Marks & Spencer Marketing Project: Impact of Global Environment

This report provides a comprehensive analysis of Marks & Spencer's marketing strategies within the context of the global economic environment. It begins with an introduction to the fashion industry and M&S, followed by an examination of the potential impact of global factors on marketing strategies, including competitive advantage, segmentation, targeting, and branding. The report then explores the influence of these factors on customer behavior and identifies potential growth opportunities within M&S's macro environment. The analysis utilizes tools such as PEST and SWOT analysis to evaluate the company's strengths, weaknesses, opportunities, and threats. The report also delves into M&S's product adaptation, pricing strategies, and distribution channels, as well as its promotional activities. Furthermore, it assesses M&S's segmentation, targeting, and positioning strategies, considering demographic, socio-economic, and geographic factors. The report concludes by emphasizing the importance of branding for M&S and its role in differentiating the company's products. The report is a detailed exploration of M&S's marketing approach within the context of the global economic environment.

Marks & Spencer
SOE11129 Global Economic
Environment & Marketing
Project 2 – Marketing
Student Matriculation:
40293357

TABLE OF CONTENTS
1. INTRODUCTION ................................................................................................................... 3
2. Potential impact on marketing strategies ............................................................................3
2.1 Competitive advantage.............................................................................................3
2.2 Segmentation, Targeting and Positioning .................................................................5
2.3 Branding.................................................................................................................... 7
3. Potential impact on customer behaviour and how it might change ....................................8
4. Growth opportunities in Marks & Spencer’s macro environment .......................................9
REFERENCES........................................................................................................................... 11

1. INTRODUCTION
Fashion is concerned with the style and trends in clothing and lifestyle of the
people and all prevailing style in behaviours and new creation in the textile design is
also part of fashion. This fashion is not just related to concern but is now grown to a
big industry in world which includes cosmetic, fashion beauty, watches and bags.
This industry is one of the most profitable sectors of world which is ever changing
and ever growing (Choi TM., 2016).
Marks & Spencer founded in the year 1884 is the British multinational
company and is operating in almost 50 countries of world. CEO of M&S says
‘’Remaining true to our basic values of Quality, Value, Service, Innovation and Trust,
we work hard to ensure our offer continues to be relevant to our customers. Through
diversifying our store locations, channels and product ranges, we are reducing our
dependence on the UK and broadening our international focus’’ (Marks & Spencer,
2013).
However, in recent years, fashion industry is facing many challenges which
are related to market and is become market leader in fashion industry. Has faced
many challenges in response to numerous changes to its markets, hence, identifying
the global market has become key player to success. In analyzing the market
position of company pricing and the effect of external factors on business
environment will be very helpful. PEST analysis is one of the best tools to analyze
environment in terms of Political, Economic, Social and Technological factors. In
addition, state of economy can make the vision clearer and indicates to factors which
can affect business of company such as taxes, consumer demand, inflation and
unemployment (PESTAL analysis.com).
2. Potential impact on marketing strategies
Managing advertising and pricing strategies of brand is one of the biggest
challenges and this needs to be handled on different market segments accordingly
(Choi TM., 2016).
2.1 Competitive advantage
The factors of company, industry and market affect adaption in international

market. Market factors influence the adaptation of product and promotion in market.
Price adaptation is affected by the industry and market influence (Albaum et al.,
2003).
Marketing mix is the combination of many elements of marketing which will
be enabling company in determining the market position. Each individual element of
marketing mix tool has different characteristics which will be discussed in this report
along with the way in which marketing mix helps Marks & Spencer to achieve
competitive advantage. Especially nowadays, there is high competition in the global
market among fashion companies worldwide.
Product
Adaptation of product is one of the essential factors to enhance and build up
competitive advantage which in turn will help companies to provide right demand
based on segment international market. Consideration of local market differences is
important as well, in terms of physical environment, characteristics of the cultures,
product lifecycle, competition and system of the distribution to obtain satisfying
customer needs. Therefore, the companies to be sustainable in the market by its
competitive advantage must be aware of the difference in markets and aware of how
making thing differently (Albaum et al., 2003).
According to Annuall report in 2017 ‘’Our Customer Insight Unit (CIU) gathers
feedback through a number of different channels including store exit surveys, online
surveys and reviews, till surveys, the Customer Contact Centre and focus groups, to
build a comprehensive picture of what our customers want from M&S. This year,
M&S carried out over 700,000 customer interviews, either offline or through online
surveys’’. Therefore, it can be seen that Marks & Spencer has developed its
products to be always sustainable. In addition, they have a wide range of different
products. Moreover, for all age group either for men, women and kids as stated in
annual report and financial statements 2017 thatr they are very committed in making
every monet special for their customer by means of high quality, own brand and
clothing, home products.
Price
It is not easy to sell the same product of company in different markets and
that too on differential price or pricing strategies. Main reason behind this is the cost
of manufacturing, taxes and competitor’s price can vary from country to country. The
price decisions on local market condition is a significant factor (Albaum et al., 2003).

However, Marks & Spencer applies competitive pricing strategy in its products as
there is a high competition in the market. In spite of that, it has its own internal
brands for clothing products and normally, the price of in-house brands range
between medium and high (mbaskool.com)
Place
Distribution is one of main keys of marketing mix tool. Placement of the
operating business and distributing product (marketingmix.com). However, there are
also several additional areas of distribution which may need to be considered before
entering the global market such as way of storage management, wholesale and retail
structures, purchasing power of consumers, the strength of competition, etc.
(Albaum et al., 2003).
Marks and Spencer is one of the biggest fashion companies in UK which is
having more than 850 branches. Furthermore, company is an international brand
that operates its business in more than 1000 stores in the world such as in Turkey,
Spain, France, Ireland, Hungary, Finland, etc. (mbaskool.com)
Promotion
Promotion adaptation can be encouraged by competitive pressure in the
international market (Albaum et al., 2003). Increasing brand sales and recognition by
promotion is a significant key and that can be by different elements such as sales
organisation, public relation (unplayable communications includes exhibitions,
sponsorship and seminar etc.), advertising (through TV advertisement, radio, print
media and social media) and sales promotion. However, the cost of these
combinations of promotion strategies are different and therefore, company’s choice
will depend on its budget (marketingmix.com).
Marks & Spencer has used different marketing strategies such as
advertisement campaign, sending messages, print and social media, etc. In addition,
it also promotes sales by offering loyal customers the special discount. Therefore, it
can be seen that Marks & Spencer follows various marketing strategies to enhance
the income (mbaskool.com).
2.2 Segmentation, Targeting and Positioning
An important challenge for international companies with increasing
globalization is to recognize customer segments and target them in diverse
countries. Matching product characteristics to customer needs and attitudes, values

and lifestyle is essential thing for companies seeking better opportunities for growth
and successful in the international market (Riefler et al., 2012). As there are different
types of customers in the world who all are having differential needs and wants so,
diversity of product is very much important in market.
Marks & Spencer’s segmentation is evaluated by psycho graphic profile
variables such as:
Demographic:
There are different segments in market which are divided into groups on the
basis of age, family size, gender, education, occupation and income (Smith, 2001).
For sustaining business in the market, companies require changing their fashion
design and colouring based on customer’s fashionable design requirement. Marks &
Spencer uses demographic segmentation. (mbaskool.com).
Socio economic segmentation:
This is the division of the market according to mixture of occupation and
income and is characterised as A-E group. They all are having the same
characteristics which are on the basis of taste, lifestyle and level of disposal of
income. The market of Marks and Spencer is also divided on this socio economic
segmentation which comprises 5 parts which are named as A-E. In this, A is defined
as upper class who are professional workers and high managerial level and whose
earning in society are relatively high then others they are likely to purchase the
products of Marks and Spencer. Middle class people of society are defined as B who
are intermediate managers or lower professionals than A or upper class. Then are
lower middle i.e., C1 who are mainly of junior level management or termed to as
clerical. Rest of them are C2, D and E who are considered as skilled working,
working and pensioners of the society.
Designat
or
Class Examples
A Upper middle High managerial, admin, professional workers.
Company directors, established doctors or solicitors
B Middle Middle intermediate managers, admin or professional
C1 Lower middle Supervisory, clerical, junior managerial
C2 Skilled working Skilled manual
D Working Semi-skilled or unskilled
E Pensioners casual workers and others
Table 2: Socio-economic grouping system

Geographic segmentation:
The division of markets into different geographical locations for example,
countries cities, villages (Smith, 2001). Segmentation in terms of Geographic
(country or region) plays a significant role for the success of company globally when
they are following geographic segmentation strategy. Geographic segmentation
consequences in segments that are more reachable effectively and efficiently
through centralization of activities such as production and logistic, service support
and sales management (Steenkamp, & Ter Hofstede, 2002). The geographic
segmentation of Marks & Spencer mainly in UK, however, the company runs their
business in 41 international countries. Therefore, it can be seen that M&S has
focused on geographic segmentation so that the customers can find its branches
everywhere in order to do shopping.
2.3 Branding
Brand is the name or symbol of any enterprise which is working in society that
helps and distinguish them from others in market. Brand is that one feature of
company which is helping them to promote their products and services which they
are offering to society. Likewise, branding is the process of assigning the name to
that particular company or its product. This includes all those ways in which
company can put the product look different in market from its rivals in market.
Branding is very much important for Marks and Spencer as this is the primary way
which is helping them to differentiate their product with that of others. As all the
products of Marks and Spencer are imprinted with the mark of capital M&S on them
which is the symbol of company and helping them and customer to distinguish them
with other and thus forming a brand image of company.

3. Potential impact on customer behaviour and how it might change
SWOT analysis is one of business tools for understanding current situation of
firms.SWOT is useful in identifying the streangths, minimising its weakness, grabing
the opportunities which are available in market and by overcoming the threats in
market.
According to Annual report in 2017 Within CIU, they have created a
centralised data analytics team to ensure they have a single accurate view of all their
customers. Through anonymised data analysis, can better understand how
customers are shopping with company by examining purchasing behaviours and
patterns both in stores and online. By understanding how customers choose to
spend their money and time at M&S, can ensure they are always working to deliver
the products and shopping experience what customre want.
STRENGTHS
 Various ranges of products - food, dress, furniture and home
 Major retailer in the United Kingdom in terms of sales
 Strong position of cash flow
 Increase revenue and trading profits
 The best quality product retailer
 M&S brand loyalty
 Internationally recognized UK brand
 Online shopping facility
OPPORTUNITIES
 Advanced products
 Customer’s demands
 Better store utilizing
 Analyzing Customer fit by using better customer resource management
systems
WEAKNESSES

 Customer disinterest
 Environmental pollution
 Long time to change
 Production high cost
 Lack of innovation
 Focusing on brand rather than products itself
 Lack of professional management
THREATS
 Current and new competitors
 Instability in Price of raw materials
 Economic crisis
 Low cost retailers
 Customer observation of high prices
4. Growth opportunities in Marks & Spencer’s macro environment
In fact, customer returns are growing at a significant rate every year, costing
too much to the retailing industry. Customer return means the policy of return of the
previously purchased product back to the retailer in order of getting money back or
exchanging the product with that of other. It is interesting to observe that the
customer return rate differs among different types of industries while it is significant
in the fashion retail industry. Furthermore, fashion products purchased online are
generally done conveniently, which also leads to high returns since customers are
unable to have the “feel and touch” service when they make purchasing decisions
(Choi TM., 2016)
Sociological factors:
In marketing, it is well known that social needs play an important role in the
purchase of conspicuous products such as high-end luxury fashion labels. In the
literature, it is well argued that consumers are purchasing goods with the goal of
satisfying not only their material needs but also social needs such as prestige and
self-image. In particular, these social needs influence the purchase of conspicuous

products such as cars, jewellery, perfumes and watches. Prior research has
provided empirical evidence of social influences on the consumption and also
identified the existence of two competing social needs among consumers; a need for
uniqueness and a countervailing need for conformity. The issue has been examined
from a psychological perspective on how these needs influence consumer choice
processes (Zheng et al., 2012).
Technological factors:
Marks & Spencer has got its own website from where the customers can buy
products and get home delivery. M&S also provides an option for international
delivery for limited products. All the products can be bought in local currency while
purchasing online (mbaskool.com). This is the most important part of company in
today's scenario as without technological advancements, they will not be able to
survive in the long run. Marks and Spencer is adapting many of these technological
changes and spending a huge amount on advertisement just to create awareness in
the minds of customers and then gaining their loyalty. The online marketing and then
creating their online shopping website as well as mobile app are some very
important technological changes of Marks and Spencer.
They are making the payment and billing system easy for convenient of
customers by allowing them to make their payment of purchase easy through
debit/credit card, POS systems and through net banking. They are also believing in
communication with their customers by obtaining feedbacks and thus, applying those
suggestions of customers in their own products. But this is only not essential for
Marks and Spencer to remain in the market as they should also ensure good quality
of products by ensuring that all types of technological changes are adapted by
company. Highly qualified R&D team should be established by Marks and Spencer
so that all sorts of technologies are used in all operational areas of company from
production to financing and from marketing to customer service.

REFERENCES
Books and Journals
Albaum, G., Tse, D., Hozier, G., & Baker, K. (2003). Extending Marketing Activities
and Strategies from Domestic to Foreign Markets. Journal of Global
Marketing, 16(3), 105-129
Choi TM. (2016) Analytical Modeling Research in Fashion Business: An Introduction.
In: Choi TM. (eds) Analytical Modeling Research in Fashion Business.
Springer Series in Fashion Business. Springer, Singapore
Macchion, Moretto, Caniato, Caridi, Danese, & Vinelli. (2015). Production and supply
network strategies within the fashion industry. International Journal of
Production Economics, 163, 173-188
Riefler, P., Diamantopoulos, A. & Siguaw, J. J Int Bus Stud (2012) 43: 285.
https://doi-org.ezproxy.napier.ac.uk/10.1057/jibs.2011.51
Smith, B. (2001). Marketing Planning for the Pharmaceutical Industry (2 nd Edition).
Journal of Medical Marketing: Device, Diagnostic and Pharmaceutical
Marketing, 2(1), 90-91
Steenkamp, & Ter Hofstede. (2002). International market segmentation: Issues and
perspectives. International Journal of Research in Marketing, 19(3), 185-213
Zheng, J. H., Chiu, C. H., & Choi, T. M. (2012). Optimal advertising and pricing
strategies for luxury fashion brands with social influences. IEEE Transactions
on Systems, Man, and Cybernetics-Part A: Systems and Humans, 42(4), 827-
837.
Online
http://annualreport.marksandspencer.com/
M&S_AR2017_Market&CustomerInsights.pdf
http://annualreport.marksandspencer.com/M&S_AR2017_StrategicReport.pdf
http://annualreport2013.marksandspencer.com/overview/how-our-business-
operates/
http://marketingmix.co.uk/
http://pestleanalysis.com/economic-factors-affecting-business/
https://www.mbaskool.com/marketing-mix/services/17122-marks-and-spencer.html