Ethical Issues in Marketing Planning for Marks and Spencer - Assignment Example

? Marketing planning Table of Contents Introduction 4 Changing pattern 5 Marketing audit 6 Barriers in Marketing Planning 8 Ways to overcome the barriers 9 Overcoming strategy by M&S 10 Marketing Plan 12 Marketing strategies 14 Ethical Issues in Marketing Planning 15 Marketing ethics by M&S 16 Reference List 17 Introduction Marks and Spencer (M&S) is one of the leading retailers of United Kingdom (UK). It has a customer base of about 21 million. M&S deals in trendy, high quality and stylish clothing and home product that render high value. They also deal in quality food products, which are sourced from 2000 suppliers from all over the globe. They are the leading menswear, lingerie and women wear provider in UK. M&S has been operating for last 129 years and has “grown from single market stall to an international multi-channel retailer” (Marks and Spencer plc., 2013a). The company is operating in more than 50 territories all over the world and has almost 82,000 employees. The organization stands on the pillars of trust, innovation, service, value and quality and works hard to offers quality products that are relevant to the customers. M&S is diversifying its product range, channel, locations and store that will help the company in broadening the international operations and reduces the dependence on UK. The turnover that M&S generates from its operations in UK are segregated into two parts like general merchandise contributes about 46% and food contributes 54%. They have nearly 766 stores all over UK and a flourishing e-commerce business (Marks and Spencer plc., 2013b). The company sells great value and high quality food. They aim towards providing the customers with an outstanding shopping experience. The study focuses on formulating a marketing plan for M&S after conducting the marketing audit and identifying its strength weakness opportunities and threat. 1. a. Review the changing pattern in the marketing planning and assess capability of your chosen company in carrying out the marketing plan. Changing pattern The process of bringing the ability of the organization and requirement of the customers under one roof is termed as marketing. Profit generation and marketing are two interrelated items. The customer receives benefits, gets satisfied, makes payment and in turn the company makes profits. However this balance in the market place is dependent on many factors, which is achieved through various practices and affects the marketing environment (Westwood, 2002). Cultural and Local preferences The customers are seen to show preference on some particular products based on the national culture, local conditions and local traditions. M&S has been expanding their business in large number of countries. In order to enhance the international buying process the company has amalgamated their central planning with the knowledge about local market and has created tailored products that reflects customers profile, culture and local seasonality (Marks and Spencer plc., 2013b). Government Policies The economic, political and legal conditions of the country in which a firm operates can affect the marketing plan; like exchange rates are often seen to influence the decision of manufacturing locally. The operating profit of M&S has been seen to decline by 9.9%, which was due to start up cost, macroeconomic condition and currency translation. The company has planned to launch in-country websites to reach the customers more easily. Competition The competitors are also seen to impact the marketing plan of the company. Product, pricing and many other facets are affected by them. M&S have many competitors like Tesco, BHS and Asda with whom they have to compete. Not only in the home market but also they face stiff competition in the other countries. Change in Technology The technology is undergoing dramatic changes, which is also leading to changes in the requirement of the customers. Innovation has lead changes the ways M&S conducts business. They have launched transactional websites in about ten markets. The company has also developed application for the iPhone users that gets the whole store transferred into the pockets of the customers. Changes in distribution pattern With the advent of shopping centres and hypermarkets the pattern of distribution channels are changing. M&S uses franchisee partners for their global operations. The franchisee model has low risk, drives capital easily and helps in accessing the local retail market. 1. b. Examine the marketing environment and analyse the internal factors and external factors (such as PEST) assessing the strengths/weaknesses and opportunities/threats in order to conduct a marketing audit. Marketing audit Marketing audit helps in identifying the internal and external factors that affect the business of an organization and accordingly helps in planning the marketing plan for the organization. The marketing audit has been conducted for M&S through PEST analysis and identifying the strengths, weakness, threats and opportunities of the organization. PEST Analysis PEST analysis helps the marketer to gain a clear insight of the market situation so that none of the changes come as a surprise and the company can take full advantage from the situation (Cheverton, 2005). Political The UK government has been involved in major intervention in the retail sector by de-regulating and creating free market economy. Removing the restriction on the opening hours and resale price of book trade are some of the major de-regulations done by government. Overall the framing of policies by the UK government suggests that the development of the economy has been encouraged (Burt, Sparks and Teller, 2010). Economic Economic turbulence has been experienced by UK in the period of 2011-12. The Gross Domestic Product (GDP) of UK was revised due to the fact that the government was facing difficulties in accelerating the economic growth and dealing with the deficit. This changed the purchasing behaviour of the customers (CBI, 2013). Social Social structure plays a major role for the retailing sector. The social structure of UK has been seen to be influence by the concept of social class. Even in this 21st century it’s concept has influenced the society (Kirkup and Pierce, 2008). Technology Retail industry is a quick and early adapter of technology. The business in which the retail sector deals requires the organization to acquire the information quickly, pass it to the warehouse, the manufacturing unit and distribution unit so that they can plan and act accordingly (Pradhan, 2009). SWOT Analysis STRENGTH WEAKNESS Brand name of the company International presence of the company Strong performance of the food section. Quality, innovation and provenance. Launching of ‘Plan A’ in regards to the environmental and ethical aspects. The business is exhibiting problem in women wear section and sales are unsatisfactory. Leadership abilities are lacking in the organization, which has affected the deliverance of better products (The Telegraph, 2004). OPPORTUNITY THREATS Expanding business in other countries. Technological innovations shown by the company. Inauguration of new stores in UK (BBC News, 2013). Disturbance in the economic condition of UK. Lower sales in clothing section required immediate action to be taken. High competition in the sector. 2. a. Examine the main barriers to marketing planning and the ways of overcoming those barriers you have identified. First explain what is meant by barriers with examples. Barriers in Marketing Planning Marketing plan is a sequence of logical steps and activities that leads to the formation of marketing objectives and formulating plans in order to achieve them. Numerous practical problems are also there that need to be overcome. There are several barriers in planning for successful marketing plan that are mainly due to the human aspect of management (Donnelly and Harrison, 2009). McDonald and Wilson (2011) have identified some of the principle barriers that reduce the effectiveness of marketing plan, which are as follows: Bewilderment between marketing strategy and tactics. Isolation of the marketing function from the operations taking place in the organization. Misunderstanding between the marketing concept and marketing function. Organizational barriers like failure in correctly defining the strategic business units. Deficit of in-depth analysis. Misunderstanding between output and process. Short of skills, knowledge and systematic approach towards development of marketing plan. Failure in prioritizing the objectives of the organizations. Antagonistic corporate culture. Ways to overcome the barriers Before implementing the marketing plan in the organization the senior management and more particularly the marketing director should first identify the person who will be responsible for the whole process. This identification and selection will be based on the experience, knowledge or seniority of the personnel. It is inevitable that every organization will have some personnel or cultural barriers that instigate a formal process, which proves to be time consuming and costly. The important aspects of marketing planning are involvement of personnel, participation of senior management, time and lines of communication. Prior to the intimation of marketing planning it is also important to consider the discussion regarding the time frame, extra resources required to accomplish the marketing plan and ensuring that everybody involved in the plan are positively motivated. These factors are important and require major concern by the management in order to make the marketing plan successful and reduce barriers (Dibb, Simkin and Bradley, 2006). Overcoming strategy by M&S For general merchandise a new team has been formed who will be operating under the leadership of John Dixon and support the new style director Belinda Earl. This step was taken in order to enhance the performance of the clothing section. For the food section, which has generated satisfactory results was enhanced by launching Simply M&S range that is coupled with well targeted offers. Apart from this the company has also implemented plans to refurbish the stores that gives more inspirational in-store environment to the customers and also provides a clear picture to them. Figure 1: The Plan (Source: Marks and Spencer plc., 2013c) Plan A is another initiative taken by the organization that reduces the barriers and issues with regards to the ethical and environmental aspects. Figure 2: Plan A for better and sustainable business for tomorrow (Source: Marks and Spencer plc., 2010) 3. a. Formulate a marketing plan for a chosen product or service of the chosen organization by analysing the SWOT factors and setting marketing objectives. Marketing Plan The main problem that M&S is facing is not only related to the rising competition but also unsatisfactory sales result from the clothing section and stores appearing too much clustered. Due to these two reasons the customers are seen to be flying to competitor’s stores. The critics have labelled that the clothing range in the stores are outdated and dowdy. Issues related to shortage of stock also hit the sales of Marks and Spencer in the women wear section. Marketing Objective: The marketing plan is designed with regards to increase the sales of women wear section and other merchandises. At the same time the plan also highlights on refurbishing the stores. M&S should recruit new people who are experts in the area of fashion designing so that they can design trendy and stylish clothing that can hit the stores. While designing the clothing the organization should target the younger generation who are more inclined towards stylish outfits. Apart from this the stores should be renovated so that they do not appear clustered or clumpy. Sales personnel should be well trained such that they provide assistance to the customers while they are shopping. Promotion is the best way to make people aware of the changes that are taking place in the stores and products. So the organization should plan for promotion through digital marketing like their website and social networking sites. Sales promotion should be done by providing offers and discounts on selected products and during festive seasons. The planning should be properly done and communicated within the organization. On the other hand the problem faced in the stores should be communicated to the management by the store managers. Regular feedbacks should be taken from the customer regarding their experience and expectation that they have from M&S. Budget plan is the integral part of marketing plan. The total plan requires a budget of ?500,000. The plan should be implementing and reviewed from time to time and matched with the expected results, which is to bring rise in the sales of merchandise section. 3. b. Develop marketing strategy based on the marketing mix variables, including the need to developing new product/services and a pricing strategy. You should justify the choice of marketing mix strategy. Marketing strategies Product The current situation of M&S suggests that the clothing and home-ware section requires special attention from the management. Women wear happened to the strongest part of the business of M&S, but presently it is showing a downward trend due to the outdated designs that is unable to attract the younger generation. Hence this product needs to be restructured, so that it can cater to the current demand and trends of the young generation. Price Pricing is the crucial part for a business because it leads to generation of profit for the business. While deciding on the pricing of the new brand of clothing the company should consider the cost of development, marketing and profit margin that the company wants to aim. At the same time the company should also quote the price so that it is not much higher than the rivals since customer often looks at the switching cost while changing their brands. Place The stores of M&S, where the customer goes for purchasing the merchandise itself speaks about the brand image of the organization. Thus the company should renovate the store to give it a fresh look along with fresh products. The company has planned to open some more stores which should be at accessible location, planned arrangement of products and ambience should be as such that the customers feel welcomed. Promotion The company should frame strong promotional strategies through advertisements and create tie up with celebrity who may act as the brand ambassador. Apart from this the company should also track festivities and seasons to launch their new products. The company should also offer discounts from time to time on various products. 4. a. Explain what is meant by barriers in marketing and examine the ethical issues in marketing that you may need to consider when developing a marketing plan. Ethical Issues in Marketing Planning In recent times a growth in the social responsibility and marketing ethics has been observed in numerous organizations. Manny organizations have seen to destroy their image, reputation and marketing effort due to problem in the ethical section. The failure in ethical conduct as a part of strategic marketing plan can lead to the destruction of customer relationship and trust, which is necessary for the success of the business. Social responsibility and ethics is also necessary in respect of the stakeholder’s demand and gradually the ethics have now become legal issues. In this context sales practice, deceptive advertising, fraud, conflict of interest, bribery and price fixing all lead to legal implications. Marketing ethics is not just attained by hiring ethical people but is achieved through strategic decision that is a major part of the culture and marketing strategy of the firm (Ferrell, 2012). 4. b. Discuss how the consideration of consumer ethics in general affects the marketing planning process in your organization. Marketing ethics by M&S The buying decision of the consumers is seen to be largely dependent upon the ethical records of a brand. The social responsibility that the brand shows is highly influencing the priorities of both men and women. The ethical consumers of the supermarket have claimed that M&S is highest in social equity. The consumers of M&S is well aware of the Plan A sustainability commitment that has proved to be creating a positive perception regarding the brand in the minds of the consumers (Barnett, 2011). While designing the marketing mix the organization should also keep the ethical aspect in mind. The product designed by the company should meet the safety standard, testing should not be done on animals, products those are dangerous should be removed or modified and ethical issues regarding planned obsolescence should be measured. While framing the pricing strategy the company should do fair pricing and monopolistic power on prices should be prevented. Promoting material should be created ethically and consider the social responsibility specially when advertising for kids and elderly people. While deciding on the place factor, it should be ensured that the products are available to everyone and on an equal cost basis (Beamish and Ashford, 2007). Reference List Barnett, M., 2011. The only way is ethics. MarketingWeek [online] Available at < http://www.marketingweek.co.uk/the-only-way-is-ethics/3028974.article> [Accessed 5 July 2013]. BBC News, 2013. Marks and Spencer to open new stall at Kirkgate Market [online] Available at < http://www.bbc.co.uk/news/uk-england-leeds-21017952> [Accessed 4 July 2013]. Beamish, K. and Ashford, R., 2007. Marketing planning 2007-2008. London: Routledge. Burt, S., Sparks, L. and Teller, C., 2010. Retailing in the United Kingdom – a synopsis. European Retail Research [pdf] Available at < https://dspace.stir.ac.uk/bitstream/1893/2551/1/BurtSparksTeller2010_ERR_BetaVersion_STORRE%5B1%5D.pdf> [Accessed 4 July 2013]. CBI, 2013. Economic forecast [online] Available at [Accessed 4 July 2013]. Cheverton, P., 2005. Key marketing skills: Strategies, tools and techniques for marketing success. London: Kogan Page Publishers. Dibb, S., Simkin, L. and Bradley, J., 2006. The marketing planning workbook: Effective marketing for marketing managers. Connecticut: Cengage Learning EMEA. Donnelly, R. and Harrison, G., 2009. The marketing planning process. London: Routledge. Ferrell, O.C., 2012. Marketing strategy. 6th Ed. Connecticut: Cengage Learning. Marks and Spencer plc., 2010. Our Plan A commitments 2010 – 2015 [pdf] Available at < http://corporate.marksandspencer.com/documents/publications/2010/planacommitments2010> [Accessed 5 July 2013]. Marks and Spencer plc., 2013a. Company Overview [online] Available at < http://corporate.marksandspencer.com/aboutus/company_overview> [Accessed 4 July 2013]. Marks and Spencer plc., 2013b. International [online] Available at < http://annualreport.marksandspencer.com/strategic-review/our-plan-in-action/international/> [Accessed on 4 July 2013]. Marks and Spencer plc., 2013c. Chief Executive's overview [online] Available at [Accessed 5 July 2013]. McDonald, M. And Wilson, H., 2011. Marketing plans: How to prepare them, how to use them. New Jersey: John Wiley & Sons. Pradhan, S., 2009. Retailing management: Text and cases. New Delhi: Tata McGraw-Hill Education. The Telegraph, 2004. Changes in store to counter catalogue of weaknesses [online] Available at < http://www.telegraph.co.uk/news/uknews/1466883/Changes-in-store-to-counter-catalogue-of-weaknesses.html> [Accessed 4 July 2013]. Read More