Marketing Audit and Segmentation Analysis for M&S: A Report

This report provides a comprehensive marketing audit for Marks & Spencer (M&S), a multinational retailer. It begins with an introduction to marketing and its application to M&S, followed by a detailed analysis of M&S's current market performance. The report utilizes the Ansoff matrix to evaluate market strategies and conducts a SWOT and PESTLE analysis to assess the company's strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, and technological factors impacting its business. The report then delves into market segmentation, exploring demographic and psychographic approaches to target specific customer groups. Finally, it examines buying behavior and research to justify marketing strategies, offering insights into how M&S can improve its market position and address competitive challenges. The report highlights the importance of understanding market dynamics and adapting strategies to meet evolving consumer needs.

INTRODUCTION TO
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Marketing audit to analyse current performance of business......................................................1
Research on Market segmentation...............................................................................................5
Analyse current marketing strategy and to meet requirement of suggested segment..................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Marketing is referred to those activities which are carried out by an organisation to
promote products and services offered by them. It involves different aspects like selling,
advertising, promoting and delivering products of consumers and other business organisations. It
will involve all those actions and activities which will benefits the company in sustaining strong
ties with their potential customers (Bacik, Gavurova and Fedorko, 2015). This assignment is
written in context with M&S which is a Britain based multinational company which is situated in
Westminster, London, UK. Organisation is a renowned retailer and specialises in offering home
products, clothings and luxurious food products to its customers. This assignment will cover
market audit so that current performance of business along with position and market strategy
within market can be acknowledged. Beside this, two sets of market segmentation are discussed
to target business successfully. At last, understanding of buying behaviour and research to justify
marketing strategy is mentioned.
MAIN BODY
Marketing audit to analyse current performance of business
Marketing is the process by which individuals became interested in the services or
products offered by an organisation. To perform marketing in a proper manner, firm is required
to conduct market analysis and research so that opinion & preferences of ideal customers can be
acknowledged. Marketing procedure pertains to the different aspects of business like sales,
distribution methods, advertising product development etc. Marks and Spencer is a renowned
multinational company which specialises in dealing with clothes, home and food items. At
present company is operating more than 1000 stores in UK where more than 600 stores provide
luxurious food items only (Baker, 2014). As company is operating globally, it faces tough
competition to sustain a visible presence within marketplace. In this regard, it is essential for the
company to perform marketing audit so that actual business performance of M&S can be
acknowledged in a clear and accurate manner. In order to perform marketing audit, it is essential
to analyse micro environment, macro environment and market strategies of M&S in a detailed
manner.
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Ansoff matrix:
It is strategic planning tool which allows senior managers, marketers and executives to
formulate market strategies so that high growth can be achieved in future. In accordance with
this this analysis, there are four kind of strategies:
 Market penetration: In this strategy, M&S will try to grow with the help of their
existing products and services in existing marketplace. It this regard, M&S will be
required to increase their market shares. To enhance their market shares, company can
decrease price of their products, increase distribution and promotion or overtake rival
companies.
 Market development: Here, M&S will try to expand its presence in new marketplace
with the help of existing services or product. To attain this, company can target different
customer segments or enhance its presence in foreign market. This strategy will bring
more benefits to M&S if they will have unique product technology that can leverage new
market (De Mooij, 2018).
 Product development: In this strategy, M&S will be required to develop new services
and products by targeting existing market so that high growth can be achieved. In this
regard, company will be required to invest high in R&D initiatives so that those product
can be developed which will be widely accepted by company.
 Diversification: This is considered as a risky marketing strategy as company tires to
enhance its market shares by introducing new products or services into market. This
strategy requires product and market development, if one of this aspect will fail, M&S
can face high loss of revenue and market shares.
At present, M&S is using market penetration strategy so that company can enhance its
revenue and profits by increasing the sales of exiting products and services in existing
marketplace. To understand market position of company, SWOT and PESTLE analysis is carried
out below:
SWOT analysis of M&S
SWOT is abbreviated as strength, weaknesses, opportunities and threats. It is a strategic
planning tool which is used by a company to understand its strengths and weaknesses in a proper
manner along with opportunities and threats which can impacts the business in a considerable
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way. It will benefits M&S in analysing their current performance and situation so that those
strategies can be adopted that will provide competitive advantage over rival companies. In this
regard, SWOT analysis of M&S is carried out below:
Strengths Weaknesses
 Marks and Spencer is a renowned
company which provide standardised
products and services to its customers.
Due to high brand value, company has
a stable base of loyal customers.
 Company offers a wide range of
products in food items, home products
and clothings. In this regard, M&S has
more than 1200 suppliers which
provides them different variety of
resources and materials so that
demands of customers can be fulfilled
appropriately.
 M&S posses a spirit of innovation due
to which company aims to provide
creative and new products or services
to its customers (Dief and Font, 2010).
 Major weakness associated with M&S
is that in clothing section, people
consider M&S are non trendy and out
fashioned. Though company offers,
products in wide range but people
consider their clothing section for aged
persons only.
 M&S posses a good presence in
Europe, USA and UK but in case of
Asian and African continent, company
is not able to sustain a strong position
due to their non-traditional or western
approach.
 As customers faces issues in returning
products both online and offline. Due to
this, brand loyalty of company has
decreased and customers are shifting
their preference towards products of
other brand.
Opportunities Threats
 As people are becoming
technologically advanced, company can
enhance its online presence so that
people will became more familiar about
their services and products. It will
benefits the company in enhancing their
 Retail stores such as ALDI and LIDL
which provide products at discounted
rates posses a big threat to the sales of
company.
 Company operates at global level due
to which they have to face different
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sales.
 Reshaping cloth segment will allow the
company to prove that their clothes are
are not out dated and old fashioned.
Due to this, brand loyalty of M&S will
further enhance.
political and economical facts of
different nations. Changing in these
aspects can posses a big threat to the
revenues and profitability of company.
According to SWOT analysis, it can be said that M&S posses a strong market presence
and offer wide range of products to its customers. Also, company believes in offering innovate
products so that interest of customer within company can be maintained. Due to multichannel
presence of company, customers enjoy both online and offline service. But clothes offered by
company are non trendy due to which customer prefers to buy them from other brands and
stores. Also, company has less presence in African and Asian region due to which M&S is
devoid of large customer base. To further enhance their sales, company can reshape their cloth
segment and enhance their online presence. To overcome the threat of rivals, M&S is require to
price their product at genuine rate so that large number of people can buy them (Engelen and
Brettel, 2011).
PEST analysis of M&S
PESTLE analysis is a strategic tool which is used in environmental scanning of strategic
management and its component. It is an external analysis that provides overview of different
factors which must be considered by M&S to attain expected results. PEST analysis for M&S is
mentioned below:
 Political factors: These factors depicts the interference level of government in
businesses and trades. As marks & Spencer favours free trade agreement, this has
reduced their sourcing cost which is an advantage for company. If M&S will have high
cost structure this will became disadvantageous situation for company within
international market. M&S lacks clarity on energy efficiency schemes, hazard
identification, health and safety standards. If company will not abide by these UK
government regulations, they can be fined or even closed down (Shaw, 2012).
 Economic factors: it is concerned with aspects like GDP, interest rate, inflation rate,
employment level of a nation. Due to Brexit and financial crisis which takes place in
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2008, retail sector is facing a slow down as people have stopped spending money on
luxurious items. Discounted price offered by TESCO, ALDI has reduced sales of
company for short term but due to standardised product company maintain strong
customer base. Falling of oil prices has negatively impacted the sales of M&S. At present
economic situation in UK is favourable as interest rate are low-to-moderate. This will
helps in increasing revenues and sales of company.
 Social factors: It represents demographics customs, norms, characteristics of population
value in which M&S is operating. It is associated with aspects like population growth
rate, health consciousness, cultural barriers and income distribution. M&S is required to
offer products as per the preference and belief of residing peoples so that they can enjoy
high sales. As people in UK are modern, company must provide trendy, fashionable
clothes so that high sales can be attained (Gopaldas, 2015).
 Technological factors: Company uses old technique to manufacture products which
results in increment production time and cost of product. This increases the price of
products due to which people feel reluctant to buy it. To gain competitive advantage,
M&S is required to update their technology and machines on timely basis. But company
has a multichannel presence around globe. At present company operates around 300 full
line stores, more than 900 stores in UK where 220 are owned and 310 are franchised food
stores. Also, products of M&S are available online. This is a big strength for company as
it will allow them to enjoy high sales and profitability.
Research on Market segmentation
Market segmentation: It helps in determining the manner in which an organisation can
divides its customer base into small segments such as age, personality, behaviour, location,
income etc. These segments will benefits the company in optimizing their products along with
carrying out advertisement tactics. There are four ways in which M&S can segment itself. These
segments are mentioned below:
 Demographic segmentation: This kind of market segment is used widely as it helps in
providing right product to the right population. In this segmentation, market is divided on
the basis of family size, gender, age, income, race, religion etc. It will help M&S in
dividing large population into small section of people so that they can be targeted
properly.
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 Psycho-graphic segmentation: In this kind of market segment, customers are divided on
the basis of their interest, activities and lifestyle. It is similar to behavioural segmentation.
Here customers will be segmented on the basis of their values, personality, attitude
lifestyle, interest and opinion etc.
 Geographic segmentation: It is most simplest and easiest kind of market segmentation.
It helps in defining different target groups on the basis of their geographic locations and
boundaries. This segmentation is beneficial as different customers have varied needs,
interest and preference in accordance with their geographies (Gummesson and Mele,
2010).
 Behavioural segmentation: It divides market on the basis of usage, decision making
pattern and behaviour of customers. This type of market segment will benefits the
company in targeting right customer with right product. People with same kind of
behaviour will be targeted so that high sales can be attained.
Out of these above mentioned segmentations, M&S is going to segment on the basis of
Demographic and Psycho-graphic segmentation. With the help of Demographic segmentation,
M&S will be able to divide its customer base in accordance with their age, income, gender,
religion etc. This will benefits the company in targeting a specific group of people so that their
needs can be catered properly. For example, dividing people on the basis of demography will
benefit M&S in targeting young age and old age section easily by offering modern & trendy
products to youngsters and classic products to aged class.
Psycho-graphic segmentation will benefit M&S in Providing services or products to
people according to their opinion and interest. As people will be given products according to
their interest, sales and revenue of company will enhance in a considerable manner. For example,
premium products of company will be purchased by rich and high class people due to their high
living standard. This is because opinion of high class people is to buy those products which
enhances their lifestyle and opinion of economic class is to buy those commodities which are
essential to sustain a life (Jung and Soo, 2012).
Marketing Mix of M&S
In order to promote and advertise product to the targeted customers which are high class
people in case of Psycho-graphic segmentation and young class on the basis of demographic
segmentation, Manager in M&S can take help of marketing mix. It impacts the buying behaviour
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of customers in a considerable manner. It helps the company in implementing marketing strategy
without facing any complex situations. Role of product, promotion, place and price will plays an
essential role in influencing buying behaviour of customers. In respect with M&S, marketing
mix is defined below:
 Product: As M&S is a renowned retail chain brand which operates at global level,
product portfolio of company involves items for women, men and kids. Company provide
food items and drink such as cold meat, cake, fish, vegetables, fruit, cheese, desserts, rose
wine, red wine, white wine, champagne, cava etc. in Home products, company offer
home accessories, bedding accessories, travel luggage, bags, console table, dining chair,
display cabinet etc. other than this, company offers apparel, footwear and other
accessories for men, women and children. These products will be widely purchased by
youngsters and high class due to their trendiness and standardised quality (Lefebvre,
2011).
 Price: To target high class, company use premium pricing so that their luxurious
products can be purchased by rich customers and in order to target, youngsters company
can provide fashionable and trendy products either by using economic pricing or bundled
pricing so that sales can be increased considerably.
 Place: At present, company operate in global context and posses multi-channel presence
due to which products or services can be easily purchased either from outlets or through
online services. This will benefits the company in enhancing their brand visibility.
Outside UK, company is managing more than 1000 outlets (Moutinho and Huarng,
2013).
 Promotion: To promote their products to targeted segment i.e. rich class and youngsters
in a desired manner, M&S can use different advertising and promotion mediums. To
promote their products, company can choose visual, print and digital medium. Company
can place advertisements in television, social media, newspaper, bill boards, hoardings
etc.
These aspects will benefits the company in gaining wide attention of customers so that
high revenue and market shares can be achieved.
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Analyse current marketing strategy and to meet requirement of suggested segment
Market penetration strategy is used by the organisations for increasing demand of their
offerings by lowering their prices of their products and services in market. It can be prove
advantageous for Marks and Spencer because through using it management of firm can easily
attract a large number of customer towards their existing offerings and gain high profitability
within a smaller period of time. For example- if the sales of Marks and Spencer were not as per
expectations then management can use this strategy in which the management think about
lowering the prices of their existing products and services which in results increasing demand
and sales figures of M&S (Palmer, 2012).
Main reason behind chosen this strategy is to taking fast growth in the existing
marketplace because this strategy helps the managers of organisation in setting effective prices
than their competitors so that high customer base would be attained by firm. However, high
competition is exist in UK market then in this kind of environment, Penetration pricing strategy
would be prove beneficial because with the help of it, Managers of M&S will not only able in
defeating their rivals but also attaining huge customer base in UK market. In it, prices of
products should be cut down by the management but when this strategy should be adopted by
M&S it is highly recommended to the managers that this strategy not affect the quality of
offerings because it can wrongly impact on customer base or sales figures of firm.
Apart from that, Segmentation on the basis of Demographic will be beneficial because
through this, management of M&S will be able in identifying the needs and preferences of
targetted customers. As the targetted customers of M&S are Youngsters and high class people
due to which the responsibility of management of M&S is to determine preferences of these
customers and provide products accordingly to them so that their loyalty would be increased
towards offerings of firm. It can be prove beneficial for M&S in form of enhanced sales figures
and customer base because when the needs of targetted customers would be satisfied by the
offerings of firm then it leads the organisation towards growth and success in marketplace. Main
purpose of choosing this segmentation is to offering quality products to targetted customers
because it not only make focuses of managers towards considering the needs of targetted
customers but also it supports them to offer products as per their expectations so as to making
loyalty of them towards offering of firm (Piekkari, Plakoyiannaki and Welch, 2010). This
segmentation is very easy for the organisations because with the help of this they can easily
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monitor the societal trends and needs of customers. With the help of this segmentation, M&S can
easily enhance their customer base and gain competitive advantage in market over their rivals.
Whereas, Psycho-graphic segmentation is prove beneficial when organisation wants to offer
products to their customers on the basis of their attributes, skills or traits. With the help of this
segmentation, M&S will be able in designing or marketing of products as per the needs of
targetted customers which is beneficial in achieving growth and success in existing marketplace
(Shankar and et. al., 2010).
CONCLUSION
From above mentioned report, it can be concluded that to achieve high revenue and
profitability, every organisation is required to perform appropriate marketing. It can be
performed with the help of different analysis such as SWOT, PESTLE, Ansoff matrix etc. There
are different ways in which market can be segmented properly. These ways helps an organisation
in providing right product to right customer so that their needs and desires can be fulfilled in a
proper manner without any mismanagement. With the help of right market strategy and market
segmentation, organisations can achieve their aims, objectives and competitive advantage over
rival companies in an advantageous manner.
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REFERENCES
Books and Journals
Bacik, R., Gavurova, B. and Fedorko, I., 2015. The analysis of the impact of selected marketing
communication factors on the online consumer behavior. Journal of Applied Economic
Sciences. 10(7). pp.999-1004.
Baker, M. J., 2014. Marketing strategy and management. Palgrave Macmillan.
De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
Dief, M. E. and Font, X., 2010. The determinants of hotels' marketing managers' green marketing
behaviour. Journal of sustainable tourism. 18(2). pp.157-174.
Engelen, A. and Brettel, M., 2011. Assessing cross-cultural marketing theory and research.
Journal of Business Research. 64(5). pp.516-523.
Gopaldas, A., 2015. Creating firm, customer, and societal value: Toward a theory of positive
marketing. Journal of Business Research. 68(12). pp.2446-2451.
Gummesson, E. and Mele, C., 2010. Marketing as value co-creation through network interaction
and resource integration. Journal of Business Market Management. 4(4). pp.181-198.
Jung, L. H. and Soo, K. M., 2012. The effect of brand experience on brand relationship quality.
Academy of Marketing Studies Journal. 16(1). p.87.
Lefebvre, R. C., 2011. An integrative model for social marketing. Journal of Social
Marketing. 1(1). pp.54-72.
Moutinho, L. and Huarng, K. H., 2013. Quantitative modelling in marketing and management.
World Scientific.
Palmer, A., 2012. Introduction to marketing: theory and practice. Oxford University Press.
Piekkari, R., Plakoyiannaki, E. and Welch, C., 2010. ‘Good’case research in industrial
marketing: Insights from research practice. Industrial Marketing Management, 39(1),
pp.109-117.
Shankar, V., and et. al., 2010. Mobile marketing in the retailing environment: current insights
and future research avenues. Journal of interactive marketing. 24(2). pp.111-120.
Shaw, E. H., 2012. Marketing strategy: From the origin of the concept to the development of a
conceptual framework. Journal of Historical Research in Marketing. 4(1). pp.30-55.
Verhoef, P.C., Reinartz, W. J. and Krafft, M., 2010. Customer engagement as a new perspective
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Online
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