Introduction to Marketing - M&S

Introduction to
Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
Marketing Audit..........................................................................................................................1
Market Segmentation..................................................................................................................5
Buying Behaviour.......................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Marketing refers to the process of promoting goods and services to potential customers in
order to increase sales as well as to earn high margin of profits (Anda and Temmen, 2014). It is
important part of an organisation which help in their growth and development. This report is
based on Marks and Spencer which is a public limited company which deals in sales of clothing,
food and home products. Its headquarter is situated in London, United Kingdom and it was
founded by Michael Marks and Thomas Spencer in 1884. This company has several brands such
as Blue harbour, M&S Energy and many more. This report explains about market audit which
helps in determining current performance of respective company. With aid of this marketing
audit, company implement strategies which will help them in their growth as well as also
enhance their position at marketplace.
TASK
Marketing Audit
It is define as a type of analysis, evaluation and interpretation of internal as well as
external marketing environment (Baker, 2016). In order to enhance organisation performance
and its position at marketplace, marketing audit helps in setting goals, objectives and strategies
so that problems can be ascertain and opportunities can be explore. Marketing Audit is not
conducts by the member of a company rather it is conducted by the third person. There are
various elements of marketing audit such as macro environment audit, task environment audit,
marketing strategy audit and so on. These components of marketing audit will help in defining
activities of marketing department that is performed in a company. Along with this, it also helps
in determining overall performance of an organisation. Marketing audit of Marks and Spencer is
well explained with the aid of 4P's of marketing mix and porters five force model. It is described
as follows:
Marketing Mix:
Marketing Mix Marks and Spencer
Product As it is one the top most retail industry that deals in production of clothing.
This company produces eco-friendly products as well as fair trade goods for
men, women and children (Marketing mix of Marks and Spencer, 2019). It
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not only offers clothing but also provides food and home products such as
furniture for living room, dining room and many more. This company
provides different as well as high quality products at reasonable price.
Place This company has its branch across the worlds such as Morocco, Finland,
Kabul, Canada (Buhler and Nufer, 2012). France and various other
international countries. It operates its main business in United Kingdom
having approximately 850 stores. This company has its website as well as
online sites on Instagram, Facebook and other social sites. Through this, they
are able to generate lead which help them in increase their sales by providing
their customers goods and services through home delivery. Respective
company also provides international delivery of limited goods.
Price This company mostly provide their products to upper and upper middle
income groups of people and set their price accordingly. The price which they
set for their goods are valuable because they provide diversified range,
convenience as well as high quality commodities. As due to increase in
competition at marketplace, respective company adopt competitive pricing
strategy. Due to this strategy they set price of their premium products between
middle to high range. The motive of this company to adopt competitive
pricing strategy is to face competitors in order to increase its mass market
consumption.
Promotion Respective organisation promotes their goods and services with the help of
advertisement on media, social sites and other sources. They also take aid of
digital marketing so that they can target their potential audience. For doing
promotion, this company provides their loyal customer special discounts and
offers at the time of season sale. In order to promote their services and
products, Marks and Spencer apply in-store strategy which help them in
making their promotion more effective.
Porters five force model:
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It is a organisation analysis model which help a business to gain competitive advantage
over their competitors (Bühler and Nufer, 2015). This model explains about reasons of different
industries sustainability to earn different level of profitability. This model is categorised into five
elements which is described as follows:
 Bargaining power of suppliers: It explains that suppliers of a company has the power to
influence the cost of inputs (Burgess and Steenkamp, 2013). The less number of
suppliers, more company depend on them due to which they get the advantage to
influence the cost for trade purpose. On the contrary, the more number of supplier,
company will have an opportunities to lower their cost of inputs which result in increased
profits. In respect of Marks and Spencer, due to competitive pressure, company has to
lower their cost of inputs which weakens the power of supplier. Respective company
focus more on private label which provides them opportunity to have power over external
suppliers. Along with this, Marks and Spencer is less dependent on their suppliers which
results in low cost of output as well as due to this they are able to earn high margin of
profits.
 Bargaining power of customers:This stage of model deals with the power of customers
to make price down of products. The small customer base the company have, there will
be more chances that price will fall for the goods. In context of Marks and Spencer,
company has to develop strong customer base so they in order to retain them they can
provide them exciting offers as well as discounts. This will help them in increasing their
sales and increased profitability ratio. Along with this, respective company will be able to
build strong bond with their customers.
 Threat of New entrants: It is one of those part of this respective model which affects
power of existing company's. The more number of new competitors enter at marketplace,
there will be more chances of company's position will get affected (Chaffey and Ellis-
Chadwick, 2019). In regards of Marks and Spencer, company focus more on quality. It is
because they believe that if they provide better and effective products to their customers
they will able to give tough competition to their rivals. Along with this, it will become for
new entrants at marketplace to break their customer base. This provides respective
company quality product advantage which help them in retaining their potential
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customers. In addition to this, Marks and Spencer is not much affected by any new
entrants at retail industry.
 Threat of Substitutes:It is one of the biggest threat for the company as substitutes are
those who produce same products of other company which indirectly affect their sales
and profits (Smith, 2012). The company which have no close substitutes have benefit to
increase their prices on limited items. Along with this, these companies is able to
maintain their customer base. In terms of Marks and Spencer, they have large number of
substitutes which becomes threat for respective company. In order to avoid this threat,
company has to update their products on regular basis and also produce their products as
per latest trend and customer preferences. This will help them in maintaining their
position as well as it will also not affect their customer base.
 Competitive rivalry:In this stage of five force model, competitors are those threat which
undercut an organisation in order to take their place at marketplace (Chandon, Laurent
and Valette-Florence, 2016). If there is large number of competitors, there be less power
to the company who are high position at market. There are numerous competitors of
Marks and Spencer, in order to defeat them, company need to make effective use of
advance technology so that they can modify their strategies and improve their products.
Along with this, they have to frequently analyse the market so that they can produce their
products as per consumers needs and desires. By performing such activities respective
company will be able to beat their competitors and able to maintain their position at
marketplace.
Current Performance of Marks and Spencer:
Marks and Spencer is one the top most company in retail industry which sell their quality
products and services to their customers at affordable price. This company serve their products
and services at global level such as Finland, Spain, France and many more. Current performance
of respective company has been enhanced all over the world. As the company currently has 1043
stores across the globe but due to decrease in sales by 2% it has to close its stores in some
countries (M&S sales and profits fall amid shake-up, 2019). Before respective company was
number one retail store in market of United Kingdom but now Primark company. As per the
data mentioned, in order to sustain in the market for long duration and maintain its position top
most most, company has to adopt differentiation strategy so that they can different and unique
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products from their competitors. This will help them in enhancing their position at marketplace
which will lead in increased sales as well as profits. Along with this, it will also lead them to
build their strong customer base.
Market Segmentation
It is define as kind of marketing concept which categorize the market into smaller subset
as per customer taste as well as preferences (Engelland, 2014). It is a segment which comprises
of like minded individuals. In market segment, no market is similar to each other, they are
different in some way or the other. With the help of market segmentation, organisation will be
able to personalize their marketing campaigns. Instead of targeting each customer individually,
firm can target their market which will save their time, money as well as resources. It also helps
in minimising risk of ineffective marketing campaigns. In respect of Marks and Spencer, in order
to make effective use market segmentation and maintain its position at marketplace, company
has adopted two set of this segment. This segments are described below:
 Demographic Segmentation:This segmentation is focused more on differentiating
between customer base. This segment is categorised in various parts such as age, income,
gender and many more. When a company organisation their structure based on
demographics segmentation, they can easily make their strategies and target their
customers accordingly. As per Marks and Spencer, which is a multinational company that
deals in clothing and other accessories decided to target their demographic segment. With
the help of this segment company can target upper and upper middle income group
customers. This is because customers under such groups is more concerned about quality
rather than the price. This help respective company to sell their products easily the main
focus of company should be to maintain their quality of products so that they will able to
retain their existing customers as well as they will also able to acquire new customers.
Targeting upper and upper middle income group will help respective company to
understand about latest trend as per current scenario (Iacobucci, 2013). Along with this,
respective income group customers will lead in increased sales as well as profits of Marks
and Spencer. Making effective use of demographic segmentation, respective company
will be able to enhance its position through which they will be able to gain competitive
advantage. With the help of this segmentation, company will be develop their customer
base through which they will able to expand their business at global level.
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 Geographic Segmentation:This segmentation is mainly based on the location of
company. It breaks the location in three categories i.e. global, national and regional
(Kotler and et.al., 2017). A company must take into concern respective segment so that
they able can understand demand and preferences of customers. On the other hand,
organisation can also target location according to goods and services they offer to their
customers. In context of Marks and Spencer, being a retain industry, company must focus
lavish area where they will able to target customer of upper and upper middle income
group. By targeting such segment they will able recognize their taste and preferences
through which they will produce their goods and services. In addition to this, according to
the targeted segment respective company will focus more on their quality rather than the
cost. It is as per market research Marks and Spencer have examined that these group are
more focus on quality and material. Taking this into concern, respective company modify
their strategies in order to improve their quality of products. This will lead them to
enhance their sales and profitability ratio.
Hence these two market segment will help respective company to improve their position
at market place in order to gain competitive advantage. Along with this, they will also able to
beat their competitors and give tough competition to them.
Buying Behaviour
Consumer buying behaviour is define as sum of consumer taste, preferences, attitudes
regarding behaviour of customers at marketplace while purchasing goods and services (Malhotra
and Malhotra, 2012). It helps in understanding reasons behind customer purchase, sector that
influence consumer purchase as well the changing factors of the society. In terms of Marks and
Spencer, focus more on upper and upper middle income group customers, they have focus on
some sectors that will help in retaining them. These sectors are described below:
 Quality:The first sector that Marks and Spencer has to keep into concern is about
maintaining quality of product so that they can influence behaviour of their customers to
buy their goods. As per targeting high income group, company has to update their quality
frequently so that they can gain their trust and retain them for long duration. Along with
this they can also adopt natural ingredient in order to attract more and more high income
group peoples.
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 Advance technology: Another sector that Marks and Spencer has to take is about
updating themselves about latest technologies. In order to make better and effective
products and services, respective company has to make appropriate use of latest
technology. This will help them to modify their products and make them more innovative
as well as attractive. Through this they able to attract more customers as well as it is also
helpful for them because it make their production process easy and more effective.
 Location: It is one of the important sector to influence buying behaviour of customers
(Molenaar, 2013). In order to convince consumer to buy product, respective company
need to open their store where they can attract potential customers. It is because with the
help of targeted location they will to acquire customer as per their targeted segment. Such
as in respect of respective company they can open or launch their store at posh and rush
area so that it can be easily approachable by their potential service users.
 Price:Respective company should not focus more on their price as per their targeted
segment, they are more concerned about quality instead of cost. If Marks and Spencer
produces effective and better quality of product their customer will not be influenced by
the price and will buy the product from their store. The respective company offer high
quality products and they are targeting to high income group peoples so in this respect
price of products offer by respective company will high.
 Packaging: Other than the product, customer must also focus on packaging of the
product. In terms of Marks and Spencer, company have creative as well as innovative
packaging of their product through which they easily able to influence buying behaviour
of their potential customers. It is essential for respective company to do attractive and
high quality packaging of their products because they are targeting high income group
peoples as well a they are offering products at high rate.
 Infrastructure: It is also one of the important sector to attract targeted customers. Marks
and Spencer have attractive as well as huge infrastructure through which customer is able
to easily determine its quality as well as its price (Proctor, 2014). The high income group
peoples get attracted with infrastructure of store so it is opportunities for respective
company to design effective infrastructure in order to attract their potential customers.
These sectors will help the respective company to attract their customers at store which will help
them to enhance their position at market place.
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Strategy:
In order to maintain position and build strong customer base, Marks and Spencer has to
formulate the strategy through which they able to maintain their targeted segment as well as their
buying behaviour (Palmer, 2012). Respective organisation has adopted differentiation strategy
which will help them to maintain quality of their product as well as their customers. With the
help of such strategies company will be able to produce unique as well as different products
which will not be easily available at other stores. Maintaining trust and relation with their
customers, respective company will be able to enhance their sales. Along with this, in order to
make effective use of differentiation strategy, company has to update as well as modify their
product as per customer need and demands.
CONCLUSION
Hence, from the above report of marketing, it can be said that in order to know the
current performance of business, company has to conduct their marketing audit. This can be done
with the help of 4P's of marketing mix and porters five model. These audit will help an
organisation to adopt the strategy which will help in their growth and development. Along with
this, it will also enhance their position in the market. Due to this they will able acquire new
customers which will assist in increase sales and profits. In addition to this, company has to
adopt two marketing segment so that they can improve their position in their respective industry.
Therefore, by understanding buying behaviour of customers as per the selected segmentation,
company has to adopt differentiation strategy which will help them to retain their loyal
customers. Through this they will able to enhance their position at market place. Along with this,
by making effective use strategies as well as advance technologies, company will be able to give
tough competition to their rivals.
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REFERENCES
Books and journals
Anda, M. and Temmen, J., 2014. Smart metering for residential energy efficiency: The use of
community based social marketing for behavioural change and smart grid
introduction. Renewable energy. 67. pp.119-127.
Baker, M.J., 2016. What is marketing?. In The Marketing Book(pp. 25-42). Routledge.
Buhler, A. and Nufer, G., 2012. Relationship marketing in sports. Routledge.
Bühler, A. and Nufer, G., 2015. Marketing in sports.
Burgess, S.M. and Steenkamp, J.B.E., 2013. Introduction to the special issue on marketing in
emerging markets. International journal of research in marketing. 30(1). pp.1-3.
Chaffey, D. and Ellis-Chadwick, F., 2019. Digital marketing. Pearson UK.
Chandon, J.L., Laurent, G. and Valette-Florence, P., 2016. Pursuing the concept of luxury:
Introduction to the JBR Special Issue on “Luxury Marketing from Tradition to
Innovation”. Journal of Business Research. 69(1). pp.299-303.
Engelland, B.T., 2014. Religion, humanism, marketing, and the consumption of socially
responsible products, services, and ideas: Introduction to a special topic section. Journal
of Business Research. 67(2). pp.1-4.
Iacobucci, D., 2013. Marketing models: multivariate statistics and marketing analytics. Mason,
OH: South-Western.
Kotler, P. and et.al., 2017. Marketing for hospitality and tourism.
Malhotra, N.K. and Malhotra, N.K., 2012. Basic marketing research: Integration of social
media. Boston: Pearson.
Molenaar, C., 2013. E-Marketing: Applications of information technology and the internet within
marketing. Routledge.
Palmer, A., 2012. Introduction to marketing: theory and practice. Oxford University Press.
Proctor, T., 2014. Strategic marketing: an introduction. Routledge.
Smith, A., 2012. Introduction to sport marketing. Routledge.
Online
Marketing mix of Marks and Spencer. 2019. [Online]. Available
through:<https://www.marketing91.com/marketing-mix-of-marks-and-spencer/>.
M&S sales and profits fall amid shake-up. 2019. [Online]. Available
through:<https://www.bbc.com/news/business-48362772>.
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