Strategic Marketing Audit for Marks and Spencer - Essay Example

Marks and Spencer Company marketing Audit Executive Summary This report will conduct a strategic audit analysis of Marks and Spencer in its quest to increase and maintain client base and market share in the United Kingdom and across the world. The company enjoys a vast market in the United Kingdom in those clothes in the lifeline of the domestic economy. This report will apply the Porter’s five force model and PESTEL in a bid to evaluate the marketing and strategic analysis being used by Marks and Spencer in a country with a population of over 60 million and with high domestic market for the company’s product. The report will also offer recommendations according to the findings with a purpose of assisting the company to maintain and increase market share in the world. Table of Contents 1. Introduction ………………………………………………………………………. 4 2. Marketing Mix………………………………………………………………….……4 3. PESTEL Analysis………………………………………………………………… 6 i. Political Factors……………………………………………………………………. 6 ii. Economical Factors………………………………………………………………… 7 iii. Social Factors………………………………………………………………………. 7 iv. Technological Factors……………………………………………………………… 7 v. Environmental Factors…………………………………………………………….. 8 vi. Legal Factors………………………………………………………………………. 8 4. Porter’s Five Forces Model Theory………………………………………………. 9 i. Competitive Rivalry………………………………………………………………... 9 ii. Threat of New Entrants……………………………………………………………. 9 iii. Threat of Substitute Offering……………………………………………………… 9 iv. Buyers’ bargaining power…………………………………………………………. 10 v. Suppliers’ bargaining power……………………………………………………….. 10 5. SWOT Analysis…………………………………………….……………..…………10 i. Strengths……………………………………………………………………………..11 ii. Weakness…………………………………………………………………………….11 iii. Opportunities……………………………………………..………………………….11 iv. Threats……………………………………………………………………………….12 6. Conclusion……………………………………………...………………………….. 12 7. References…………………………………………….…………………………... 14 Marks and Spencer Company marketing Audit Introduction Marks and Spencer is one of the leading retailers of clothes, home wares, financial services, and food in the United Kingdom. The company owns over 700 stores in the United Kingdom and 300 across 40 countries in the world. Marks and Spencer has been operational since the year 1884. The company offers high quality, stylish, home products, and exceptional value clothing. Marks and Spencer employ over 75,000 people in the United Kingdom and abroad. The company is the leading provider of women’s lingerie and wear in the United Kingdom, and it is rapidly growing worldwide. Marks and Spencer home wares and clothing account for 49% and the other 51% is in fresh produce, groceries, and food. Marks and Spencer is listed on the London stock exchange, and it is a constituent of the FTSE 100 index. The company, which is colloquially known as “Marks and Spencer ”,“ M&S or “Markies”, was characterized in the early 20th century of selling British made goods giving it a reputation. For the purpose, of the study the company in last few faced with economic turmoil’s hence moving towards “ back to basics” strategic while trying to survive the competitive market. The company’s back to basic strategies has not been successful in solving the problems thus necessitating an overhaul in their marketing and strategic audit (Gordon, 2009). In so doing the company will be able to gain a broader understanding of market structures while setting standards in values quality, innovation, customer trust and value services. Through strategy audit, the company will be able to answer financial crisis and the economic recessions. Marketing matrix For marketing mix, Marks and Spencer is just in place in that their mix conforms to the products, place, price, and promotion. The company is averse to marketing because of convection advertising and brand offering. Through it, they have promoted new services and products in new store openings. The position of the competitors store has made the company restructure their prices resulting in low and high prices depending on the decision of the finance office and the availability of a competing store. The management capability in terms of promotion has also enabled the company to increase the customers and improve the loyalty and trust of the clients. The company is considering sustainable and strategic growth in undertaking new practices as an essential element in sustaining and promoting competitive products and services. There is also a need of maintaining competitive advantage through site selection, price reduction, and product segmentation so as to meet the clients need without marching other retailers (Gordon, 2009). Growth is confined to quantity of market share, and this is achieved by the company through the increase of strategic options and maintaining closeness to the customers (Baker, & Hart, 2008). As part of the marketing mix, Marks and Spencer are offering customers benefit value through promotional techniques hence maintaining customer loyalty. Promotion should be handled with caution in that it usually hard for the company to terminate without causing customer dissatisfaction. Promotion used by Marks and Spencer include point of purchase which stimulates the customers impulse of buying. Marks and Spencer have failed in the creation of incentives as a mode of promoting its products, which can increase both the loyalty and the customer base. Another promotional way is the introduction of frequent shopper programs that entail the use of credit bonus by putting offers on particular items (James, 2010). In terms of products, the clothing sector is one of the lifelines in connection to the domestic economy of the United Kingdom. Marks and Spencer have diversified their trends in terms of fashion to include a variety of baby clothes and women lingerie. In it to keep abreast with the global demand in terms of clothing Marks and Spencer should capitalize on the technological advancement and target the internet home shoppers. The product can always undergo review in basis of market trend and fashion in comparison to other players (Baker, & Hart, 2008). Marks and Spencer have increased orientation in products and behavioural segmentation that emphasize on good value at a reasonable price. To explore the external diverse the company introduced clothing and food for festive occasions too. To increase the sales of its products, the company did segmentation in terms of psychographic. This has enabled them to cater for different personalities, perceptions, and lifestyles. PESTEL Analysis PESTEL analysis is used to analyse that factors that may affect a company in terms of market share and how they can be used to create an enormous profit margin (Brugman, 2003). These factors are categorized into six main groups, which are political factors, economic factors, social factors, technological factors, legal factors and environmental factors (Williams, 2005). i. Political Factors The government through political influence sets regulations for organizations and companies. The set regulation dictates the performance of the companies and such policies includes health and safety British standards that stipulate the mandatory operational guidelines. The company in abiding to it, they should follow standards such as, planning for hazard identification, risk control and risk assessment. Failure to abide by the laws leads to a company being charged or faces fines and others forced to close. Another factor is the introduction of fair-trade policy that has led the company to go down the fair trade route on both food and clothing. The policies include cuts in recycled packaging, salt, and fat in foods and animal welfare protection. ii. Economic Factors The current economic outlook makes the company face lot uncertainties. The impact of economic turmoil’s in us will likely affect their retail sales because people will not have surplus cash to consume in luxurious food and clothing. Marks & Spencer have experienced this and have led to the closing of the number of retail stores countrywide. The impacts of the worldwide economic crisis have made the company retrench employees by almost two percent. Marks & Spencer has restructured its marketing strategies so that they can try to stay ahead of the recession (Porter, 1996). iii. Social Factors The current technological advancement has led to changes in society setup. The impact of this change led the company to stretch its company brands introducing online food sell as part of a plan to lead in multi channel retailing. To revive the street clothing stores the company has increased varieties in the version trends enabling them to counter the less expensive versions. They have maintained clothing ranges up to date keeping the latest trends available in all their stores. Consumer purchases are influenced by, social, cultural, psychological, and personal characteristics and marketers cannot control these factors unless they take them into account (Armstrong & Kotler 2007). iv. Technological Factors For the company to communicate to the consumer’s advertisement, should be taken into consideration. The online marketing and the outsourcing of companies marketing departments have enabled the company to maintain the client base all over the world. Through technological advancement, the company has had to include celebrities in TV adverts and blogging in the websites. The technology in the production of clothes assists in quicker and cost effective methods of production, which has enabled the company to catch with the increasing demand for their products (James, 2010). v. Environmental Factors The current environmental debates have forced most companies to change their production habits in lieu of favourable sustenance (Ottman, 1998). The company has established their own green policy dubbed plan A stating that there is no plan B in environmental degradation. Through this plan, the company has had five plans to restructure their carbon emission to meet the UK regulated standards. The company endeavours in implementing its policies of zero-waste-landfill, sustainable sourcing, health promoting business and ethical trading. vi. Legal Factors Legislations always keep changing. Marks and Spencer in quest of being up to date on the legislation changing the company carries out re-training & update to its employees every year. To ensure environmental and health regulations are met they keep up to date on training the staff. Legal factors are also experienced from the tax regulating bodies hence the need of updating the finance departments in meeting the government’s obligations. Under the legislative acts, the company has had to update its packaging techniques to include manufacturers details. Porter’s Five Forces Model Theory Porter’s five-model theory is a model that is used to determine the competitiveness of a market in terms of the product that is being introduced by the company (Branson 2010). i. Bargaining power of customers The power of customers is of vital stature is vital in the company hence its core in the customer relations. Competencies in handling success factors and making strategic moves are integral in the bargaining of customers. The use of website information accompanied with online catalogues has helped the company in achieving strong customer base. The impact of providing customer with easy ways of accessing product gives the company an edge over its competitors (Baker, & Hart 2008). Marks & Spencer have responded well on customer-oriented promotions and hence offering them in their strategic implementations leading to positive motion for sales and gains. ii. Threat of new entrants To deal with the threat of new entrants like the company has engaged in retail expansion through allocation of resources in its strategic base of global bossiness (James, (2010). Marks and Spencer business strategy have assisted in stability options making new entrants had to catch up with its market base. It is every hard for new entrant to have a point of entry into the companys base. The company also has expanded beyond the UK, and this has been possible through its development of research and technology. iii. Competitive Rivalry Competition exists in every business setup. The main competitor of Marks and Spencer is Sainsbury although the company’s image has gained more popularity as compared to its rivals. In counteracting the rivals, Marks and Spencer have achieved progress in clothing lines such as lingerie for women and menswear while the competitors are diversifying into groceries and other areas. It is also evident that Marks and Spencer have capitalized on structured formula to its operations maintaining fundamental principles of marketing. To survive, the fierce competition the company will have to redirect its business strategies and keep up with the global market in order to have a better shot on the marketing mix. iv. Bargaining power of suppliers Suppliers play a crucial role in Marks and Spencer in that it utilizes many primary products. The company utilizes chain management drivers allowing it to have a wide supplier base for its logistic products and services. It has set standards in supply chain performance maintaining and attaining quality marketing tools that appeal to suppliers (Wilson, 2008). The company has broadened the supply base to include zones outside the UK, hence focusing on inbound and outbound supply logistics. v. Threat of substitute products  There have been threats of substitute’s products to marks and Spencer makes it stands the risks of being put out of the operations. The company is expected to put emphasis and be careful in terms of products image and branding and thus should ensure concrete patent to every product offered and launched by the company (Branson 2010). Its originality and durability makes the company counteract the threats of substitute’s products making the company’s reputation strong in relation to customer choice. SWOT Analysis i. Strengths The greatest strength that characterizes Marks and Spencer is it high quality product. There is the availability of quality clothes and foods such as fruits in the company chain stores. It has also capitalized on quality baby products and women underwear enabling customers to get a variety. The company has a high reputation in respect to customer services hence has made a good relationship with the customers (Quam, 2012). They also have favourable shopping environment making customers more comfortable and convenient in modern designs. Another strength of the company is its excellent and strict manger training system improving their management skills and work experiences. Every manager in the chain stores must be familiar with every post. ii. Weakness In the clothing sector there is a lack of segmentation in that Marks and Spencer has many segments. There is minimal consideration on merchandise especially the women outerwear that lack cut and design. The issue of branding has also not been considered much in respect to younger consumers. Another weakness experienced by the company is within the stock control. Sometimes the management is not aware of finished stock especially those in the waiting lists. There has been customers complain because of defects of e-shopping and delivery mechanisms. Sometimes the company suffers from lack of balance between the stock and information technology system. The company waste many storage spaces in that they are increasing storage spaces, but its market share has not been on the rise (Wilson, 2008). iii. Opportunities The availability and easy access of the internet worldwide offer an innovative opportunity for the company. Buying products and services online has become a new trend worldwide (Doney, 2006). The customers are adapting and getting used to online purchases. The current change of eating habits also favours Marks and Spencer in that there is demand of specific foods. People currently pay much attention to quality food for a healthier life. Operations through franchise are an added opportunity for the company hence increasing successful partners. iv. Threats Strong competition is a serious threat to the company (Doney, 2006). Examples of companies keeping Marks and Spencer not at ease are Tesco, Asda, and Sainsbury. The companies not only provide value added products but also quality items to build customer trust and loyalty. In the sector of clothing, there exist Next, Gap, Top shop and other upcoming outlets. The change of the social environment affects the cloth markets making them spend a lot in design and research. Pollution is another threat to the company in that every product they sale is dependent on a chemical (Ottoman, 1998). The government initiative in environmental protection poses as a threat to the company. Conclusion In conclusion, Marks and Spencer’s have maintained its successes in terms of competition and quality products and services for many years. It has been evident that the economic fluctuations and turmoil’s have forced the company to compete against cheaper products that are young on the market (Bevan, 2001). The impact of the recession has also forced mark, and Spencer to improve and to restructure their policies to suit and counteract the consequences of low demand. The political, technological, sociological, environmental, and legal policies are to be considered by the company for it to survive the competitive world. Finally, the company needs a total overhaul by ensuring the management is streamlined while marketing mix changed. References Baker, J. M. & Hart, S., 2008. The Marketing Book: New Product Launch into the Market. Taylor and Francis Group, New York. Branson, H. L. 2010. Marketing: A Comparative Study on Launching New Products. Kniff, London. Bevan, J. 2001. The rise and fall of Marks and Spencer. Profile Books. Oxford University Press, London. Doney, P. 2006. UK Market: Threat or Opportunity. 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