Detailed Marketing Report: M&S Clothing Business Analysis

This report provides a comprehensive marketing analysis of Marks and Spencer's (M&S) clothing business, examining its market position, challenges, and strategic recommendations. The report begins with an executive summary and introduction, outlining objectives such as increasing profitability and sales. A thorough market situational analysis is conducted, using PESTLE and SWOT models to assess external and internal factors influencing M&S. The analysis covers political, economic, social, technological, legal, and environmental factors, along with competitor analysis. The report also identifies the target market and discusses segmentation strategies, focusing on behavioral segmentation. Furthermore, it outlines the marketing mix strategy, implementation plans, and budget considerations. The conclusion summarizes key findings and recommendations for M&S to improve its market performance, addressing issues such as declining sales, increased competition, and changing consumer behavior. The report emphasizes the importance of reducing costs, implementing effective promotional tools, and adapting to the evolving retail landscape.

MARKETING

EXECUTIVE SUMMARY
Marketing is important business function that needs to be performed by every business
enterprise in for attract its potential and target customers towards products and services. Present
report is based on analysis of clothing business of Marks and Spencer, which is major retail
business enterprise of UK. There are various like increases in tax burden and increase inflation
has reduced its customers base and sales in market as compared to competitors. However, to
reduce the issues organization needs to reduce its prices of products and implement effective
promotional tools for reducing its cost of operations.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
Objectives........................................................................................................................................1
Market situational analysis..............................................................................................................1
Target market...................................................................................................................................5
Segmentation....................................................................................................................................5
Marketing mix strategy....................................................................................................................7
Implementation and control.............................................................................................................8
Budget and Sales projection.............................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Marketing plan is analysed as road map that clearly provides direction to organizations
and its management towards reaching to business objectives. Present report is based on analysis
of clothing business of Marks and Spencer, which is major retail business enterprise of UK. In
order to achieve growth, removing the cost and simplifying the business, marketing plan is
developed to comprehend the growth of business and determination of strategies that needs to be
applied for accomplishment of objectives (Brooks and Simkin, 2012). In this context, as
marketing consultant situational analysis of M&S clothing business is accomplished to analyse
the factors that affects its business growth and profitability in market. External analysis is done
through application of PESTLE model and internal analysis is done by using Swot analysis
model. Consumer’s behaviour and competition in clothing sector for M&S is also discussed
along with the target market of organization. Further, marketing mix strategy of organization is
also determined along with the implementation and control of strategies.
Objectives
 To increase the profitability of clothing business by 20% in next quarter.
 To increase the total sales of clothing business by 2.3 billion by year 2017.
 Increasing number of customers by reducing the cost of operations.
 Increase average length of customer relationships and decrease customer turnover.
 To merge the retailer's womenswear and kids wear teams.
 Reducing the cost of operations for removing pre tax burden on consumers.
 To restore its price position by investing in everyday price and reducing the number of
promotions and sales (Haverila and Ashill, 2011).
 Increase in number of online shopping customers by 7.4 million.
 To increase the sale in international by business by 2 percent in next three years.
Market situational analysis
Situational analysis is accomplished with an aim to determine the competitors and
influences of internal as well as external market on business operations of M&S. In this context,
marketing plan is also developed with an aim to analyse problems faced by organization due to
these major factors (Pike, 2015). These factors will also help in identification of measures that
needs to be taken by organization for resolving those problems in market. M&S is the UK’S
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leading clothing retailer but it has now faced the competition in clothing sector from one of the
most exclusive brand Zara limited. Further, PESTLE will provide a clear understanding of
factors that affects the market position and growth of its clothing business.
 Political: It is essential for M&S to follow the government policies in regulation of
business operations in European market. There are various policies such as Taxation
policies, Free trade agreement, employment legislations and other business marketing
policies also provide implication on business operations of organization. In present
context, M&S group revenues were 10.6 billion pounds which was identified growth of
2.4 percent from last quarter but increase decrease in pre-tax profits by 18.7 percent has
reduced their earning (Malhotra, Birks and Wills, 2013). Along with this, changes in
employment regulation have also increased their cost of hiring employees at workplace.
Increase in inflation rate also provided influence on business and reduced their customers
in market. Moreover, Increase in cost of promotions and advertisement have also
increased their costs and resulted 14 percent fall in profits for its 2016-17 financial years,
reflecting lower sales and higher employment cost. In order to reduce these issues, M&S
has planned to drive improvements in its quality, fit and availability for its ranges, while
lowering the prices and reducing the amount of garments sold off in special promotions.
 Economical: M&S is mainly affected by the competitors discounted pricing policies in
clothing retail sector. M&S concentrated on supply of high quality products which not
only led to short term loss and customers were attracted towards quality with the value.
Customer behaviour and confidence was sustained by M&S efforts to push through
enhanced quality (Forshier, 2012). Increase in inflation and financial crisis has however
led to more price sensitive customers and company is required to work on with the
market if they want to sustain their sales. Increase in tax burden has also reduced the
buying power of customers which has led to decline in sales of enterprise in market
(Evans, Stonehouse and Campbell, 2012). It has increased employment and suppliers cost
for M&S in clothing business.
 Social: These involve the impact of perception, values, current trends, culture and
behaviour of customers towards products and services which has also affected sale of
M&S in clothing business. With the economic development of UK, buying power of
customers has been increased. This has influenced the perception of customers towards
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purchase of high quality products and service. However, increase in inflation rate has led
the customers to be price sensitive. Customers are now likely to buy products with high
quality at low rates.
 Technological: Adaptation new digital marketing communication channels are
implemented by organization which has provided positive impact on their business
operations. Social media applications such as Facebook and what’s app messenger are
used by organization for promotion of their products and service directly large number of
population. Implementation of new technologies and advertisement channels such as E
commerce websites, company website and online selling has also increased the sales and
profitability of clothing business of M&S (Baack, Harris and Baack, 2013). However,
this technology has also raised the competition in market by increase power of customers
to make choices. Therefore, it is essential for company to reduce prices of their products
to achieve growth in clothing business. Direct Emails and tele calling methods are also
used by marketers of organization for customer relationships management and retain old
customers.
 Legal: There are various factors like employment laws, financial laws , health and safety
laws , advertisement laws and other policies made by government are also provide
influence on business operations of Marks and Spencer. In this context. Legal restriction
created on import and export of products and service in other countries by UK
government after Brexit will also provide implications on business (Terpstra, Foley and
Sarathy, 2012). Change in employment laws has also increase cost of operations of
enterprise. Consumer rights act has also led down some challenges for organization in
online selling of products. However, M&S needs to ensure that they do not obstruct any
law or regulations both its home market, international market as well as in the countries
alongside its value chain.
 Environment analysis: With stricter environmental laws and regulations both at
European and international level and increasing consumers’ pressure concerning business
practices, major retailers and brands are required to examine the life cycle of their
products top grave from their suppliers to end usage and disposal. M&S is also required
to be transparent about their strategic and tactical environmental practices and should be
fully accountable.
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SWOT analysis
Strengths Weaknesses
 M&S international expansion through
franchise agreement has provided them
competitive advantage compared with
competitors like Zara
 Strong financial strength in retail
industry.
 Decision to make investment in
innovation and brand building
advertisement policy throughout the
inflation and recession has successfully
strengthened its brand position in as
organization offering high quality and
good values products (Papasolomou
and Melanthiou, 2012).
 Wide channels of distribution channels
 Experience of around 130 years in retail
sector.
 Shift from strong focus on products to
more customer oriented strategy has
benefited the company.
 Decline in sale of clothing business
from last four years.
 Turnover of qualified employees from
organization to main competitors
including marketers, product
developers, food technologists and
general merchandise design team
members.
 Poor financial performance.
 Dependability on European market
makes M&S vulnerable to the market
conditions in the local country.
 More reliance on premium class
customers.
 High prices of products and service as
compared to competitors.
Opportunities Threats
 Opportunities of growth and
development through expansion of
business in Asian countries.
 Increase in online customers and selling
experience.
 Increase in competition in market will
lead down the profitability and market
share of M&S.
 Changing trends in the clothing space.
 Increase in burden of tax rate.
 Change in tax legislation and economic
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 Reshaping of clothing segment.
 Implications of their operational model.
 Continuous economic growth of
country.
policies of government.
 Depreciation of sterling post Brexit.
However, it is analysed that organization has strong brand position in in market because
they provide quality of products and service to customer. In order to overcome weakness, it is
essential for organization to reduce prices of their products for controlling tax burden on
customers. Along with this, M&S also needs to apply effective communication channels and also
provides it more focus on customer relations ship management. They must also analyse
competitor strategies and focus on retaining of their qualified employees in organization to
reduce influence of competitors on business operations. They also need to provide empowerment
to their employees so that they will provide innovative and effective ideas for promotion of sales
and profitability in clothing retail. Discounting policies are required to be adopted by
organization to attract more and more local customers towards brands.
Target market
Targeting approach utilized by M&S is analysed as more multi segment targeting than
the concentrated targeting approach. Study of segmentation statistics provides clear
understanding that middle aged women are the prime revenue generator for the organization
(Hugos, 2018). Therefore, M&S needs to more focus on targeting multi segments of people with
the good educational and socio economic class along with some high income urban population as
well. M&S was previous focused towards women customers only but now environment variable
has changed and company has also entered in to men clothing market with high quality products
as well which has increased the brand image in the clothing and accessories industry (Mihart,
2012). M&S does not required to adopt differentiation approach as the product pricing
techniques are such that it is targeted to limited segment of the higher socio economic class, who
have the more demands and can also afford luxury and pleasure effectively.
Segmentation
There are basically three main factors in strategic marketing on which M&S needs to focus and
the first and fore most is segmentation. Organization has its own strategic plans for the
promotion of brand. This plan mainly concentrates on new strategies which are being followed
by the organization for the purpose of increasing its brand image within market. Moreover, it
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mainly focuses on middle income group but they also required focusing on other variable as well
for the purpose of segmentation. Below given are some criteria for segmentation that
organization needs to consider such as:
 Behavioural segmentation: It implies to segmentation of market on the basis of buying
power and behaviour of customers towards products and services. In this context, most of
the products and service of M&S are analysed as good value product which are available
at reasonable price (Kahn, 2014). There are wide ranges of clothes offered by
organization for the special occasions to casual wears. However, it will be effective for
organization to target their customers on the basis of their brand perception and standard
clothing.
 Psychographic segmentation: In this, customers are targeted by organization on the
basis of life style and age groups. In present scenario, M&S was focused on middle aged
person mainly women that desire to purchase branded clothes. Moreover, it is essential
for organization to reshape its clothing business and target young customers towards
products and service for increase their sales and profitability along with the achievement
of competitive advantage over rivals.
 Demographic: Average customers of organization in market are between the age of 35 to
54 years which is focused on family and rich (Ottman, 2017). However, company has
provided its more focus meeting requirement of these customers but they also have to
focus on increasing their brand image among local customers in market. For this, they
needs to adopt their turnaround strategy and should decrease the prices of their clothing
products.
 Geographical segmentation: Organization will make segment of market on the basis of
geographical segments. In this context, Marks and spencer mainly focuses on Wealthy
suburban areas, home countries and prosperous and metropolitan areas.
However, it can be said that organizational needs to adopt multi segmentation strategy where
they can target their previous customers and also provide focus on attracting local customers in
home countries. They also need to adopt effective promotional strategies for expansion of
business in Asian countries.
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Marketing mix strategy
This strategy is based on analysis of marketing elements which clearly defines the
effectiveness of organization in market as compared to competitors. Below given are elements of
marketing mix strategy of M&S.
 Product: This mainly involves the products and service which are sold by organization to
its customers. Marks and Spencer is top mots retail fashion brand that delivers wide
variety of clothes like Casual wears and special occasion clothes. As compared to
customers, M&S was mainly focused towards delivery of high products to consumers
which was only affordable by premium class customers (Wilson and Gilligan, 2012).
However, changes in environmental variable also provide influence on quality of
products. In order to raise its sales and profitability, M&S needs to provide high quality
to attract local customers. Rather, organization can focus on promotion and selling of
products in Asian countries to increase its brand image and capture the market share.
 Price: Adaptation of effective pricing policy will support the M&S to attract the price
sensitive customers to purchase their products. Earlier organization has implemented
skimming pricing in which they have kept high prices of their products which has
resulted in decline sales and profitability. In order to achieve the objective of increase in
profitability and attaining the previous position, M&S needs to adopt penetration policy
and should reduce prices of their products and services/. This also aids organization to
achieve competitive advantage over rivals.
 Promotion: Application of effective promotional channels and media also influence the
profitability of M&S. There are various marketing and promotion methods have been
used by organization to increase the promotion and sales of products but it has increased
the cost of operations (Wilson and Beard, 2014). At present, management has decided to
reduce its cost of promotion. However, organization needs to apply promotional tools like
social Media application, direct mails and E commerce websites to provide information
to large population directly about new products and service. Although, organization
needs to increase its online presence to attract young customers towards products.
 Place: It implies to the method used by organization for distribution of products and
services in market. In this context, M&S spencer needs to provide its more focus of
online marketing and selling of products. This aids the management to reduce the cost of
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products and services (Brooks and Simkin, 2012). Further, they also have also established
their new outlet at prominent place to attract customers of competitors. They also need to
offer discounting offers to customers on online purchasing of products which tends to
raise its customers from different countries.
 Process: It implies to distribution channels of organization used for supply of products
and service to customers. M&S has strong distribution in different countries which has
provided them capabilities to provide instant delivery of products to customers at
different places (Forshier, 2012). Further, company has also established their outlets at
prominent places to provide easy accessibility to customers. For online customer,
company needs to free delivery of products and service in order to maintain effective
relationship with customers. Suppliers are accessed by organization from different
countries to reduce cost of materials and prices of products. These suppliers also increase
promotion and sale of organization.
 People: Hiring and retention of qualified employees at workplace also enables M&S to
achieve continuous success in market. External analysis provided clear understanding
that M&S is facing problem of employee turnover from its competitors (Pike, 2015). For
reducing the influence of competitors, management needs to reduce its labour turnover by
increasing pay scale of employees and providing them empowerment to participate
decision making. They are also direct connected with customers and help the
organization in customer relationship management. Marketers of company also focused
on retention of previous and they provide information to these customers.
 Physical Evidence: It implies to layout and infrastructure of outlets of organization that
also attract its customers. M&S has developed its exclusive and luxurious business
outlets in different countries to attract the customers.
Implementation and control
It is also important aspects that imply the ways through which organization will adopt its
strategies for achievement of success in business operations. In this context, with effective
allocation of resources, authorities and responsibilities to qualified employees in marketing and
other department, organization will tends to implement its strategies. M&S will also identify the
requirement of customers to implement their marketing plan with an effective coordination of
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other business units. Along with this, it will also promote its products in new market segment to
reduce the cost of operations.
Budget and Sales projection
Activities Budget $
Marketing and promotion 50000
Employees training and development
Market research
25000
Technological implementation 25000
CONCLUSION
From this report, it has been concluded that marketing plan needs to be developed by
every business enterprise to achieve success in business operations. Marks and Spencer is major
retail business enterprise that needs to implement effective market strategies and reduce its prices
of product to achieve its strategic business objectives. M&S group revenues were 10.6 billion
pounds which was identified growth of 2.4 percent from last quarter but increase decrease in pre-
tax profits by 18.7 percent has reduced their earning. Organizational needs to adopt multi
segmentation strategy where they can target their previous customers and also provide focus on
attracting local customers in home countries.
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