Marketing Analysis: Marks and Spencer - Essay Example

? Marketing analysis: Marks and Spencer BY YOU YOUR SCHOOL INFO HERE HERE TABLE OF CONTENTS 0 Current market segments...................................................................................... 2.0 Brand positioning.................................................................................................. 3.0 Recommended target markets and positioning strategy....................................... 4.0 Product and services strategy................................................................................ 5.0 Distribution/channel strategy................................................................................ 6.0 Promotional strategy............................................................................................. 7.0 Pricing strategy...................................................................................................... References EXECUTIVE SUMMARY Marks and Spencer is not doing an appropriate job of gaining target market interest in the brand and continues to cater to the older demographic. The company has built a rather old-fashioned and stuffy brand that caters to wealthy High Street consumers in the over-55 age bracket. This prevents the business from building a more contemporary brand personality that would attract younger and trendier fashion consumers. To better position the company, the business needs to utilise psychographics rather than demographic segmentation and focus less on quality and more on price and fashion-forwardness. Improvements to fashion procurement, utilisation of the Internet for online purchases, social media for promotion, and lifestyle-related advertisement will improve the brand competitiveness in this highly saturated and dynamic competitive environment. Marketing analysis: Marks and Spencer 1.0 Current market segments Marks and Spencer continues to attempt to attract younger consumer segments through the introduction of more contemporary fashion merchandise with edgy and trendy designs. The business, in an effort to appeal to the twenty something markets, recruited models Lily Cole and Lizzie Jagger to serve as celebrity endorsers that would be aspirational to the youth, female markets (Wood and Finch 2009). However, this strategy failed to rouse interest in the M&S brand and clothing sales to the over-55 female segment rose by 10 percent (Wood and Finch 2009). The problem at Marks and Spencer is that the business continues to segment based on demographics. As a high street fashion business, the business maintains a premium pricing model on the majority of its fashion merchandise, thus making clothing more affordable to the older demographic. Premium fashion products are segmented just below luxury brands and therefore usually carry a higher price tag (Hameide 2011). The average age of the business’ customers are between 35 and 54 who maintain the high level of financial resources necessary to afford a high price (Ayub 2010). The brand has been defined according to the demographic characteristics and purchasing behaviours of existing consumers, affluent middle-aged women living in wealthy regions who are the major revenue producers for the company. The business, in an effort to attract desirable target markets, recruited the 1970s model Twiggy to promote a new clothing line launch. This strategy did not appeal to the younger consumer market segments and seemed to reinforce a lifestyle connection with the aging consumer target market. Joanna Lumley, from the Absolutely Fabulous craze, was also recruited to appear in and perform voiceovers for advertisements, yet another older celebrity figure which continued to appeal to the existing, greying market (Chislett 2009). Hence, by focusing on demographic segmentation in order to identify target consumers, Marks and Spencer is limiting its ability to boost revenue production by not utilising other segmentation strategies. The company continues to utilise strategic marketing strategies that are more relevant to the lifestyles and income demographics of older consumer segments. Alongside a rather stuffy and conventional brand personality that is perceived as being rather old-fashioned, Marks and Spencer is unable to attract other potential markets in the younger age category. 2.0 Brand positioning Brand positioning is defined as a marketing activity in which the company attempts to make modifications to the intangible and tangible characteristics of the business to change consumer perceptions about the brand in relation to competition (Blankson 2004). It is a methodology of differentiating the business and creating a unique brand personality that allows a consumer to distinguish between one business and competition. Marks and Spencer is positioned with an emphasis on product quality, which is aligned with the demographic (income) characteristics of its most profitable, existing market. This strategy assists in justifying the higher, premium pricing model in gives consumers the perception that the company is offering superiority against competition in terms of product excellence and class. This is illustrated in the upscale in-store design concepts and advertising which offers consumers quality guarantees. Marks and Spencer emphasises its distinguished reputation as a long-standing UK brand that provides luxury-type clothing made from impeccable fabrics and high quality designs. 3.0 Recommended target markets and positioning strategy Marks and Spencer is greatly limiting its earnings potential by continuing to focus on quality and utilising strategies that appeal to the older demographic. In order to attract new market segments, the company should utilising psychographics (lifestyle marketing) to make the brand appear more relevant to younger consumer attitudes, values and way of life. The younger youth market, between 25 and 34, are still seeking identify justification from a social perspective. This market is attracted to premium products and often consumes fashion merchandise as a means of enhancing their social status (Executive Digest 2008). Furthermore, Zhang and Chan (2009) indicate that when consumers perceive that a brand can improve their individual self-expansion, they are likely to develop very strong emotional connections to the brand. Therefore, the company should be utilising psychographics as a means of segmenting based on lifestyle. Though the 25 to 34 year old markets do not maintain the same higher income status of the older markets which currently support sales growth at the business, the company maintains many opportunities to offer lower-priced merchandise and then utilise advertising that illustrates youth aspirational actors and celebrities to steer away from quality positioning and instead focus on value. Youth markets purchase premium brands under the concept of status consumption, which involves an outward presentation of merchandise in the social environment to validate identity and illustrate their unique personalities. Figure 1: Example of Lifestyle Advertising for Youth Target Markets Source: AAFM. (2013). All about fashion marketing. [online] Available at: http://selincetinkaya.com/category/lifestyle/ (accessed 19 November 2013 Source: AAFM. (2013). All about fashion marketing. [online] Available at: http://selincetinkaya.com/category/lifestyle/ (accessed 19 November 2013). Pricing is often the criterion by which markets judge quality (Foxall, Goldsmith and Brown 1998). Therefore the company, to gain youth market attention, can utilise a blended strategy of positioning based on price and value, which would be utilised in conjunction with lifestyle marketing. The younger market, though limited by resource availability, still wants trendy, edgy and contemporary clothing options in the fashion retailing environment. This has been proven with such competition as H&M and Cos which provide these types of youth-oriented designs. In order to reinvent the brand and remove the old-fashioned perceptions, positioning the company as a modern and progressive brand would have significant return on investment for gaining youth market attention. Because youths still consider their peer networks to be aspirational reference groups and believe that avant-garde fashions improve their social belonging and status, the company should be emphasising that the brand is up-to-date and understands the needs and values of the 25 to 34 year old markets. 4.0 Product and services strategy The lead time for high quality and high priced merchandise at Marks and Spencer is considerable long. The business has ample opportunities to adopt a fast fashion model, such as that with Zara, to provide more relevant and low-priced fashion options with only a six to eight week lead time. There are ample international opportunities to adopt this model, due to the strong infrastructure for fashion production and raw materials procurement that could radically change the dynamics of supply chain strategy for the business. If the company hires a design team that is highly skilled with creating relevant, youth-oriented fashions, the business can guarantee exclusivity (thereby creating quality perceptions) and ensure that its fashion offerings are not stagnant. This would inject excitement and newness into the rather old-fashioned brand that would better engage the youth markets and better position the business. To the older markets, impeccable and competent service are important constructs when determining loyalty to the fashion brand. Youth markets, however, require only price-related value and the ability to express their unique social identities through interesting and exciting fashion consumption. Therefore, emphasis on product rather than service would be relevant to the 25 to 34 year old markets and would reduce costs along the existing operational model that currently dedicates so much labour and capital expenditures on the service model. 5.0 Distribution/channel strategy Youth markets are some of the largest users of Internet technology and smartphones. At Marks and Spencer, Internet-based shopping rose by 16.6 percent and attributes to 13 percent of total merchandise sales at the business (BBC News 2013). Youth markets utilise smartphone technologies and mobile applications as part of their lifestyle which provides ample opportunities to not only reduce operational costs for in-store development, but inject convenience that is relevant to the mobile usage patterns of youth markets. Therefore, the business should be utilising more emphasis on mobile purchasing. By changing focus from the in-store service-oriented experience that is more relevant for the affluent, aging market, Marks and Spencer can generate higher sales revenues. Currently, the business spends significant financial capital on creating a luxury-oriented, in-store experience which imposes costs on the operational model. Therefore, focus on Internet shopping and development of a more youth-oriented website would provide the best return on investment and better satisfy youth markets that engage regularly in mobile shopping. 6.0 Promotional strategy Promotional strategy will be a key performance enhancement to the existing business model at Marks and Spencer. As was illustrated by the two lifestyle marketing examples in Figure 1, the company must create relevant advertising that illustrates aspirational celebrity endorsements and actors sharing the same social values and lifestyles of important, new target consumers in the youth segment. Figure 2: Lifestyle Advertisement Mock-Up Source: Brand audit blog. (2011). Thinking about beer. [online] Available at: http://thinkingaboutbeer.wordpress.com/page/2/ (accessed 19 November 2013). The company should be utilising magazine advertisements in relevant lifestyle publications such as Cosmopolitan in order to gain consumer attention. These types of publications have high readership and loyalty from youth markets as they pertain to lifestyle and the social environment with emphasis on vanity and beauty through fashion consumption. Marks and Spencer can also utilise the high youth market following of such social media sites as Facebook, creating low-cost videos illustrating lifestyle dimensions (such as those shown in Figure 2) and being able to be more interactive with desirable youth target markets to assist in building a more relevant and contemporary brand personality. Fournier (1998) indicates that consumers are highly self-aware and want to engage in reciprocal relationships between the self and the brand, wanting to purchase products that bring significant value into their lifestyles. Social media represents a very low cost methodology of building these important relationships and sending consistent integrated communications that illustrate Marks and Spencer’s knowledge and concern about the lifestyle needs of youth markets. Statistics show that 91 percent of all mobile Internet engagement is related to social media (Site Rapture 2012). This is absolutely significant for better interactivity with the desired youth target market. 7.0 Pricing strategy Quality does not need to be sacrificed in order to provide relevant fashion merchandise to the new youth markets. However, to gain youth market following and loyalty, the fashion clothing offered to consumers must be just below premium brand status due to the income capabilities of younger markets. Since consumers believe that pricing is a measurement of quality, Marks and Spencer can offer a lower pricing model on its new fast fashion merchandise procurement that will position the brand as one that understands the income demographics of its consumers and attempts to provide affordable and trendy clothing. The business does not have to sacrifice its current quality and service-focused strategy for the aging markets whilst also providing moderately-priced merchandise that is aligned with such companies as Zara and H&M. It is highly important that the new fast fashion merchandise be aligned with major competitors that already cater to younger markets with a focus on edgy and contemporary styling. The business, furthermore, can utilise digital marketing and promotions to offer exclusive discounts to loyal customers, such as email promotions with hyperlinks to make online purchases, to incentivise selecting the Marks and Spencer brand over that of competing companies. The company should also be creating a new loyalty program that offers exclusive discounts to consumers who sign up for the loyalty card. Customers that participate in this type of incentive program feel as though they have a better sense of ownership within the company and are usually more loyal to the brand (Hart, Smith, Sparks and Tzokas 1999). This would again reinforce and create the perceptions to consumers that the business is dedicated to providing value to the new youth market and satisfy their price sensitivity. With many competitors offering recurring discounting as a means of gaining consumer following and interest, Marks and Spencer can avoid the sales process and utilise price discrimination that give consumers a greater sense of belonging with the brand. References AAFM. (2013). All about fashion marketing. [online] Available at: http://selincetinkaya.com/category/lifestyle/ (accessed 19 November 2013). Ayub, M. (2010). Strategic marketing of Marks and Spencer. [online] Available at: http://ezinearticles.com/?Strategic-Marketing-of-Marks-and-Spencer&id=5935288 (accessed 21 November 2013). BBC News. (2013). Marks and Spencer profits fall as clothing disappoints. [online] Available at: http://www.bbc.co.uk/news/business-22605609 (accessed 17 November 2013). Blankson, C. (2004). Positioning strategies and incidence of congruence of two UK store brands, Journal of Product & Brand Management, 13(5), pp.315-328. Chiselett, H. (2009). Marks in time: 125 years of Marks & Spencer. Weidenfeld and Nicolson. Executive Digest. (2008). How to market to the overlooked 25 to 34 year old age segments. [online] Available at: http://www.marketing-execs.com/news/11-08/2.asp (accessed 17 November 2013). Fournier, S. (1998). Consumers and their brands: Developing relationship theory in consumer research, Journal of Consumer Research, 24(March), pp.343-372. Foxall, G.R., Goldsmith, R.E. and Brown, S. (1998). Consumer psychology for marketing, 2nd edn. UK: International Thomas Business Process. Hameide, K.K. (2011). Fashion branding unravelled. Fairchild Books. Hart, S., Smith, A., Sparks, L., & Tzokas, N. (1999). Are loyalty card schemes a manifestation of relationship marketing? Journal of Marketing Management, 15, pp. 541–562. Site Rapture. (2012). Featured mobile industry stats / trends. [online] Available at: http://www.grabstats.com/statcategorymain.aspx?StatCatID=16 (accessed 20 November 2013). Wood, Z. And Finch, J. (2009). A new face, but the same old problems at Marks and Spencer, The Guardian. [online] Available at: http://www.theguardian.com/business/2009/nov/22/bolland-marks-spencer-problems (accessed 20 November 2013). Zhang, H. and Chan, D. (2009). Self esteem as a source of evaluative conditioning, European Journal of Social Psychology, 39, pp.1065-1073. Read More