Marketing Management: Marks and Spencer - Essay Example

? Marketing Management Marketing Management: Marks and Spencer Company Background Marks and Spencer has been operating for the last 129 years, whereby it grew from a single market stall and it became an international multi-channel retailer. Currently, the company is operating fifty stalls around the world, providing employment to 82,000 people in different counties. M&S has focused on diversifying their store locations, channels and rage of products and this leads to decreased dependence on UK; though they are also widening their international focus. Revenue generated by this company is divided at a 54% from sales of food and 46% general merchandise. However, some of the activities that generate income for the company range from purchases and delivery, which offers customers a good shopping experience. 1. A. Macro environmental factors PESTLE ANALYSIS Political Factors M&S has been subjected to tax policies, political and environmental laws are entailed in the UK, leading to substantial influence on with holding their products from the public. The company focuses on gaining and maintaining good attitude towards foreign companies, which is evident through their association with other companies. Moreover, they are always adhered to the laws on hiring and firing, hence there have been no cases of employee disputes in the company.  Therefore, they appreciate the fact that political factors are related to the extent of government intervention and economy.   Economic Factors The rate of unemployment has been falling at a fast rate and the measure of Gross national product is rising at a modest rate in UK. The government has made the relevant effort to lower the interest rates in order to facilitate borrowing of by customers, hence increasing their purchasing power. Nevertheless, the inflation is being controlled by the government through the relevant fiscal policies aimed at regulating money supply into the UK economy. The economic factor has influenced the operations and decision-making process. There has been an increase in the operating cost due to many economic factors, whereby there was a rise in the consumer Price Index. Social Factors M&S products have a significant influence on lifestyles, whereby the consumers are consuming products, which is highly expensive. Therefore, prestigious products are contributing to increased living standards among the consumers. The company is also contributing generation of employment due to the advancement in technology that is increasing career expectations among those in the field of technology. The company is interested on consumer activism, since they focus on purchasing products that are environmentally friendly, though this is finite since the prices are playing a substantial role in decision of the consumer. There is a relation of the political and economic circumstances and this entails the cultural aspect and the rise in environmental consciousness, emphasis and attitudes on environmentally friendly. Technological Factors The company has invested on intensifying their Research and development in order to facilitate the advancement of technology for producing better products in the future. Moreover, the company is focusing on applying the new developments in technology in order to offer their products in a way that will enable them attain the required market share. Therefore, M&S has been utilizing technological advancement, whereby they have enabled their customers to access their catalogues online, and they are able to purchase products in a timely manner. On the other hand, the company has integrated their operation with Business Intelligent BI systems to increased performance in the future (Mohd, Idris, & Momani, 2013, p.40-49). Environmental Factors The company operations are affected by the environmental factors like the growing awareness of the climatic change, which may reduce sales for some of their products. There are factors affecting consumers due to the increase in awareness of the environmental impacts on consumption of various products. Micro Environmental Factors PORTER 5 FORCE ANALYSIS Bargaining Power of Suppliers In production of food and acquisition of commodities, suppliers of various products required for production and stock have low bargaining power. Nevertheless, food production and dealing with merchandise requires numerous interchangeable suppliers with an ability to produce various components in a short time, and in this situation, the suppliers lack the liberty to alter prices of their products. Bargaining Power of Buyers The buyers of various commodities from the company are having a high bargaining power, whereby they have acquired lot of information from source such as internet concerning the places where they can find alternative products. Therefore, this has created a need to indentifying preference of private consumer for certain type of commodities such as food. Threat of New Entrants There is ease in entry into the business of selling food and general merchandise since it does not require any form of special knowledge of production. However, there is difficulty in reaching the level at which this company has attained. Apparently, M&S market share has been acquired through decades of hard work in the industry. Nevertheless, the company is susceptible to suffering from reduced performance due to new entrants using technological advancement as a source of their competitive advantage. Intensity of Competitive Rivalry Although competition is healthy for a business enterprise, it may sometimes lead to unforeseen challenges. As such, when the competition is too high, then operations are greatly affected, which consequently affects the overall performance. Threat of Substitute Products or Services Substitutes usually offer an alternative to a commodity and as such, when prices are unfavourable, substitutes are usually preferred Marketing Activities and Results over the Last 3 Years M&S marketing activities can be analyzed on the basis of the marketing mix, which entails the element product that entails customer satisfaction in relation to goods or service, whereby, Lamb, hair and Carl (29) explains that, it includes not only the physical unit but also its packaging warranty, after sales services, branding, company image and other facts. Therefore, M&S ensure have been concentrating on the nature of products offered to their customers (Doh, Lawton & Rajwani, 2012, p. 22-29). Price is the second element, which is a significant component of the marketing mix that involves the establishment of pricing objectives and policies that determine product prices (Boone & Kurtz, 11). In this case, M&S are keen at setting prices in a way that is affordable and competitive in order to attract more customers (Mun, 2010, p. 10-42). Place is the next element, which focuses on ensuring that products are available at the right time and at a convenient place, whereby, Ferrell & Hartline (2010, p.20) explain that the objective of distribution and supply chain management is to get the right products at the right time, in right quantities and at the lowest cost, and this has been a prime activity undertaken by M&S for the last three years. The last element is promotion, which involves the activities focusing on creation of awareness to customers about the organization and its products and increasing publicity for new or existing organization (Pride and Ferrell, 2010, p.10). M&S has been engaging in promotion through communication between them as sellers and buyer; in fact, though communication, customers can be directly reached via the salespeople or else indirectly though advertisements. 2. Company’s Response to Changes in the Environment M&S has focuses on social factors, which include the demographic and cultural factors of the population that make up the social factors of the external environment. For example, the society lays an emphasis on the self-guided workforce with opportunity for diverse creativity. Therefore, M&S has redefined workforce descriptions by adapting an effective model in the working environment in order to attract labour force. The company also focuses on technological factors, which sometimes are likely to pose serious challenges to the industry. In case the firm may fail to cope with new and ever-changing technology, it may not sustain its business in the market. The company focuses on socio-cultural environment, which is among the significant external factors of the firm. M&S conducts analyse of these factors while formulating effective business strategies to respond to associated changes. Therefore, the company has realized that if it ignores the cultural aspects such as norms, values, traditions, tastes and preferences, it is likely to fail in the global market (Schlager & Maas, 2013, p 39-61). 3. A. Company’s Marketing Strategy M&S uses their strategic marketing to attract and maintain the existing and the new customers in target market (Aaker, 20). On the other hand, their market strategy is successful, since they divert resources to understand and access the customer’s needs. According to Abraham Maslow theory of hierarchy needs, customer-purchasing decision relies on the unfulfilled needs; in fact, consumer needs keep on changing depending on the level on hierarchy of need (Gordon, 2004, p. 27). Therefore, M&S considers the consumer behaviour which is unpredictable in while implementing their marketing strategies. In addition, entering into a given market segment with a new product, M&S is likely to perform well in the market because they developed these products to meet consumers' need; in fact this company ensures that it uses all means to maintain this (Hawkins, Best, and Coney, 2004, p. 30; Devinney, Pedersen, & Tihanyi, 2010, p.11-19).). B. Strategic Priorities for the Future In the future, the company can employ various marketing strategies that can enable it to achieve a competitive advantage in this new market in order to enable it to operate its business activities successfully. One of the effective options that the firm may adopt in expanding into this market is employing marketing mix strategies. Secondly, use of product differentiation strategy also plays significant role in the global business environment. Thirdly, product distribution is another strategy that can enable the company to increase profits. Moreover, offering effective training programmes to workforce on the way they should perform their tasks to avoid creating problems in a multicultural business environment is crucial. Lastly, there also is the need to address the issue of effective communication when employing an internationalisation expansion strategy. Communication is one of the imperative aspects in any working organisation because it solves language barriers or any conflict of interest that is likely to arise (Lamb, Hair & Carl, 2008, p. 9-32; Lee, & Lee, 2012, p.801-831). References Aaker, D. A., 2005, Strategic Marketing Management, New York, The Free Press Boone L., & Kurtz D. (2011). Contemporary Marketing. New York: Cengage Learning Devinney, T. M., Pedersen, T. & Tihanyi, L. (2010). The past, present and future of international business & management. Bingley, UK: Emerald. Doh, J. P., Lawton, T. C. & Rajwani, T. (2012). Advancing nonmarket strategy research: Institutional perspectives in a changing world. Academy Of Management Perspectives, 26(3), 22–39. Gordon, R., 2004, “Beyond Maslows hierarchy of needs: What do people strive for performance improvement”, Performance journal, 43(10), 27-31. Hawkins, D., Best, R., and Coney, K., 2004, Consumer behaviour: building marketing strategy, Boston, MA, McGraw-Hill/Irwin Ferrell C. & Hartline, M. (2010). Marketing Strategy. New York: Cengage Learning Lamb, W., Hair, J. & Carl, M. (2008). Marketing. New York: Cengage Learning Lee, Y. & Lee, Y. (2012). Integrated assessment of competitive-strategy selection with an analytical network process. Journal of Business Economics & Management, 13(5), 801–831. doi:10.3846/16111699.2011.620171. Mun, H. (2010). Global business strategy: Asian perspective. Singapore: World Scientific. Mohd, W., Idris, S. & Momani, R. A. (2013). Impact of environmental dynamism on marketing strategy comprehensiveness and organizational performance. International Journal of Business & Management, 8(9), 40–49. doi:10.5539/ijbm.v8n9p40. Pride, M. & Ferrell C. (2010). Foundations of Marketing. New York: Cengage Learning Schlager, T. & Maas, P. (2013). Fitting International Segmentation for Emerging Markets:Conceptual Development and Empirical Illustration. Journal of International Marketing, 21(2), 39–61. Appendices Marks and Spenser Peripheral Gains Retrieved from http://online.barrons.com/article/SB50001424052748703792204578219750987900968.html Read More