Marketing - Rivalry among the Competing Sellers - Essay Example

Introduction Porters 5 forces Rivalry among the competing sellers In the industry there is a very strong force since the Marks and Spencer’s company’s competitors use the price cuts in their competition and there is also a low cost and an ease to the switching brand. Thus the companies in this industry diversify and also acquire other companies for their strategic growth as well as synergy. Marks and Spencer’s foods segment strives for a competitive advantage over its rivals in the foods industry. The rivalry which exists between Marks and Spencer’s and the other firms in the industry is very high since there is plenty of counter response when the company acts in a particular way. In the food segment the Marks and Spencer’s company employs the following competitive moves so that it cab have an advantage over its rivals. First and foremost it changes its prices to suit the consumer’s purchasing power and this enables the company to have a temporary advantage over the other rivalry firms. Similarly the company makes further improvements in its food products differentiation and it also maintains good relationships with the suppliers. (Baryon 2006) 2. Competitive force of the potential entry In the industry this is a very strong force since the Marks and Spencer’s company’s food industry has strong brand images and this makes it very hard for the new entrants. The initial capital expenditures are very huge and the exiting companies are achieving their economies of scale by being global. Another threatening factor to the potential new entrants is the trade tariffs as well as the international regulations whereby they have to prove themselves to the foreign companies, customers and also suppliers. 3. Competitive pressures of the substitute products In the food industry the substitute food products belong to the other firms in the industry. The Marks and Spencer’s foods segment is highly affected by the price changes in the substitute food products. Since the more the substitute food products become available to the consumers then the demand of the food products from the Marks and Spencer’s company become more elastic. This further allows the consumers to have more alternatives in the market. However this is a moderate but weak force in the industry since the businesses and also individuals wish to use other cheaper food products. A close substitute food product in the industry further constraints the company’s ability to raise its prices. On the other hand there is a lot of price competition in the industry especially in the food substitutes. Most of the consumers in Marks and Spencer’s foods consider the suitability as well as the nutritive value and also the convenience of the food products which they are purchasing. (Claris, 1980) 4. The power of the suppliers This is a very strong force especially since the suppliers serve the food industry. The Marks and Spencer’s company requires the food supplies and other food raw materials. This has further led to the company creating very solid relationships with its suppliers and also the other firms which provide the company with the required food products. Since the company’s suppliers are powerful they exert a lot of influence in the industry. On the other hand the company’s suppliers are concentrated and they also have powerful customers. 5. The power of the buyers On the other hand this is a very moderate force in this industry since the existing competition keeps the prices similar amongst all the other companies in the food industry. However the only difference is that companies such as the Marks and Spencer’s foods segment have value added food products which allow a higher price. The customers have a very high impact in the Marks and Spencer’s foods industry since their buying power is very strong. The company also has a few buyers who have a significant market share and they purchase a very significant proportion of the company’s food products. The porter’s 5 forces model has some limitations that are very major limitations in the market environment presently. This is because the model fails to take into account the new business models as well as the markets dynamics. Similarly the model provides a very good framework for the company’s analysis but it fails to make considerations on the issues surrounding the changes in repositioning the company’s competitive advantage. (Dexter and Booms 1981) Branding and positioning The Marks and Spencer’s foods clearly targets the affluent consumers who look for very high quality assortment of food products. The company has been very successful in the food industry since it mainly focuses on the innovation of new food products such that the consumers often find new and additional food product ranges. This makes the consumers to revisit the company’s food stores so that they can see what is new in the market. On the other hand the company’s simply food has had a great impact on the consumers especially on the women who are in their middle ages. The Marks and Spencer’s company’s food products possess the company’s label. The ranges of the food products are also strongly segmented and most of the times the ready meals as well as the desserts have a very distinctive packaging which further draw the other associated food product ranges. This provides them with a very strong brand presence in the market. Customer life cycle The Marks and Spencer’s foods industry customers life cycle is a framework which looks into the metrics for reaching, acquiring, converting and also retaining the company’s existing customers. The consumers lifecycle in the Marks and Spencer’s foods industry allows the company understand its business nature in relation to its competitors. On the other hand the company uses both the offline and the online marketing channels in its marketing strategies so that it can reach, acquire, convert, as well as retain the consumers. (Eileen 1998) 1. Reaching the consumers. The first step in the customer’s lifecycle is reaching out to the consumers. Reaching the consumers means that the company gets their attention. For the company to reach the consumer it has to get their attention and it does this through vigorous advertisings, newsletters, food products brochures, news papers and magazines, bill boards and also through the media. The company employs different methods so as to reach their customers who are in different market segments. 2. Acquiring the consumers. The second stage in the consumer’s lifecycle is the acquisition of the consumers. Acquiring the consumers is defined as how effective the company reached out to the consumers in the market place. By the company acquiring the customers it shows that it was able to get their attention and this could be further verified by the consumers purchasing the food products from the company’s store outlets. 3. Converting the consumers. The third phase in the consumer’s life cycle is the conversion stage whereby the consumers are further led to make purchases in the company’s store outlets. 4. Retaining the consumers. The fourth phase in the consumer’s life cycle is the retention of the consumer’s since the existing consumers in the company’s industry are more valuable than the new consumers. Thus the existing consumers need to be handled very well so that they will not be attracted to the competitors’ products. In the customers life cycle the company will claim the people’s attention, then it will bring them into their sphere of influence, the company will turn those individuals into paying customers, it will then keep these people as their customers and this individuals will be turned into being the company’s advocate. (Finney 1964) Product life cycle 1. Introduction stage. In the food product introduction stage the company’s need for an immediate profit is not seen as a pressure at all. The company performs a lot of promotions so as to create awareness to the consumers. Similarly the company further employs a scheming price strategy if the food product ha fewer competitors. In this stage there are very limited numbers of the food products which are available in the company’s marketing channels. 2. Growth stage In this stage the company’s competitors are attracted to the markets with food products which are alike. The food products then become very profitable and there are mergers or even joint ventures and also alliances which are formed. In this stage the company spends very high costs on advertising as it also focuses on building the brand for the new food product. Similarly the company’s market share becomes more stable. 3. Maturity stage. In the maturity stage the company’s food products which have survived the previous stages in the industry. Stay longest in the markets. On the other hand the company’s sales grow but at a lower rate but they later stabilize. Thus the company tends to differentiate its food products and brands since there is very stiff competition as well as very intense price wars. The company then begins to leave the market because of the poor margins and it adapts to the promotional strategies for the food products. (George 1994) 4. Decline stage In this stage the company faces a down turn in the market place sine the consumers tastes have further changed or even there are more innovative food products in the market. The company then resolves to cut the prices of the food products and on the other hand many of them are withdrawn from the market. The product life cycle is not relevant ant it also has some limitations. This is because there are very few products which follow the above mentioned prescriptive cycle. Also the company has various food products and the length that is taken by each product in each stage varies enormously. Similarly the company’s decisions could change a particular stage thus it is not easy to tell the stage at which a food product is in. Value chain The Marks and Spencer’s foods industry through a period of intense competition has managed to double its commitment to its products quality, value and also service. The company turned its strong integration with its suppliers into a very vibrant and a global supply chain which responds very quickly and also efficiently to the needs of the consumers. In the company’s support activities there is procurement, the technological advancement, the company’s infrastructure as well as the human resource management. The company has some of its stores globally and it offers various food products including the fresh fruits and also vegetables. (Milton 1998) Similarly the company has a very high value for its employees and it has further developed some ethical sourcing practices in its corporate social responsibility. There is a very great attention which is placed on the quality of the food products offered to the consumers. Similarly the company has a very efficient workforce who is dedicated to serving the consumers in the best way possible. In its primary activities the company highly cooperates with the skilled employees so that they can create very high quality food products. On the other hand the company gets most of its food products from reliable suppliers. The company lays a lot of emphasis on the quality of the food products and it also stresses on the importance of proper customer services. (Kathleen and Robert 1989) 7 Ps of marketing 1. Marks and Spencer’s products First and foremost the company ensures that its products are offered to the customers and there are several issues which are evaluated before the release of the product to the consumers. The company ensures that it fully understands its products from the views of its customers domestically and also internationally. In the product description of the Marks and Spencer’s Company the company can clearly state why their food products are perfect for their consumers as well as what their food products would do best in comparison to the other food products in the market. The company’s food products are more descriptive in nature and this helps in attracting more consumers. On the other hand the company pays a lot of attention on the benefits of its food products. Marks and Spencer’s company also gives a lot of emphasis on its food product adaptability such that by understanding the adaptability of its food products the company can thus incorporate the necessary elements into their domestic and international marketing mix. 2. Marks and Spencer’s price Marks and Spencer’s Company has also adapted some international and domestic pricing strategies which has eased the international and domestic pricing difficulties. It puts into considerations factors such as the fixed and the variable costs, the company’s objectives, the competition, the proposed company’s positioning strategies as well as the target group and the willingness of the consumers to pay for the products. Similarly the company in the international and domestic pricing strategies makes considerations on the cost of transportation and it also looks into the import duties or even tariffs that could be levied on its food products as they are sold on an international and domestic scale. On the other hand the company makes considerations on the incomes of its consumers. 3. Marks and Spencer’s promotion The company Marks and Spencer’s has adapted to a promotion strategy which helps it best in meeting the demand of its consumers. The company highly emphasizes on advertising its food products. In its international promotional strategies Marks and Spencer’s Company takes a lot of concern in the level of the media development both locally and internationally. The company further adapts a strategy of adopting its advertising messages to the domestic as well as international markets so that it can successfully meet the demands of the consumers. 4. Marks and Spencer’s distribution or place Marks and Spencer’s Company has devised several international and domestic distribution strategies in the local and global markets. This ensures that the company’s products swiftly move from the manufacturers to the wholesalers to the retailers and they finally get to the consumers. The company puts into consideration the many other intermediaries that are involved in the in the distribution process of the company’s products in the international markets. (Newton 2006) Marks and Spencer’s Company also adapts to using internet as a very effective distribution channel thus allowing the company to make more sales. In its international marketing mix Marks and Spencer’s Company identifies its international markets so that it can know the existing potential customers who are selected for marketing. Emphasis is laid on the target market so that the company can be able to segment its market as well as have the ability to determine the existing different markets for the various segments. 5. people People play a very significant role in the Marks and Spencer’s Company’s food industry. The company further ensures that the consumer’s individual needs are further met and this is achieved by offering personalized services. Most of the company’s customers are attracted to the good attitude; appearance as well as the skills which are displayed by the company’s staff and administration. In Marks and Spencer’s Company food segment people add value through training, customer service as well as personal selling. The company’s personnel are highly trained and they maintain a very high quality personal service to the consumers. (Price & Brown 2005) 6. process Process is an element of service which perceives the consumers experiencing the products being offered by the company. In the company, for every stage of the process the markets there is delivery of value through all the elements of the marketing mix since the process, people and also the physical evidence enhance the services which are provided by the company. On the other hand the company’s feedback can be taken and thus the market mix is altered. Similarly the consumers are retained by the company as the other serves or even the food products are marked and extended to them. The Marks and Spencer’s Company’s food industry has tailored its processes to suit the needs of the consumers as they experience a similar services at the same time. 7. Physical evidence. Physical evidence of a product and the consumer’s tent to rely on the material cues which provide the physical evidence of the company’s food products. The Marks and Spencer’s Company’s food segments uses the following tools for its physical evidence; the internet, brochures, packaging, uniforms, brochures, mailboxes as well as the company’s business cards. Reference: Baryon, K. (2006): The concept of the marketing mix Presentation on marketing management, Vol 1, Oulu University -Finland Claris D. (1980): Defining the Business: The Starting Point of Strategic Planning; Prentice-Hall, Dexter, J. and Booms, B. (1981): Marketing strategies and organizational structures for service firms, in Donnelly, J. and George, W. Marketing, American Marketing Association, Chicago. Eileen, N. (1998): The Concept of the management; Journal of Advertising Research, June, Vol. 2, pp. 20-15. Finney, N. H. (1964): The Concept of the Marketing Mix, Journal of Advertising Research, June, Vol. 4. George, C. J. (1994): The Idea of Luxury: A Conceptual and Historical Investigation. New York: Cambridge University Press. Kathleen, O. L. and Robert A. W. (1989): Psychological Antecedents of Conspicuous Consumption; Journal of Economic Psychology, 10 (2) Milton, J. (1998): The Management of Marketing Costs; Graduate School of Business Administration, Boston, Mass: Harvard University. Newton, M. (2006): The Art of Marketing: Developing Management Skills, Vol. 3, Crest Publishing House, New Delhi Price, R & Brown, L. (2005): International marketing: an Asia-Pacific perspective, 3rd edition, Pearson prentice hall, French’s Forest Read More