MARKS & SPENCER

Marks & Spencer of Britain is a general retailer that sells clothes, gifts, home furnishings and foods in the UK, Euorpe, theAmericas and Far East. There are many types of retail organisations such as deparment stores, variety stores, independet stores, franchising, warehouse clubs. Department stores some features are; impressing architecture and desing, emphasising on customer service, pay an attention for store ambiance, more expensive prices than the other stores, the store wolud be spread out over a number of different levels, possibly four or five and each level would be allocated to a spesific function: clothing; toys; household goods; lightening; cosmetics. Variety stores offer a wider range of products such as cooking supplies, small tools, personal hygiene supplies, kitchen supplies, organizational supplies, small office supplies, holiday decorations, electronics supplies, gardening supplies, home decor, novelties, toys, pet supplies, out of print books, DVDs and VHS tapes, food products, automotive supplies, among other products. Marks & Spencer belongs to variety stores group. Independent stores usually in the CTN sector. Many are family-owned and pass from generation to generation. They relate to the needs of the loca community and they are more flexible with their opening hours however they have to work harder to meet needs of their customers. Franchising is a contractual agreement between a franchiser and a franchise that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchiser. Warehouse clubs products are in low pirce and they offer little service, their stores are large one-level buildings and there are wide isles to enable fork-lift trucks to move freely. They work with membership. Variaty and department stores have smilar sturctures because of offering wide choice of product however Marks&Spencer belongs to variety sotres.

Competitors
Competitors of Marks & Spencer are; Top Shop, Miss Selfridge, Jigaws, Oasis, Warehouse and the GAP. Other retailers, such as Next, Debenhams and BhS, offer better values. Food chains, such as Tesco, Waitrose and Sainsburys have moved into prepared foods . M&S is being challenged in every single business segment it competes. M&S has not changed quickly enough to react to accelerating competition, which resulted in unacceptable fall in profitability and market share. The reduction of the average selling price of general merchandise by approximately 2.5% coupled with a decline of some 1.5% in the number of units sold, contributed to the overall fall in general sales

Economic Growth
According to offical results of M&S official research; In 2010/11 International sales grew 6.1% to just over 1bn, and underlying operating profit rose by 8.6% to 147.0m. they opened 49 new stores during the year, giving them an additional 560,000 sq ft of space. They now have a total of 361 stores in 42 territories. This year they shared them plans to further expand our international presence, making the M&S brand more accessible to customers around the world and reduce our dependency on the UK economic cycle. According to Alan Stewart Chief Finance Officer : Marks & Spencer has delivered a good set of results this year, with sales up 4.2% despite challenging trading conditions. Underlying profit before tax was 714.3m, 12.9%* ahead of last year, with underlying earnings per share at 34.8p, 16.0%* up on last year. This performance reflects the good work of our teams across the business, as we continued to build momentum in both Food and General Merchandise, as well as our growing International business. These statements demonstrates successful growth of M&S.

Contiribution of U.K. Economy

Economic growth of M&S significantly contributes to the economy of Britain. . For 2011 M&S net income was at around 220 million euros by the end of september. M&S have over 600 shops throughout the United Kingdom, with nearly 1.2 million square metres (12.5 million square feet) of selling space..These high numbers of sotres also provides high employment for U.K. and enhances retail sector thus competition increase for U.K. market and this competition rate contributes to the development of the U.K. economy.

Retail Environment Changes

In terms of the market environment, Marks and Spencer did not keep changes. According to CEO of Makrs and Sepncer pace with the tremendous changes taking place in the retail market; while their competitors strengthened, they were busy developing new stores. So when markets tightened in the second half of the year, they were hit by falling sales, loss of market share and declining profitability. Economic: Marks and Spencer had the notion of that they did not and should not have to reduce prices, either at end of range or during seasonal periods like Christmas. They recognized that although this strategy worked initially for them, in time, the public realized that with other stores in the market, they could not only purchase the same items that Marks and Spencer stored at lower prices, but also receive discounts from these other stores at times as mentioned above. Marks and Spencer once again did not pay attention to this sentiment of the public. Socio-Cultural: In terms of socio-cultural factors that affected Marks and Spencer, they realized that the public became more fashion conscious in the 90s than consumers had ever been in terms of what Marks and Spencer provided them with, i.e. classic, wearable fashions. Hence people decided to shop for clothing in trendier places. As a result they faced that they employed George Davies (founder of Next) and other haute couture fashion designers to design clothing exclusively for Marks and Spencer. Technological: A factor that haunted Marks and Spencer was their inability to keep up with technology. Simple schemes like buying cards for customers were not in place. This coupled with the close on to extinction EDI system that controlled communication between Marks and Spencer and their suppliers made sure they stayed at the back of the pack. However, in 1999, Marks and Spencer announced the integration of a new information system called BizTalk. There were three reasons for using BizTalk. Firstly and most importantly, the principles behind the BizTalk framework, industry standard XML, and the opportunity to avoid writing custom interfaces between each of our applications. Secondly, the BizTalk server product architecture, and its use of core products, such as MSMQ, SQL Server and MTS. And thirdly, its seamless integration into our strategic architecture based on Microsoft Windows and IBM System 390. Marks and Spencer recognized that they needed a global supply chain to compete, and radical changes in the way they use information throughout the company. To create this, they would have to manage new richer information more quickly, optimise our stock management, and be more responsive to our retail business. Firstly, in terms of managing information, they needed to maximize the availability of our information throughout their business. The variety, volume and frequency of that information was increasing. Using BizTalk, they were changing the way that sales information was being delivered to central systems. Rather than aggregating sales and transferring these back to the centre overnight, they would pass sales as they happen to the central systems that could act upon them. They would use the same technology to transfer event-driven information out to their stores, such as short-ter On the Internet side, they would use BizTalk to link their customer web sales into their existing back-end systems, and ultimately through to their suppliers Secondly, in terms of optimising stock management, they would improve their product availability, whilst reducing costs by passing sales information in near real-time to their suppliers, so that they could change what they manufacture and what they distribute. BizTalk would, over time, replace their existing batch EDI links to their 500plus supply chain. Thirdly, regarding being more responsive to their business, internally they leveraged their existing application developments by using BizTalk to enable true application cooperation and business process integration.

Political and Legal: It is important for companies to follow government policies and global organisation systems, such as World Health Organization, while they make marketing plans. Governments, especially in the developed countries, consider ecological environment and humans life. Governments set up policies and organisations to monitor firms and their products, such as energy saving policy and genetically modified food control.The UK government has introduced energy saving organizations, such as Climate Change Levy and Green Tax on energy use to reduce CO2 by 2010 by 20% against 1990 levels, and supplied subsidies to improve its policies. M&S has claimed: launched an incentive scheme where stores can keep the value of 10% of any savings the make over and above budges .This scheme helps M&S saving around 5% of its energy saving . In recent years, gene technologies have increased substantially. Some of these technologies have used to produce food. However, some of these technologies may cause natural environment pollution and endanger humans health. Some European supermarkets are moving towards selling only meat from animals produced fed on non-GM feeds. This is building on moves by many retailers in the UK to go non-GM. M&S also announced that it supplied all non-GM foods on its shelves. Environmental: The task of marketing management is to attract customers and establish good relationship with customers by creating the worth and satisfaction of customers. However, marketing managers not only pay attention to the needs of target market, but also need to realize the effect on environment that are suppliers, distributors, customers, and competitors. Suppliers: M&S has not only established good relationship and reciprocal profit with suppliers but also maintained long-term partnerships to cooperate with suppliers. Suppliers supply necessary resources to companies for producing products or services. Therefore, the development of suppliers may bring enormous influence to the company. It is a right policy that M&S values suppliers for maintaining its business. Nevertheless, it may cause suppliers to raise the cost of materials. M&S needs to consider the issue. M&S has built a good reputation for supplier management. If a supplier refuses to supply materials to M&S, it can turn to another supplier. The company has this advantage that can supply it with an unfailing supply of materials. If suppliers can not supply materials to the company immediately, customer loyalty may be reduced by lack of products. M&S has controlled this matter. Distributors: M&S is the largest and the leading variety store retailer in the UK . New brand and product development over the last ten years in fast-moving consumer goods sectors in the UK is that many of the most original and successful initiatives have been taken not by manufacturers but by retailers. M&S has changed the marketing structure from manufacturers to retailers and inspired other major retailers to follow. This is a very significant even for retailers change. However, M&S does not control the stock on popular selling clothing. Customers cannot purchase products that they really want. This situation needs to be handled and improved. Customer: M&S believes that customers are the most important element of consideration and understands that customers are very important for its origination. Companies should understand that customer satisfaction is more important than product sale. M&S realises this main attribute and provides good services and high quality products to customers for raising the customer loyalty. M&S believes that precise quality controls must persist forever. In 1999, M&S ensured that all its food products were non-GM foods. This company always considers customers concern and tries to provide the best quality or services to customers. Competitors: M&S focuses its business on the quality and service. Sainsbury and Tesco that are the competitors for M&S focus its business on the quality, convenience, breadth of range. A company not only satisfies the needs of customers but considers strategies of competitors in the same target market. M&S has some competitive advantages that are over one hundred years in business, recognizable brand name, and good supplier relationship. In particular, M&S has its own market testing and exercise tight quality control . The quality and service can keep customers loyalty. M&S has done this great. Unfortunately, Sainsbury and Tesco not only emphasize the quality but establish their stores universally. M&S needs to improve this disadvantage certainly.

Market Segmentation

Marks and Spencercer offers many types of good and services: clothing, food, furniture and financial services, technological products, gifts, food and wine. This variaty market segmentation allows M&S to treat similar customers in similar ways, whilst distinguishing between dissimilar customer groups. M&S uses demographic segmentation to select its target markets for its products (focus strategy). M&S targets its customers by age, income, social class, and occupation. M&S targets the 30 plus age group with middle and high income and executive occupation. M&S also bases its market segmentation through value. Many products in M&Ss clothing range have a premium-priced, high quality segment (M&S, Clarks, Faith, Office), a mid-priced segment (Top shop, River Island) and a low-price segment (Barratts) e.g. shoes. In such a market, fashion and quality differences can outweigh price variations.

Target Market

M&S has to concentrate on stylish, trendy young males females, which are in employment and have enough money to spend on stylish dress, this sort of people reside mainly in the city and in the suburbs of the city, M&S should build the stores close to its customers. These people are normally educated people who work Monday to Friday and they have spare time in the evening to go out for dinner or to the party and they want to dress fashionably in order to get social recognition from their peers. M&S has to concentrate as well on middle age working males and females who want dress to go to work for a reasonable price. M&S products should neither be cheap nor very expensive; the pricing should suit the budgets of the young working males and females who are working towards higher income. Segmentation will definitely help M&S in making the number of competitors less and enhancing profit margins.

Marketing Mix
Price: M&S charges premium prices through its differentiation strategy. M&S followed a value price strategy from its inception, statinh with Micheal Marks who put all his products for a penny in one side of the store with a sign saying dont ask the price, its a penny. Since M&S has concentrated on midlle cless customers, it has continued value pricing strategy. Although most of its suppliers have been from Britain, which has higher textile manufacturing costs then some developing nations , M&S was able to maintain its value by developing strong economic bonds with suppliers. Due to recent strength of the sterling and the large British manufactured content in the stores, profit margins has substantially declined for example a pair of casual pants in one major European city cots about $50. Product: M&S markets its products based on superior quality and reliability. M&S products can be divided into three lines of business; general merchandise, foods, financial services. General mechandise include clothing, undergarments, handbags, footwear, goods for home, toys, boks and cosmetics. The food business offers wide range of prepared foods, perhishables, ethnic foods, meats, alcholoic and nonalcoholic beverages and olso its posisible to find chocolate-covered ginger biscuits, salmon en croute, chicken tikka sandwiches and mushroom risotto. M&S changes its food offerings currently with new bistro style meals and coffee bars in some stores. The company also sells financial services such as credit card, personal loans, personal equity plans, unit trusts and life insurance. M&S credit Cards are accepted only in companys British stores, where M&S does not accept major credit cards such as Mastercard, Visa, Discover or American Express. Customers deposit money into their M&S credit cards and can get up to 20 times the purchasing power. For example, with a deposit of $100, the customer gets a line of credit of $2000.

Place: M&S products are sold through its large number of stores in city and town centres. More recently M&S has expanded its sales distribution channels through the Internet via its website (online shopping). M&S stores come in two basic formats. The first format is general merchandise store with its basement dedicated to foods while the second offers foods only. The average size of the store ranges from 35,000 to 40,000 square feet, with a minimum of 100,000 square feet for remote locations. 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. Promotion: M&S integrated marketing communication is delivered through media in various forms, advertising, TV, national newspapers and magazines as well as through the web site. M&S tried to avoid advertising and relied on word-of-mouth. Word of mouth advertising was very powerfull and also cost-effective. In the past the company used advertising rarely such as when M&S was introducing a new product or retail format or when brand name recognition was low. After recent years of bad financial statements, the compy has significantly increased the advertising budget o about L20 million.