I.

INTRODUCTION 

Marks and Spencer or M&S is a major British multinational retailer which

spreads through Europe, North America and Asia. It brings quality, great value food,
clothing and home ware to millions of customers around the world. The company started
in 1884 by Michael Marks and Thomas Spencer in the Leeds market. The core values of
M&S are quality, affordability and service. With nearly 300 stores in the United
Kingdom, it is the country’s largest retailer and holds 17% of the United Kingdoms’
clothing market. In 1998, the M&S was the first British retailer to make a pre-tax profit
of over 1 billion Euro but subsequently there was a decline in the sales and the overall
performance of the company. In recent years, the company’s clothing sales have fallen
down while its food sales have increased. This case study aims to discuss the main factors
affecting the demand for M&S products and to analyze the weaknesses and threats on the
demand side of M&S involving controllable and uncontrollable factors. 

II. FACTORS AFFECTING THE DEMAND FOR M&S PRODUCTS

 Advertising

The level of advertising is one of the factors that affects the demand of any
business because it provides consumers with information about the existence of a product
and its features, which in turn encourages more consumers to consume it. As much as it
helps introduce a product to the market, in the long run, it is also a factor that can alter
consumer preferences. In M&S case, their first-ever television advertisement received
negative feedbacks. This caused a huge blow on the image and credibility of the company
and created doubts about the brand. M&S also failed to uphold the branding they
established as stated by their core values. They are known for quality product at a
desirable price, however, it has flopped in that area as complaints in overcharging and
poor quality products arose. Branding is also part of the marketing matrix of businesses
that is why the inconsistence of M&S’ branding and service caused them to flunked.

 Outdated Business Model

 While other competitors constantly strive for innovations, M&S continued with
their outdated business model. They failed to progress just like the other companies
because of the lack of judgment as to what they should do to help their companies. They
followed their own preferences without considering what their target consumers need and
want. M&S must adapt with the current trend and explore new opportunities that can help
develop the company rather than being rigid in their management approach.  

 Social factors

One of the main factors that affected M&S demand is social factors. There are
many considerations under this factor such as trends, customer preferences, and
demographics among others. The main problem on this area is that the company was not
able to master the changes in the market.

Trends

The clothing industry evolves over time as new styles emerge because of
innovations. Entities must always have a good track in this matter because this is
the primary basis of most consumers for their purchasing decisions. M&S did not
consider the changing societal trends around that drastically affected their
demand. Not only in clothing fashion but also in manner of marketing, M&S
lacked monitoring on what are the new matters and timely techniques to be
utilized in the market.

Consumer tastes and preferences

Just like how they missed the changing trends, the same thing happened
with the company’s failure to react to the change in the consumers’ tastes and
preferences. As M&S shops look like a hangover from a bygone era dwelling on
the usual styles of the past, the older age group customers, from following how
their parents dress, have now gotten into trying the fashion of the youngsters.
With this gap, the company was not able to meet and satisfy what the customers
prefer and led to demand decline.
 Demographics

The company did not realize the importance of knowing the demographics
of their market. They failed to collect data that can be beneficial in understanding
the preferences of their customers. Studying the population based on factors such
as age, employment, education, and income could have been a stable founding
reference on deciding how they would produce and introduce their product in the
market in a way that could benefit them the most. They should have foreseen the
customers behavior if they have given importance to the demographics of their
customers. Another thing is M&S did not consider that their consumers are
mostly on the age of over 45. Even though the product they offer are for these
people in this age bracket, these individuals are less likely to spend on clothes.
Basically, with the changing demographics, M&S should have reacted on this and
tried to strategize on how to attract consumers who are likely to spend on the
products they offer.

 Substitute Products
The availability of substitute products made it more difficult for the company to
get back on track after series of bad judgments and decisions because it gave the
customers variety of choices and made them easier to change from one brand to another.
The presence of substitutes on clothes and food that M&S offers increased the buying
power of the customers. The customers chooses other products that are cheaper and of
good quality that can give them the highest satisfaction.
 Competitors
As the industry has low barrier of entry, threat of new entrants is high. The
presence of strong competitors greatly affects the demand of the M&S products may it be
clothes or food. The strong competition in the market along with the late progress of the
company to adapt on new trend and business methods had a huge impact in the products’
demand.

 RELUCTANCE TO PART FROM LONG-TIME PRACTICE

 As the time passes and change is constant, many stores have upgraded, renovated
and developed their ways and business; however this can't be said with M&S. While
other stores--which includes its competitors are adapting to changing business ways,
M&S clung to its ‘Buy British’ policy which is good in a way but not for the business as
the trend seems to shift with other styles. Another scenario is when the company held out
the use of credit cards for more than 20 years and launched its own store card instead.
This showed how reluctant M&S is from straying away from their long-time practices
that their business, the demand of the company is being compromised.