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Marketing Audit of Marks & Spencer: A Comprehensive Analysis

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This report provides a comprehensive marketing audit of Marks & Spencer (M&S), a renowned British multinational retailer. It analyzes the company's current performance, market position, and marketing strategy, utilizing frameworks like PESTEL and Porter's Five Forces. The report identifies key strengths and weaknesses, highlighting areas for improvement. It also proposes two relevant market segments for M&S to target, exploring the growth potential within these segments. Furthermore, the report delves into buyer behavior, examining factors influencing customer choices and suggesting strategies to cater to the identified segments. This in-depth analysis offers valuable insights for M&S to enhance its marketing efforts and achieve sustainable growth.

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Table of Contents
INTRODUCTION........................................................................................................................ 3
BODY........................................................................................................................................4
CONCLUSION.......................................................................................................................... 16
REFERENCES........................................................................................................................... 17
1

LIST OF FIGURES
Figure 1: Marketing Audit Components..................................................................................4
Figure 2: Porter’s Five Forces Analysis....................................................................................7
Figure 3: M&S’s Operating Model...........................................................................................9
Figure 4: M&S Today............................................................................................................. 10
Figure 5: Core customer front of mind..................................................................................12
Figure 6: Listening to the customers.....................................................................................14
Figure 7: Changing customer behaviour...............................................................................15
2

INTRODUCTION
Marketing refers to all the activities a company could relate to the purchasing and selling of
the products and services. Marketing is one of the key functional areas in various customer-
oriented organizations. This report is based on the famous British multinational retailer
company Marks & Spencer Group PLC also known as M&S. M&S is established in the year
1884 and headquartered in the London, UK. M&S major products include clothing, luxury
food products, and home products. In 2017, M&S is having around 979 stores in the UK out
of which 615 are selling food products only. In 2017, the number of employees working in
the M&S is around 84,939 along with revenue and operating income of £10.622 billion and
£690.6 million respectively. In this report, a marketing audit of the M&S's current
performance and evaluation of the M&S's current market position and marketing strategy
would be conducted. A proposal is presented including two relevant market segmentation,
which could be successfully targeted by the M&S in the retail business. This report also
presents a suitable research for explaining the growth of the business with the chosen
customer segments in the retail industry. Lastly, this report will demonstrate the
understanding of buyer behaviour with suitable research justifying the selected marketing
strategy for fulfilling the requirements of the chosen segments for the growth of the
business.
3

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BODY
INTRODUCTION TO MARKETING
Marketing comprises sales and distribution of the product and it’s advertising as well.
Marketing main focus is to attract the targeted customers and maintaining relationships
with them. Even simpler tasks and activities such as inviting clients for sponsorship events,
sending thank you emails, replying clients promptly and meeting with past customers are all
part of marketing (Gbadamosi, et al. 2013).
MARKETING AUDIT OF M&S
The marketing audit is the systematic, comprehensive, interpretation, evaluation and
analysis of the marketing atmosphere, both internally and externally, its objectives,
principles, goals and strategies for ascertaining the problem area as well as opportunities
and suggesting a recommendation for future marketing plan for enhancing the current
marketing performance of the company (Fahy and Jobber, 2012).
By making the marketing audit M&S current performance, current marketing strategy and
market position are evaluated. The following components are used to complete the
marketing audit of M&S:
Figure 1: Marketing Audit Components
4
Marketing
Audit
Macro-
Environmant
Audit
Task
Environmant
Audit
Marketing
Strategy
Audit
Marketing
Organization
Audit
Marketing
System Audit
Marketing
Productivity
Audit
Marketing
Function
Audit

A. Macro-Environment Audit
It comprises all the external factors of the company which influences the M&S’s
marketing performance. This audit could be conducted considering the PESTEL analysis:
PESTEL Analysis
 Political factors
Because of M&S's high-cost structure, it has also suffered from a loss in the market
share when entered into new markets (Marks & Spencer, 2015). During 2015,
M&S suffered a slowdown in the international business growth because of
international uncertainties, reduced profits in new markets and insufficient
infrastructure which results in winding up of 12 M&S stores in the year 2016. The
geopolitical disturbance has also impacted the overseas operations of the M&S
(Marks &Spencer, 2016).
 Economic factor
Since the 2008 financial crises, M&S's competitors have followed discounted pricing
strategy whereas M&S always stresses over high-quality products with improved
customer satisfaction (The Marketing Society, 2010). This strategy may lead towards
reduced sale for a short-term period but results in enhanced customer confidence
for long-term it is because of the desires and preferences of the British consumers
who seek quality and value both. During 2015, this strategy helps the M&S to keep
on maintains their market share in maximum markets and retained extraordinary
sales in key markets (Marks &Spencer, 2015). Since the continued financial crisis has
radically enhanced the price sensitivity of the M&S loyal customers as well.
Moreover in there are certain macroeconomic factors, reduced prices of the
commodity, currency fluctuations, and an unexpected fall in the Brexit vote has led
to falling in customer confidence. Additionally, the clothing sales have recorded a
ten-year lowest in Britain (Davey, 2016). While dropping of oil prices has negatively
affected the performance of Middle East M&S stores (Marks & Spencer, 2016).
 Socio-Cultural factors
The green consumerism an ethical issue in relation to socio-environmental costing
for the brands could be used as a supporting factor in the M&S's development and
5

sustainability based reports. M&S has adequately stressed up on their social agenda.
Their strategic sustainability plan has helped to build the relationship with the
consumers, dealers as well as communities, which is necessary for the company.
During 2015, any food surpluses are redistributed by a ‘Community Shop’ program.
Whereas during 2016 a campaign named ‘Spark Something Good’ has involved
around 1000 staff members for the charity and community work days (Marks &
Spencer, 2016).
 Technological factors
M&S has introduced huge data projects like allocation replenishment and predictive
analytics system. The company has also revised its digital strategy by utilizing the
mobile first approach which helps to answer customer needs through the latest
trends in mobile technology. The company is also having a dedicated in-house digital
lab team with 150 software engineers working to keep the M&S always at the front
position in the technological advancements (Marks & Spencer, 2016).
 Environmental factors
M&S is very transparent in its supply chain where it has published a map from where
it is sourcing its products (Marks & Spencer, 2015).M&S is forward than its
competitors making sustainability a priority by adopting an essential and rewarding
strategy.
 Legal factors
The UK’s and its retailer’s decision to exit from the EU also makes M&S face legal
problems. Lack of accessibility to common markets also affects the M&S’s supply
chain, Intellectual property rights, international agreements and free trade
movement etc. This decision will also result in introduction of new VAR rules in place
of old zero VAT rating for making any intra-European Union consumptions and
import tariffs and taxes will be imposed (Dentons, 2016).
B. Task Environment Audit
The task environment factors are closely related with the company like its retailers &
distributors, markets, competitors, customers, marketing intermediaries & Facilitators,
and Customers etc. which could affect the marketing program efficiency.
Porter’s Five Forces Analysis
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The Porter's five forces help to evaluate the M&S current market position:
Figure 2: Porter’s Five Forces Analysis
1. Threats of New Entrants
M&S strong customer loyalty, its strategy of delivering quality items, well-established
supply chain network would discourage the new potential entrants in the retail sector
(Vizard, 2015).
2. Threats of Substitute products
Clothing business of M&S is highly threatened by substitutes as it would be easily
intimated and copied the current fashion designs and trends. M&S position may get
affected by the change in customer taste and preferences as they could shift on other
brands with the same quality at a more affordable price (The Marketing Society, 2010).
M&S is operating in the retail business; where it is necessary to remain intact with the
innovation for maintaining the brand’s consistency and changing requirements of
customers (Price Waterhouse Coopers, 2015).
3. Bargaining Power of Buyers
7
Porter’s
Five
Forces
Analysis
Threats of
New
Entrants
Threats of
Substitute
products
Bargaining
Power of
Buyers
Bargaining
Power of
Suppliers
Competitive
Rivalry

M&S is operating in a retail sector where customers are having high bargaining power.
This sector is highly prone to customer market shifts like customer’s price sensitivity
seeks for unique designs, increase in preferences towards fashionable products, disloyal
UK customers for the British goods and products are highly influencing the retailers
(Cunningham, 2016).
4. Bargaining Power of Suppliers
After 1990s M&S have faced a high decline in its sales and this makes the company deal
with global suppliers with more competitive prices than the British suppliers (BBC,
2013). Therefore, in the recent scenario suppliers bargaining power is low. Moreover,
M&S’s brand model serves with more competitive advantage (Marks & Spencer, 2016).
5. Competitive Rivalry
Marks and Spencer are operating in a highly competitive retail industry where the
company have various competitors like home products departmental stores, fashion
retailers and supermarket chains. There is several supermarket chains rivalry in the food
business for M&S like Asda, Sainsbury’s and Tesco and various competitors of home care
and clothing business retailers like John Lewis, Zara, and Topshop etc. (Retail Week,
2016)
C. Marketing Strategy Audit
M&S has depicted its mission through Plan A where it is committed towards
environmental, ethical and social aspects, which helped the company in building strong
brand position focused towards waste decline, social care and valued sourcing (Marks &
Spencer, 2016).
D. Marketing Organization Audit
M&S for covering its low sales and empowering its support for "changing M&S", the
company has restructured the marketing team being a part of M&S's five-year
transformation plan (Tesseras, 2018).
E. Marketing Systems Audit
8

M&S is trying to renovate its computer systems for fighting with the fast-moving online
competitors. This Information technology revamp provides the M&S new capability to
handle any changes in trends as well as tastes and make a saving of around £30 million
in a year up to the year 2022. Whereas, this online marketing system change costs
around £25 million on an initial level (Oliver, 2018).
Figure 3: M&S’s Operating Model
Source: M&S, 2017
F. Marketing Productivity Audit
The new no-frills approach strategy in the last Christmas quarter has resulted in a fall of
food sales by 0.4%, fall in general merchandise sales 2.8%, and total UK sales got up by
1.1%. M&S brand valuation remains to be strong. In the year the brand of M&S is worth
around $3.8 billion (Vizard, 2018).
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Figure 4: M&S Today
Source: M&S, 2017
G. Marketing Function Audit
The core competencies are checked in my marketing mix (4P’s) strategy of the company:
 Product
The marketing mix M&S product portfolio is very wide ranging covering the various
range of products from kids to women category. The women category is also wide
covering clothing, footwear, bags & accessories etc. with its popular brands like Per
Una, Foot Glove, Classic, Indigo, Autograph and Twiggy. M&S also has various
categories like home furniture, food & wine, and flowers and other gift items. The
M&S core competency is by selling its in-house brand in place of other international
brands (Marks & Spencer, 2017).
 Price
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The M&S product portfolio in its marketing mix strategy uses competitive pricing.
The in-house brands of M&S for kids, men and women are priced from medium to
high range for the premium quality it serves. But, still, M&S is also focusing on the
competitive pricing strategy due to the availability of various options to customers
and increased level of competition. At seasonal time M&S also adopt the dynamic
pricing strategy by offering discounts to gain more customers and putting an old
stock on sale at lower prices than new arrivals.
 Place
M&S is having approximately 1000 plus stores with its presence in more than 50
countries. M&S’s major source of business is conducted in the UK with around 850
stores. Some of the countries where M&S also presented are France, Ireland, Spain,
Finland, India, Hungary, Turkey etc. M&S also owns its website which facilitates the
customers to buy online and get home delivery of products (NWANKWO, 2013).
M&S also facilitates some limited category products to be delivered internationally
with their local currency purchase.
 Promotion
The marketing strategy chosen is carefully selected by the M&S for maintaining a
balance between the advertising campaigns for digital marketing and the store
strategy. The M&S strategy gives a common message on all the communication
mediums. M&S adopted different mediums like TV ads, mobile ads, print media and
other social media advertisements (Lea-Greenwood, 2013). The company makes
promotion on its website, through blogs and running special loyalty program named
‘Sparks' by giving points on shopping from M&S stores which could be redeemed on
future purchases from M&S.
MARKET SEGMENTATION
Market segmentation is the categorization of a mass market with recognizable and diverse
segments or groups, where each one is having common needs and attributes and
demonstrates the same reactions for marketing activities (Weinstein, 2013).
11

M&S has more emphasis on the middle-aged group’s category people but also has focused
on the other aspects of the segmentation process. The current criteria for segmentation
where M&S should focus are as follows:
 Psychographic Segmentation
M&S major customer segment involves middle-aged (30 to 45 years) women, who
are very active and energetic. M&S has to identify the customer segment of
individuals who are educated, family-oriented and middle-aged people having an
active standard of life.
 Behavioural Segmentation
This segment comprises events, benefits search for, needs, significant value etc. The
M&S products are categorized or valued as number one and are obtainable at
affordable prices. People perception of M&S brand is for a classic, traditional and
standard clothing brand. The brand also delivers a range of clothing and garments
like formal, casual wears, for specific occasions and events etc. A maximum of total
sales percentages is from the M&S's substantial user profiles.
Figure 5: Core customer front of mind
Source: M&S, 2017
M&S should focus on the above two segments majorly by adopting multi-segmentation
criteria where more than two segments are targeted by the M&S for successfully targeting
12

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its business on the frontiers of growth. The middle-aged women and heavy customer
profiles are the main revenue generator for the M&S if they are targeted than it would be
more effective for the M&S international expansion of the brand as well. Therefore, the
M&S brand is targeting over the multi-segments which are having active lifestyles, high
income, and education etc. But with the more efficient approach, the M&S could also focus
on the launch of branded as well as attractive menswear for achieving a leading market
position in the retail sector of the UK.
The homeware products and apparel remain to be extremely competitive, Marks and
Spencer needs to concentrate on the innovation in quality and design with high-end fashion
products for providing better options to the customer segments of behavioural and
psychographic segments. For appealing the younger audience and markets, Marks and
Spencer needs to adopt trendy promotional ways such as promoting online ways of
shopping, hoardings fixing-up in the famous places etc. and the introduction of innovative
brands for capturing the attention and attraction of the youth (Wilkinson, 2013).
BUYER BEHAVIOUR
Today’s customer is highly powerful having more knowledge and sophistication. Therefore it
is important to research on the modern buyer behaviour especially in the retail sector.
Researching in retail and identifying the ways to attract the buyer through a better
atmosphere, policies and services is an essential part of the research for improving today's
customer experience in the context of the M&S.
The following are the crucial areas where M&S need to focus on the understanding the
buyer behaviour for focusing the proposed two segments in its marketing strategy:
Any unethical or deshopping buyer behaviour
Deshopping means buying a product and then return back after meeting the purpose, which
is unethical. While growing the M&S business online it is necessary to make an investigation
for the online deshopping (De Chernatony, 2010).
Customer service
13

M&S also needs to focus its current customer service experience is perceived by the
consumers in the customer-oriented retail industry.
Retail store atmosphere
There are several instances when a customer gets attracted to a retail store environment
and shop something (Barnes and Lea-Greenwood, 2010). That means for M&S it is essential
to understand the retail environmental influences on the shopping behaviour of the
customer.
Female and Male shopping behaviour
There is a huge difference between the male and female buying behaviour M&S retail
business is focused on both the groups, so M&S should understand the differences between
the two and then demonstrate the products accordingly.
Online customer behaviour
Furthermore, the growing trend of the online shopping is very popular among the various
customer groups. M&S needs to understand each group and their needs and fulfil them on
the point of sale with clear terms and conditions, which will remove all the ambiguities of
the online customer before shopping online (Hsin Chang and Wang, 2011).
Figure 6: Listening to the customers
Source: M&S, 2017
14

After researching all the above aspects of the buyer behaviour it would be clearly evident to
M&S that which marketing strategy needs to pursue meeting the requirements of the
behavioural and psychographic segments and achieves the growth in the business.
The product development strategy would be more suitable for serving the chosen segments
of behavioural and psychographic customer groups. M&S is a leading retail brand which
offers the premium category products to its customers if the company offers new improved
products to its existing markets then it will be an edge for both the company as well as
customers (Varley, 2014). This would enhance the company’s market share and position and
help it to move its business forward and provide customers with more categories and extra
premium quality products with the same reliability of the brand.
Another strategy M&S could adopt is Market penetration, where the existing product is
sold by the Company in the existing markets with more sales. M&S have to work on the
consumer behaviours for getting results from the market penetration strategy. This strategy
may prove to gain the loyal customers of the brand at a faster pace and on a larger scale
(Baker, 2014). This could be possible by using various promotional techniques and
campaigns for advertising the M&S products.
Figure 7: Changing customer behaviour
Source: M&S, 2017
Both the strategies could be challenged by the changing customer behaviour and retail
industry is very sensitive for changing customer behaviour. M&S must always keep
identifying the changes in the customer’s preferences, behaviours, tastes, values and other
significant facts which may turn their brand preferences from the M&S.
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CONCLUSION
On the concluding note, M&S’s marketing audit has depicted various approaches, tactics,
strategies and other assessing factors which are showing the improvement ways and
assessments where there is need to make improvement in the overall marketing area. The
marketing audit is successfully conducted by explaining the assessment criteria and
improvements in the marketing activities. Afterwards, market segmentation proved to be
another significant area where M&S need to focus and deliver its complete efforts through
adopting the suitable strategies proposed for making the business grow on the higher scale
with much more profitability. This report also elaborates the significance of the consumer
behaviour in the M&S retail business, where the business is highly dependent on the
customer’s attitudes and behaviours. M&S needs to acquaint with the changing needs and
behaviours of the customers for becoming more successful in its area.
16

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International Journal of Retail & Distribution Management, 38(10), pp.760-772.
BBC, 2013. Marks and Spencer food sales offset clothing weakness (Online available at
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Cunningham, 2016. The week ahead in business and finance, The Telegraph (Online
available at https://www.telegraph.co.uk/business/2016/05/22/the-week-ahead-in-
business-and-finance/ last accessed on 25 July 2018)
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De Chernatony, L., 2010. Creating powerful brands. Routledge.
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Fahy, J. and Jobber, D., 2012. Foundations of marketing.
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Hsin Chang, H. and Wang, H.W., 2011. The moderating effect of customer perceived value
on online shopping behaviour. Online Information Review, 35(3), pp.333-359.
Lea-Greenwood, G., 2013. Fashion marketing communications. John Wiley & Sons.
M&S, 2017. Customer & Shopping Experience: Shareholder Panel (Online available at
https://corporate.marksandspencer.com/documents/reports-results-and-publications/
private-shareholder-panel-event-presentation.pdf last accessed on 25 July 2018)
17

Marks & Spencer, 2017. Annual Report & Financial Statements 2017 (Online available at
https://corporate.marksandspencer.com/documents/reports-results-and-publications/
annual-report-2017.pdf last accessed on 25 July 2018)
Marks & Spencer, 2015. Annual Report & Financial Statements 2015. (Online available at
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NWANKWO, S., 2013. 1 THE PURPOSE OF MARKETING. Principles of Marketing: A Value-
Based Approach.
Oliver, M. 2018. M&S to update computer systems so it can adapt quickly to new trends like
rivals Zara and Primark (Online available at
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adapt-new-trends.html last accessed on 25 July 2018)
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Retail Week, 2016. Fashion Retail 2016: The future of fashion retailing in a digital age
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at https://www.marketingweek.com/2018/01/18/ms-overhauls-marketing-structure-fight-
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last accessed on 25 July 2018)
Varley, R., 2014. Retail product management: buying and merchandising. Routledge.
18

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Vizard, S. 2015. Marks & Spencer brand perceptions on the rise as it is rated one of the UK’s
top brands (Online available at https://www.marketingweek.com/2015/07/15/marks-
spencer-brand-perceptions-on-the-rise-as-it-is-rated-one-of-the-uks-top-brands/ last
accessed on 25 July 2018)
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(Online available at https://www.marketingweek.com/2018/04/19/marks-spencer-one-
brand-marketing-strategy/v last accessed on 25 July 2018)
Weinstein, A., 2013. Handbook of market segmentation: Strategic targeting for business and
technology firms. Routledge.
Wilkinson, F. ed., 2013. The dynamics of labour market segmentation. Elsevier.
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