Student Id: xxxxxxx

Strategic Marketing Management

This assignment is for reference only. I request you all to get an idea and help from it. Avoid using same words; you can be in problem, as you won¶t get second chance now. You can use standard models and theories though and references (with changed dates and with some smartness).

All the best, I want you all to pass this assignment.

Table of Contents
1. Introduction & Background --------------------------------------------------------- ----------------------- 3 2. Strategic marketing planning process ------------------------------------------------ --------------------4 2.1 Assessment of marketing planning ---------------------------------------------------------------- 4-5 2.2 Marketing Planning process------------------------------------------------ -------------------------5 -8 3. External Marketing environment and marketing audit------------------------------------------------ 8 3.1 External marketing audit ------------------------------------------------ -----------------------------9-16 3.2 Internal marketing audit---------------------------------------------------- ------------------------- 17 -24 4. Possible strategic marketing options------------------------------------- -----------------------24-27 4.1 Option1_Market penetration technique---------------------------------------------------27-28 4.2 Option2_Niche Technique---------------------------------------------- -------------------------29 5. Recommendation -------------------------------------------------------------- -----------------------30 References ---------------------------------------------------------------------- -------------------30-31

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Student Id: xxxxxxx

Strategic Marketing Management

1. Introduction nd B ck round

This report is a study of principles of Strategic marketing management by considering Marks and Spencer s Clothing business In this report the Marketing Planning Process has been discussed and the MPP has been applied to assess the possible Strategic marketing strategies to improve the business of Clothing division of Marks and Spencer. Here, we have studied the External and the Internal environment of the Marks and Spencer with the help of available market data and have done Marketing audit with the help of different techniques and analysis Models.

Marks and Spencer is one of the leading retailers of UK, with over every 21 million people visiting Stores every week. Company offers high quality, stylish, great value home and clothing products. M&S employs around 75,000 people and have above 600 stores in UK and expanding number of stores worldwide. M&S is number one provider of women s wear and lingerie in the UK, and are having growing market share in menswear, kids wear and home, due in part to their growing online business. Overall, company s clothing and home ware sales account for 49% of our business.

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Student Id: xxxxxxx

Strategic Marketing Management

2. St ategi Ma eting Planning P o ess
Marketing planning process is the planned application of marketing resources to achieve marketing objectives. It is generally a logical sequence and series of activities leading to the setting of marketing objectives and the formulation of plans for achieving them. Marketing Planning is essential in today s economic scenario because of increasingly hostile and complex environment in which companies operates. There could be various external or the internal factors which can impact the ability of organisation to achieve its goals.

2.1 Assessment of Ma eting Planning
There are numerous advantages of adopting a marketing planning process by an organisation. The various stages involved in the marketing planning not only helps organisation to focus on its weakness to achieve the desired objectives but it also devises a proper strategy to achieve it. By setting a mission in the marketing planning process, the organisation not only sets its long terms goal, but it also gives a direction to the management for the future. A well defined and accepted mission always becomes a tool of motivation for the employees. While, marketing audit helps organisation to find its current position, strengths and weakness, the external factors and the organisation s preparedness to achieve the set the objectives. Marketing assumptions has its importance, as it defines those factors which are not in control but needs to be considered while doing the planning. Forecasting expected results helps organisation to understand the result it should set target at and it can achieve. While in the alternative plans helps organisation to have contingency plans in case of any failure or deviation from expected outcomes. While the budgeting process helps organisation to plan its finances in advance to start the process. Some of the advantages of following marketing planning by Malcolm Macdonald are:
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better co-ordination of and increased confidence in business activities; identification of expected developments; increased organizational preparedness to change and explore new markets; minimization of non-rational responses to the unexpected; reduction of conflicts about where the company should be going; improved communications and a common framework for decision-making; management is encouraged to think ahead systematically; available resources can be better matched to opportunities; provides a framework for the continuing review and monitoring of operations; a systematic approach to strategy formulation leads to a higher return on investment and real competitive advantage.

If an organisation has not taken marketing planning process while devising their new business strategies, then it can have serious impact. The organisation will never be in position to devise a proper and well planned strategy without following the marketing planning processes. Some of the key disadvantages of not following the marketing planning process are:
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Faulty marketing decisions based on improperly analyzed data Page | 3

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Strategic Marketing Management

Confusion and communications between the top management and the employees in absence of corporate objectives Creation of unrealistic financial projections due to incorrect interpretation of data Without alternative plan, there s a high risk of failure Finance will always remain issue for executing the plans Organisation will not be in a position to know the threats and the competition it is having Organisation may not know the customers and market segment it need to target

2.2 Mark tin Plannin Proc ss

Malcolm McDonald gave ten stages Marketing Planning Process, which has been widely accepted model in the business environment. MPP is more realistic and takes into account the organization s existing competitive position, its capabilities and the competitive environment it faces. Smith s PhD (2003) proved that there s a direct link between organizational success and the marketing strategies. The Marketing planning process contains following stages:

Table: Stages of MPP Stage Mission Statement Description Mission is basically a purpose statement which is largely philosophical and qualitative in nature. Mission statement sets the boundaries of the business and tells the way it wishes to do its business. It is generally a Page | 4

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Student Id: xxxxxxx

Strategic Marketing Management framework or context within which the company s strategies are formulated. Setting corporate objective means setting goals or standards which can be achieved in certain timeframe. Objectives are the most basic planning tools underlying all planning and strategic activities. Objectives are goals which are not subjective but they can be measureable. A marketing audit is a structured review of organisation s current marketing activities. It is a fundamental part of the marketing planning process. Marketing audit enables oragnisations to anlayse its current performance as well as past performance which helps the organisation to identify the next steps forward. Marketing audit is done on both internal as well as external environment of the organisation. SWOT analysis is a strategic planning technique used by oragnisations to evaluate Strength, weakness, opportunity and threat related with the business. It is one of the most important parts of the planning process and helps to focus on the key areas. While planning the strategies of company, there are various factors considered which are not under the control of the organisation but are the key determinants of the success. These factors are known as assumptions. This stage is all about selling the objectives and the strategies to the stake holders and convinces them to agree with it. An objective is what needs to be achieved, while the strategy is the planning to achieve the objectives. After completing the major planning stages, estimating the feasibility of the objectives and strategies in terms of market share, sales, etc. Based on various test, judgments and calculation the outcome is estimated. In case of any contingency or fallback of the planned strategies, alternative plans should be well considered in advance. If the result is not as per the plan, or objectives are not achieved through the planning process, then there should be some backup plan , planned in advance. The total expense or cost involved in carrying out these strategies to achieve the objective of the plan is termed as budget. This stage tells how much finance is required to carry out the strategic planning process. This is the last stage of the process, in which a written strategic marketing plan is prepared in advance. It mentions every stage and step involved to carry out the marketing planning process. It contains the marketing, sales, advertising and product promotion plans.

Setting corporate objective

The marketing audit

SWOT analysis

Assumptions

Marketing objectives and strategies

Estimate expected results

Identify alternative plans

The budget

First year detailed implementation programme

The next table explains the activities involved at different stages of MPP and the justifications for performing those activities. We have outlined these activities and justifications briefly. Page | 5

Student Id: xxxxxxx Table: Activities involved in MPP Stage Mission Statement

Strategic Marketing Management

Setting corporate objective

Activities A formal meeting is conducted between the Board of directors and the major stake holders for discussions and inputs are taken from them. A process is formulated to take confidence of every employee and the management in the discussion and then Mission statement is agreed upon. The senior management and the major shareholders are involved in setting up a measurable target, which is done after taking in confidence of every stakeholder involved.

Justification By involving everyone in the discussions, the stakeholders will have faith in the planning process. As the strategic planning process is not done at lower level, it s for the whole organisation so everyone should be taken in confidence. The board of directors is more focused on the quantitative figures. They want to see the targets and these targets can only be made achievable only if all the stakeholders are involved. Internal and external environment both need to be audited. As both these factors have direct influence on the organisations growth prospects. By considering the previous record of information a realistic auditing can be performed.

The marketing audit

SWOT analyses

Assumptions

Marketing objectives and strategies

The marketing audit is conducted by either the internal marketing team or the external consultants. They audit both the internal environment and the external environment of the organisation by using various tools and techniques like PESTEL, Porter s five forces, value chain, Ansoff model, BCG,PLC, etc. All the information and data (finance, sales, market share, infrastructure, etc related with the organisation is analyzed and evaluated. At this stage, the data collected in the external and the internal audit is analyzed by the marketing planning team and based on the studies, the strength, weakness, opportunities and threats are analyzed. Every factor which is not under control should be studied and mentioned in the plan, which can affect the planning strategies. It could be both internal as well as external factors of the organisation. Marketing team should make proper presentations and plans to educate the stakeholders involved in the change. Opinions should be taken from every stakeholder. A good marketing strategy should be considered to convince the major stake holders about the strategic planning and its objective.

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Only by considering the internal and the external audits, a true SWOT analyses can be achieved.

By studying the internal and external factors only, proper assumptions can be made.

If the stakeholders are not satisfied with the objectives and the strategies then, the plan can never move ahead. They need to be taken in confidence should be well explained about the profits and advantages involved in taking up the planned strategy Page | 6

Student Id: xxxxxxx Estimate expected results

Strategic Marketing Management The finance team should be involved with the marketing planning team along with the sales team to formulate the estimation of the expected results. Finance and sales team has expertise and experience, moreover they are in best position to calculate the estimated results as they are directly related with the business and they have better judgments. By analysing the past data and the trends, it becomes easier to identify and prepare for the alternative plans.

Identify alternative plans

The budget

First year detailed implementation programme

By doing thorough study of the internal and external environment, and by analysing the past data of the industry and the results achieved and also by taking feedbacks from the stakeholders. The finance team studies the full strategic planning and then gets the data on the expected finance involved at various stages from different teams involved. Then finance team prepares approximate financial budget. All the departments involved in the strategic planning process should be discussed with. The head of departments should be agree on the decisions taken by the planning team and then a written document should be prepared.

The financial aspects are handled by the finance team and they know better the expenses involved in the planning process.

Various departments are involved in taking forward the strategic planning process ahead. So while making a implementation plan, their inputs are required as they are the one who will actually be implementing the planning programme.

3. The Exte nal Ma eting Envi onment and the Ma eting Audit
A marketing audit is a structured review of organisation s current marketing activities. It is a fundamental part of the marketing planning process. Marketing audit enablesoragnisations to anlayse its current performance as well as past performance which helps the organisation to identify the next steps forward. As the business environment is constantly changing, the marketing audit should be used as a reference tool, with constant updates reflecting changes in the external environment and organisation s own internal business experiences. Philip Kotler defined marketing audit as a comprehensive, systematic, independent and periodic examination of activities and resources in order to find problem areas and opportunities and to recommend a plan of action. Marketing audit can help organisation to refine its business processes and improve its productivity and profitability. Marketing audit has been broadly categorized into internal audit and External Audit. There are various tools and methods available to carry out these audits. The external environment of an organisation can be broadly categorized into: Page | 7    

Student Id: xxxxxxx

Strategic Marketing Management

y Economic environment (consisting of political, economic, social / cultural, technological, environmental and legal changes) y Competitive environment(threat of new competitors/new entrants to the business and how could it threaten the current market share) y The market environment (Total market size growth and trends, products, prices, physical distribution channels, industry practices. Various tools are available, each one providing a means of structuring analysis, like STEEPLE, PESTLE and PEST analysis. We will be using PEST analysis, to assess the external environment impacting the business of Marks and Spencer.

3.1 Ext rnal Mark tin Audit
To conduct the external audit of the M&S, we have considered the available market data through various sources which can be a major deciding factor while planning the strategic planning decisions. Here, we have used PEST and the Porter s five forces analysis, to analyse and evaluate the external environment. Mark t Data FIGURE 1: UK: Concern over job prospects, 18 25s, February 2008 une 2009 Base: 1,000/2,000 adults

Source: Mintel Youth unemployment (18 24 year-olds) has risen from 17.2% in Q2 2009, compared to 12.5% in the same period of 2008, and this figure will continue to rise in the short term.   

    

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Student Id: xxxxxxx

Strategic Marketing Management

FIGURE 2: The items adults are cutting back on in the recession, February 2009 Base: 1,440 adults aged 16+ who have cut their expenditure in the recession

Source: Mintel As seen here in the graph, clothing has been hit maximum, where maximum adults decided to do the cut downs.

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Strategic Marketing Management

Figure 3: UK: Population forecasts, age group, 2003-13

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Source: Mintel The UK s ageing Population poses a challenge to clothing retailers who need to adapt to facilitate a more mature customer The growth of the - s will benefit the retailers where they already shop, but will also put pressure on other organisations to attract these customers

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Student Id: xxxxxxx

Strategic Marketing Management

PEST Analysis PEST Analysis stands for Political, Social, Economic and Technological analysis and provides a framework of external environmental factors influencing the organization s strategies. Table: PEST Analysis Politi al 1. In 2010, Coalition of Conservative and liberal democrat party under the leadership of avid Cameron came into power. 2. To fight the recession, Government has undertaken massive job cuts in public sector and various cuts in funds given to different sectors of economy. 3. EU is negotiating Free trade agreement with India. 4. Chinese and Indian economies have performed much better and had less impact of recession. 5. Policies of Increase in tuition fees of students and proposals to cut down the immigration of students from non Europe countries will impact the young consumers segment.

E onomy

1. UK suffered its worst recession in 2009 in over 60 years. 2. Consumer expenditure declined by 4.4 in 2009. 3. The economy of the UK is among least dependent in Europe of exports of goods, thus less vulnerable to the risk of external shocks from falling global Page | 11

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Student Id: xxxxxxx demands.

Strategic Marketing Management

4. evaluation of UK sterling in 2008 exporters.

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5. Between July 2008 and January 2009 the pound lost 32.0 of its value against the US dollar and 19.7 of its value against the Euro. 6. Youth unemployment (18-24-year-olds has risen from 17.2 in Q2 2009, compared to 12.5 in the same period of 2008. 7.Rising fuel and food prizes are squeezing the disposable income 1. UK has a multicultural model containing different races, ethnics and religions. 2. UK is among one of the most popular countries for immigration. Between 1998 and 2008, 1.5 million people were added to the population, two third of them are from Asia and Africa. 3. ue to ongoing recession and government s policies of job cuts in public sector unemployment has increased. 4. People prefer cheaper clothing s now, due to decrease in the income sources. 5. ue to recession, the adults have cut down their expenses and the maximum is on the clothing.

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Te hnologi al 1. Retailing methods are becoming more dependent on online shopping through internet.

2. Online market for fashion is extremely dynamic and so various companies are setting up online shops, for eg. Tesco (clothingattesco.com , Asda (George . 3.There are different modes of payment now :Online banking, irect debit cards, Credit cards 4. The management and services of the company are undertaken on IT systems, which are maintained on secured servers at distant location.

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Student Id: xxxxxxx

Strategic Marketing Management

Porter s five forces model helps the organisation to set a realistic objectives by assessing the external influences on the firm s behavior. Porter explains that there are five forces inherent in a market, which will jointly determine the intensity of competition and profitability of M&S.

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forc s Clothing is today one of the highly competitive industry. In the recession, the clothing sector has been hit maximum. There are already well established players present in the market, so it will be very difficult to sustain the competition. Consumers have become price and quality conscious due to economic turmoil, so it will not be easy to provide the clothing at lower prices and maintain profits as well for new entrant. So, in the current economic scenario, there s a low threat of new entrants. Due to highly competitive market, buyers today have various available options for marketing. They hold the highest bargaining power. The companies are devising there sales policies as per the buyers marketing trends and the social factors affecting the buyers. Clothing is necessity. There s no substitute for clothing .It can only gets advanced in near future Page | 13

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Student Id: xxxxxxx

Strategic Marketing Management with the use of highly quality textiles and the machines. But there is almost no threat perception of substitute products or services. The developing countries are the major suppliers of clothing industry. Textile industry is one of the major parts of revenue for these countries. For country like Bangladesh, textile industry constitutes for 80 of total export and this industry has highest employment numbers. There are other countries as well, like Pakistan, India, china, Cambodia, Haiti who has high stake in the textile industry and this in turn reduces the bargaining power of suppliers, as there are number of suppliers fighting which each other to increase their market share, which in turn leaves them with low bargaining powers. The clothing industry is one of the highly competitive industries. There are number of well established players present in the market and they keep trying to increase their market share through different sales and pricing techniques. In the current economic scenario, market has become more competitive which has resulted into aggressive pricing strategy. The companies offering low prices have started gaining the momentum.

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Student Id: xxxxxxx

Strategic Marketing Management

FIGURE 3: Selected retailers where the 18-25s buy clothes, May 2008 and July 2009 (% point difference vs all respondents) Base: 1,986 adults

Source: Mintel The companies like Primark have been able to increase their momentum in the economy by strategically planning their pricing. Su

The economic recession has not only made the clothing market more competitive but has alsoexerted pressure through various other factors to change the market trends and the social factors affecting the economy. Because of recession, the government policies are resulting into more job losses. There s a sharp increase in unemployment and the inflation is steadily moving up. All these factors have resulted in cut down of expenses by the consumers and clothing is hit maximum. As discussed under the PEST analysis, the Political, Social and Economical factors have made the clothing business very challenging. While the Porter s five forces further strengthened this notion by assessing the competition .As shown in figure 3,companies like Primark has been able to increase their momentum of sales because of their pricing, which in turn making the market more competitive in terms of pricing .

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ar of the external Audit

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Student Id: xxxxxxx

Strategic Marketing Management

3.2 Internal Marketin Audit
Internal marketing audit is a process of evaluating and assessing the internal factors of the organisation. It not only helps to identify the strengths and weaknesses of the organisation but also determines its competitive advantages. Internal audit focuses on some of the key areas which includes: current state of new product development ,evaluation of profitability of product portfolio, effectiveness of customer relationship management, effectiveness of customer facing processes, effectiveness and efficiency of distribution and finances are to name a few. Here, we have assessed the product life cycle and the product portfolio through PLC and BCG matrix. We have also used Porter s value chain analysis to audit the internal environment of the organization, because of difficulty in finding the accurate data; we have made assumptions as well. And in the end we have done the SWOT analysis to determine the strength, weakness, opportunity and threats. Market Data Figure 5. Marks and Spencer s Revenue and Share price

Source: http://www.telegraph.co.uk/finance/markets/questor/2819073/Questor -Join-MandSs-latestdrive.html As seen in the chart, 2005-2006 saw the drop in revenues of the company. While, in 2007 onwards company consolidated its position and picked up the growth in revenues and reached £ 9.26 m.

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Student Id: xxxxxxx

Strategic Marketing Management

Figure 6.

Source: http://liesdamnedliesstatistics.com/tag/market-share Marks and Spencer had consolidated its share in the online merchandise sales and is steadily growing. However, it has tough competition from established players in the market like Amazon.

Michael E. Porter s Value Chain Anal sis Michael Porter used Value chain term in his book Competitive Advantage: Creating and sustaining superior Performance (1985).Value chain analysis basically determines the activities within and around an organization, and relates them to an analysis of the competitive strength of the organization. In his value chain analysis, Porter has considered the organisation s activities in tow segments: Support activities and Primary activities. Primary activities are directly related with the creation and delivery of goods or services. It can be grouped in five main areas: Inbound Logistics, Operations, outbound Logistics, Marketing & Sales and Services. These Primary activities are connected with the Support activities to improve the efficiency of work. The four main areas of Support activities are: Infrastructure, Human Resource Management, Technology Development and Procurement. Diagram: The model of Porter s Value Chain Analysis is as follows:

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Student Id: xxxxxxx

Strategic Marketing Management

Source: www.12manage.com

Application of Porter s Value Chain Analysis on Marks & Spencer Primary Activities y y Inbound Logistics: M&S has outsourced its inbound activities to third party vendor. The vendor takes care of all the activities involved in transporting the shipments to various stores. Operations: Marks and Spencer has huge employee strength. Company regularly invests on the employee s development and training activities. Company has been investing to improve its infrastructure and the stores to further improve the company operations. Outbound Logistics: Marks and Spencer has not focused much on the distribution of merchandise to the consumers. They have not formulated policy for the outbound logistics and this is a department, where company should focus to improve the customer services. Marketing & Sales: M&S has always run advertisements in newspapers and magazines. It is highly aggressive in marketing. M&S has achieved a big consumer base and name because of its marketing and sales policies. They have heavily invested on print media and online advertisements. Service: Company has 76,000 employees at it s around 700 stores in UK and they have been able to maintain its service standards to a level. M&S maintains the quality of staff and the services it provides to the customers.

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Support Activities y Procurement: The fundamental principle of M&S procurement policy is flexibility and integrity. Company has its list of preferred contractors to carry out the construction project. They assess the suppliers routinely for the quality of the products and condition of the employees engaged in the work. Human Resource and Management: As per the 2010 report, M&S employs 76000 people. M&S has one of the lowest turnover rates in UK retail 14%.Around 46% of the employees are with M&S from past five years and 27% employees for more than 10 years. They offer competitive salaries, retirement plans in-store and online discounts, share save options and bonuses. M&S provides regular training to its employees and gives them opportunities for future career developments. Company also organizes regular seminars for its employees to help them plan their finances and explain the pay structure. Page | 18

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Student Id: xxxxxxx
y y

Strategic Marketing Management

Infrastructure: M&S has around 600 stores in UK and 300 stores worldwide operating in 40 territories. Technology evelopment: M&S has incorporated latest technologies to improve its business. It is one of the highly environment friendly organisation. As per the reports published in year 2010,by incorporating various technologies and techniques they have cut down their carbon emission by 8 and have reduced the waste send to landfill by 33 .Through their innovative techniques and technologies they have managed to achieve 19 energy efficiency at all their stores this year.

Figure 4: Markets share Summa y Ma s & Spen e Pl : Competitive Position 2008

Source:

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P odu t Life Cy le Model Product life cycle model helps to analyze the maturity stages of products and industries. This term was used for the first time by Theodore Levitt in 1965.Product life cycle model has significant impact on the oragnisations strategies and performances. It identifies the different stages affecting the sales of product from the time of introduction till retirement.

Source: www.12manage.com Applying the Product Life Cycle Analysis model to the Marks and Spencer s Clothing business, we can conclude that the Clothing business is still in the growth stage. Referring to the available data in figure 4 , the Clothing Business is further segregated in different sub sectors: Men s outerwear, Women s outerwear, children s wear, clothing accessories, underwear and nightwear and socks, stockings and tights. Though many of these subsectors are leading in the market but they still have lots of scope to grow. For example men s outerwear was no 1, in the market but it still had market share of only 8.34 . While if we see the other subsectors, they are still competiting with other companies to gain the number one position like children s wear and clothing accessories which has market share of less than 5 for the former and less than 3 for the later. Boston Consulting Group Matrix Boston consulting group matrix was created by Bruce Henderson for the Boston Consulting Group in 1968 to help organisations to analyse their product line. It helps the company to allocate resources and is used as an analytical tool in product management and portfolio analysis. Boston Consulting Group matrix has two dimensions: Market share and Market growth. This method tells that bigger the market share is or the fastest the market growth of product is the better it is for the organisation.

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Student Id: xxxxxxx

Strategic Marketing Management

Source: www.mindtools.com

As seen in the figure 4, Underwear and nightwear products have a high market share of 19.4 and comfortable enjoys number one slot in its segments. The profits and cash generations from this product is quite high and it does not need high investment. While, Men s outerwear, Women s outerwear and Socks, stockings and tights have around 9 of market share but they are leading the segment and have shown good market growth. But the products Children s wear and clothing accessories have very low market share and they are at fourth spot. Placing these products into BCG matrix, the Marks and Spencer s Product portfolio is as follows: y y y Cash Cows: Underwear and nightwear products, as these enjoy high market share and is bringing high revenues to the organisation without any requirement of extra investment. Stars: Men outerwear, Women s outerwear and Socks, Stockings and tights are the star products of the company, as they are leading the segment with a promising market growth rate. Dogs: Children s Wear and Clothing accessories have low market share and have been poor performers with respect to other products of M&S s portfolio.

After Conducting the PEST Analysis, And Porter s five forces we analyzed the external environment, which can impact the business of the Marks and Spencer. While by using the Porter s value chain model we evaluated the internal environment.

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Y

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Student Id: xxxxxxx SWOT Analysis

Strategic Marketing Management

SWOT analysis is a tool for auditing an organisation and its environment. It helps to determine the core strengths of the organisation and the weaknesses it has which needs to be focused upon .It is the first stage of planning and helps the management to focus on the key areas. The SWOT stands for: Strength, Weakness, Opportunities and Threats. The Strength and weakness of the organisation are determined by the internal audit while the threats and opportunities are related with the external environment. Strengths 1. Marks and Spencer date back to 1884.It is a brand name in UK. They provide excellent and quality products. 2. Marks & Spencer continues to be a leading retailer of clothing and footwear in the UK. 3. M&S has a diversified business ranging from Clothing Merchandise to Foods Retail. 4. M&S has maintained growth in the new online business of clothing and is one of the fastest growing businesses. 5. M&S has employee strength of around 76,000 and has around 700 stores in UK and 300 stores worldwide at 40 different locations giving it an international brand name. M&S has healthy relationship with its employees and it pays competitive salaries as per the market. 6. Marks and Spencer regularly updates and upgrades its technologies to keep sync with the current technologies. 7. M&S is highly environment friendly and has heavily invested in achieving zero carbon emission. 8.Marks and Spencer has presences in almost every part of UK and they have strong Supply chain management services. Wea ness 1. Marks and Spencer has failed to compete with the companies providing goods at lower rates. 2. M&S has not been able to re-engineer its policies in the economic turmoil, leading to loss in market share. 3. They have failed to keep up with the fashion trends of the market. 4. Company has failed to attract young customers. 5.Marketing strategy has not done to change the image of Marks and Spencer, which is perceived as Brand for Mature customers between the age group of 35 -45.

Opportunity

Threat Page | 22

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Student Id: xxxxxxx

Strategic Marketing Management 1. Companies like Primark and Asda, who are providing goods at cheaper rate, are eating the market share of Marks and Spencer. 2. Being a big retail company, it will be very difficult to done strategic changes at organizational levels in terms of pricing, which can further reduce the profit margin. 3. The increasing inflation in the developing countries and the improvement in the living standards have led to possibility of increase in wages of workers working for suppliers. 4. Increase in fuel cost may further lead to decrease in the operating costs. 5. Expansion into international has not been very successful for M&S. 6. Clothing industry is mature and market is still not saturated, while the customers are continuously looking for new fashionable trends.

1. The online marketing business has a great potential of growth and M&S need to tap this opportunity. 2. Current recession has presented M&S s management a situation to rethink on its marketing and sales strategy and formulate new strategies to cope up with the future economic issues. 3. Marks and Spencer should venture into alliances and collaborations with the company s of developing markets to tap the opportunities available there. 4.India,China and brazil had not serious impact of recession, so M&S should start focusing on these countries as these are growing economies and also account for biggest customer base, where company has less presence

Summary of Internal Audit
The clothing industry is Mature but not yet saturated. And so in the PLC analysis, the product has been put in the Growth stage. The Marks and Spencer is a leading retailer and because of its brand name and established infrastructure. The area where they need to focus more on is to follow the fashion trends in more aggressive manner and devise strategic marketing and sales technique to achieve the set objectives.

4. Possible Strategi Marketing Options
Strategy Development Model (Ansoff matrix) Igor Ansoff created the Product/Market diagram in 1957 as a technique to classify the options for business expansion. Ansoff matrix helps oragnisations in analysing and planning the marketing strategies to meet the customer needs and expectations. It allows management to consider strategies to expand the business via current and/or new products, in current and/or new markets - there are four possible product/market combinations. This matrix helps oragnisations decide what course of action should be taken in given current performance.

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Student Id: xxxxxxx

Strategic Marketing Management

Source: www.anythingresearch.com Following the current economic scenario, the strategies which should be undertaken by Marks and Spencer management to outline the alternative methods to achieve the growth , are: y Market Penetration: Focusing on the existing products in the existing market and consolidating its sales and growth within the present market. The various penetration strategies which should be considered are: Attract the new customers who are occasional buyers and are just testing waters . These customers should be targeted. - Attacking Competitors Sales, as clothing market is mature and highly competitive. To increase the sales, company will have to target the competitor s customers. This strategy can be achieved by adjustment of marketing mix, by altering one or more elements like, price or promotion techniques. - Increasing the consumption by current Customers, this strategy can be achieved by devising some policy to give special benefits and discounts to the regular customers. Market Development: Marks and Spencer is already present in the global market. It has around 300 stores in 40 different locations. By locating new markets where the customers can have chose from the existing products of the company. M&S can not focus only on one market to survive in the business. it will have to look for new regions and markets where it can sell its existing products to further consolidate its position in the market. Diversification: M&S needs to diversify its business strategies by entering into new markets with new products. The new products should be as per the local market it has entered to do the business. Company can t survive in new market by focusing only on its existing products. It needs to customize and develop new products as per the requirements of the new customers. For example when McDonalds entered into developing countries it customized its burgers as per the local tastes. It wasn t selling the burgers which it sold in western countries. -

y

y

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Student Id: xxxxxxx

Strategic Marketing Management

y

Product Development: By bringing new range of clothing targeting the existing customers, profitability can surely be increased. The one area where M&S really needs to work upon on this step. It needs to have clothing ranges and should be with current fashion trends.

Porter s Generi Strategies Porter explained a category scheme which consists of three general types of strategies that are often used by businesses to achieve and maintain competitive advantage. These three generic strategies are defined along two dimensions: strategic scope and strategic strength. Strategic scope is a demand-side dimension and looks at the size and composition of the market organisation intend to focus. While, Strategic strength is a supply-side dimension and looks at the strength or core competency of the organisation. Porter identified two competencies that he felt were most important: product differentiation and product cost. Figure: Porter generic strategies

Considering porter s generic strategies in Marks and Spencer s case, the following options are concluded:
y

Differentiation Strategy: Marks and Spencer needs to focus on sustaining its edge competitive edge over other competitors by maintaining its quality and improving the services. Company should focus on providing the best services t its customers. For example having enough change rooms and fitting sections, having different ranges and variety of products with the best quality to meet the need of all the customers. By having fashion stylists and specialists for different section of merchandise, who can suggest and guide the customers, who in turn will make the customers experience better. By having enough number of well trained and motivated staffs at the store, M&S will be able to serve customers in better way and will maintain its edge over other competitors. Uniqueness competency should not only be maintained in product quality Page | 25

a

Student Id: xxxxxxx

Strategic Marketing Management

but should also be maintained in the services and store infrastructure and the overall experience which customers get at company s stores.

y

Segmentation Strategy: M&S needs to formulate segmentation strategy to target on specific group of customers, based on culture and age group. Company has been seen more as stores for mature and people in the age group of 35 -54, with its prominent grey and black shades of merchandise. Company should start focusing on its marketing and sales strategies to target youths. With globalization and because of free society in UK, the non British populations forms a major part of customers, which is still being untapped by the company. M&S should target this segment based on different cultures and countries.

y

Cost Leadership: Having cost competency is always fruitful in increasing the market share of the company, but it can t be taken as a long term strategy. It may reap fruits in short term but it will further decrease either profit margin or the competitive edge of the organisation. Marks and Spencer should not fail because of cost of its products as it does play a role, but it should also maintain the quality and competitive edge over its competitors.

4.1 Option 1 _Market Penetration Strategy

Table 1: Market Penetration Strategy Strategy Option Marks and Spencer is though the leading retailer in the UK market, but as per the data available, the various clothing subsections were having market shares in one digit only. There is a high growth opportunity and company need to plan focused marketing and sales strategies to penetrate further in the current market. M&S should concentrate on consolidating its position by following better Market Penetration Strategy. By focusing on the current market segments like, Underwear and linger, Children s wear, Men s outer wear and Clothing merchandise in which M&S is already competiting, company will not only be able to make its position strong but will be also raise its market share. The estimated outcome is that the M&S will be able to penetrate further into the market and will consolidate its position in different subsectors of clothing and will be able to achieve nearly 10 of market share. The major concern though is the current economic recession and the high competition from the companies like Asda, Primark and Next who has been able to increase their market share by lowering the prices. To overcome this issue, the company needs to maintain its competitive edge and make the customers feel that, the products they are buying are worth every penny. And as explain above, M&S can handle this issue by maintaining uniqueness competency.

Probable Out ome

c

b

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Student Id: xxxxxxx

Strategic Marketing Management 1. Market is well known to the company, so company need not to invest extra to understand and study the customers and the infrastructure required. 2. Customers already know the brand name of M&S, so it will save time and revenue spend in marketing and advertisements. 3. Company already handling these customers so they know very well about their expectations and henceforth can formulate strategies to cater their needs and fulfill their expectations.

Advantages

Disadvantages

1. Customers are well aware about the company s brands and services and they already have a image of the company, which is very difficult to change. 2. The market is very mature and the competition is very high, companies offering the low prices are gaining the market share, and if M&S follows the same suit, it will decrease its profit margin. 3. Being a big organisation it s not easy to bring strategic changes and decide the policies at the ground level of the organisation.

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Student Id: xxxxxxx 4.2 Option 2_Ni he Strategy

Strategic Marketing Management

Table 2: Ni he Strategy Strategy Option Creating Niche business strategy is basically to target specific set of customers who share common characteristics. Marks and Spencer should form a strategy to target immigrant population from Asia aged above 40+. As the youths tend to adjust themselves according the latest fashion and trends, the adult and the mature people likes to stick to their roots and fashion. The major Asian population here is from Indian subcontinent and they come from almost same culture so targeting them will be beneficial. By entering into this market company can strengthened its position on men s outerwear and women s outerwear which can grow upto 8 of market share in the span of 3 years. The area of concern for M&S is, that company will have to change its strategy to focus only on the western population. It s basically an issue with the mindset of the management. This can be overcome, by good communication strategy and by educating them about the benefits of this strategy and by bringing them in confidence. 1. Targetting a niche market means that only a sizeable amount of customers are being targeted and hence capital investment is less. 2. As the niche market being targeted shares common characteristics and culture so it is easier to achieve growth in this segment once company is able to penetrate the market. 3. Being one of the most famous brands in UK, it is easier for the company to convince the customers about the quality and the services provided by the company.

Advantages

Disadvantages

1. Targetting a niche market is always considered as a risky strategy, because company is focusing into totally new segment which it has no experience of. 2. Focussing on a specific market means, revenues are being diverted to focus on a different unknown market and in the case of failure or if the expected results are not achieved then it can really be cause of trouble. 3. Without proper study and analysis of this market, it is very difficult to penetrate it, which means company need to spend considerable time and resources to gather the data related.

f

Probable Out ome

d

e

e

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Student Id: xxxxxxx

Strategic Marketing Management

5. Re ommendation
On evaluating the probable strategies ,by considering the Ansoff Model,Porter generic strategy,Penetration Strategy and Niche strategy, we can suggest that the best suitable strategy for Marks and Spencer would be to maintain its Comptetive edge and focus on the Market penetration strategy.Being a brand name, it is already well known in the market so, it is not facing new customers, hence it is easier for the company to focus on this market as it already has a presence and it knows well about the trends and culture prevalent in the market.While, keeping the experience of recession and the maturity of clothing industry of uk ,marks and spencer should also need to venture into the gorwing economies like India,Brazil and China.Company should consolidatde its position as these are countries with fastest growing economies and the buying capacity of consumers have increased .They are also the countries with the largets customer base.To conclude, the recommended marketing strategie for Marks and spencer for the next three years should be Penetration Strategy and the Diversification Strategy.

Refren es
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y y y y y y y y y

Marks and Spencer official website. (2010 .[Online],Available at http://www.marksandspencer.com/ (Accessed:12 Dec 2010 marketingteacher.com.(2010 .Marketing Audit. [Online] , Available at http://marketingteacher.com/lesson-store/lesson-marketing-audit.html (Accessed: 10 Dec 2010 themanager.com.(2010 .valuechain .[Online],Available at Source: http://www.themanager.org/models/valuechain.htm (Accessed: 8 Dec 2010 smallbusiness-marketing-plans.com.(2010 .Marketing niche strategy .[Online],Available at http://www.smallbusiness-marketing-plans.com/marketing-niche-strategy.html (Accessed 8 Nov 2010 answers.com.(2010 .Market penetration.[Online],Available at http://www.answers.com/topic/market-penetration-2 (Accessed:5 Nov 2010 Malcolm McDonald . (2005 Marketing Plans 5th Edn .Burlington:Elsevier Philip Kotler,Kevin Lane Keller.(2006 .Marketing management.12th Edn.New jersey:Pearson,Prentice Hall Mintel .(2010 [Online].Available at http://academic.mintel.com/sinatra/oxygen_academic/my_reports/ (Accessed:12 Nov 2010 Euromonitor.2010[Online].Available at http://www.portal.euromonitor.com/Portal/Magazines/Welcome.aspx(Accessed:12 Nov 2010 Themanager.com.(2010 .porters five forces.[Online],Available at http://www.themanager.org/models/p5f.htm (Accessed:8 Nov 2010 Valubasedmanagement.net .(2010 .BCG Matrix.[Online],Available at http://www.valuebasedmanagement.net/methods_bcgmatrix.html (Accessed 17 Nov 2010 Armstrong&kotler.(2006 .Marketing an introduction.8th edn.New jersey:Pearson,Prentice Hall Angela hatton.(2000 .the definitive guide to marketing planning.1st edn.Glasgow:FT Prentice Hall Page | 29

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Geoffrey Randall .(1997 .Principles of Marketing.1st Edn.Italy:Thomas business press Philip Kotler,K.L.Keller,Mairead Brady,M. goodman,T.Hansen .(2009 .Marketing Management.1st Edn.Essex:Pearson One

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