Marketing Of Marks Spencer Marketing Essay

1516 words (6 pages) Essay

1st Jan 1970 Marketing Reference this

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Introduction

Marks & Spencer (M&S) is a major British retailer which has 895 over stores in more than 40 territories around the world, over 600 domestic and 295 international. It is the largest clothing retailer in the United Kingdom with its head office in the Waterside House in the City of Westminster, London, England, as well as being an upmarket food retailer. As of 2008, it became the 43rd largest retailer in the world. Most of the business of their domestic stores sold both clothing and food, and since the turn of the century it has started expanding their business into other ranges such as home wares, furniture and technology. Since 1952 Michael Marks open market stalls in many locations around the North West of England. In 1894, Thomas Spencer invested in Marks’ activities and they opened their first store, in partnership. From 1950 to 1972, Marks & Spencer began to extend their market like introduce Asian food and built international stores. Though a few years later it plunged into a crisis which lasted for several years, it became the first British retailer to make a pre-tax profit of over ¬£1¬†billion in 1998.

The success of Marks & Spencer is a very good example. This report describes the marketing of Marks & Spencer from three aspects marketing mix, market orientations and marketing segmentation. For years, M&S’ marketing philosophy was clearly: produce high quality products under a recognized brand name at acceptable prices, and advertise through word-of-mouth. However, in recent years, the company started losing its competitive stance and which caused their marketing philosophy has come under attack. The move to develop a marketing department was a departure from a long tradition of production/manufacturing emphasis. In order to remain competitive, Marks and Spencer has had to change its target market over the last couple of years. Much of their marketing strategies are now aimed at specific markets.

Discussion and Analysis

Marketing mix

Product – A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. M&S products can be divided into three lines of business: general merchandise, foods, and financial services. General merchandise includes a large-scale such as clothing, undergarments, handbags, footwear, and goods for the home, children toys, books and cosmetics. The food business carries a wide range of prepared foods, perishables, ethnic foods, meats, alcoholic and nonalcoholic beverages. The company also sells financial services including a store credit card, personal loans, personal equity plans, unit trusts, and life insurance. For branding, the St. Michael brand name has been used on most of the products sold through M&S. The brand, therefore, is used on a wide range of products targeting everyone from middle aged patrons to kids. M&S expertise has been delivering consistently high quality products under the St. Michael brand name. A commentator in Financial Times (1999), however, suggested that the company follow the example of Debenhams (a competing retailer) and use sub-brands to target specific segments of its market.

Price – The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer’s perceived value of the product. Marks and Spencer followed a value price strategy from its inception, starting with Michael Marks who put all his products for a penny in one side of the store. Since M&S has concentrated on middle class customers, it has continued value pricing strategy. M&S has managed to remain moderately priced. For example, a pair of casual pants in one major European city cost about $50. In anticipation for the Euro conversion, the company features prices both in local currency and Euros in its European stores. It also has limited conversion tables by the cashiers.

Place – Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet. M&S stores come in two basic formats. The first format is a general merchandise store, with its basement dedicated to foods, while the second offers foods only. M&S tries to locate its stores on the Main streets of major cities, claiming that it seeks “to build critical mass around capital cities or across important conurbation. In 1994, M&S started to aggressively focus on building distribution networks to supply its growing global operations (De Nardi-Cole 1998). The focal point of this network, however, has remained in the United Kingdom.

Promotion – all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, personal selling and sales promotion. M&S has mostly tried to avoid advertising and has relied on word-of-mouth. In the past the company used advertising only in rare cases, such as when M&S was introducing a new product or retail format or when brand name recognition was low, as in the case of its store introduction in Paris (De Nardi-Cole 1998). The company has already invited advertising agencies to pitch and is planning its second-ever television campaign focusing on M&S products (Marketing 1999).

Market Orientations

The definition of market orientation is business approach or philosophy that focuses on identifying and meeting the stated or hidden needs or wants of the customers, through its own or acquired products. See also product orientation and sales orientation. The heart of a market orientation is its customer focus. To create superior value for buyers continuously requires that a seller understand a buyer’s entire value chain, not only as it is today but also as it evolves over time. Buyer value can be created at any point in the chain by making the buyer either more effective in its markets or more efficient in its operations. Market Orientations can be divided into five types: production, product, selling, marketing and socially responsible (ethical). M&S is belonging to the product type. Firstly it focused on product high quality food production, such as charging higher prices than competitors like Tesco, Sainsbury’s.

Secondly it provided high quality clothing at a reasonable price. Thirdly it do good at analyze customer behavior, for example using stores cards to analyze which products sell best. And lastly is keeping a high standard in their product range like identifying needs for new products.

Market Segmentation

Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations sharing with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. A true market segment meets all of the following criteria: it is distinct from other segments as different segments have different needs, it is homogeneous within the segment as exhibits common needs; it responds similarly to a market stimulus, and it can be reached by a market intervention. In order to they can be charged different amounts, the term is also used when consumers with identical product and service needs are divided up into groups so they can. These can be viewed as positive and negative applications of the same idea, separate the market into smaller groups. Market segmentation allows M&S to treat similar customers in similar ways, whilst differentiate between different customer groups. M&S uses demographic segmentation to select its target markets for its products. M&S targets its customers into different groups by age, income, social class, and occupation. M&S targets the 30 plus age group with high income and executive occupation. It also bases its market segmentation through value. Many products in M&S’s clothing range have a high quality and premium-priced segment as M&S, Clarks, Faith, and Office, a mid-priced segment as Top shop, River Island and a low-price segment for example shoes. In such a market, fashion and quality differences can outweigh price variations.

Conclusion

Using introduce the marketing of Marks & Spencer through marketing mix, market orientations and marketing segmentation. We have seen that M&S have various good strategies in its current business activities. It has done well on the strategy product, price, place and promotion. For market orientations, it has very clear orientation which is focused on product high quality food production. Lastly, market segmentation of M&S is to treat similar customers in similar ways, whilst distinguishing between dissimilar customer groups.

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