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A Marketing Analysis of Marks and Spencer

Module Tutor: Dr. G. Fahad Module: MKT4000 Managing The Marketing Interfaces

2..2 3..2.1.......1.2........1..1.2.3 3..2 2.....4 3 3...1.1 2....Pei-Sui Sung (Betty Sung) I-Cheng Chang (Erica Chang) Yiduo Zhang (Amy Zhang) Ling Huang (Karen Huang) Yan Yu (Vivian Yu) 20 November 2002 CONTENT EXECUTIVE SUMMARY 1 2 2........1 3.1 2.4 2.2..2 INTRODUCTION MACRO-ENVIRONMENT AND MICRO-ENVIRONMENT MACRO-ENVIRONMENT Political and Legal Economic Social Technological MICRO-ENVIRONMENT Suppliers Distributors Customers Competitors SWOT Analysis STRENGTHS High Quality Customer Services Shopping Environement Manager Training WEAKNESS Clothing Lack Segmentation Stock Control.4 3.2 3... .....2......1....1.3 2..1 2.....2 2......1.3 2............1 3.2 2................1 3........

2 3.1 3.3.2. and serve consumers effectively.4. and modifies its business strategies. M&S needs to revise its marketing segmentation.4. The purpose of this report is to evaluate how M&S survives in the changeable market. it causes some disadvantages. By analysing current business situation.3 4 5 6 7 Waste Store Spaces OPPORTUNITIES Internet Technology Healthy Eating Marketing Extending THREATS Strong Competitors The Change of Social Environment Chemical Pollution CONCLUSION RECOMMENDATION BIBLIOGRAPHY APPENDICES EXECUTIVE SUMMARY This report critically analyses the impact of external and internal influences on the business strategies of Marks and Spencer (M&S) between 1996 and 2002.3 3.and micro-environment affect M&S to make its marketing plans and investigates the strengths.1 3. 1 INTRODUCTION . evaluates the factors. weaknesses.3. The major finding is that M&S has successful business strategies and marketing plans. Moreover.3. Indeed.2 3. its concludes how macro.3 3. opportunities and threats of M&S.4 3. However.4. divide its products into different target markets. the company does not maintain these advantages continuously.3 3.3.

North America and Asia. M&S has claimed: “[it] launched an incentive scheme where stores can keep the value of 10% of any savings the make over and above [it] budges” (Marks & Spencer. legal. consider ecological environment and human’s life. 2002b). and supplied subsidies to improve its policies (Marks & Spencer. Secondly. “Some 1 2 . footwear. 2 MACRO-ENVIRONMENT AND MICRO-ENVIRONMENT 2. which spreads through Europe. it uses the SWOT chart to analyse the four aspects of its business. such as World Health Organization. This report includes three parts. This scheme helps M&S saving around 5% of its energy saving (Marks & Spencer. 2002a). while they make marketing plans. it analyses the macro-environment and micro-environment of M&S. it draws a conclusion about the whole analysis and gives the recommendations of M&S’s future.1 Political and Legal It is important for companies to follow government policies and global organisation systems. gene technologies have increased substantially. such as energy saving policy and genetically modified food control. 2002a). such as ‘Climate Change Levy’1[1] and ‘Green Tax’2[2] on energy use to reduce CO2 by 2010 by 20% against 1990 levels. Governments set up policies and organisations to monitor firms and their products. Finally. 2002a). gifts. social and technological factors. In recent years. It sales clothing. However.M&S is an international company. especially in the developed countries. The UK government has introduced energy saving organizations.1. These factors use to analyse how macro-environment affects M&S to make their marketing decesions. 2. and food (Marks & Spencer. Firstly. Governments. some of these technologies may cause natural environment pollution and endanger human’s health. house appliances. Some of these technologies have used to produce food. economic.1 Macro-Environment The broad external factors that indirectly impact upon an organisation are consist of political.

2002b).6 million pounds between 2001 and 2002 from its international retailers (Marks & Spencer. and retailers were seeing sales decreases (BBC News. it may cause M&S to lose its sale to competitors (Jobber. modern. M&S has closed its loss-making operations in Continental Europea and sold its non-core business in North America (Marks & Spencer.European supermarkets are moving towards selling only meat from animals produced fed on non-GM feeds. Another social factor is that credit card acceptance has increased more than 10% of all trade (BBC News. and sale their non-core business. In fact. although it has high quality goods. M&S has allowed its customers to pay by credit cards from 18 April 2000 to contend with its compatitors who have accepted credit cards for a long time (BBC News. 2000). 2.1.1. 2002b). It caused consumers to change their purchasing habits. M&S keeps with the latest style and colour. 2000). people purchase fashionable clothing and use credit cards to satisfy their needs. and convenient. M&S also announced that it supplied all non-GM foods on its shelves (BBC News. The 11th September accident in USA caused economical crisis in North America and other countries. For example. People want to feel special. M&S lost its profits around 8.3 Social The requirements of consumers are changeable. such as close loss-making operations. the 11th September 2001 accident in USA has caused many companies to face the recessions in North America and European countries. 1999). This is building on moves by many retailers in the UK to go non-GM” (Meat & Livestock Australia.2 Economic Economic factors have affected companies to extend their business or retrench its business. 2001). 2001). Hence. especially in clothing market. . 2. M&S does not consider with customer needs. 1999).

most stores in the UK and Western Europe were running a trial of the EPOS (Electronic Point Of Sale)3[3] systems. M&S did not control its online shop and EPOS system effectively. Therefore. and competitors (Kotler and Armstrong. M&S has invested its information technology. M&S has also used this system to drive sales. and databases to help them to increase their sales from online customers. 2001: 78-79).4 Technological At the present time. and most companies has built their own websites. increase customer service. marketing managers not only pay attention to the needs of target market. 1997: 204). Therefore. They collect information and analyse their customers to know their customers’ needs and wants. In addition. it may cause suppliers to raise the cost of materials. 3 . M&S needs to consider the issue. who use its online shop. its website could not show its stocks immediately.2.2. Actually. still feel inconvenient.2 Micro-Environment The task of marketing management is to attract customers and establish good relationship with customers by creating the worth and satisfaction of customers. Customers. but also need to realize the effect on microenvironment that are suppliers. 2. 2001). Suppliers supply necessary resources to companies for producing products or services. the development of suppliers may bring enormous influence to the company (Kotler and Armstrong. It is a right policy that M&S values suppliers for maintaining its business. and improve its efficiency (Yorwerth.1 Suppliers M&S has not only established good relationship and reciprocal profit with suppliers but also maintained long-term partnerships to cooperate with suppliers (Wilson and Gilligan. customers. However. 2. online shops. 2001: 78). distributors. However.1. information technology changes fast. such as online shop in 1999. Nevertheless.

2002).2. M&S does not control the stock on popular selling clothing (Jobber. M&S believes that precise quality controls must persist forever (Macrae.2. “New brand and product development over the last ten years in fast-moving consumer goods sectors in the UK is that many of the most original and successful initiatives have been taken not by manufacturers but by retailers” (Textile Outlook International. M&S ensured that all its food products were non-GM foods (Marks & Spencer. M&S realises this main attribute and provides good services and high quality products to customers for raising the customer loyalty. it can turn to another supplier (Robert. Nevertheless. In 1999. However.M&S has built a good reputation for supplier management.2 Distributors M&S is the largest and the leading variety store retailer in the UK (Textile Outlook International. Customers cannot purchase products that they really want. 2002). If a supplier refuses to supply materials to M&S. 2. This is a very significant even for retailers’ change. Companies should understand that customer satisfaction is more important than product sale4[4]. 2002). This company always considers customers’ concern and tries to provide the best quality or services to customers. 2002a). “ ‘own labeling’ of over 30% of stores’ lines is 4 .3 Customers M&S believes that customers are the most important element of consideration and understands that customers are very important for its origination (Stokes. M&S has changed the marketing structure from manufacturers to retailers and inspired other major retailers to follow. The company has this advantage that can supply it with an unfailing supply of materials. 1996: 394). Consumers perceive that all St Michael products are in good quality standards (Macrae. M&S has controlled this matter. 2. 1996:394). 1997: 57). If suppliers can not supply materials to the company immediately. 2001: 149). This situation needs to be handled and improved. customer loyalty may be reduced by lack of products.

M&S has its own market testing and exercise tight quality control (Hart and Murphy. M&S realized this matter and tried to avoid this impression. Sainsbury and Tesco that are the competitors for M&S focus its business on the quality.1 SWOT analysis chart Internal Strengths     High Quality Customer Services Shopping Environement Manager Training External Opportunities    Internet Technology Health Eating Marketing Extending Weaknesses  Clothing Lack Threats   Strong Competitor Changeable Social Segmentation .2.4 Competitors M&S focuses its business on the quality and service. Sainsbury and Tesco not only emphasize the quality but establish their stores universally. M&S has some competitive advantages that are over one hundred years in business. however. M&S has done this great. 2. recognizable brand name. 1996: 394). 2002). The quality and service can keep customers’ loyalty. M&S needs to improve this disadvantage certainly. 1997: 302). In particular. they do not want to be confined their lifestyle by ‘own labeling’. breadth of range (Wilson and Gilligan. and good supplier relationship (Robert. 3 SWOT Analysis Figure 3.often perceived by consumers as restricting their lifestyles” (Macrae. A company not only satisfies the needs of customers but considers strategies of competitors in the same target market. Consumers prefer good quality of products. convenience. Unfortunately. 1998: 7).

customers do not worry about being drowned in many shelves and avoiding multitudinous people.2 Weakness 3. when women want to buy underwears for themselves. Customers always find high quality goods such as fresh fruits. especially ladies outerwear.1 Clothing Lack Segmentation The clothing market of M&S has many segments.4 Manager Training One of M&S’s strengths is its strict and excellent manager training system (Retail Technology. M&S grasps the consumers’ need. managers of M&S are arranged practice of every post.  Stock Control Waste Store Spaces Environment  Chemical Pollution 3.3 Shopping Environement M&S tries to make customers feel more convenient and comfortable. 2001). M&S has high quality of products that are the food and other products. 1999).1 Strengths 3. With many people turnning to eat vegetarian meals. 2002). In fact. the shop assistants will help them to measure sizes and give them good suggestions.2. the merchanclise. In fact.2 Customer Services M&S has high reputation for focusing on customer service. and uses modern designs (Rungfapaisarn.1. 3.1. All goods in the shop can be seen immediately. such as baby products and women’s underwear.1 High Quality High quality is the major strength that makes M&S successful. 3. For example. In addition. This is one of the most important methods to make a good relationship between customers and M&S.1. Every manager of M&S must be familiar with duty of every post. It makes stores brighter. 3. affluent . (Christie. Furthermore. is outmoded design and cut. 2002). vegetables.1. 3. and other superior goods in M&S’s food hall (Ciao. It helps them to improve both work experiences and management skills.

3. buying products online became a new trend. 3. such as Gap.1 Internet Technology Internet technology has developed fast. low fat or organic food. 2000). People pay attention to the life quality. Customers are getting used to accept the model and adapt it to their daily lives. but its market share in clothing has not increased (Stewart.3. Customers complain the defect of e-shooping and delivery services. 3.2. Next and Topshop (Jobber. In fact. 2002d). In the future. 2002). they request companies to offer varied products to satisfy their needs.2 Healthy Eating Healthy eating offers an opportunity that the demand of specific food will be increased (Leyshon. In terms of this circumstance. 3.younger consumers prefer purchasing brand-labels. M&S does good segmentation in providing the vegetarian.2 Stock Control “The non-performance of the home delivery/shopping service even sometimes involves wedding lists. 3. it has added 75 percent of square footage since the early Eighties. in the food market. it offers an opportunity to increase the demand for the online products (Zakon.3 Opportunities 3. For example. This is the advantage that the competitors have not aware of it. To some extent. the company will expand its business beyond the existing area. Customers were told that items were out of stock” (Jobber.2. .3.3 Marketing Extending The Company owned stores in the Republic of Ireland and Hong Kong and has 131 franchise stores in 28 countries operating through a network of successful partnerships (Marks & Spencer. 2001: 149). 2001: 149). and the demand for this kind of products would be increased in the future. M&S suffers from the unbalance between the stock and Information Technology System.3 Waste Store Spaces Another problem is that M&S has many store spaces. M&S needs to find some new products to stuff its extra spaces. 1999). 3.

4. such as eating. M&S will be influenced by social environment. opportunities and weaknesses. Since the social environment changes at any time. the customers’ tastes are also changed. M&S is influenced by the factors of ecnomic. In the clothing market. it still occurs some threats from itself and other competitors. Moreover. Gap.4. They provide not only high quality but also value-added products to build customers’ loyalty. 2002). Next.3 Chemical Pollution Environment pollution is a threat for M&S.1 Strong Competitors Strong competitors are the most threat to M&S. 3. M&S obeys the government’s policies and protects the natural environment. 2002). M&S is a successful company. . For example. 2001).4 Threats Although M&S has its own strengths. Topshop and other fashionable brands may compete with M&S (M&S shuts. in micro-environment. For example. Governments are taking measures to protect natural environment and reduce pollution. M&S can adjust its products to satisfy different needs. 3.4. people move to other countries. In macro-environment. there are four main supermarkets.3. On the other hand. such as Tesco. and dressing. “ Every one of the 30. 4 CONCLUSION In conclution. and technological to make its business strategies. Safeway and Sainsbury (Ocr. 3. in the food market.000 product line that M&S sells is dependent on chemicals” (Friend of the Earth. Asda. An environmental systems manager of M&S claimed. This potential risk will affect its development of M&S in the future. and their culture will affect the local people’s lifestyles. social. the M&S has created a good and long-term relationship with the suppliers and customers.2 The Change of Social Environment Except other competitors.

To sum up. change clothing’s style and cut. M&S should change its design . and increase its potential market share. The significant strategies of M&S are creating potential customers and maintaining the existing customers.For women. the main disadvatage is the lack of clothing market segmentation that causes M&S to lose its brand awareness among the existing customers. 5 RECOMMENDATION M&S is a successful multinational corporation. M&S should consider the global economic environment. M&S should focus its target group on mid-age and mid-class. However. M&S has won a large amount of loyal consumers. Above all. For young consumers. overcome its weakness forces as well as turn these two factors into opportunities.From the SWOT analysis. adding bright color. . Depending on its high quality. On the other hand. It will help M&S find problems immediately and supply products timely. In addition. especially in clothing market. Women do not like M&S’s clothing from design to color and young consumers prefer fashionable design. M&S should revise its marketing segmentation. The recent economic recession causes M&S’s sales delining. M&S should enhance stock management. the analysis of M&S has found that its business structures follow the trend of society. M&S has advanced information technology system. Their income can afford the high price of M&S. Facing different target markets. M&S should develop its strength forces. The main advatage is its high qualiy that uses to build customers’ loyaty. good service. which will help M&S maintain its market position. This segmentation may satisfy people’s different needs. this system can combine with its stock management effectively. improve design to show M&S’s own personality. Except changing its own business strategies. keep the position in the market. due to a wide range product. comfortable shopping environment and convenient access. the most important factor for M&S is to satisfy customers’ needs.

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A.co. Both the above products are can be directly connected to your Sage Line 50 accounting software.thisisthelakedistrict. Available from: http://www.textilenet.html). Available from: http://www.siamfuture. (2002). and the Re-Scan Bar-coding and EPOS/Stock control systems from LYNX Geosystems(UK) Ltd.asp?tid=603 [Accessed 13th October 2002]. (2000). • Appendix B Green Tax: Shifting taxes away from human initiative and onto monopolization of natural resources.html [Accessed 9th October 2002].com/).cclevy.org.cadsnet.progress. • Appendix D Customer Products And Services Improved products And Services . 7 APPENDICES • Appendix A Climate Change Levy: The Climate Change Levy is a tax on energy. ‘Marks and Spencer’. • Appendix C EPOS System: Electronic point of sal system.org/banneker/shift. [online].tw/citis/leader/uk/4. Marks and Spencer facing its toughest battle. The Beetle/Reckoning System . further increasing the productivity and accuracy of your accounting (Source: http://www.from: http://www. It will be applied to most industrial use of energy from 1st April 2001 (Source: http://www. [online].uk/money/in_the_city/NEWS0.uk/epos_systems. ○ Textile Outlook International.htm).co.com/ThaiNews/ThNewsTxt. ○ Stewart. pollution and government-granted privileges instead (Source: http://www.html [Accessed 13th October 2002].

1997: 5 Figure 2.Feedback Feedback Needs Modified Needs Source: Stokes.1 Illustrates this process of customer satisfaction. .

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