Principles of Business: M&S Report on Market and Finance

This report provides an in-depth analysis of business principles, focusing on the multinational retail company Mark and Spencer (M&S). The report begins by examining the characteristics of business markets, the nature of interactions within them, and how organizational goals are shaped by market forces. It then delves into business innovation, exploring its meaning, various models, sources of support, the product development process, and the associated risks and benefits. The report further assesses the importance of financial viability, the consequences of poor financial management, and essential financial terminology. Budgeting is also discussed, including its uses and effective management strategies. The principles of marketing, including the 4Ps (Product, Price, Place, Promotion), are explained, along with the sales process, market research, and the value of branding. Finally, the relationship between marketing and sales is examined, offering a comprehensive overview of key business concepts and their practical applications within the context of M&S.

PRINCIPLES OF
BUSINESS

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Characteristics of various business markets..........................................................................1
1.2 Nature of interaction between business within a market......................................................1
1.3 Organisation's goals may be shaped by the market...............................................................2
1.4 Describe the legal obligation of a business...........................................................................2
TASK 2............................................................................................................................................2
2.1 Meaning of business innovation............................................................................................2
2.2 Uses of models of business innovation.................................................................................3
2.3 Sources of support and guidance for business innovation....................................................3
2.4 Process of services or product development.........................................................................3
2.5 Risk, benefits and implications associate with innovation....................................................4
TASK 3............................................................................................................................................4
3.1 Importance of financial viability for an enterprise................................................................4
3.2 Consequence of poor financial management........................................................................4
3.3 Different financial terminology ............................................................................................5
TASK 4............................................................................................................................................5
4.1 Uses of budget.......................................................................................................................5
4.2 How to manage a budget.......................................................................................................6
TASK 5............................................................................................................................................6
5.1 Principles of marketing.........................................................................................................6
5.2 Explanation of sale process...................................................................................................8
5.3 Uses and features of market research....................................................................................8
5.4 Value of a brand to an organisation......................................................................................9
5.5 Relationship between marketing and sales...........................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11
.......................................................................................................................................................12

INTRODUCTION
Human beings are continuously engaged in some activity or other in order to satisfy their
unlimited wants. Every day we come across the word 'business' or 'businessman' directly or
indirectly. Business has become essential part of modern world (Anupindi and et. al., 2011).
Principles of business defines as a Fundamental norms, rules, or values that represent what is
desirable and positive for a person, group, organization, or community, and help it in
determining the rightfulness or wrongfulness of its actions. Principles are more basic than policy
and objectives, and are meant to govern both.
This report is based on Mark and Spencer is a multinational retail company in worldwide.
This project described about characteristics of business market and use of business innovation
model. Uses of budget and principles of marketing also determined in this study. At last
relationship between sales and marketing which is also shown in this assignment.
TASK 1
1.1 Characteristics of various business markets
Business market: Business markets are defined as all organisations that procure products
or services that are consequently used in manufacturing other goods and facilitating service for
other consumers. There are different kinds of characteristics which are described under this:
Market structure and demand: Typically, there are few but relatively large types of business
buyer deals that organisations often engage in that are related to the business market. It should
also be noted that these customers are much focused geographically.
Nature of buying unit: This is the other characteristic that distinguishes the difference between
consumer markets and business markets (Belohlavek, 2012). Participants in the business
purchase tend to buy more and there are more participants, and the process also tends to be
relatively professional.
1.2 Nature of interaction between business within a market
Nature of interaction: The interactions between businesses within a business market will
depend upon a variety of factors, including:
 Buying decisions:
 The buying process, and who participates in the buying process
 Influences upon buyers
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 How businesses make their buying decisions
1.3 Organisation's goals may be shaped by the market
Businesses do not operate alone and in isolation; they are affected by changes that happen
inside the organisation itself (internal factors) and changes that happen outside the organisation
(external factors) (Dlabay and et. al., 2011).
Internal factors include:
 Management:
 Organisational culture:
 Products and processes:
External factors may be:
 Political:
 Economic:
 Social:
 Technological:
1.4 Describe the legal obligation of a business
The most common business structures in the UK private sector include: Sole Trader: It is the simplest form of business structure and is relatively easy and
inexpensive to set up. As a sole trader business will be legally responsible for all aspects
of the company.
 Partnership: It is an arrangement in which two or more individuals share the profits and
liabilities of a business venture (Guitián, 2015). Various arrangements are possible: all
partners might share liabilities and profits equally, or some partners may have limited
liability.
TASK 2
2.1 Meaning of business innovation
Business innovation is an organization's process for introducing new ideas, workflows,
methodologies, services or products. It is the creation of substantial new value for customers and
the company by creatively changing one or more dimensions of the business system. In other
words, business innovation is the creation and adoption of something new that generates business
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value. This includes new products, services, or processes, such as integrated supply chain
solutions.
2.2 Uses of models of business innovation
There are a variety of models of business innovation, and perhaps the one most
straightforward models are ‘Technology-Push.
Technology Push is when research and development in new technology, drives the
development of new products (Jägers, 2011). This usually does not involve market research. It
tends to start with a company developing an innovative technology and applying it to a product.
The company then markets the product.
2.3 Sources of support and guidance for business innovation
The government are constantly focused on improving business in the UK and offer help
to those businesses who’re in need. Here business can get support to get improve and grow its
business through ways of business innovation. Often local authorities also offer businesses help
to get going. Mark and Spencer offer a business start up plan which helps local people set up
their own innovative businesses.
2.4 Process of services or product development
Product or service development is the process by which an existing product or service is
improved or modified, or a new product or service is developed, to keep up with trends in the
marketplace and customer preferences and buying behaviours (Kamatali, 2011).
New Product Development (NPD) is described as going through eight stages:
 Idea Generation:
 Idea Screening:
 Concept Development and Testing:
 Marketing Strategy and Development:
 Business Analysis:
 Product Development:
 Test Marketing:
 Commercialisation:
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2.5 Risk, benefits and implications associate with innovation
Innovation is inherently risky as it is a complex process with many stages, usually
requiring investment of time and money before the perceived benefits of the innovation are
realised (Li and et. al., 2011).
The benefits associated with innovation include:
 Profit/Margins increase
 New business opportunities
 New markets
 Competitive advantage
The risks associated with innovation include:
 The product is not accepted by the market
 Initial high investment and long payback period
Implications associated with innovation include:
 It may be necessary to move resources away from existing products or services
 New skills may be required to implement the innovation
TASK 3
3.1 Importance of financial viability for an enterprise
Financial viability: Financial viability is the ability of an organisation to generate or
attract sufficient income to meet its operating expenses and financial obligations and still have
sufficient funds for future growth.
Importance: Financial viability is extremely important in any business because making
financially viable decisions can determine whether your business is successful or not. Making
sure something is financially viable simply means to ensure it’s profitable and you can afford it
3.2 Consequence of poor financial management
Poor financial management is the main cause of business failure, and occurs when
financial information about the business is not collected and analysed regularly (Pitas and
Venetsanopoulos, 2013). In order to monitor income and expenditure, maintain control over
creditors and debtors and enable business decisions to be based on sound financial information.
Consequence of poor financial management:
 Follow our steps to securing investment or making a successful loan application
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 Make sure business books are in order know their tax responsibilities
 Consider invoice financing to solve cash flow issues
 Understand the business expenses and can claim back from HMRC
 Build a cash reserve so that company can cope with unexpected issues
3.3 Different financial terminology
Financial terminology’ is the language used by, for example, accountants and financial
institutions, and a good understanding of financial terms is necessary in business. Some of the
most important financial terms are to be found in the following:
Profit and Loss Account: This is also known as the “P&L”. This is the Profit and Loss statement
which is the same as the Income statement (Seck, 2011). P&L, Profit & Loss and Income
Statement can be used interchangeably.
Balance Sheet: A balance sheet is a financial statement that summarizes a company's assets,
liabilities and shareholders' equity at a specific point in time. These three balance sheet segments
give investors an idea as to what the company owns and owes, as well as the amount invested by
shareholders.
Cash flow Statement: In financial accounting, a cash flow statement, also known as statement of
cash flows, is a financial statement that shows how changes in balance sheet accounts and
income affect cash and cash equivalents, and breaks the analysis down to operating, investing
and financing activities.
TASK 4
4.1 Uses of budget
There are mainly four uses of budget which are determine under this:
Track Expenses: It is easy to forget where business spent that extra money last month or
realize just how much they are spending on certain expenses. Budgeting allows to see these facts
in black and white.
Set Limits: Budgeting allows to set limits on business spending (Spitzer, 2013). A budget
helps them to determine how much money they should have going out each month based on how
much income have coming in each month.
Reach Goals: Without a budget, company have no way of really knowing where each
penny is going each month.
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Build Wealth: Plenty of people become millionaires without a budget, but most will not
stay millionaires without one.
4.2 How to manage a budget
Budget management is primarily concerned with monitoring and comparing actual
expenditure to date against planned expenditure for the same period in order to identify, analyse
and explain any positive or negative variances (Spitzer, 2013). There are certain points which
defines how to Mark and Spencer manage a budgets are as follows:
Step 1: Set Goals
Step 2: Calculate Your Income and Expenses
Step 3: Analyse Your Spending and Balance Your Chequebook
Step 4: Revisit Your Original Budget
Step 5: Commitment
Step 6: Wants vs. Needs
Step 7: Seasonal Expenses
TASK 5
5.1 Principles of marketing
Meaning of marketing: ‘Marketing’ involves a range of processes across the organisation that
combine to satisfy customer needs.
(Source: 4P's of marketing mix)
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Illustration 1: 4P's of marketing mix

Principles of marketing: It is define as a 4P's of marketing which is very important for
the success and development of Mark and Spencer. These are identify under this:
Product: Marks & Spencer is a popular and top retail chain brand in the world based out
of UK. The product portfolio for Marks & Spencer in its marketing mix is wide covering items
for all age group be it men, women and kids (Jägers, 2011). Marks & Spencer offers products for
women that include clothing like Blazers, Cardigans, Cashmere, Jeans, Linen, shirt, skirt and
many more.
Price:Marks & Spencer follows competitive pricing strategy in its marketing mix for its
product portfolio. Marks & Spencer has its own in house brands for clothing for women, men
and kids.
Place:Marks & Spencer is an international brand which has got more than 1000 stores
operating in more than 50 countries. Marks & Spencer’s major business is in UK where the
company has around 850 stores. It has got 50+ stores in India where it began its operation in year
2001.
Promotion:Marks & Spencer chooses its marketing strategy very carefully so as to align
its advertisement campaign with digital marketing and in store strategy (Jägers, 2011). M&S
emphasizes to provide a common message on all medium of communications.
5.2 Explanation of sale process
A sales process is an approach to selling a product or service, and there are a number of
models that set out this process as a series of ‘steps’
1. Product Knowledge: This step is fairly straight forward, but it is also the great undoing of
many a technical expert turned sales person.
2. Prospecting: Prospecting, just as the word implies, is about searching for new customers.
Like product knowledge, this step may seem fairly straight forward but upon closer
examination it becomes more complex (Guitián, 2015).
3. The Approach: This is where the rubber meets the road in the sales process. For our
present purposes lets consider the approach in the context of a sales call rather than lead
generation.
4. The Needs Assessment: This is arguably the most important step of the sales process
because it allows you to determine how you can truly be of service.
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5. Presentation: Remember the discussion in step one, focus on benefits rather than
features? If Mark and Spencer consider its product/service in terms of how it benefits the
customer, business presentation will be a focused and relevant dialogue rather than a self
aggrandizing monologue.
6. The Close: Eighty percent of sales are lost because a salesperson fails to close. Closing is
about advancing the sales process to ultimately get an order.
7. Follow-up: Good follow up will double your closing ratio. When a sales person makes
contact with a prospect a relationship has been built, and follow up is how it is nurtured.
5.3 Uses and features of market research
Market research may be quantitative or qualitative, and market research is a key element
in ensuring that an organisation has a clear marketing focus in everything that it does in order to
meet the needs and expectations of customers (Guitián, 2015).
Features and uses of market research include:
 Uses statistics and statistical analysis
 Is a continuous process
 Used as a decision-making tool
5.4 Value of a brand to an organisation
Brand’ may be defined as ‘a name, term, sign, symbol, design or a combination of these,
which is used to identify the goods or services of one seller or group of sellers and to
differentiate them from those of competitors’.
Easier processing of orders and tracking down problems
 Legal protection
 Attracting a loyal and profitable set of customers
 Easier segmentation of markets (Belohlavek, 2012).
 Easier processing of orders and tracking down problems
5.5 Relationship between marketing and sales.
Basic Marketing Sales
Definition Marketing is all about bringing
people into business store, to
its website or getting them on
The sales process involves
closing the transaction after
marketing begins the process.
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the phone.
Branding One of the most important
components of marketing is
building a brand name for a
company.
If Mark and Spencer have a
brand that they want to
promote, marketing can help
its customers become aware
of it.
Direct relationship Even though many advertising
agencies calculate many
statistics on the direct
relationship between marketing
and sales, it can vary greatly.
So it is smiler for the
marketing which is very
essential and necessary for the
company success and
development.
Consideration It is essential to get business
marketing and sales efforts on
the same mater.
If company have separate
departments that cover
marketing and sales, each
department needs to work
with the other for best results.
CONCLUSION
As per the above information that define business is very important part of the
organisation success. Company use different types of tools and techniques for achievement of
long term growth and success. Internal and external factor also support organisation to increase
their sales and revenues. Innovation is vital element of the enterprise development and growth.
Marketing and sales are smiler element for the firm to maximise their sales as comparison to
another organisation.
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REFERENCES
Books and journals
Anupindi, R. and et. al., 2011. Managing business process flows: principles of operations
management. Pearson Higher Ed.
Belohlavek, R., 2012. Fuzzy relational systems: foundations and principles (Vol. 20). Springer
Science & Business Media.
Dlabay, L., Burrow, J. L. and Kleindl, B., 2011. Principles of business. Cengage Learning.
Guitián, G., 2015. Service as a bridge between ethical principles and business practice: A
Catholic Social Teaching perspective. Journal of Business Ethics. 128(1). pp.59-72.
Jägers, N., 2011. UN Guiding Principles on Business and Human Rights: Making Headway
towards Real Corporate Accountability?. Netherlands Quarterly of Human Rights.
29(2). pp.159-163.
Kamatali, J. M., 2011. The New Guiding Principles on Business and Human Rights'
Contribution in Ending the Divisive Debate over Human Rights Responsibilities of
Companies: Is It Time for an ICJ Advisory Opinion. Cardozo J. Int'l & Comp. L. 20
p.437.
Li, H., Adeli, H., Sun, J. and Han, J.G., 2011. Hybridizing principles of TOPSIS with case-based
reasoning for business failure prediction. Computers & Operations Research. 38(2).
pp.409-419.
Pitas, I. and Venetsanopoulos, A. N., 2013. Nonlinear digital filters: principles and applications
(Vol. 84). Springer Science & Business Media.
Seck, S. L., 2011. Canadian mining internationally and the UN guiding principles for business
and human rights. Can. YB Int'l L. 49. p.51.
Spitzer, F., 2013. Principles of random walk (Vol. 34). Springer Science & Business Media.
Online
4P's of marketing mix. [Online]. Available through: <https://www.marketing91.com/marketing-
mix-4-ps-marketing/>.
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