Performance Management of Marks and Spencer - Essay Example

Analysis of performance management of Marks and Spencer with interview questions Contents Introduction 2 Analysis and Discussion 2 Conclusion 5 References 6 Appendices 7 Introduction This paper deals with detailed analysis of comparative performance management of Marks and Spencer in two countries. The two countries are United Kingdom and another is China. The objective of this study is to identify the key reasons why Marks and Spencer is very much successful in UK but not in China. The main strategy that the company has taken in terms of capturing and retention of the market share is to make the distribution channel diversified. The company ensures that the product that it produces cater to the needs of the public. The diversity in the product portfolio is brought in to make sure that there is at least something for the customer of each and every market segment (Kotler, 1972, p. 49). The luxury food products are produced in a way to make sure that the quality is not compromised in any way. The company has invested a lot of money in the space for display and the opening of the Food Halls so that the products lure the shopper to buy the food. Analysis and Discussion The company has taken a mass marketing strategy to target the majority of the population in U.K. and to incorporate innovation in the process of production so that cost reduction is possible at every unit of production. The online channel for sales have also been adopted in collaboration with the e-commerce companies so that in the fast pace of today, the consumers can buy products sitting at home. The strategy of next day deliver has been instrumental in making the sales figures high (Zabin and Brebach, 2004, p. 26). The consumers got their products delivered at their doorstep the next day after they had ordered the item online. This has enabled the company to accrue more profits over time. The company has also undertaken campaigning strategies that have helped the consumer become aware of the new trends and the discounts that are going on presently. The online channel has also assisted the consumer to get tips and guidance about clothing. This strategy of the brand has been successful in developing an emotional bonding of the customer with the brand. The multi-channel sale is one of the reasons why the company is successful in the U.K. The customers are also more fashion conscious and are less sensitive to prices. They would be ready to go for the trendiest clothes even if it is overly priced (Kurtz, 2010, p. 147). The existences of competition in the market with other brands that are equally high priced have helped the brand to survive in the U.K. market with the high end products. There is abundance of shoppers in Britain who make their purchases from the high end stores. The people of the British Market are more conscious about their health. Therefore they would go for the luxury food products. The sales of these products reach the peak during Christmas. The company also has a strong brand presence in UK. Most of the shoppers go to the stores and are ready to pay high because of the label under which they are buying. Company’s approach towards dealing with the customers and understanding the pulse of the market was the reason for company’s sudden growth. When the strategy that our team took became successful in the homeland of the brand the senior management of Marks & Spencer took a decision to engage our entire team in China to understand the market situation and to help increase the sales figures in the country. Hence sending this team for handling the China market was again a strategic move by the senior management of M&S to increase the market share in China. Our team had been entrusted with the duty of analyzing the market properly and to find out how the sales can be increased. The target market had to be identified and the pricing strategies had to be developed to make an impact on the bottom line. The brand commenced its operations in China in 2008. We opened up 14 stores in different parts of China. The shop locations were selected in the most expensive and up market locations (Ruddick, 2013, p. 12). The distribution channel was improved to ensure that the newest products reach customers as soon as they are launched in the headquarters in the UK. The logistics and the supply chain management was made more efficient so that very little time was wasted in the unnecessary delay of transportation. The company also ensured that proper market sizing is done so that excess production which become outdated, do not remain locked up in the inventory. While being in the US, the company was getting affected by the consumer cycles of purchases. Hence the sales peaked only during the Christmas. The main reason behind targeting this overseas market was to generate sales even at the times when there would be no occasion or there would be local events and festivals that would increase the amount of sales (William, 2005, p. 23). M&S has failed to understand the behaviour of the Chinese Consumer because proper market research was not carried out. There were a lot of cultural differences in the UK and China and no attempt was taken to bridge this gap. The brand should have taken steps to change the products as per the demands of the Chinese consumer that is adapting it to the Chinese tastes. These issues were not taken care of properly. The customers could not afford to buy the products that would take more than their monthly salary. Instead they got products from the local suppliers and other pocket friendly brands that delivered good quality products at a much cheaper rate. The concepts like pre-cooked rice or other luxury food items were not successful in China because the food habits of the Chinese differ from that of the Westerners. But the brand offered the same food products as in the UK. The older generation constitutes a large percentage of the Chinese population and they are conservative about their spending habits (Peppers and Rogers, 2004, p. 12). They would not spend so much money on clothing but the brand did not devisee their strategies keeping this target audience in mind. Conclusion The Chinese Consumers are more price sensitive than their British counterparts. The premium prices that they offered generally to the British customers were acceptable in U.K. as the people in Britain are fashion conscious and their purchases are driven by the fact that how much it is delivering up to the modern fashion standards. They are even ready to pay a high price if the products are fashion statements by themselves. On the other hand the Chinese consumers are more sensitive to the changes in the prices (Parry, 2009, p. 1). They would purchase those articles that are more pocket friendly. The Chinese population is also inclined towards more oriental style of clothing. The portfolio of products that Marks and Spencer’s brought to China was more of Westernized which the Chinese did not accept. They wanted more out of the brand. There was a need for adaption of the brand with the local culture, tastes and preferences. It was one of the major areas where the brand lacked in China (Crane and Desmond, 2002, p. 550). References Crane, A. and Desmond, J., 2002. Societal marketing and morality. European Journal of Marketing. Issue 36(5). Kotler, P., 1972. What consumerism means for marketers. Harvard business Review. Issue 50(3). Kurtz, D., 2010. Contemporary Marketing. Mason, OH: South-Western Cengage Learning. Parry, S., 2009. Shoppers shun flagship M&S store in China for being too British and too expensive. The Daily Mail. Available at: http://www.dailymail.co.uk/news/article-1104775/Shoppers-shun-flagship-M-S-China-British-expensive.html. [Accessed on 13 September 2013]. Peppers, D. and Rogers, M., 2004. Managing Customer Relationship: A Strategic Framework. New Jersey: John Wiley & Sons. Ruddick, G. 2013. Marks & Spencer missing Chinese sales targets. Available at: http://uk.finance.yahoo.com/news/marks-spencer-missing-chinese-sales-193505256.html. [Accessed on 13 September 2013]. Wiliam, C. A., 2005. The Marketing Plan. New Jersey: John Wiley & Sons. Zabin, J. and Brebach, G., 2004. Precision Marketing: The New Rules for Attracting, Retaining and Leveraging Profitable Customers. New Jersey: John Wiley & Sons. Appendices Appendix 1: Questionnaire You have worked as the Deputy Marketing Manager of Marks and Spencer in the United Kingdom for 6 years at a stretch. What are the main strategies have your department taken to capture the British Market? What do you think are the reasons for the success of Marks & Spencer in the U.K.? What do you think are the reasons for the management to transfer you to the Chinese Operations? What approaches did M&S take to turn around the business operations in China? Why do you think that the attempt failed? What are the setbacks that M&S faced in the venture? What differences do you find in the Chinese Market and the British Market? Read More