Introduction to Marketing Assessment: Marks and Spencer Case Study

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INTRODUCTION TO MARKETING ASSESSMENT
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Table of Contents
Introduction......................................................................................................................................3
Market segmentation.......................................................................................................................4
Process of market research..............................................................................................................4
Marketing audit................................................................................................................................8
Current performance......................................................................................................................10
Market strategy..............................................................................................................................11
Evaluation of position....................................................................................................................12
Discussion two market segmentation criteria................................................................................13
Suitable market research................................................................................................................14
Buyer behaviour.............................................................................................................................14
Conclusion.....................................................................................................................................16
Reference list.................................................................................................................................17
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Introduction
Marketing management is defined as the process of formulating strategies for the development
of specific product or service for gaining potential customers in business. Competitive strategies
and economic value are the factors that need to be used for developing the brand position of
business. In this study, a marketing audit will be developed for analysing the business
performance of Marks and Spencer that is one of the top retailers of UK. Thomas Spencer and
Michael Marks have founded the company in year 1884 to sell luxurious product, home
products, and clothing items (Marksandspencer.com, 2019). The purpose of the study is to shed
light on the importance of marketing and positioning strategies of the firm and identification of
the buying behaviour of consumers. This study will discuss about the segmentation and position
of the company along with details of current marketing strategies used by the company.
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Market segmentation
Market segmentation is the method of categorising the market for identifying the potential
customers based on geographic, demographic, psychographic, and behavioural segmentation.
The development of segments is required for understanding similar traits such as needs, interests,
and locations for creating the marketing strategies (Mathooko et al., 2015). In context of M&S, it
has been found that the company is focused on developing the products according to the desires
of customers. The segments of M&S are categorised in three parts. In demographic segment, the
company focused on regular customers that purchased products on a daily basis. Besides this,
this segment comprised of age, gender, and education of the customers. In psychological
segment, the company focused on attitude and buying habit of the customers. On the contrary, in
geographical aspects, the company divides the business in segments of states, region, and
country.
Hence, it can be said that company is doing well by focusing on all the mentioned segments
effectively. However, the company can improve the HR team so that they can strengthen the
market segmentation by upgrading the structure of the business. For example, they can bring new
technologies in business for upgrading the framework of marketing.
Process of market research
Presently, M&S is facing complex situation in business such as change in sales, repetition of
products, and massive market dependency that has resulted in the loss of customer’ loyalty.
Macro environmental factors such as regulations, business politics, environment and others has
been discussed for doing a proper market research of M&S.
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Figure 1: Pestle analysis
(Source: Hendriksz, 2018)
Pestle analysis
Factors M&S business impacts
Political Brexit has created a massive pressure on
business of M&S as the outsourcing costs of
products has been reduced. This can lowered
the sales rate upto 3% as the labour costs,
financial costs and others have increased
(Beveridge and Koch, 2017). This has resulted
in significant loss to the company’s profit
level. Fair trade policy has been implemented
by the company has decreased the demands of
outsourcing products such as salts that has
become a great advantage for the company.
UK has scored 80 out of 100 in corruption
index and this has affected largely on the M&S
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business.
Economical Brexit event also negatively affected the
economic condition of the company.
According to annual report of UK, it has been
found that inflation rate has become 2.7% in
2018. Moreover, in year 2018, recession rate
of UK region has become down by 4.2%. This
has created a negative impact on M&S
business (heritage.org, 2019). Employment rate
in UK is 75.6% that indicates M&S is able to
recruit large number of employees at its
business (GOV.UK, 2019). This is because the
company suffered from financial crisis, which
has lead to the increase of dissatisfaction level
of customers. Thus, in order to enhance
sustainability of business, the company should
reduce prices of products as well as improve
the quality of products.
Social The profit of the firm depends on the changing
attitude, tastes and perceptions of the
customers. M&S is largely affected with these
issues while implementing business in UK
market. The company is following High Street
fashion. Hence, branded qualities of clothes
are available to the customers. M&S is having
wide range of businesses in entire world, so
they try to attract every age group of
customers. However, they need to update
themselves with the trending styles in fashion
for gaining a positive impact on the
productivity of the company.
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Technological The company preferred traditional techniques
rather than automatic system. Whereas, its
competing firms like Tesco and Sainsbury is
accustomed to use automatic system more.
Hence, this resulted in the loss of business
reputation of M&S. The company is
recommended to use new technologies to
create a competitive advantage and withstand
its position. There is a scope for M&S to
develop promotional strategies using social
networking sites as customers mostly use
online sites now rather than visiting the stores.
The company has started technology
transformation programs that aim to costs £25
million by speeding up the digital
transformation plans for gaining more business
profits (Hendriksz, 2018).
Legislation Based on Data Protection Act 1998, the
company is having responsibility of keeping
the data and information of the business as well
as employees in a safe system
(legislation.gov.uk, 2019). In M&S, the safety
of employees and other components like salary
information, residential address, and others are
kept in protected system. Apart from this,
under Consumer Protection Act 1987, M&S
needs to design products safely without having
any negative effect on their health
(Legislation.gov.uk, 2019). All the grocery
items should manufactured with chemical free
components in order to maintain safety of
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consumers.
Environmental The company is found to check the
environmental factors by developing eco-
friendly products for the consumers. For
example, M&S is using dairy farms that are
having RSPCA stamped for selling fresh milk
to the consumers. This helps the customers in
developing a positive image towards M&S that
is helping to improve the brand identity. The
environmental pollution rate in UK is 8.3%;
hence, company can implement environmental
initiatives like planting trees to overcome this
situation (Yearley, 2016). The sales of the
company are also getting high due to these
kinds of environmental activities. However, the
company should maintain supply chain
managements based on the seasonal changes
products to balance the shortage of stock in
business.
Table 1: Pestle analysis
Marketing audit
Marketing audit has been developed under the supervision of board of director of M&S for
analysing the business performance. Under this, objectives, strategies, and current activities has
been investigating and analyse for examining and reviewing the marketing tactics.
Objectives
 To inspire the customers at every turn of business
 To listen properly to the demands of the customers
 To implement continuous research to innovate new products
 To produce quality products to provide excellent services to the customers
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Strategies
The strategies that are used by the company have been explained using 7ps of marketing mix
below:
Product strategy: M&S is one of the most popular brands as it is performing business in the
entire world. Product portfolio of the company is found to cover variety of age groups. In
Fashion sector, M&S provides goods such as jeans, shirts, blazers, linen, skirts, footwear items,
and others for both men and women groups (Kanagal, 2015). Apart from this, in food section, the
company offers products like wine, lunch and dinner packages, starter items and others
according to the preferences of customers. This indicates that M&S is able to balance all the
retail divisions in a prosperous manner.
Pricing strategy: M&S is found to follow competitive pricing strategy in sell the products for
gaining profits in business. The company follows this strategy as the customers are having large
option to choose products from others competitors (Kienzler and Kowalkowski, 2017). It has
been observed that M&S is facing high competition from the online retailers; therefore, it has
started using dynamic pricing strategy during the seasonal times. For this purpose, the company
has started offering discounts to the consumers so that they get attracted to M&S brands.
Promotional strategy: M&S evaluate the marketing tactics before placing the promotional
strategies in the market. The company used print media, mobile ads, and social media campaigns
for advertising the products among the customers. Beside this, M&S uses their own website for
promoting the brands. The company is using loyalty program such as ‘Sparks’ that helps in
adding points in the account of customers based on the amount that they spent on shopping.
Place strategy: As the company is international brand, the company is having about 1500 stores
that are operating in about 50 countries (Marksandspencer.com, 2019). M&S has distributed its
operations in countries like Turkey, India, Finland, Spain, Hungary, France and others. Recently,
the company has developed international delivery strategy for enhancing the options of online
delivery.
Process: The Company aims at inspiring the customers by promising sustainable products and
services. M&S communicate with every stakeholder to show responsible approach for portraying
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the social and ethical diversity. Customers are provided scope of selecting their desired stuffs
from the stores and can pay their bills from the checkout counter.
Physical evidence: Company offers variety of products that acts as physical evidence. The
company has developed its presence in other global countries that has helped in enhancing the
brand image of business. Besides this, the official website of M&S is representing as physical
evidence for the company.
People: M&S is having about 85000 staffs and the company is giving special attention and
comforts to the staffs (Marksandspencer.com, 2019). It is following competitive payment policy
in order to retain the staffs successfully. Staffs are also enjoying special discount on the
purchasing of M&S products from stores or online sites. Company provides option of flexible
working hours to increase the efficiency level at works.
Current performance
Ansoff matrix
Current performance of M&S can be analysed using Ansoff matrix. The company can integrate
Ansoff matrix for understanding the strategy that needs to be used for increasing customer base.
Figure 2: Ansoff matrix
(Source: Gurcaylilar-Yenidogan and Aksoy, 2018)
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Market penetration: Currently, the company is using market penetration strategy in the
existing sector of food and fashion. This strategy aids the business to become one of the popular
retail brands in the world. M&S is using this strategy for obtaining customer loyalty and give
proper values to them. In financial and house ware service, this strategy is used for expanding
and growing the business successfully.
Product development: M&S is using the product develop strategy for enhancing the
performance level of the business. Organisation is able to grow substantially by projecting the
new products and services in the market (Gurcaylilar-Yenidogan and Aksoy, 20180. Strategy
used in the food industry is related to the changing of the packaging based on the requirements of
customers. Furniture and house ware sector is found to use this strategy for launching products
with innovative styles, which helps in, developing leading position in retail sector.
Market strategy
Porter’s five forces analysis
Analysis of porter’s five forces is done for gaining an overview of the competitors that the
company is currently facing in UK market. The detailed discussion has been done below:
New entrant threats: Entering in the retail market is quite difficult for the new companies, as
they need to invest large amount to start the business (Hu and Yang, 2016). As M&S is a popular
retail company, the threat of new entrant is low. M&S is having strong product quality and the
company focuses on developing competition work that is very tough to snatch the loyal
customers of M&S. Competing with the established channels of M&S is hard as they provide
discounts and low price to diverse range of products to grab loyal customers.
Product substitution threats: This threat is low; however, there is a need of continuous
innovation for keeping the brand position strong and satisfy the needs of the customers
(Eskandari et al., 2015). M&S is able to provide uniqueness in the products by providing a
private labelling in those items. It has been observed that fashion sector of M&S is filled with
substitutes as they are copying design and selling it at cheaper rate.
Buyer’s bargaining power: Bargaining power of customers is high as there is a huge option of
switching due to alternatives (Grebe et al., 2016). Hence, M&S should focus on building
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customer loyalty by providing innovative products. This would help the company in lowering the
negative impact as per the changing tastes of consumers. The company requires improving the
designs of apparels and footwear products for increasing the profits of business.
Supplier’s bargaining power: At the beginning, the company had only British consumers.
However, due to pressure of competitors, the company started doing outsourcing that has reduces
the costs of suppliers. Therefore, M&S has focused on private label for gaining power over the
external supplier groups. It can be said that as switching costs of suppliers of M&S has
increased, hence, bargaining power of the suppliers has become low.
Competitive rivalry: Competition is found to be high in the retail sector. M&S is having tough
competition from wide range of companies such as Tesco, Sainsbury, and Asda. Level of
competition has become more intense due to the growth of online segment. Hence, the company
should focus on the adoption of loyalty cards for enhancing the capturing power over the
supermarket chain (Hu and Yang, 2016). However, the company has planned to start new
concepts such as “simply food” outlets for strengthening the position in market.
Evaluation of position
Position plays a major role in retail industry as the competition level is quite high which
represents that M&S requires positioning its products and services after doing a detailed analysis
of preferences of customers (Takata, 2016). The below positioning map has comparatively
analysis the position of M&S with its major competitors such as H&M, Primary, and Asda based
on the price and quality of the products.
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