TABLE OF CONTENTS INTRODUCTION...........................................................................................................................1 TASK...............................................................................................................................................1 1.1 A marketing audit of the business’s current performance and an evaluation of the organisations current marketing strategy and position in the market.........................................1 CONCLUSION................................................................................................................................9 REFERENCES..............................................................................................................................10
INTRODUCTION Marketing is the activity of business in which marketers promote and sell their products and services, which includes research and advertising. This activity is done to satisfy customers (Armstrong, Kotler and Brennan, 2015). It is the process in which a product is brought in the market which includesresearching, targeting market, segmentation, pricing, strategies for promotion, etc. Marketing audit means investigation and analysis of marketing activities, objectives and goals. The audit must be comprehensive i.e. it should cover all areas, systematic, independent, and periodical. Mark & Spencer Group is a multinational retailer company in London, United Kingdom founded in the year 1884 by Michael Marks and Thomas Spencer. The company deals in the selling of clothes, home ware products, and luxury food items. It also started selling branded products like Kellogg's Corn Flakes in 2008. This report will undertake a marketing audit of the business's current performance and evaluation of organisation's external strategies and position in the market. Apart from this, it will cover two sets of marketing segmentation to be proposed for successful targeting of the market. And lastly, it will show how the chosen customer group will grow the business within the retail industry. TASK 1.1Amarketingauditofthebusiness’scurrentperformanceandanevaluationofthe organisations current marketing strategy and position in the market. Thebroad,systematic,analysis,assessmentandinterpretationofthebusinesse situations, its objectives, goals, strategies, etc. is known as marketing audit. It determines various defects, problems, internal and external marketing environment and compares marketing plans of the company with its actual performance. Marketing audit is basically conducted by the third person and not a member of the company. Any organisation, conducting a marketing research must keep some key points in mind such as: - Comprehensive: Marks & Spencer marketing audit must be such that it should cover all the areas of marketing, those areas where the problem prevails (Mullakhmetov and Akhmetshin, 2016). Systematic: The audit must be systematic, i.e. the analysing and evaluation of micro and macrofactors,objectives,marketingprinciples,strategiesandotheractivitiesthat 1
influence the organisation's marketing performance must be systematically done by Mark & Spencer. Independent: The audit can be done in 6 ways; self-audit, audit from across, from above, company auditing office, company task audit and outsider audit. The best one for Marks & Spencer is the outsider's audit, in which the external party is the auditor to a company, who is independently working without partiality. Periodic: The marketing audit is basically conducted only when some problem arises in the market. But, it has been suggested to conduct marketing audit regularly so the problem in Marks & Spencer can be corrected at its source. Marketing strategy of a company refers to the future long term planning for business to achieve its objectives and goals. It is essential for any organisation. The focus of company's strategy is to make sure that its products and services must meet customers’ needs, to build long term customer relationship. In the year 2004, Marks & Spencer withdrew all its operations and began focusing in the local market (Baumgarth, Kaluza and Lohrisch, 2016). This was a good decision that they took, because there were many faults that have taken much time for correction along with big losses. It was time, when M&S is recovering and identifying new opportunities to move into the international market along with a proper planned and structured method to target the international customer’s retail market. M&S has done careful analysis of its past mistakes and then has created its future plans. Afterwards, the company was mainly focusing on restoring its stableness by improving its products marketing. Further, it sets future foundations for enlargement. The company has decided to change itself from the niche and create its market share in the UK. These measures prove that M&S is clear about its future vision & mission. With the points discussed above, it has been proved that to go ahead with the current international strategy, they have to understood the demand in the global market and must apply their strategy accordingly. Word of Mouth Marketing 2
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Word of mouth marketing strategy is the type of strategy used by Marks & Spencer in which the information gets passes from person to person orally. It is an important part of marketing strategy which depends upon believability of person to person interaction. Customer like to share the brands they love with the world. This strategy is used since ancient times, through which people get to know about what to purchase. M&S has now understood that how to create trustworthy word of mouth for their companies (Baker, 2014). Customers may promote brands by word of mouth due to functional, social and emotional factors. This marketing strategy is very effective in the advertising campaign because it offers a solution to, ‘penetrating consumer’s guards' to get them talk about that particular product. Market segmentation is the process used by marketers for dividing customers or market. People with similar interests, common belief, same lifestyle, or similar demographic profiles are some characteristics according to which market segmentation is done. There are four types of market segmentation; demographic, behavioural, psycho-graphic and geographic. Basis for segmentation are: Gender: division of market based on gender into small segments by marketers. Age group: dividing customers on the basis of their age. Two market segmentations which could be successfully targeted by Marks & Spencer are, one is Demographic segmentation and other is psycho graphic segmentation. 1.Demographic segmentation:it is one of the easiest and most widely used market segmentation. This segmentation is used to have the right people based on variables. Its variables are age, family size, gender, income, race, religion and nationality (Armstrong, Kotler and Brennan, 2015). Marks & Spencer can apply this strategy for home ware and luxury items. This segmentation enables to classify a group of customers with similar needs.Thegivenimagerepresentsthevariousvariablesunderdemographic segmentation. Information regarding demographic segmentation is easily available from census data and the collected data like age, gender and can be adjustable according to the company's requirements. 3
2.Psycho graphic segmentation:this segmentation uses people's lifestyle, their interests, activities, as well as persuasion to determine a market segmentation. Marks & Spencer can use this strategy of segmentation for selling clothes on the basis of people thinking and the kind of lifestyle they prefer to have. Marks & Spencer can make more new products which fulfil customer’s needs and wants. These days there is a continual requirement of buying new products by the customers. Position in the market Marks & Spencer is a multinational retail based leading company in the UK. In 2018, there were about 1,036 M&S stores located in the United Kingdom and about 429 other stores situated around the world (Chan, Hwang and Wu, 2016). The company employees 80 thousand people in which 73% are females. M&S has a huge variety of options for its customers, which includes cosmetics, clothing, home wares and luxurious products. In recent, M&S has also developed a high quality food brand. Since 2010, the company has seenincreased worldwide revenue growth, and in 2018 the revenue reaches almost 10.7 billion British pound. Online platform of Marks & Spencer has also growing and showing rise in 4 Illustration2: Psycho graphic Segmentation 1: Illustration Demographic Segmentation (Sources:Demographic Segmentation, 2008)
revenue of 370 million British pounds since 2011. Marks & Spencer ranks higher when it is about customer perception, as compared to other brands in UK. According to a survey in 2015, it has been found that 37% of shoppers think that Marks & Spencer deserves a 5-star rating for customer services and about 67% think the same for product quality. The company was rated as the 8thleading brand in 2017 based on its Buzz Score rating. According to the market research undertaken to know how these segmented customer groups can help Marks & Spencer to grow within the retail industry, the study states that by understanding the variables of demographic of the customers will help a company to attract more of them. M&S can build trust with the help of company's logo, testimonials and reviews. Another growth tactic is social media advertising (Cross, Belich and Rudelius, 2015). Over recentyearsuseofsocialmediatargetinghasalsoincreased.Byknowingcustomer’s demographics, M&S can send social ads to customers to attract them. While analysing past trends, demographic data is used as it is essential to focus on the future. Marks & Spencer can create more awareness by creating education and entertaining content.The designed content must be valuable, entertaining, visualised, etc. As information changes, it becomes necessary to know customers interest in a company's product. Demographic variables are factors which help Marks & Spencer to determine the target group. Marks & Spencer has chosen different variables which can help them to divide customers according to company's requirements. The chosen variables are income and occupation. Income: - Marks & Spencer product's prices are decided not only on the basis of cost of production but also on the income of its target market. In this way the company will be benefited from the product and also customer's buying power will not be impacted. Occupation: - Marks & Spencer also created market segmentation on the basis of customer's occupation. When any product or service is produce to satisfy customer's needs, then the market is divided by profession. Psycho-graphics segmentation is the division of people on the basis of their attitude, values, interests, and opinions. Understanding customer's attitude helps M&S to predict their behaviour (Hurley, 2017). This segmentation allows M&S to make better experience for their customers and online visitors which will lead to higher sales. By knowing customer's interest not only improve their marketing efforts to increase sales but also create highly targeted and 5
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attractive content for their website.M&S, by using psycho graphic segmentation can also save money. Decision making process of customers as the time of purchase and usage of the product is known as buyer's buying behaviour. Customer's decision involves whether to buy a product or not, what to purchase, why to purchase, how to purchase, when to buy and how much to buy. The process of consumption not only refers to buying and using but also disposing. Following are the steps involved in decision making process are: - Recognition of needs: - This is the first step in customer's buying process. At this stage customer becomes aware about functional and emotional needs. In marketing strategy, it is common to include emphasis on challenging need awareness to shape customers in their brand's direction. Both direct marketing and personal selling are useful in drawing out customer's need. Information research: - this is the important stage for the Marks & Spencer to persuade their customers that their offers are best for a given need. This is the well-defined image company creates with targeted customers that the benefits are superior. Well-developed position and brand image is essential to affect customers during research process. Buying and experience: - Marks & Spencer, looking for long term growth and success requires customer possession and loyalty. Hence, it is necessary for M&S to provide a strong purchase experience consisting of deliveries, installation, warranties and effective follow-up, etc. to gain their loyalty (McDonagh and Prothero, 2014). Decision modes: - buyers generally make decision based on one or more perspectives; prolonged problem solving, limited problem solving, habits or brand loyalty. Marketing strategies deals with extended problem solving, which means buyers actively search lots of information on options and benefits. Limited problem solving perspective involves less risk in purchases. Marks & Spencer uses loyalty programs for maintaining their relationship with core customers. Habitual buyers buy product with a particular brand routinely, without any second thought. Buyer’sbehaviourisever-changing,multi-disciplinary process.Buyersdon't make decisions in a space, rather they react to a range of external influences and internal personal 6
factors. Each individualbuyer bringsuniquemotives, needs, perception, self-conceptsto purchasedecision.Hence,buyer’sbehaviourisaffectedbymanypersonal,internaland interpersonal factors. Generally high involvement products buying decision requires more investment and time of customers than to those with less expensive goods. It is important for every marketer to understand buyer's buying behaviour because it includes serious marketing implications (Cypryjański, Grzesiuk and Rudawska, 2016). Recommendation strategy for Marks & Spencer is Direct Mail Marketing. Direct mail marketing is the form of advertising that allows companies or non-profit firms to interact directly with the customers. Through advertising tools that include; emailing, text messaging, interactive websites, ads, catalogue, fliers, etc. Characteristics of direct mail marketing are explained below: Messages related to the marketing are directly conveyed to the customers. Variety of forms determines the addressability which includes phone numbers, email addresses, web browser cookies, postal addresses and fax numbers. Direct marketing is performed by companies of all sizes. A well performed direct marketing can get the positive return on investment. There are certain advantages of using direct mail marketing. Some of them are discussed below: It ishighly targetedi.e. is focus on the specific customers, thus, customers receive only those offers or information that fulfil their need.It ishighly measurablei.e. M&S can easily measure the results of more than one direct mail campaign. Cost effective: Mark & Spencer can design colourful and eye catchy brochures with the help of computers and have many copies printed affordably by a print vendor. Direct mail marketing ishighly flexiblei.e. M&S can use postcards to market its product to save costs. They can also make use of free samples in their mailing. The execution of direct mail issimpleas it does not require a huge investment in digital infrastructure (Wong, Hui and Howes, 2015). Direct mail marketing strategy has been proved to be more effective than e-mail. Based on a research conducted by DMA, when a direct mail is sent to an existing consumer, the rate of 7
response is 3.5%, whereas the response rate of email is 0.22%. Whenever a customer receives a direct mail and opens it, that creates physical bond with that brand, it is something that email cannot do. There is no use of complicated tools in direct mail marketing, as it is very easy to find out whether someone has taken action with direct mail or not. These easy ways determine that the mail sent to right demographic or not. By knowing person's place, it can also help to identify his income, occupation, interests, values etc. which makes sure that direct mailing is highly targeted. Another benefit of Direct mail marketing is that direct mails have higher chances of being opened than email. They are fast, as with a moderate campaign to a known targeted audience, they can get a mailing list, create mailing content, and start receiving responses in just a few months. This strategy is much faster as compared to other advertising campaign. Marks & Spencer can easily print their promotional flyers and can send them using direct mail service for faster and safe delivery. Many surveys and study proves that greater percentage of people daily go through their mails and even more get attractive to a well-designed flyer. Direct mail marketing is the best strategy as it consumes less time. Company's articles can be printed in less time and sent through mail to existing as well as potential consumers. Benefits of direct mail marketing involves customer’s quick response and increased revenue. Marks & Spencer can acquire a mailing list and target their advertisements to particular demographics, like; gender, ages, income groups, etc. (Choi and Forster, 2014). Youngsters between 18 to 25 age group have the best response rates to these direct mail campaigns. A survey proved that these age groups had a better result and preference for direct mails rather than other types of marketing strategies. People with age of 65 and more also respond well to mail advertising as elderly people lean to have positive response rate to direct mail. This segmented demographic uses online sources, but respond better to print advertisements. Personalisation of mails, such as adding their name, makes them realise that the product is custom made just for them.Marks & Spencer can reach out to existing consumers to know their values and attitudes in order to divide them by shared beliefs. 8
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CONCLUSION The above report concludes that marketing is the process in which marketers promote their product or service and sell them to potential customers, it also includes marketing research and advertising. This activity is performed by marketers to satisfy their customers. It is the processinwhichaproductisbroughtinthemarketwhichincludestargetingmarket, segmentation, pricing, strategies for promotion, etc. Apart from this it shows that the broad, systematic, analysis, assessment and interpretation of the business e situations, its objectives, goals, strategies, etc. is known as marketing audit and it is basically conducted by the third person and not a member of the company. Based on the research, the company's current position in recent, M&S has also developed a high quality food brand. Since 2010, the company has seen increased worldwide revenue growth, and in 2018 the revenue reaches almost 10.7 billion British pound. By knowing customer’s demographics, M&S can send social ads to customers to attract them. Marks & Spencer can create more awareness by creating education and entertaining content. The designed content must be valuable, entertaining, visualised, etc. Further it explained that word of mouth marketing strategy is the type of strategy used by Marks & Spencer in which there is oral communication between person to person for exchange of information. At last the report concluded that the best and most recommended strategy for Marks & Spencer is Direct Mail Marketing. Direct mail marketing is the form of advertising that allows companies to interact directly with the customers and also direct mails have higher chances of being opened than email. This strategy is much faster as compared to other advertising campaign. 9
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