Discuss about the Introduction to Marketing for Marks and Spencer.
Marketing is the business activity that is associated with acquiring and vending a service or product. It is comprised of promoting, vending, and supplying services and products to people. People who perform their roles in the department of marketing of organization put their efforts to grab the attention of target market with the help of packaging design, general media exposure, slogans, and celebrity endorsements (Baker and Hart, 2016). The report is being presented to suggest two market segmentation criteria and their marketing strategies. For this, the report will highlight the current marketing strategies of Marks and Spencer.
Marks and Spencer Group is a big British retailer with headquarter in London. The business is registered on the Stock Exchange of London and is component of the FTSE 100 Index. It has a specialization in the retailing of superfluity food items, home merchandises, and clothing. Thomas Spencer and Michael Marks established Marks and Spencer in 1884. The company started vending branded products such as Kellogg’s Corn Flakes from 2008. Marks and Spencer presently possess 979 stores in the United Kingdom comprising 615 stores that only vend food items (Reuters, 2018). The company operates its business in two segments that are UK and International. The United Kingdom segment is comprised of the retail business and the franchise operations of United Kingdom. The International segment is comprised of retained businesses of Marks and Spencer in the Republic of Ireland, Asia, and Europe, along with international processes of the franchise (Reference for Business, 2018).
Targeting
Marks and Spencer particularly aims the market of the United Kingdom, the target is comprised of around 95% of the whole population. The business is planning to increase its food stores in the country to meet the needs of the consumers in the local area.
The market segmentation purpose is to manage the resources and support in fulfilling the customer’s needs. Marks and Spencer target particularly the young people and encounter the customer’s needs. They entice a segment of the younger female into their store (Campaign, 2017).
Segmentation
Segmentation is the market separation of people with likes/dislikes in terms of preferences and tastes (Williams and Williams, 2017). Marks and Spencer define the market and targets that market with the help of the approach of diverse measures like the clothing line support to discover the market in an appropriate way with the support of geographic, psychographic, and demographic profile.
Demographics- In the market of clothing, Marks and Spencer majorly target women and the business gratified the market segment of each age group and normally above 20 years of age group. The company has targeted teenage girls as they look for colorful clothing, and are very conscious of their styles.
Psychographic- The personalities and social class are the same but the difference is in the lifestyles. The consumer buying behavior can be understood by the transaction and it assists marketers to offer better items for the target market (Hobbs, 2016).
Geographic Segment- The key geographic segment of Marks and Spencer is comprised of 337 stores internationally. It divides the market geographically by building a store in regions and shadows the method of regular packaging and it is very simple for the customers to do shopping.
Behavioral segmentation- The superior customers of M&S are the regular consumers. They come back for shopping at the stores because they are pleased with its offering. Regular consumers are vital in order to be profitable in the industry because they possess the power to pay more and collect more items. Loyal consumers will support the business in enhancing the sales.
The positioning of Marks and Spencer
The positioning of the business in the market is a premium brand. It provides customers with premium price products because they are ready to pay for this brand at a premium price. The company fixes its prices with the approach of premium brand perception in the eyes of the customers.
Product
Marks and Spencer is a well-known and world’s big retail chain based in U.K. The business’s portfolio of the product is wide-ranging that covers the items for all the age group kids, women, and men. Marks and Spencer provide products for a female that comprises clothing such as Cardigans, Jeans, Shirt, Blazers, Linen, skirt, Cashmere, etc. M&S Company also involve Furniture and Home section that offer bedroom furniture, dining room, home accessories, living room, lighting etc. Marks and Spencer include the section of Wine and Food, which offers all dinner and lunches, wine, starters, and main courses, etc. Further, the Company provide various gift items such as Flowers. Marks and Spencer mostly operate its business in-house brand in place of other international brands (Bhasin, 2018).
M&S shadow the competitive pricing strategy for its portfolio of product. The business possesses its own in-house brands for kids, men, and women clothing. Normally, the prices of these in-house brands are between the categories of average to higher and reason is of the high price is its high quality. However, Marks and Spencer follow a strategy of competitive pricing because the consumers today have various options to select from due to increased competition.
M&S is a well-known international brand with numerous stores operating in 50 countries. The key business of Marks & Spencer is in the United Kingdom with approx. 850 stores. In India Company, have 50+ stores where it started its business activities in 2001(MBA Skool, 2018). In some more countries where the company has its operation are France, Finland, Turkey, Hungary, Spain, Ireland, etc. M&S operates its own website from where consumers purchase products and receive home delivery services. It also offers the option of international delivery for some products. All the items could be purchased in domestic currency in only shopping.
Marks & Spencer picks its strategies of marketing very wisely to bring into line its campaign of advertisement with in-store strategy and digital marketing strategy. Marks and Spencer stress to offer a shared message on every communication medium. M&S make use of TV ads, social media campaigns, mobile ads, and print media. The company makes use of its website to advertise its offers and clothes for kids, men, and women. Consumers can get fashion tips and find blogs on the company’s website. M&S also endorses its season sale to its regular and loyal customers by offering them discounts. The company also operates a loyalty program i.e. ‘Sparks’ that helps in adding points to the account of consumers depending on the amount spent by them on shopping. These points of reward can be used on future shopping from M&S stores.
According to Michael Porter, if a company is presently a market leader that does not mean that it will always remain at the same position, therefore he suggested three primary ways to make a supportable competitive advantage i.e. Focus, Differentiation, and Cost leadership.
Cost leadership- It means businesses offer rational value at a lower price. Businesses do this by regularly enhancing working efficiency (Amadeo, 2018).
Differentiation- It refers to those companies offer superior benefits than anyone else in the industry. It can be attained by offering an exclusive or high-quality product.
Focus- It refers to those leaders of the company who understand and offer better service to their target market as compared to their competitors in the industry.
From the above analysis, it can be said that Marks and Spencer can adopt cost leadership strategy in order to get another market segment, which can help, in increasing the market share in the industry. In the market, the behavior of the customer changes regularly as per trends and fashion. Besides this, what changes the customer behavior is the cost or price of the product. Marks and Spencer offer luxury brands and products at high cost, which can only be affordable for the high-class customers. This reflects that the middle-class segments which are eager to purchase branded products at low cost are not able to purchase such high brand products, which eventually affect the market, share and customer share of Marks and Spencer.
In order to cover this market segment, Marks and Spencer should reduce some prices of its products such that middle-class people can also purchase branded products. This strategy will not only be beneficial for the company in the apparels segment but also in the food segment. In the market segment of food Aldi supermarket, Tesco, etc. are the market leader due to their low price strategy that can be seen in the below diagram.
Diversification strategy normally exists when a business establishes a new product in the marketplace. These strategies are said to be diversification strategies (Zkjadoon, 2016). In order to increase the market share Marks and Spencer Company can diversify its business into the hospitality segment by opening a hotel and resort due to the increasing demand for luxury hotels and tourism.
According to research, the global hotel and resort market size has been valued in 2017 at USD 83.10 billion and is expected to enlarge at a CAGR of 4.3% over the prediction period. Developing corporate and tourism industries of different areas, increasing disposable income, improving the living standard of people, and increase in liking for leisure travel are likely to drive the market (Grand Review Research, 2018). Increase in the living standard and purchasing power are the key factors responsible for attracting customers towards luxury resorts and hotels.
Moreover, the industry of hotel is the most essential segments of the lodging sector in the U.K. Overall 17.4 billion British pounds in 2015 was generated, which adds most of the value to the economy of UK as compared to other services of accommodation (Statista, 2018). This market analysis reflects that Marks and Spencer can diversify to Hotel and Resorts business in the UK to increase customer and market base. The company can concentrate on business class and high-class customers to offer luxury services in this segment.
In order to promote the products at the low-cost company can make use of television, radio, and print media because this entire medium can reach to a maximum number of people of the population.
In order to promote the hotel and Resort business Marks and Spencer can place their brochures on the airports to attract high-class and business class customers. Besides this, it can contact the different travel and tourism companies by soliciting potential customers.
Conclusion
From the above analysis of marketing strategies of Marks and Spencer, it can be said that it is one of the well-known business in retailing as it has adopted various approaches to promote and present its offerings in the market such as Segmentation. Targeting, and positioning. The above report has shown the market position of the company in relation to its competitors. Further, the report has suggested two segments in which business can concentrate to increase the market and customer share that are cost leadership and market diversification.
References
Amadeo, K. (2018) What Is Competitive Advantage? Three Strategies That Work [online]. Available from https://www.thebalance.com/what-is-competitive-advantage-3-strategies-that-work-3305828 [accessed 15 July 2018]
Baker, M.J., and Hart, S. (2016) The Marketing Book 7th ed. U.S: Routledge.
Bhasin, H. (2018) Marketing mix of Marks and Spencer [online]. Available from https://www.marketing91.com/marketing-mix-of-marks-and-spencer/ [accessed 15 July 2018]
Campaign (2017) Will the new M&S brand strategy boost the retailer’s fashion and food credentials? [online]. Available from https://www.campaignlive.co.uk/article/will-new-m-s-brand-strategy-boost-retailers-fashion-food-credentials/1433486 [accessed 15 July 2018]
Grand Review Research (2018) Industry Insights [online]. Available from https://www.grandviewresearch.com/industry-analysis/luxury-hotels-market [accessed 15 July 2018]
Hobbs, T. (2016) M&S targets attitude not age to rebuild fashion business [online]. Available from https://www.marketingweek.com/2016/11/04/ms-dismisses-segmentation-saying-fashion-attitudes-are-ageless/ [accessed 15 July 2018]
MBA Skool (2018) Marks & Spencer Marketing Mix [online]. Available from https://www.mbaskool.com/marketing-mix/services/17122-marks-and-spencer.html [accessed 15 July 2018]
Nielson (2017) Discounters hot record grocery market share [online]. Available from https://www.nielsen.com/uk/en/press-room/2017/discounters-hit-record-grocery-market-share.html [accessed 15 July 2018]
Reddit (2018) Is there a supermarket hierarchy in your country? [online]. Available from https://www.reddit.com/r/AskEurope/comments/7otj1x/is_there_a_supermarket_hierarchy_in_your_country/ [accessed 15 July 2018]
Reference For Business (2018) Marks and Spencer p.l.c. [online]. Available from https://www.referenceforbusiness.com/history2/68/Marks-and-Spencer-p-l-c.html [accessed 15 July 2018]
Reuters (2018) Marks and Spencer Group PLC (MKS.L) [online]. Available from https://www.reuters.com/finance/stocks/company-profile/MKS.L [accessed 15 July 2018]
Statista (2018) Hotel industry in the United Kingdom – Statistic & Facts [online]. Available from https://www.statista.com/topics/3146/hotel-industry-in-the-united-kingdom-uk/ [accessed 15 July 2018]
Williams, R.L., and Williams, H.A. (2017) Vintage Marketing Differentiation: The Origins of Marketing and Branding Strategies 1st ed. Germany: Springer.
Zkjadoon (2016) Diversification Strategy Definition | Types of Diversification Strategies [online]. Available from https://www.businessstudynotes.com/finance/diversification-strategy-and-its-types/ [accessed 15 July 2018]
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