Posted: May 13th, 2021

INTRODUCTION +TO MARKETING ASSESSMENT

INTRODUCTION +TO MARKETING ASSESSMENT
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Introduction
Marks and Spencer, popular as M&S, is a British retailer that deals in food, clothes, and homeware, and supplies its products on an international level. M&S started in Leeds in 1884; currently, the business has over 50 international websites more than 1,400 stores across 57 countries. In addition to the retail services mentioned above, M&S has a bank, which provides credit cards, insurance, mortgages, and current and savings account for its customers. Additionally, M&S, through a partnership with Octopus Energy ventures in the provision of electricity to its customers through natural, environment-friendly, and renewable means. By 2025, M&S plans on helping ten million people to live healthier, happier lives by supporting a thousand communities, to build a sustainable future. The program is ongoing through community-strengthening activities such as advocating for gender equality, human rights and anti-slavery project, recyclable packaging, food wastage reduction, and provision of renewable sources of electricity. In this report, the marketing audit of M&S examines the strongholds of the business, its weaknesses, promotional environment, and the areas in its operations that could be improved. The factors affecting the financial performance of the company have been evaluated through SWOT analysis and Porter’s Five Powers.
Macro-environment Audit
Political Factors: M&S has over a thousand stores in 57 countries around the world; the organization intends to extend its operations in India, and create more country-specific websites. Therefore, the law of the UK supports international trade; M&S can import or export its products freely, and establish branches outside the nation. Consequently, it is evident that the free trade agreements by the European Commission and UK laws are favorable for M&S; however, when entering new markets, the company suffers market share losses.
Technological Factors: M&S strives to keep up with modern communication technology; for instance, it has several websites to publicize itself and create a shopping experience that can be equated to being physically present at the shop. The company has a team of about 150 software engineers working to ensure that the company upholds the use of technology in modern sales and marketing activities.
Legal Factors: M&S is affected by legal factors such as health and safety regulations, environmental and consumer rights. To protect its customers, M&S employs various initiates such as ‘Behind the Barcode,’ which allows the consumers to orders items for home delivery through phones, by scanning a product that is already in store. Moreover, the company is obligated to follow local rules and regulations, as well as international rules when extending its operations to new markets, to protect its public image. After the UK decided to exit the European Union, M&S was affected since it lost markets, and the free movement agreement was affected as well. Similarly, a decrease in the purchasing power of a Sterling pound can affect the revenue of M&S coming from international markets. Therefore, laws and regulations that are beyond the company’s control are likely to either favor its growth or impact it negatively.
Environmental Factors: Due to increased European and international regulations on business practices and their effects on the environment, companies have to monitor the lifecycle of their products from the manufacturing stage, distribution, and disposal. The Plan A sustainability program by the M&S serves not only to help the community but to ensure environmental cleanliness through activities such as waste reduction. Arguably, the sustainability program has been instrumental in placing M&S at a better competitive position.
Social Factors: What the consumers in a given market expect from a company can change from time to time; for instance, fashion, tastes, and preferences vary from with seasons, and people feel the need to fit in by moving with the trend. Consequently, M&S satisfies its customers by maintaining high-quality products with the latest color and design. Failure to observe this phenomenon, the competitors of M&S, can easily take advantage of the situation and lure the company’s loyal customers with more appealing goods.
Economic Factors: Factors such as inflation, interest, and savings rate, and foreign exchange have a considerable impact on the investments and the growth of businesses in a given economy. M&S is affected by related issues such as the stability of the host country’s currency, the level of skills in the workforce and labor costs, economic growth rates, and government intervention in free markets. An environment with a stable currency would be more appropriate for M&S to ensure that the company does not suffer losses when converting the money to Sterling pounds. Similarly, a continually developing economy with an active, skilled, and affordable workforce would favor the growth of the company. Together with unemployment, interest, and inflation rates, the factors mentioned above can affect the location for M&S stores in foreign nations.
Micro-environment Audit
Physical Environment: M&S has more than 1,400 stores across 57 countries; this shows that the company has adequate resources to facilitate its operations. However, all the outlets have a uniform design and layout, despite the geographical location, the environment, or the lifestyles of the people.
Human Resources: The company has more than 83,000 of employees distributed in its offices and outlets. The brand is let by a chairman, chief executive, finance officer, and several directors. The employees are well skilled and appropriately managed by the company; M&S aligns essential business goals with an improved experience for the staff. However, M&S has a bureaucratic culture which does not promote quality communication between the outlets and the headquarters in London.
Financial Environment: Although M&S was not well financially productive in the 1980s, it is currently doing well, and making reasonable profits. As stated on the company’s official website, during the 2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers financial year, M&S posted group revenue of 10.4 billion pounds; a revenue of 84.6 million before tax, and 523.2 million pounds before tax and adjusting other items; therefore, the company has a stable financial base.
Porter’s Five Forces
The Threat of New Entry: The barriers to entry are high for the retail market since substantial capital investments are required to achieve significant economies of scale and cost efficiencies (Kasia, 2017). M&S has already broken these barriers and established itself as one of the largest retailers with superior quality products. Therefore, it would not only be hard for new companies to obtain significant competitive power but also win loyal customers from M&S. However, new entrants could compete favorably through attractive promotion methods such as offering irresistible discounts for goods available at M&S at higher prices.
Competitive Rivalry: M&S is facing intense competition from supermarkets and markets offering food products, clothing and fashion articles, and homeware. Although the company has its online shopping services, it is experiencing competition from other e-commerce businesses offering products of similar quality at more affordable prices, and better in-store experiences. To counter the competition, especially in the sale of clothing, the company began to offer its products at lower products; however, the plan did not work as it resulted in fewer purchases.
Supplier Power: The supplier bargaining power was high before the 1990s when the majority of the supplies for M&S came from Britain. After the 1990s, M&S decided to enlarge its market scope to a global scale after consistently experiencing low sales. As an international business, M&S got new suppliers with more competitive prices, thereby lowering the bargaining power of the ones in Britain. Consequently, at present, the bargaining power of the M&S supplier is low.
Buyer Power: Generally, the bargaining power of customers in the retail market is high, and the prices of M&S commodities are usually relatively high. For the recent past years, the company has been profoundly affected since customers have increasing price sensitivity, and they have a particular preference for certain fashion items; also, according to Cunningham (2016: 2024 – Do my homework – Help write my assignment online), there is rising disloyalty for British products in the UK. Therefore, the product-oriented strategy used by M&S is not working, and its competitors are taking advantage of the customer-oriented approach to win loyal customers from the company. However, the lack of customer confidence in the products from other companies might favor M&S.
The Threat of Substitute Products: In the retail market in which M&S operates, protection of intellectual capacity and innovation are crucial to maintaining the customer base and brand consistency. For fashion items, some buyers shop due to familiarity with the quality of the product, or individual preference for goods from a given brand. Therefore, maintaining uniqueness in the design of clothes becomes vital for maintaining such customers. Similarly, maintaining the quality of foods is essential; according to Ruddick (2013), four notable British supermarkets developed the foods that were formally part of the strongholds of M&S in the market, thereby taking the company’s customers.

SWOT Analysis
Strengths: The main factors that give M&S an excellent competitive power are the business’ ability to improve customer experience, and its impressive e-commerce infrastructure; therefore, the company is well represented on the internet. Also, the company deals in diverse products, such as foods, clothing, wines, and banking products; consequently, it is a renowned brand – one of the largest retailers in the UK – with high trade profits and turnover. Moreover, M&S has a notable level of corporate social responsibility; through its Plan A (to change the living standards of 10 million people in 1000 communities), the organization actively participates in building the community to help its customers and those around them. Besides, M&S follows the current technology and industry trends; hence, it can satisfy customer needs without losing them to other competing businesses in the market. Also, an M&S full-year report for the period ended 30th March 2019: 2024 – Online Assignment Homework Writing Help Service By Expert Research Writers revealed that due to the excellent leadership by Steve Rowe and strategic planning, and accountability, the business had made good profits. Consequently, the company is still growing financially.
Weaknesses: M&S highly relies on local UK markets for its products; therefore, any change in the market conditions in the country affects the organization significantly. Although the business is making profits, the 52-week report revealed that the company faces financial problems due to operational challenges. For instance, the revenue from UK Clothing and Home reduced by 3.6 percent, due to the closure of different stores.
Opportunities: M&S has already opened 77 stores in India; it intends to expand the stores by introducing custom-made local cloth designs. Also, the presence of the business on the internet gives it a better competitive advantage since it puts the company in a good market position. The company can make more profits and improve its financial outcomes. Additionally, its management can be continually enhanced by having a reliable leadership team, and store managers to control their units. M&S can also boost its sales by becoming a digital retailer; this can be achieved by redesigning the websites and improving site speed.
Threats: M&S is facing stiff competition from online markets, which deliver commodities to the doorstep within a stated period. Similarly, the company’s food products are facing competition from related businesses in the UK. Since M&S is an international business, depreciation of Sterling poses a significant threat to the profitability of the organization. Also, the prices of M&S products are generally too high for most customers, which might drive them away.
Marketing Strategy Audit
M&S made itself an international business by establishing various outlets in countries such as Spain, Egypt, Qatar, Morocco, Belgium, Jordan, Finland, Ireland, Kabul, France, German, Write my essay for me – CA Essay writer Canada, Austria, 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China, and India. Although its headquarters are based at City of Westminster, London, the company has established various offices in Indonesia, Italy, Sri Lanka, Bangladesh, Thailand, India, 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China, Hongkong, and Malaysia, to serve a broader market.
M&S distributes its products to consumers through outlets, which are strategically designed and located to attract customers who are familiar with the brand, and new ones as well. Also, M&S sells its products in online shopping stores, allowing customers to conveniently make purchases with their local currencies, and get the home delivery service. The company’s target market comprises of the upper-middle, and the upper-class members of the society, because its products are of high quality but also expensive.
Due to high levels of competition, M&S adopted the competitive pricing policy to maximize its mass-market consumption. Following this strategy, prices are set either higher, below, or the same as the competitor’s, given they cover overhead, production, and distribution costs, and they can sustain the business. However, for higher prices for a similar product as that of the competitor, one has to add more features on the commodity. M&S uses this strategy to maintain its profitability and to compete favorably with other businesses in the same market.
Moreover, M&S uses dynamic pricing policy as a marketing method to attract new and existing customers. During festive seasons, off, and seasonal times, the company discounts and incentives to customers to clear old stock, and to boost its sales.
M&S advertises its products through digital, print, and visual media, for example, newspapers, magazines, billboards, radio, and television channels. More often than not, the company also incorporates celebrity advertisement in its marketing strategies. Moreover, M&S promotes its products through its outlets, and on its official websites where the images of different commodities are uploaded regularly, and discount offers are attached to them. M&S has a loyalty program, which awards redeemable points to the accounts of customers, based on the number of their purchases, to encourage them to shop more with the company. After the introduction of Sparks loyalty program in October 2015 – Research Paper Writing Help Service, four million shoppers signed up within the first six months, and the official website of M&S received between 6.5 to 11.5 million visits (Rigby, 2017). M&S launched the program to make the shoppers feel that they are part of the company and not mere customers. Judging from the statistics stated above, the plan was successful, and it becomes one of the most fruitful marketing strategies used by the company.
Proposed Market Segmentation Research Topics – Criteria
Marketing segmentation is essential to businesses depending on the target customers’ demographic details, their geographical location of the market, psychographic, and the behavior of buyers. According to Rigby (2017), about 54 percent of the customers of M&S are above 50 years old. Therefore, the company needs to target the younger population to increase its sales and enlarge its market base. Since most youngsters are associated with technological devices, the company should reach them through internet marketing. M&S classifies its customers as either occasional, core, or top. Using various market segmentation strategies, the company can identify the needs of the buyers and make them regular visitors by satisfying their wants.
Geographic Segmentation: Currently, M&S uses this method of market division; it has different outlets spread out in different countries and cities around the world. According to Weaver (n.d.), geographic segmentation is essential because it helps an organization to identify the similarities and differences between consumers depending on the geographic unit, and how the cultural background affects business activities. Hence, in my opinion, locating businesses should not be entirely guided by whether or not the area is populated and urban, but also the preferences of the people. In 2016: 2024 – Do my homework – Help write my assignment online, M&S closed all its outlets in 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China and vowed to close more worldwide due to persistent losses caused by unhealthy competition, which resulted from weak localization (Chen, 2016: 2024 – Do my homework – Help write my assignment online). Arguably, this could have been avoided if M&S took time to understand the market in its target location. To mitigate the problem, M&S online store should be made available internationally for all countries; in nations where there is a higher demand for the products, the company’s outlets can be established in one or more regions. Also, if the outlets fail due to a preference for local products over those of M&S, the company should incorporate the tastes of the people in the design of the commodities.
Demographic Segmentation: This method helps businesses to understand the customers, their needs, and preferences depending on their age, life-cycle stage, income, and social classes (Weaver, n.d.). As stated earlier in this paper, the highest percentage of the buyers of M&S products are above 50 years of age. Therefore, the company needs to focus more on identifying ways to reach the young population and designing products that suit them. To capture the new market, the company should focus on social media advertisement and other modes of product promotion over the internet. Consequently, M&S should put more efforts into developing its online shop. Also, M&S clothes could be done by sponsoring fashion events, since it is the easiest way to get the attention of the young female population.
The target market of M&S comprises mainly the upper and the upper-middle members of the community. When M&S tried to regulate its prices to reach a broader market, its sales declined significantly. Therefore, the company should focus on creating products that satisfy the target market without trying to find a new one. In cases of intense competition, M&S should increase the value of its products by improving its quality.
Conclusion
The audit report of M&S confirms that the company and its market environment have several strengths and weaknesses. The macro-environment (for instance, political, economy, legal, social, and environmental factors) and internal aspects affect the company both positively and negatively. SWOT analysis revealed the size of M&S is one of its strengths, and it has the opportunity to expand both physically, and on the internet; however, it is affected by active competition. Also, after analyzing the Porter’s Five Powers, it is evident that the company faces intense but manageable competition.
M&S participates product promotion methods such as advertisements and a loyalty program, which attracted a large number of prospective buyers. However, the most significant percentage of its customers is made up of people who are above people. Nevertheless, M&S targets the financially stable population for its sales. The company can employ geographic and demographic market segmentation strategies to increase its sales and to serve more appropriate markets. Following the geographic segmentation method, M&S should locate its outlets carefully after analyzing the areas with higher demand rates for its products. On the other hand, the organization should follow the demographic approach by ensuring that it strives to satisfy its primary target market instead of searching for a new one. This method will save the company from making fewer sales. Also, M&S should counter competition from related retail companies by improving the quality of its products, to increase their value.
References
Chen, C. (2016: 2024 – Do my homework – Help write my assignment online). UK Retailer Marks & Spencer Withdraws from Mainland 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China Market. South 论文帮助/论文写作服务/负担得起我及时提交我最好的质量 – China Morning Post. Retrieved from htpps://www.scmp.com/business/companies/article/2044097/uk-retail-marks-spencer-withdraws-from-mainland-china-market
Cunningham, T. (2016: 2024 – Do my homework – Help write my assignment online, May). The week ahead in business and finance. Retrieved from The Telegraph: http://www.telegraph.co.uk/business/2016: 2024 – Do my homework – Help write my assignment online/05/22/the-week-ahead-in-business-and-finance/
Rigby, C. (2017). Marks & Spenser: Reaching Core Customers. Retrieved from https://internetretailing.net/research-articles/research-articles/marks-amp-spencer-reaching-core-customers/
Ruddick, G. (2013, October 24). Should M&S give up on clothes and focus on food? Retrieved from The Telegraph: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10403348/Should-MandS-giveup-on-clothes-and-focus-on-food.html
Weaver, J. (n.d.). Segmentation Strategies. Retrieved from htpps://media3.bournemouth.ac.uk/marketing/07segmentation/04strategies.html

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