and in social media and can modify and
change its products. Thus Marks & Spencer can develop its market through this digital
means. Apart from the above points, there is one more point and that is the customer can do
online marketing sitting in their homes. Marks and Spencer can make an online delivery after
the sale of a product (Duan et al., 2018). Both are very convenient to the customers. Thus in
the above ways both the children and the adult group of society can be influenced by digital
marketing. as the social media and the website of the company are updated with the current
data, the customers can always be updated with the current data with all the change and
modifications and the sale of the company may increase thus. So both the customers and
Marks & Spencer will be benefitted by this.
Behavioural effects
The behavioural factors can also be influenced by the digital technology.
When Marks & Spencer updates all its product and service data in its websites and the
customers view the data they can view its price, quality and all other features and they can be
aware of their buying capacity of the products. The guardians of the children can also view
all the details and they can have an idea of the price of the products (Krum et al.,2016).
As various customers have different types of usage, they can update themselves as per their
usage taking knowledge of the products from these social media and also from the website of
the company.
As both the customer segments are connected with the digital technology, they can know how
Marks & Spencer is using the digital technology in its business field. The more the customers
will know about the technological use of Marks & Spencer, the more they will be interested
about the company, and will be interested to purchase the products of the company.
Apart from the above points, the customers of Marks and Spencer will know the maintaining
of the corporate social responsibility and the value of the company will be enriched in the
minds of the customers (Souza-Monteiro and Hooker, 2017).
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Marks & Spencer also for the use of this digital technology can process all its operation in a
cost-effective manner and can save cost of the company. As the advertisement cost reduces
the advertisement cost of the company reduces. So Marks & Spencer can provide good-
quality products at lower cost. Customers are also satisfied by this business strategy
(Alexander, 2016).
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7. Conclusion
From the above discussion, it can easily be analysed that marketing is one of the most
important part of the organization that determines overall success or failure of the
organization. Marketing strategy is the basic procedure of any organization to attract huge
number of customer for purchasing its products and services effectively and efficiently. The
organization Marks & Spencer use situation analysis in order to understand and identify the
collection methods for an appropriate analysis of both internal and external factors. Main
strength of this organization is that it provides a wide range of products and services that
directly leads the organization to enhance its future scope and opportunities. The organization
Marks & Spencer need to focus on segmenting the market under Demographic market
segmentation criteria and Behavioural market segmentation criteria. This organization can
develop its market through this digital means in order to attain maximum number of
customers in minimum period of time.
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