Marks and Spencer
IB209 Marketing Analysis

Anshul Maini 1036526

Marks and spencer also called as M&S and Marks and Sparks was found in the year 1884 by two people Michael Marks and Tom spencer (Bevan, 2007). Ever since then marks and spencer has delivered goods of the best quality and now to day it stands as one of the best retail chains in the UK. They primarily deal in Clothing and food. The company is headquartered in London, UK and is the one of the biggest companies in the world. It’s ranked #725 in the Forbes 2000 list (Marks and Spencer on Forbes 2000 list, 2011) and is amongst the top 5 retail firms in the country. Currently the chairman of the company is Robert Swanell and the Chief Executive is Marc Bolland. (Annual Report, 2011). Over the years Marks and Spencer has gone through ups and downs. It is the first British Retail firm to make a Profit before tax of over £1 Billion which was in the year 1998.After that the company had hit rock-bottom which was due to heavy competition and the company’s inability to satisfy its customers, it went into heavy losses in its turnover. After amending a few policies and the change of the Chief executive, the company looked more closely at the customer’s needs, wants and demands and modelled their strategies around it, thus rising it from the ashes. However again in 2008, the company went into a credit crunch which was mainly because of the recession. (M&S shares dive on gloomy outlook, 2008) (Bevan, 2007).Although M&S has faced many challenges in its recent years; it has still managed to keep the company name up and advanced forward. Rising from a terrible phase and coming back into a market which has heavy competition truly shows its commendable performance. The company currently has over 703 stores in the UK and 152 stores internationally and over 200 franchises worldwide. It has a total turnover of over £9.7 Billion for the year 2011. (Annual Report, 2011). Marks and Spencer has a variety of products and services which it offers to its customers. Although the majorly the turnover generated is from Clothing and Food. 1. Clothing: M&S offers clothing for Men, Women, Children and lingerie. 2. Home: the company now also offers furniture and home decoration items online and in store. 3. Financials: M&S money which is marks and spencer’s initiative in providing loyalty card/credit card and various other services like insurance and personal loans. 4. Food and Wine: M&S offers a large variety of food items such as pre-prepared meals, celebration food like wedding cakes and showcases a large wine collection. 5. Technology: They also offer electronic gadgets, computing devices and home appliances. 6. Online Services: With M&S you can send flowers and Gifts to people with their online service. (Marks and Spencer) (M&S Business Report);

The marketing Environment is comprised of 2 parts which are the Microenvironment and the Macroenvironment. The marketing microenvironment of a company is based on principle actors like the company, Suppliers, Marketing intermediaries, customers, competitors and publics.

Company: The Company’s corporate objectives are mainly defined by its Mission, Vision and Values. Mission- To make Aspirational quality accessible to all Vision – To be the standard against all others are measured Values – Quality, Values, Service, Innovation and Trust Objective – To increase shareholder value and profit margin while maintaining customer satisfaction. (M&S Objectives) The company also focuses on the issue of corporate social responsibility (CSR) by coming up with various policies regarding concerns for the environment and charity which are included in their scheme called Plan A (Annual Report, 2011). This basically shows that the company’s aim and goals are clear and therefore it bases its marketing based on them.

Supplier: In the Early days marks and spencer had a policy of selling only British made goods. However later on when competition rose they had to shift their clothing line suppliers to South East Asia for cheaper made goods. Because of the high amount of suppliers in the market the company did not face a problem of bargaining power of suppliers because of which they were able to squeeze costs to the minimal and maximise their profits. The company has a lot of suppliers for its products reason being that if one supplier fails to supply the goods, they can rely on other suppliers, for on time supply of products. Marketing Intermediaries: In the UK M&S sells its products from its own stores or online. In year 2007 they had made a collaboration with Amazon to use their platform to increase the companies ecommerce (Computer Weekly, 2007), However they plan to discontinue this after 2013 and substitute it with their own platform (James Hall, 2010).They also have a program called M&S and Oxfam clothes exchange which helps in promoting both the companies buy offering vouchers for old M&S clothes (M&S and Oxfam clothes Exchange). Also along with this the company has more than 200 franchises internationally in over 42 countries. The company also has financial intermediaries like VISA and MasterCard which help me in processing transactions in-store and online. Customers: M&S has a consumer Market where it sells finished products directly to its consumers which are products like food and clothing and services like credit card and personal loan. For them customer satisfaction is their main motive therefore increasing customer loyalty. Competitors: In the UK M&S exists in a market with Perfect Competition, even then it is the market leader in the clothing line, which is because they provide the best quality in terms of clothing keeping their customers satisfied and loyal. In terms of retail, they are still behind companies like Tesco because Tesco is the cost leader and M&S would never compromise on the quality of their products to achieve cheapest cost.

Publics: There are numerous companies that play a role in helping M&S reach its goals. In 2004 M&S and HSBC made a joint business venture to jointly manage M&S financial services (HSBC and M&S joint venture for financial services, 2004).Along with this Amazon, the online retailing Giant provides a platform to the company for e-commerce. TCS (Tata consultancy services) is responsible for the application development services (Computer Weekly, 2008) and there are various other suppliers which manufacture goods for the company.

The marketing Macroenvironment of the company can be defined by simply doing a PEST analysis of the company. Political, Environmental and Legal- the Government has posed various policies for companies to become more eco-friendly such as the Eco tax. Along with this M&S is one of the first major British retailer to follow a fair trade policy in food and clothing (Sahni). To make its company more environmental friendly it has proposed a plan called Plan A which focuses on sustainable development and welfare of nature. Economic- Usually the company has a larger turnover during the months of December which is due to Christmas when the company offers various discounts and offers as an incentive to attract customers to their stores.

(Amadeus) The above graph shows the profit before tax of the company of the last 10 years. As we can see the profit has mainly dipped in 2001 and 2008.The Company in 2001 had a major setback which was of the various policies that set them behind the competition and again in 2008 which saw a loss in

profit because of the recession that hit the country. The company is now back on recovery and is still growing.

(Fame, 2010) If we see the peer review of last year’s turnover. It can be clearly seen that M&S has the highest turnover in the firms mentioned shows that the company has a strong hold in the market. Socio-cultural and demographic-The consumer is always looking for something better in the market so the company has to be up-to date with the latest fashion in their stores. This is one of the reasons why the company dipped in 2000 as it was unable to keep up with the latest fashion trends. Their particular section in women’s clothing called ‘Per Una’ has been a huge success for the company ever since it started in 2001 (BBC news, 2005).As the social trend is seen of people having more of a balanced healthier diet, the companies tries its best to make its food as healthy as possible without compromising on taste and quality. Another trend seen in the last few years is that people prefer paying my debit/credit card rather than cash, therefore the company has also started accepting them since 2001.The company is also focused on marketing their products to a specific age group of people, therefore dividing their products into different sections. Technological – Over the years the company has made a lot of technological changes to make the working of the company efficient and to promote the company. The company uses RFID tags to track certain products to prevent theft. Moreover it has broadened its market by making an online store for computers and mobile phones where people can purchase products online which get delivered to their homes. Another special feature of their website is that you can order gifts and flowers for other people and get them sent to their homes.

The SWOT analysis basically comprises of Strength’s, Weakness, Opportunities, and Threats for a company. The SWOT analysis for Marks and Spencer is as below.

Strength’s- The Company sells premium quality products at an affordable price. It is the market leader in Clothing Department. It is expanding into larger and larger markets worldwide making it more global. The company is in now more than 42 countries with over 400 international stores and going up. Finally the company also has had a highly effective corporate social responsibility strategy. (Datamonitor360, 2011) Their Plan A has been highly successful. They have made 180 commitments for sustainable development till 2015 and have already completed 95 of them (How Do We Do Business- M&S, 2011). Weakness- the Company in the past has been incompetent in studying the market and its customers properly ending up making huge losses. This has also left many of its shareholders disappointed. Along with this although they provide premium quality products, they have also made a perception of high prices. The company does not provide anything for customers who might be of a lower background or would prefer something cheaper, because of which they lose out brands like Tesco Value. Opportunities- the Company can extend itself lot more internationally; countries in Asia like India, Pakistan, China and Thailand are huge Potential markets. The online shopping industry is rising at a speed of light and M&S could really grab this potential opportunity. With its online marketplace the company can move itself to a global level by delivering its products globally. Since the company has made a name of itself in the market as a premium product seller it cause also use this image towards its home range and make it a lot more premium and luxurious (Datamonitor360, 2011). Threats-In the UK the company exists in a market of nearly perfect competition. Its Food section in particular has a tough competition against Tesco’s pre-prepared meals and could lose out against it because of Tesco’s larger market. Also over the years the consumer spending in the UK has decreased and which has made it is harder to compete. The company also faces a threat of change in social environment. The company has already been injured from this kind of problem in the past but it is still prone to it in the future. Along with this since the company is venturing into new markets, it should do it with caution as it might get opposed to the competition there.

The Marketing Mix of any firm basically comprises of 4 things which are Product, Price, Promotion and Place. Product – The products sold by the company are based on the Brand name. M&S has created a sense of trust with exceptional quality over the years which is assured on each and every product of theirs. That’s why they are one of the most trusted brands in the UK. Along with this the products they sell is appealing to everyone, from kids to old ladies, broadening their market as a whole. Price – The products by M&S are moderately priced. Although the products aren’t as cheap as what Tesco and Primark sell but are quite affordable. The reason of their higher cost is because they provide a much more premium quality product. Their profit margin is around 8% which is a bit more than other companies like Tesco, Debenhams and Primark but they can afford that as they have made a sense of trust which makes their customers loyal to their company (Fame report for Profit Margin, 2010).

Place – The Company has developed a multi-channel by making shopping more convenient for its customers. Now its customers can buy their products online, in-store and even on the phone. Last year M&S direct sales were up by 31% (Annual Report, 2011).One can get the products delivered to their place or can be picked up from the nearest store, making it as convenient as possible for its customers. Along with this the company implemented a system of local marketing. The company does not provide the same range of goods in all its stores, in fact each of its stores is tailored to fit the local market. For example the store on Bridge Street, Stratford-upon-Avon is tailored to suit the wealthy local market and tows huge tourist industry while the store in Solihull is focused on Food (Kotler & Armstrong, 2008). Promotion- M&S has promoted itself through various conventional ways like TV, Radio, Newspaper, Magazine and online Advertising. Along with this M&S has also promoted its products by launching an online service called M&S TV.IT has allowed the company to share its products ,innovations and ideas with the customers. Also customers can purchase the products they liked in the videos instantly. Also along with this company also released a Credit Card which works also like a loyalty card to its customers which earns you points whenever you shop with it at any marks and spencer store. The company has taken out various offers for its products during festival seasons like Christmas and various discount sales. Most of their TV advertisements have catchy songs involved, which is to attract the viewers to it and they wouldn’t mind watching it again. In their recent Ad campaign, they have joined up with the infamous X Factor shows finalists to produce the Christmas 2011 advertisement, attracting the viewers of the show towards the company. Along with this the company in 2004 changed the banner to ‘Your M&S’ to give its customers a more warm and comfortable feeling which has worked quite well for the company over the years.

The company can do wonders in the future keeping in mind its customers and its premium quality. For their future there would be several critical success factors involved. First of all there is a huge online market which is getting bigger day by day. According to a CRR research commissioned by Kelkoo, an online shopping search engine the online retail sales in 2010 were more than £44 Billion in the UK (Online Retailing in UK and Europe). Currently the online sales for the company are around £543 million (Annual Report, 2011).This is a huge potential market which if the company can get hold of can be a major success factor. The company is already a market leader in its clothing department and has created a niche market in its food department. It still has yet to work on its home department. This department has high potential in the niche home market and can grow there. Along with this the company is in on the move of global expansion, this is a great strategic decision made by the company and is concentrating in countries like India, China and the rest of Asia. These markets have high potential of growth and if M&S can capture a segment of the market, it can do wonders for the company. Plan A which is a sustainability development strategy taken up by the company can also help out in its success .Plan A has reduced the environmental footprint, it has brought a positive contribution to the communities.IT has also helped in increasing its efficiencies and brought greater innovation and additional business to the company (How Do We Do Business- M&S, 2011). Out of 180 commitments in their plan they have completed 95 of them. IF they are able to complete all of them, they will be helping themselves and also the environment. This will also make them the most sustainable retailer in the UK.

Marks and Spencer, which has been one of the oldest major retail chains in the UK has had its high’s and its lows in the past. Throughout the years many things have changed but they have never compromised on their quality. The firm has grown well over the years and continues to focus towards its mission. Even with tough competition the company has survived and turned out to be the market leader in clothing. Their main aim has been to keep its customers happy and loyal. With technological advances over the years it has increased its sales and multi-channelled themselves. With its Fair-trade policy and Sustainable Development strategies the company has made a benefit to its employees, consumers and also its shareholders. The company aims to drive itself internationally by 2015, make it more multi-channelled and make it accessible to even more customers around the world yet not forgetting its focus in the UK. If the company maintains its core values of Quality, Value, Service, Innovation and Trust and provides it to its customers. It can look at the future with confidence.

Total number of words in essay – 2,961 words

WORKS CITED HSBC and M&S joint venture for financial services. (2004, july 12). Retrieved from HSBC: http://www.hsbc.com/1/2/newsroom/news/2004/hsbc-and-mands-join-forces-in-financialservices-in-the-uk (2005, October 11). Retrieved from BBC news: http://news.bbc.co.uk/1/hi/business/4329412.stm (2007, march 23). Retrieved from Computer Weekly: http://www.computerweekly.com/news/2240080492/Marks-Spencer-launches-website-incollaboration-with-Amazon Computer Weekly. (2008). Retrieved from http://www.computerweekly.com/news/2240085968/Marks-Spencer-outsources-to-TataConsultancy-Services M&S shares dive on gloomy outlook. (2008, july 2). Retrieved from BBC news: http://news.bbc.co.uk/1/hi/business/7484700.stm Fame. (2010). Retrieved from Fame: https://fame2.bvdep.com/version20111124/Report.serv?seqnr=0&context=XPDM797N7ZPIQUR&_cid=75# (2010). Fame report for Profit Margin. (2011). How Do We Do Business- M&S. Marks and Spencer on Forbes 2000 list. (2011). Retrieved from www.forbes.com: http://www.forbes.com/companies/marks-spencer/ Amadeus. (n.d.). Retrieved 2011, from Amadeus: https://amadeus.bvdinfo.com/version20111122/Report.serv?_CID=109&context=22TJ797N86Z0MY6&SeqNr=0 Annual Report. (2011). Marks and Spencer annual report. Marks and Spencer. Bevan, J. (2007). The Rise And Fall Of Marks & Spencer: ..and How It Rose Again. Profile Books. Datamonitor360. (2011). SWOT Overview M&S. James Hall. (2010, November 10). Retrieved from The telegraph: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8120502/Marksand-Spencer-looks-to-web-and-overseas-for-growth.html Kotler, P., & Armstrong, G. (2008). Principles of Marketing, European Edition. In P. Kotler, & G. Armstrong, Principles of Marketing, European Edition 5th edition. Pearson Education. M&S and Oxfam clothes Exchange. (n.d.). Retrieved from Oxfam: http://www.oxfam.org.uk/shop/content/secondhandstore/fashion/ms_clothes_exchange.ht ml

M&S Business Report. (n.d.). Retrieved November 25, 2011, from Scribd: http://www.scribd.com/doc/44834640/M-S M&S Objectives. (n.d.). Marks and Spencer. Retrieved from www.marksandspencer.com: http://www2.marksandspencer.com/thecompany/our_stores/world.shtml Marks and Spencer. (n.d.). Retrieved from Marks and Spencer: www.marksandspencer.com Online Retailing in UK and Europe. (n.d.). Retrieved from www.retailresearch.co.uk: http://www.retailresearch.org/onlineretailing.php Sahni, A. (n.d.). Analysis of M&S. Retrieved from http://www.scribd.com/doc/46921930/PestleAnalysis-for-Marks-and-Spencer