Retail Marketing - Essay Example

? Retail Marketing (Marks and Spencer) Table of Content Introduction 3 Company history 4 Marketing mix 5 Sustainability trends 8 Social media aims 9 Social awareness idea 11 Conclusion 11 References 13 Introduction Marks and Spencer is one of the leading multinational retail company headquarter in London. The company has 703 retail stores in United Kingdom and 361 stores in 40 foreign countries across the world. The company offer stylish high quality clothing, apparels and variety of necessary home products as well as super quality food products. The company has core competency in its industry for the outstanding quality of the food products and also the variety of the processed food products. It gets supply of clothing as well as food products from more than 2000 global suppliers and operates its business through more than 78,000 employees. Marks and Spencer is the leading provider of womenwear in UK clothing and apparel market. It also has been increasing its market share in menswear, kids-wear and necessary home products. The major business of the company comes from food business as 51% revenue comes from food business and rest 49% comers from clothing and home products (M&S, 2012). The company offers verity of food products like fresh food products like fruits and vegetables, grocery products and wide range of processed food products. Apart from the business the company is also dedicated to social responsibilities. It has become carbon neutral and zero solid waste by effective implementation of its five years eco plan for company’s green credential. The company enjoy the benefits of over 21 million footfalls in all the stores each week. By providing quality product and services and effective retail marketing strategies, the company has able to generate this huge number of footfall each week which is the key achievement for the company as a leading retail chains of the world. Company history The company was founded in 1984 by the partnership between two entrepreneurs, Michel marks and Thomas Spencer. Michel started his own business by acquiring a stall in Leads market and then invited Thomas to become partners for his business. In next few years, they were able to expand their business by opening many stalls in different location of England. Marks and Spencer made its reputation in the early 20th century by selling “British made goods” in England. The company introduced St Michael brand in 1928 which was a brand of clothes as well as foods. The company started expanding in 1957 in continental Europe and Ireland and also started selling of Asian food in the European market. The company got reputation for doing business through fair value of money and by this it got trust and brand value from its customers. The history of M&S is known as “iconic retailers of British Quality Goods”. The company started concentrating on the customers’ taste and preferences at the time of marketing myopia when other companies used to concentrate on the product quality by their won decision and choices. For this effective marketing and promotional strategies through the objective that customer is always and completely right the company got high reputation and brand image for4 its priority to the customers buying behaviour and preferences. After 1970 the company redesigned its packaging style for the food products and started selling food products by showing date of manufacturing. This was one of the important strategies of the company by which it generated huge customer base for the transparency and responsibilities to the customer in terms of ethical busi8ness practice. Since the inauguration of the penny bazaar by Michael Marks in 1984, five key principles have been followed by the company till now. These are quality, value, services, trust and innovation. The company came into Asia by opening first st5ore in Kabul in 1960. It had faced a continuous loss for a long time after 1973 in Canada and in 1999 all the 38 shops were closed due to unprofitable business. The company entered into France by opening few stores in Parish in 1975 and that are very profitable till now. But other shops in Western Europe are sold in 2001 due loss making business. In 2011 new branch was opened which sells clothing as well as food products and this has become one of the most crowded branch of the company (M&S, 2012). In nineteen century most profitable financial year of the company was 1997-98. Just after few three years the incurred huge loss in 2001 financial year due to the higher cost of supply from the British supplier rather than its competitors who get supply in cheap from the foreign suppliers. Share price of the company gone down to two third in 2011. After this financial deserter it launched online shopping service. In 2007, it opened the foreign largest branch of the company in Dubai Festival City. In the first decade of twentieth century the company has been performing efficient business practice and sustainable growth in terms of customer satisfaction, investor relation and profitability (Toda, 2009). Marketing mix Marketing mix is backbone of marketing strategy. Any company needs to efficiently analysed and effectively developed marketing mix for strategy formation. Marks and Spencer analysis this tool of marketing to determine the current scenario in terms of marketing strategies and implementation activities in every five year. The company reformulate its marketing plan every five and developed new strategies and plan for the next five year of their business. This strategy has been taken by the company for the possible changes in world economy and the business environment and also the income level and the purchasing power of the consumer and their change in buying behaviours and taste and preferences. Apart from the four basic components of marketing mix, price, product, distribution and promotion, the company has been considered other factors based on unique characteristics of the retail marketing (Blankson, No date). These are customer service, visual merchandising, and personal selling. All international businesses of the company are operated as franchisee and that is why the company can able to perform in depth analysis in different regional market and the different consumer behaviour and buying patterns by the help of the franchisee owner and management of local people. This is one of the key benefits of the brand to understand each market preferences better and by this way the brand can also compete with the regional retail players in different foreign market (Gerdeman, 2011). Price: M&S charges premium price for its high quality product ranges. Pricing of the company has been developed considering the target segment of customers especially their purchasing power and buying habits. These segment of people believes that premium pieced products are of superior quality. So, to retaining this customer psyche, the company maintain premium pricing for the products. The company has segmented the all the brands according to the price level. Like M&S, Faith, Clerks, Office are premium brands; River Island and Top Shop are medium price brand and a single low price segment is Barrats. So, the company use market led pricing strategies for the exclusive products. Product: The Company focus on the product differentiation to reduce the risk of low demand and short product life cycle of fast moving consumer goods like food products, clothing and apparels. It has totally different two different kinds of product categories, clothing and food and also another product category of high demand i.e. necessary home products. These three product line up always has high demand and with increasing of the consumer income level and purchasing power, the demand for these products increases proportionally. Pro9ducts offered by the company are recognised for the superior quality and for this reason a particular segment of people of higher income level chose this brand for their quality concern. Food pr4oducts are totally different from market competitors and the clothing ranges are of new style and trends. Place/Distribution: M&S chose crowded location of their potential targeted consumers for its stores. All stores of the company are located in central area of cities where there are high footfalls of the consumers of high income level. The ultimate objective of the company is to influence potential buyers for repeat purchasing through visual merchandising inside the stores. It developed effective distribution or placement of merchandise, not only visual display like local companies in each of its foreign as well as domestic market. Promotion: The main objective of effective promotion of the company is to attract their focused target customers who are demographically segmented as 30 plus age with high income and executive occupation. All the promotional activities are developed and designed only to take attention of these segment who does not think about the price for superior quality product and sati8sfactory services through purchasing experiences. The company has concentrated on the ecommerce to increase the online purchase especially for the clothing, apparels and home products (M&S 2, 2012). 3ps of service marketing: People i.e. the employees in the outlets are well trained, experienced professional staffs in all outlets to enhance the purchasing experience of loyal customers. Advanced buying process includes faster billing cards and loyalty cards and better customer service through personal selling of exclusive products. Physical evidence includes good ambiance of the brand and standard service design of all the outlets around the world. These service marketing strategies provide similar presence and buying experience to the customers in any outlets of the company (Johnson & Scholes 1993, p.15). Sustainability trends The company has been generating sustainable growth through various corporate social activities. These are the non financial activities implemented by the company every financial year to become environmental friendly. It is dedicated to its external stakeholders like the society or the community and the environment from where it getting the valuable resources. For sustainable business practice and growth of the company it has launched Plan A in January 2007. The main objective of this plan A is to become most sustainable retail business in the world. Plan A was developed for five year sustainability plan of the company in 100 countries and for the efficient implementation of these social initiatives the company has extended this plan A to 2015 to cover total 180 communities around the world especially regions where it operates (M&S3, 2012). The main objectives of Plan A are to reduce waste, climate control, sustainable sourcing of raw materials, ethical business practice and focus on the healthier lifestyle of the customers. This a unique social responsibility programme by the company which has become core competence of the company. People or the customers expect from this type global business who are using major resources from the environment and community where its customers are living. So the company is very much concern about returning back to the society through various non financial activities. The top management of the company believes that sustainability is the core value of the company and plan A is developed to stay ahead in terms of consumer trust and sustainable growth in this fast moving world. The company has been following sustainability trend through various environment positive activities by partnering with many global NGOs. The main five areas of Plan A are followings (M&S3, 2012). Climate Change: In every process of company’s business has carbon footprint and for this it has been trying to become carbon neutral by FY 2012 in all its business operations. It is reducing energy consumption and using renewable energy as much as possible. Waste: M&S commits to the environment that its products will not ends up as landfill and it has been reducing solid waste through initiatives with the customers who generally contributes one third of their total food purchase as waste. The company organise events partnering with Oxfam to get unwanted old garments from the customers for recycling. This event has generated 3.3 million for Oxfam. Apart from this guide to recycling and stop using polyethylene bags are also part of this activity. Sustainable raw materials: The Company is very much concern about the natural resources likes welfare of living for animals, fish and beneficial insect like butterfly. It also has responsibilities for the farmers and the suppliers in terms of development of the countryside and the cultivated fields in UK. Fair trade: M&S is dedicated to ethical and fair trade or business practice with the customers as well as suppliers through the help of one fourth million workers worldwide. The customers get satisfactory return of their money and the suppliers also get actual value of their innovation and labour. Health: The Company has reduced salt, fat and saturated fat levels in the food products of Eat Well and Count on Us brands to improve the health of the customers as well as the employees of the company. Social media aims Marks and Spencer promote social awareness through media aiming the overall its sustainable living experiences of the external stakeholders especially for the customers and the people of the local community. The company has developed “My Plan A” website for spreading awareness to the customers across the world. The company wants to get effective participation of the customers from different region of the world in the environmental positive activities. So the company want get share from the customers about their Plan An activities and the plan for one year. The websites will be launched this year where the customers can track their participation for a better environment where they live. The company is also promoting its various eco-friendly activities and campaign through various popular social media websites like face-book and twitter. The main aim is to promote these activities through different kind of social advertisement to get participation from the customers. It has also become successful in few activities like “One Day Wardrobe Clear-out”, campaign. Effective planning for social media advertisement has generated huge awareness among the customers of various regions. This campaign has generate3d 3.3 million old unused clothes from the customers which has saved this amount of solid waste. Another success of social media campaign has happened in the campaign of “Butterfly Count Activities”. The company has provided videos of these successful campaigns in the “Plan A” website and polar social media sites to provide visual experience of the gain from these social activities. Apart from the use of websites it promotes many social awareness advices to people through innovative advertisement in the television. M&S is dedicated to continue effective marketing communication through the social different social media including “My Plan A” website to generate more response and participation of the customers. The company also has launched an encouragement campaign for the customers to get innovative environment friendly idea from the customers so that the company can also implement those with the customers. This is a competition of idea generation which has a prize value of ?100,000 (M&S2, 2012). Social awareness idea M&S has developed so many social awareness ideas and implemented those very successfully through it "Plan A” initiatives. The company even wants to take participation in generating new idea for the environment. One effective social awareness idea would be reusing packets of the sold products. The company needs to promote this awareness programme as a part of solid waste positive environment. Generally the customers do not use the packets of the products and these are thrown out after taking away the goods at home. These packets can be the carry bag of per purchase of goods and also can be packets of grocery and food products. The company needs to provide a minimum discount of total purchase if a customer bring the carry bag of last purchase and the packets last purchased goods like the cover food and grocery products. Then the company need to provide those packets to the packaging companies for recycling and make new packets for packaging of new products. Thus the total use of packets will be reduced in a very percentage which will proportionally reduce the solid waste amount by the company as well as by the customers. Customers will be also easily influenced by the discount on total purchase depends on the packets they bring in to the shop. This idea might be effective for reducing solid waste as major solid waste comes from the packets of the grocery and food products because these are not innovative collected. Conclusion Marks and Spencer has experienced a long tough journey of its business from the very small start of the company. The company has been focusing and emphasised on the customers taste and preferences from its history and developed the brand present image by the trust and reputation from the customers. The company is very much popular in comparatively higher income group of people who only desire the product quality even in higher price. So, it needs to offer medium range priced products to wide its target segment of customers. This will generate more revenue and reduce the risk of competitive disadvantage. The company is very much dedicated to the society, customers, investor, supplier and the environment as these are the major contributor its success and current market share and position in the industry. If the company expand its target segment, it will be one of the leading retail companies in the world in near future in terms of revenue, social responsibility and customer satisfaction through efficient service provided by the company. References Blankson, C. (No date). Retail Marketing Mix and Planning. [Ppt]. 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Available at: http://corporate.marksandspencer.com/aboutus/company_overview. [Accessed on May 24, 2012]. M&S2. 2012. Press releases. [Online]. Available at: http://corporate.marksandspencer.com/investors/press_releases?filterBy=Product. [Accessed on May 24, 2012]. M&S3. 2012. About Plan A. [Online]. Available at: http://plana.marksandspencer.com/about. [Accessed on May 24, 2012]. Toda, Y. 2009. Changing brand – changing image? The historical analysis of brand management in Marks and Spencer. [Pdf]. Available at: http://faculty.quinnipiac.edu/charm/CHARM%20proceedings/CHARM%20article%20archive%20pdf%20format/Volume%2014%202009/toda%20jackson.pdf. [Accessed on May 24, 2012]. Read More