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International Marketing Plan for Marks and Spencer Terms of Reference Date: November 2012 Prepared for: Shareholders of Marks and Spencer Plc Prepared by: Marketing Consultant Background Marks and Spencer intends to expand its operations to the emerging market. The activities involve the opening of new stores in Georgia with the objective of achieving growth and creating more value for its shareholders. As part of the expansion project, the Shareholders of Marks and Spencer have requested an International Marketing Plan from the Marketing Consultant of the Company. This terms of reference (TOR) outlines the objective, situation analysis, products associated with the preparation of the international marketing plan. Objectives of the Marketing Plan The objective of the marketing plan is to conduct a situation analysis and customer analysis. Understand the corporate objectives and strategies as well as the target market. In addition, the objective is to design an entry mode as well as a marketing action plan focusing on the four Ps including product, price, place and promotion. Parties involved in the Preparation of the Marketing Plan The only Party involved in preparing the marketing plan is the Marketing Consultant of the Marks and Spencer. Method of Preparation The Marketing Plan will be prepared by using the following information: Review of the company and Background information of Marks and Spencer -Analysis of the Customers of Marks and Spencer -Analysis of the External Environment of Marks and Spencer -Analysis of the Corporate Strategy and Objectives of Marks and Spencer -Analysis of the Products and Services offered by Marks and Spencer. Marks and Spencer is a renowned company that operates in the retail industry. The company operates in about 40 companies across the globe. The company specialises in the retail of clothing and food items as well as apparel equipment. (Marks and Spencer, 2012). Its unique selling point Situation Analysis The situation analysis covers both the external and internal environment of Marks and Spencer Plc. The external environment is analysed using the PEST (Political, Economic, Sociological and Technological) Framework, while the internal environment is analysed using the Porter’s Five Force Analysis Framework (Johnson and Scholes, 2002; Kotler and Keller, 2003). External Analysis (PEST) Political Environment Georgia has a stable political environment. Marks and Spencer will not face significant political risk by extending its operations to Georgia. A new government came to power in October 2012 following a free and fair election. The new government has promised to institute policies that will attract foreign companies to Georgia. Therefore, Marks and Spencer is likely to benefit from the incentives offered by the new government. There are no laws that can conflict with the objectives of Marks and Spencer (Wilson, 17). Economic Environment According to the World Bank, Georgia is a thriving economic power. Georgia is currently ranked as the 18th country in terms of “Calmness of doing business”. This figured has improved from 112th in 2011. The country operates an open and free market economy, with little or no economic sanctions and embargoes (Wilson, 13). This provides Marks and Spencer with the opportunity to realise its full potential if it decides to expand to Georgia. Socio-Cultural Environment Goergia is characterised by a diverse population. It has rich cultural roots and most of the people are Christians. People are secular and adaptable to change. They love different brands. Marks and Spencer can use this as an opportunity to market its products to different customer segments by understanding the needs of each segment providing them better than competitors can do. Technological Development Georgia is a technologically advanced country with good road networks, bridges, and transportation systems and other infrastructural developments. This means that Marks and Spencer will not have difficulties finding a suitable environment to operate its business. In addition, transporting its products from one location to another will be facilitated by the good road network system. Marks and Spencer has adopted the latest information and communication technologies that enables it to manage its supply chains, understand its customers and thus offer great value for money. Internal Analysis (Porter’s Five Forces) Porter’s five forces include bargaining power of customers, bargaining power of suppliers, threat of substitute products, threat of new entrants, and rivalry among industry competitors. Bargaining Power of Customers Marks and Spencer has a strong brand name which affects the purchase decisions of customers. Customers do not have a strong bargaining power over Marks and Spencer. Marks and Spencer focuses mainly on seasonal sales such as Christmas and Quarterly sales (Nazli, 2008). Bargaining Power of Suppliers Marks and Spencer sources its products from multiple suppliers. This ensures that it has a higher bargaining power over its suppliers. Threat of Substitutes Marks and Spencer deals is engaged in the retail of clothing and food items. These items have a variety of substitute products. Therefore, one can assume that there is a high threat of substitute products. However, the company has put in place strategies to immune itself from this threat (Anderson, 4). Threat of New Entrants The retail industry does not have significant legal barriers to entry. This means that there is a high threat of new entrants. This threat is however limited by huge costs that may be involved in setting up a new business. Marks and Spencer has a strong brand name, which means that new entrants will find it difficult to convince customers of Marks and Spencer to switch from Marks and Spencer. Rivalry among Industry Competitors Competition in the Georgian Retail Market is high. One of the major competitors is S&K which has captured most of the market and assumed a dominant position. Marks and Spencer will need to adopt strategic marketing and corporate plans that will ensure that its captures a significant share of the market. Customer Analysis Potential Customers of Marks and Spencer are Diverse. These customers believe in strong brand names. In order to succeed in Georgia, Marks and Spencer would have to conduct significant research on each customer so as to understand its critical success factors and deliver them better that than competitors. Objectives and Strategies Objectives The Corporate Objectives of Marks and Spencer can be found in its mission and vision statements. These outline where Marks and Spencer currently stands and where it wants to be. The Mission Statement sets out in writing what a firm wants to achieve and often includes information on the values of the business (Johnson and Scholes, 7). According to the mission statement the core businesses of Marks and Spencer include clothing and food. The financial objective of Marks and Spencer is to deliver shareholder value by increasing the return on equity as well as realising an increase in sales and market share. As outlined in the annual report, Marks and Spencer states as follows: “our customers continue to see Marks & Spencer as the place to shop for special food, produced to exacting standards” (Marks and Spencer Annual Report and Accounts, 5). The company also considers its employees as important elements of its plan. Finally, the modernisation of its stores is also one of its key objectives. Strategies Marks and Spencer’s Strategy is to sell its own brand of products. By so doing, it can guarantee high quality to customers. This will result in high perceived customer value for its products and services. The company aims at improving its product appeal, availability and value so as to rebuild its relationship with core customers. Target Market Marks and Spencer has a wide range of customers with different demographic profiles. The company segments its customers in terms of style, needs, wants, demands, cultures and consumption pattern of potential customers. Customers are segmented using behavioural segmentation. Marks and Spencer’s main focus is on the middle aged segment of the market. These include mainly women who are active, energetic and fit. Its brand has been defined as particularly suitable for people who fall in the Middle age group, educated, family oriented with relatively active life style who enjoy good food. With respect to demographic segmentation, the average customer falls within the age range 35 to 54. With respect to socio-economic variables, marks and Spencer focuses mainly on people with successful careers with high incomes. With respect to geographic segmentation, Marks and Spencer focuses mainly on wealthy suburban areas, affluent greys, prosperous, Home Counties and professional metropolitan regions. Entry Mode Dunning (6-13) suggests that in order to successfully enter a new market, the company’s strategy has to be chosen in such a way that it can achieve the best return on its investment in the new market. It must consider the risks of the new environment and determine whether this is consistent with its risk/return profile. Marks and Spencer has in the past adopted a naive rule for most of its international expansion projects. Franchising has been used as an entry mode into many international markets. The problem with this mode of entry is that it ignores the different culture and demand patterns that characterise different business environments. This approach has often been unsuccessful. The international franchise of Marks and Spencer operates approximately 200 stores in more than 300 countries. Given that franchising has not been very successful, Marks and Spencer should use a strategy rule approach. The company should consider a variety of factors that can influence its success in Georgia. There are four variables that need to be considered (Sirkeci et al., 2009). These include: Internal variables; External variables; Desired mode variables; and Transaction-specific behaviour. One internal factor of interest is firm size. Marks and Spencer is a very large company with enough resources to invest in a foreign market. In order to gain high level control over its international operations and ensure that the quality of its products is not compromised, Marks and Spencer should use a Foreign Direct Investment strategy. Taking into account its prior success in the international arena, Marks and Spencer can benefit from lower costs of uncertainty of operating in the foreign market in general and Georgia in particular. The FDI entry mode will give Marks and Spencer greater control and thus ensure high quality standards in its products and services. Marketing Action Programmes Product Marks and Spencer offices products in two main categories: clothing and food. The design of the product is very important. The country of origin effect can have a significant impact on the success of Marks and Spencer in Georgia considering that Marks and Spencer is from the United Kingdom. Marks and Spencer offers tangible aspects of good quality and healthy food. Price Pricing is very important for success in any market. Many customers consider price as a very important factor in determining their purchase decisions. As such price has become a very important marketing mix variable in determining product success. Marks and Spencer’s success in Georgia will depend on internal and external factors. With respect to internal factors, Marks and Spencer positions its products in exclusive locations using differentiation. With well-differentiated products, Marks and Spencer will be able to have higher control over its pricing. Product factors will also affect the price. These include factors such as product adaptation which will allow Marks and Spencer to develop a unique selling point. Place Place is very important in marketing planning. Customers need to know where the products are located. The place variables that are going to affect Marks and Spencer in Georgia include Channels of distribution, outlet location, sales territories and warehousing system. Marks and Spencer needs to ensure that the distribution channels are suitable for the customers in Georgia. In order to succeed Marks and Spencer would need to locate in urban, cosmopolitan cities. These places usually surround shopping centres which are visited on a frequent basis by customers. Customers also find these places convenient for shopping. Promotion Although Marks and Spencer has a strong brand, it would need to make significant investments in promoting its products in Georgia. In order to do this, it can use public relation campaigns, personal selling and advertising. Monitoring and Evaluation In order to determine whether the objectives of the marketing plan have been achieved, the plan will be monitored and evaluated on a monthly basis. It should be noted that things don’t always go as planned. For example, changes in the environment may change and as such affect the outcome of planned activities. For example, the number of customers may change as well as their buying behaviour. Financial Considerations In order to implement any plan, one needs to be able to have adequate financial resources. Marks and Spencer is a large company. It can borrow at lower costs because of its good credit rating. Therefore, in order to create value for existing shareholders, the plan should be financed using debt financing. Debt financing is cheaper than equity financing because debt holders do not partake in the residual earnings of the company. Consequently, earnings per share can be increased through the use of debt. Secondly, interest on debt is tax deductible. Therefore, by using debt, the company can minimise its corporate tax liability while creating value for existing shareholders. References Marks & Spencer Plc., Companies' overview, (2009) Available URL: ttp://www.marksandspencer.com  Date viewed: 15th November 2012  Johnson G, Scholes K, Whittington R (2008) "Exploring Corporate Strategy", Eight Edition, Prentice Hall Sirkeci I, (2009) "International Marketing", Pearson Read More