Marketing Assessment of M&S - Report Example

Marketing assessment of M&S Section Summary on situation analysis Marks and Spencer (M&S) is one of the leading retailers of the United Kingdom that offers apparels, food and grocery, accessories, home and furnishing merchandises to consumers of different age groups. Besides the UK, the company operates in Asia, Europe and the Middle East. The company witnessed slow growth in terms of revenue in 2014 and stiff competition can be one of the contributing factors in this regard. The paper mainly focuses on the home and furnishing section of M&S and discusses strategies for improving brand awareness. In the UK, M&S has around 798 stores that serve weekly 34 million consumers (Marketline, 2015). The situational analysis has been undertaken based on SWOT assessment of M&S. The company is heavily dependent on the retail sector of the UK as it contributes largely toward the firm’s top-line growth. The firm has adopted multichannel growth approach by means of mobile application, online shopping store, home and telephone catalogue and in-store ordering. Marks & Spencer has transactional iPhone app and has recently launched M&S home app for iPad as well. However, the company’s excessive dependency on a particular geographic market may prove risky in the long run. The company is presently expanding its food business division in Europe and also at prominent locations in the UK so that greater number of consumers is served. It also believe that significant opportunity lies in developing markets of China and India as disposable income of consumers is increasing rapidly. However, the rising labour cost can have an adverse impact on operating profit of M&S considering the company’s dependence on the UK (Marketline, 2015). The UK market is facing stiff competition as more and more number of companies is entering the market by offering home furnishing products along with others. With respect to home shopping, the main competitors of M&S are Tesco, ASDA, Sainsbury’s, Next and Debenhams. The dominant position of Tesco and other competitors has affected demand for M&S home furnishing products. M&S has so far focussed on promotion and selling of various retail products except home furnishing and consequently, it is losing its market in the UK. Additionally, the UK market being M&S’s prominent revenue generator, loss in market share can affect the firm’s revenue in long run (Marketline, 2015). Considering the growing competition, the paper presents sales and marketing strategy for M&S home products so that brand awareness is improved among consumers. Section 2: Summary on advertising plan Section 2.1 Objectives of the advertising campaign Television and internet have become a prominent source of broadcasting advertisement and as a result, advertising campaigns are being used by almost every firm for product promotion and awareness. Advertisements are viewed by consumers chiefly to remain informed about products. This information is later utilised by consumers for analysing and comparing the products. Advertising campaigns in the form of motion pictures are considered as an effective source of communication because such campaigns not only converse the features of the product but also its utility and implications on the lives of consumers. The objectives of the campaign are discussed as follows: The advertising campaign of M&S with Harper Beckham aims at stimulating emotional appeal of consumers and improving their brand awareness regarding M&S home offerings. The campaign aims at establishing identity marketing by means of celebrity endorsement as such endorsements helps consumers to relate to the product The campaign aims at increasing brand awareness that M&S home sells superior quality of furniture which can transform outlook of any space within the house. Another important objective of the campaign is to increase sale of M&S home products such as bed, table, chair and other furniture. Section 2.2 Audience profile Audience profile of M&S will strictly include every individual belonging to its target market. Target market is referred to a specific group of consumers that a business organisation targets for selling its merchandises. Defining the target market is an essential part of marketing strategy. The target audience of M&S comprises men, women, babies and children belonging to the age group of 0 to 70+ years. Interestingly, the company does not do any biasness towards consumers in terms of gender and social class. The company offers an array of products that can cater to the needs of individuals belonging to middle and upper classes and their sub-classes. The company sells variety of products such as apparel for men, women and children, games and toys, shoes and related accessories, beauty products, alcohol and non-alcoholic beverage, food and grocery, gifts, travel goods, furnishing products, card and other stationeries. The idea behind discussing all the products is to reflect that M&S has significantly diversified its offerings for accommodating requirements of various consumer groups. The company targets majority of consumer groups for ensuring continuous flow of revenue as targeting one specific consumer group often limit scope of profitability. Consumers belonging to different segments have been included in consumer profile of M&S because greater consumer base implies more revenue for a company as well as greater market share in long run. M&S has tried to implement one-stop solution strategy for its consumers. In other words, any kind of consumer, irrespective of their demographic and psychographic backgrounds, will be able to satiate their product needs at M&S stores. Additionally, variety of offerings enhances comfort level of consumers and appeals them for future visits. Figure 1 (Source: Telegraph, 2013) Figure 2 (Source: Telegraph, 2012) Figure 3 (Source: Daily Mail, 2013) Section 2.3 The creative platform of the advertising campaign The creative idea of the advertising campaign mainly focuses on the theme of the advertisement which is Christmas. The motion picture will show that Harper is writing her Christmas wishes and then goes to sleep. On the other side, it will be shown that wish list of Harper blows away at the chimney because of wind. Harper wakes up to see variety of furniture such as beds of different size, cupboards, tables and so on and so forth. Harper runs downstairs to find more furniture of different designs and sizes. Suddenly, Harper notices that three bears enter the house and sit down for Christmas feast at the new table and chairs. Harper Falls asleep while watching them enjoying their meal and wakes up to rush to her parents to share her dream while the last of the campaign presents the slogan “create a little magic”. The campaign mainly portrays that M&S home is largely focused on fulfilling dreams of consumers regarding their home. The idea is to convey consumers that the company knows exactly what is required to be done for converting a house to one’s home. Quality, class and style have been essentially incorporated in the advertisement so as to give a British feeling to consumers with respect to the products. Section 2.4 Summary of advertising media choices M&S has ensured that a holistic approach is adopted for marketing the furnishing merchandises of the company. The media choices of the company focus on both broadcast and print media. The digital choices include: Television: Three different television channels, namely, ITV 1, ITV 2 and Channel 4 have been chosen for promotion and on these channels advertisements will be broadcasted for 4 to 8 times per day. The advertisements will mainly emphasis on quality of the products, their competitive price and availability of almost every kind of product at M&S. The scheduling has been done for 6 months which will be covered over a period of one year by airing the ads for every 2 months. The budget was determined to be £829,254. Facebook ads: Facebook advertisement has been ranked as one of the most effective media of social advertising. Price slash, new products and discounts will be used herein. £20000 has been invested in Facebook Pay per click advertisement for the year. Video streaming on YouTube: The special ad campaign of M&S will be accessible to consumers on YouTube and for this purpose £144000 has been invested with respect to twice a day viewership. Google adwords: Google is a common search engine and is equally preferred all over the world for its effortless integration and search capabilities. Google Adwords was considered appropriated for advertisement because Google is highly familiar among consumers. The same has been subscribed for 365 days at a cost of £18250. Cinema advertising: Viewership of cinema is increasing on a regular basis and considering its popularity, the strategy has been adopted for 3 months where promotion will be done once in every two months for a payment of £15000. The main advertising content will comprise consumers (actors) visiting M&S for making purchases. Interior designing magazines: £3000 has been invested in print promotion through magazines for 6 months where the advertisement will be done for 6months. In-store advertisements and live window display: In-store advertisements and window displays influence store visitors and passersby. In-store advertising will be done through posters and banners of new collection of clothes, furniture, discount and rebates and attractive images of fresh fruits and vegetables. M&S budget invests £40000 for the same for a period of 6months. The company will invest in live window display for four months, that is, one month per quarter for £35000 at 15 prominent store locations. Ads on billboards and busses: Ads on billboard will be placed for an entire year while that on the busses will be done for six months on weekly basis. The bus ads will be displayed for a month in every two months. The respective budgeted amounts for these are £11200 and £2380. The contents will mainly focus on informing consumers about fresh arrivals, discounts and special events. Celebrity endorsement: the celebrity endorsement is an one time investment where the allocated budget value is £100000; the endorsement is mainly focused on promoting M&S home offerings. The content focuses on bringing makeover to consumer’s home and to add special effects with respect to Christmas. Newspaper: Newspaper advertising will be done for 6 months equally distributed over a period of one year at the cost of £43560. Newspaper is accessible to almost every individual and consequently, its content will mainly focus on informing consumers in a concise manner. Special M&S catalogue on Christmas: M&S will distribute 15000 catalogues at different M&S Home stores during Christmas. The catalogue content focuses on new products and designs. The allocated amount for this media segment is £480000. Gift vouchers: Gift vouchers have significant impact on buying behaviour of consumers and consequently, M&S will produce around 100000 vouchers between September and March at the cost of £262 per 250 vouchers. The idea is to encourage greater purchase during festive seasons and when seasonal sale is low, for instance, during March. Section 3: Sales Promotion plan Section 3.1 Objectives of the sales promotional campaign Sales promotion is referred to implementation of an array of marketing tools for conveying product information to various consumers and influencing them to purchase the product. Promotional tools are intended at a business concern’s target audience. Promotional campaigns can include various print and broadcast tools (G. Belch and M. Belch, 2001). The objective of M&S promotional campaigns are: a) Introduction of new products: Sales promotion tools such s trade fairs, free samples and money back offers have been targeted at introducing and promoting new products at the market. Trade promotional tools such as target based incentives will also motivate stores to increase product sale. b) Attracting new consumers: Since the industry is highly competitive, it was assumed that innovative promotional techniques will attract new consumers towards M&S products. Exchange schemes and money back offers are essentially useful in attracting new consumers. c) Retention of existing consumers and appealing them for more purchase: Bonus points and gift vouchers play an important role in retaining existing consumers. Premium and bonus offers also have equal impact on individuals who are regular shoppers (Shimp, 1997; Schultz, 1992). d) Maintain competition: Trade promotion to franchisees and owned stores has been accommodated in the promotional plan in order to ensure that stores remain competitive in their respective geographic locations (Kotler, 2000). Sales promotion tools employed Free samples: Free samples are primarily distributed so that new consumers can try the product and understand its utility. M&s Home will distribute small home decor items as free samples. Premium and bonus offers: Premium and bonuses are useful for retention of existing consumers through additional products and/or services to the consumers. The bonus offer at M&S home will include rebate on second purchase. Exchange schemes: Exchange schemes imply offering new products at a nominal price in exchange of old and used products of consumers. At M&S home, the exchange scheme consists of exchange of old furniture for contemporarily designed furniture. Price-off offers: Price-off offers involves selling a particular product at a price that is less than its actual price. Such offers have strong appeal on consumers as they think they can save more if they purchase during these offers. Price-off will be incorporated for increasing off-season sale at M&S home. Gift vouchers and Coupons: Gift vouchers and coupons are useful in attracting existing as well as potential consumers which consumer can redeem during their next purchase. Trade fairs and shows: Trade fairs and shows are considered important for their capability of generating awareness among consumers regarding product features, utility and quality. M&S home will participate in trade fairs for increasing its product awareness and building consumer base in regional areas of the UK. Bonus points: Bonus points are considered as a lucrative option for attracting consumers. In this method, regular consumers are made members of the store and they are allocated bonus points with respect to their purchase amount which they can redeem during their next purchase in the form of cash discounts. Bonus points are useful in retaining existing consumers. Money back offers: This kind of offers imply that full refund will be provided in case consumers are not satisfied with product quality, features or services. Scratch and win programs: Scratch and win programs are useful during contests that are undertaken during product launch. Such programs attract consumers because of the underlying hope of consumers that they may win something free of cost along with the purchase. Trade promotion to franchisees: Trade promotion is done exclusively for motivating store employees and franchisees to perform better. M&S home is incorporating a number of promotional tools in order to establish a holistic presence in the market as the market is becoming increasingly competitive with entry of various domestic and international retailers. The promotional tools are expected to have strong impact on consumer mind because by availing these offers, consumers can purchase superior quality products at relatively low cost. Additionally, aggressive promotion is important for M&S Home to establish its superiority and gain market position (Kotler, 2000). Section 3.2 Customers to be targeted Segmentation can be done on the basis of geography, demography, behavioural and psychographic bases (Ang, Leong and Tan, 1999). The geographic and demographic segmentations suggest that the consumers are largely based in urban areas of the UK and they belong to different age groups between 0 and 70+ years. This suggests that the company is capable of catering infants as well as elderly people. Furthermore, the consumers do not belong to a specific gender group; instead, both male and females shoppers can be observed at M&S store. M&S home products have been created to serve every consumer irrespective of their age and gender. In other words, the company presents housing solution for individuals belonging to any gender group, age group, income group and social class. M&S keeps products for all income and occupational groups such as low income, middle income and high income earners. The retail group serves needs of consumers belonging to different social groups such as working class, middle class and elite class although majority of consumers belongs to upper middle class and skilled working class. The psychographic segmentation reveals that the stores are visited by determined buyers as well as by quick or casual buyers on a regular basis. Since M&S sells products belonging to different price groups, it is visited by spenders as well as savers (Kotler, 2000). Section 3.3 A series of consumer-oriented sales promotions Consumer oriented sales promotion methods are fundamentally used for boosting sales revenue. There are several techniques in this regard such as couponing, contest, sampling, premium, sweepstake, refund, rebates and price markdown. The consumer oriented promotional tools have positive as well as negative impact on a business. The consumer oriented sales promotion of M&S consists of free samples, premium and bonus offers, exchange schemes, price-off offers, gift vouchers and coupons, trade fairs and shows, bonus points, money back offers and scratch and win programs. The promotional tools are aimed at ensuring that consumers ultimately purchase the product (Parker, L. Pettijohn and C. Pettijohn, 2002). M&S promotional budget has allocated £2,000,000 for consumer and trade promotion over a span of 12 months. Rebates are provided to consumers in the form of cash discount and often as reimbursement as they present a proof of purchase. Refunds are mostly provided by FMCG markets whereas rebates are provided by consumer durables sellers. M&S will implement rebates for home furnishing products by means of gift vouchers. Consumers can purchase one product and use the rebate during their next purchase. The company will initiate a period exchange scheme where consumers can exchange their old products with new ones in exchange of nominal price. Contests and sweepstakes are primarily scope of wining cash and non-cash prizes during or after the purchasing process. However, in contests participants need to exhibit certain level of skills while sweepstakes are disbursed purely on the basis of chance. Contests in the form of scratch and win programs during new product launch of M&S home will appeal consumers to buy and participate thereof. Sweepstakes will be distributed through free samples, premium offers and coupon vouchers for a certain amount of minimum purchase. Price off offers and bonus points on regular purchases will also be implemented at M&S home products so that bulk purchasing is encouraged among consumers (Koekemoer, 2004). Section 3.4 Outline of trade-oriented promotions Trade oriented promotion involves developing incentives for attracting retailers or franchisees. Since the company itself is involved into retailing practices, it will mainly develop incentive plans for franchisees so that the stores can be developed in more locations. There are several forms of trade oriented promotion such as cash bonuses, relaxed credit terms, stock return, conference for franchisees and best performing franchisee award. M&S will be using incentives for encouraging its franchisees to improve revenue generation. Such incentives will attract new franchisees as well. Relaxed credit terms and decrease in royalty fee will also support franchisees to grow in new markets (Koekemoer, 2004; Parker, L. Pettijohn and C. Pettijohn, 2002). M&S will initiate lending program for its existing as well as new franchisees. It is expected that these lending programs will allow franchisees to choose M&S over other retail chains for franchising purpose. Franchisee conferences and awards at year end are expected to be other sources of motivation because the company’s overall performance and that of each franchise can be discussed and appreciated in award ceremonies and conferences. Alongside, sales incentives for employees at different M&S stores can be expected to generate positive outcome. Trade incentives will also be provided by M&S for developing strong customer relationship and brand loyalty at various stores. Individual and team rewards will also prove useful in improving sales at various M&S stores (Koekemoer, 2004; Shimp, 1997; Parker, L. Pettijohn and C. Pettijohn, 2002). For the purpose of sales and trade incentives, £50000 has been allocated in the budget of the company which will be distributed quarterly based on store performance. Section 3.5 Communication considerations Communication consideration at M&S home focuses mainly on integrated marketing approach where several kinds of communication tools are utilised for communicating marketing message related to the product. The tools that the company will be implementing are ad campaigns, celebrity endorsement, bus displays, billboards, video streaming and special edition catalogues. Customer relationship development is also recommended for communication of marketing message. The ad campaigns of M&S home can be viewed at the company website and also by means of video streaming at YouTube. Celebrity endorsement is one of the common marketing techniques of the company and for M&S home, it is recommended that the company considers British actors and actresses. Interior decoration magazines and other magazines are also important tools for product message communication. Various loyalty programs can be designed by the company for ensuring consumer engagement and relationship development (Koekemoer, 2004). Advertisement in newspaper, magazines, special edition catalogues and social media sites will help in providing significant amount of information regarding new and existing products to the consumer and may incite the purchasing feeling. M&S home has implemented both above-the-line and below-the-line advertisement tactics so that the communication is undertaken in a holistic manner. In the above-the-line marketing strategy, M&S will use billboards, display on buses, magazines, television and live window display whereas the below-the-line techniques involve Facebook ad, Google ad, in-store advertisement and promotion by advertising agency. Consumers can directly interact with company representatives by means of email and social networking sites (Smith and Taylor, 2004). Promotion by means of movies has also been considered useful for the promotion of M&S home furnishing. Movie as a communication tool has often been considered consumer engaging. M&S will be investing significantly television promotions as well but the products that will be promoted by means of television ads depend largely on the company. Since the home furnishing products are for mass consumption, the above discussed promotional tools will prove to be extremely effective. The promotion campaign of M&S has been designed using the AIDA model (Attention, Desire, Interest and Action). The ads have been designed in such a manner that it will ensure that consumers place their maximum attention to M&S home products. The ads have been designed while keeping in mind taste of the British consumers in particular. The main ad campaign will be endorsed by Harper Beckham and it is expected to have maximum impact on various household consumers (Schultz, 1992). Section 3.6 Budgetary considerations Sales promotion tools Budgeting expenditure Duration Estimate Free samples £15000 per month 4 months £ 60,000.00 Premium and bonus offers £20000 per month 8 months £ 160,000.00 Exchange schemes £100-150 per exchange; 500 exchanges 4 months £ 240,000.00 Price-off offers £20000 per month 12 months £ 180,000.00 gift vouchers and Coupons 250000 vouchers and coupons at £1.50 6 months £ 375,000.00 Trade fairs and shows £30000 per month 12 months at different locations £ 360,000.00 Bonus points £10000 per month 12 months £ 120,000.00 Money back offers £41000 per month 5 months £ 205,000.00 Scratch and win programs £50000 per month 2 months £ 100,000.00 Trade promotion to franchisees £50000 per month 4 months £ 200,000.00 Total £ 2,000,000.00 In the above budget plan, almost every promotion tool has been accommodated for the promotion of M&S product offerings with respect to its every store in the UK. A major segment of the budgeted amount has been allocated to gift vouchers and coupons because gift vouchers and coupons have strong prospect of appealing any consumer group. Second highest budget amount has been allocated to trade fairs and exhibition as these are the best tools for accessing regional and local consumers and demonstrating them the features and utility of home furnishing products. The entire budget has been allocated after critically evaluating the degree to which various promotional tools influence consumers’ buying behaviour. Significant investment has been done in money back offers and exchange schemes as it was determined that such offers have certain powerful impact on consumers and can influence existing and potential consumers to visit the store for unplanned purchases. Fair share of the budgeted amount has been allocated to free samples, premium and bonus offers, price-off offers, bonus points and scratch and win programs because they stimulate emotional appeal of consumers and also contributes towards unplanned bulk purchases and off-season purchases. Section 3.7 Scheduling considerations The scheduling has been done based on the new budget that has been discussed previously. The budget scheduling has been done on the basis of off as well as peak sales seasons. For instance, majority of budget has been allocated for the festive season between October and December. Majority of budgeted costs such as that of bonus points, trade fairs and price-off offers has been allocated for the entire years while exclusive tools such as free samples, scratch and win, exchange scemes has been undertaken for peak seasons while for off-seasons premium and bonus offers, gift vouchers and money back offfers have been undertaken. For effective trade promotion among franchisees and stores, quarterly reward has been allocated in the budget. Section 3.8 Logistical and legal considerations Logistic and supply chain management largely encompasses activities related to movement of raw materials for production to delivery of the goods to final consumers. M&S is a large retail group and it needs to have efficient supply chain management system for ensuring cost optimisation (Croom, Romano and Giannakis, 2000). Logistical decisions comprise procurement, warehousing, movement of final goods and final delivery. M&S sells a number of goods and as a result need to maintain significant precaution in logistical process. In this regard, the company will follow legal guidance as well in accordance with the UK government norms. All home furnishing products will delivered to the consumers at their home address and will be fixed or installed thereof. Existence of any kind of dispute will be resolved immediately and the company will get the product picked from consumer’s doorstep and will deliver undisputed product to the consumer at the earliest. M&S will ensure that every activity is integrated and quality is maintained at every stage (Pelton, Strutton and Lumpkin, 2002). Reference list Ang, S. H., Leong, S. M. and Tan, C. T., 1999. Marketing management: an Asian perspective. Singapore: Prentice Hall. Belch George, E. and Belch Michael, A., 2001. Advertising and promotion. An Integrated Marketing Communications Perspective. New York: McGraw Hill Higher Education. Croom, S., Romano, P. and Giannakis, M., 2000. Supply chain management: an analytical framework for critical literature review. European journal of purchasing & supply management, 6(1), pp. 67-83. Koekemoer, L., 2004. Marketing Communications. Claremont, South Africa: Juta and Company Ltd. Kotler, P., 2000. Marketing management: The millennium edition. Upper Saddle River, NJ: Prentice-Hall. Marketline, 2015. Marks and Spencer Group plc. [online] Available at: [accessed 17 March 2015]. Parker, R. S., Pettijohn, L. S. and Pettijohn, C. E., 2002. Using trade incentives to promote customer relationships in a retail setting. Journal of Market-Focused Management, 5(2), pp. 135-147. Pelton, L. E., Strutton, D. and Lumpkin, J. R., 2002. Marketing channels: a relationship management approach. New York: McGraw-Hill. Schultz, D. E., 1992. Integrated marketing communications. Journal of Promotion Management, 1(1), pp. 99-104. Shimp, T. A., 1997. Advertising, promotion, and supplemental aspects of integrated marketing communications. Harcourt: Harcourt Brace College Publishers. Smith, P. R. and Taylor, J., 2004. Marketing communications: an integrated approach. London: Kogan Page Publishers. Telegraph, 2013. M&S, its time to break the ridiculous cycle of selling clothes entirely at odds with the weather. [online] Available at: [accessed 23 March, 2015]. Telegraph, 2012. Marks & Spencer installs wi-fi in e-commerce push. [online] Available at: [accessed 23 March, 2015]. Daily Mail, 213. M&S faces boycott as it lets Muslim staff refuse to sell alcohol or pork. [online] Available at: [accessed 23 March, 2015]. Appendix Advertisement scheduling information Television scheduling has been done for six months and the six month time span has been distributed equally for next 12 months. The television ads will be aired in every two months starting from July. Similar strategy has been adopted for print media, that is, news paper but the ads will be published from August. Facebook ads have been scheduled from July but the payment has been made on a quarterly basis. The budget scheduling for Google ad words, YouTube video streaming and in-store advertising has been done on a monthly basis. Celebrity endorsement, payment of ad agency and special Christmas catalogues have been done as one time investment. Budget for gift vouchers, live window display and bus ad has been allocated on quarterly basis. Budgeting allocations in Advertising plan The budget allocation has emphasized mainly on increasing sales and consequently greater investment has been done in Christmas catalogue and gift vouchers. For most media tools, budget has been allocated on the basis of 6 months. However, in few tools such as Google ad words and banners and posters, the investment has been made on yearly basis. Furthermore, investment in catalogues and gift cards has been done on per piece basis. Investment in celebrity endorsement and ad agency has been made at once. Measuring the effectiveness of the advertising campaign The effectiveness of the advertising campaign will be measured by means of level of consumer awareness regarding M&S home product, increase in revenue and increase in product demand. The company will conduct in-store product and consumer survey to have feedback regarding quality of the product and service of the company. Revenue assessment with respect to investment in ad campaign can also prove to be useful in measuring effectiveness of the same. Read More