Marks and Spencer Report

Marks and Spencer Report The retail industry is a very dynamic and fast changing sector as it is constantly trying to appeal to customers and compete with competition. It is regarded as highly commercial; driven by sales and profit. It is vital to monitor performance; the strengths and weaknesses as well as what the competitors are getting up to. Moreover, with constant changes of demand; customers expect new innovative products and services.

Therefore, it becomes the company’s responsibility to develop it. Marketing is a key aspect to promoting any company and supplying the innovations to the public.I will be analysing Marks and Spencer (M&S) in order to show how they tackle these four areas. Marks and Spencer has become one of the UK’s leading retailers with around 21 million customers visiting their store each week! It is renowned for its high quality and great value products including clothing and food.

(Annual Report 2011) To start off with, I will look at the revenue figures for the past 5 years to give a clearer idea of the progress M&S are having. From the bar chart on the left, it is apparent to see that there revenue has been increasing. 008-2009; the period of recession saw a little increase in revenue. But revenue are at a peak this year with roughly 9750 million revenue. Sale growth has also shown an upward trend as shown on the graph (right). It highlights the growth of sales, and indicates a less steep rise during recession.

In 2011, Growth in Food and Clothing was 31%, however in 2007 growth was 16. 8% This pie chart shows the two main areas of M&S- Food and clothing. Food brings in 0. 3Bn more revenue than clothing as shown on the pie chart. Food is fast selling, and it would seem logical for it to earn more revenue.M&S also provide financial and online services.

They have achieved 6. 1% sales growth in international markets. Business strengths and weaknesses: The M&S brand itself has become the biggest asset of the company. They have achieved this through their recognisable logo and exceptional advertising methods.

M&S are often labelled for having clothing that reflects the taste of the ageing population rather than younger women. But they have showcased their clothing collection using Dannii Minogue, Lisa Snowdon and others.It demonstrated how styles can work for every age group. This had led to additional 1. 8 million customers being attracted to the store.

Their leadership in clothing led to them becoming a market leader in department stores. Other retailers such as Debenhams and BHS have started to provide a similar clothing line. Their new collection of per Una clothes was launched to target younger age groups. They have created ‘A no quibble refunds policy’ which initiated since 1953. This means that there is no time limit on the returns of non-perishable goods i. e.

furniture and clothing.Most retailers do not use this approach and in the short term, this may have a negative impact on M&S sales. But with the scrap of this policy this year, they saw an increase in revenue. Development of new products and services: Marks and Spencer always look to improve on what they provide; advancements in technology has made it easier to create new products and services. With the help of the M&S website and Mintel database, I have produced a timeline shown below with some of the products and services which the company have innovated in the past 5 years.If we focus on the M&S food, then they have produced many unique products including the world’s first seedless pepper which are said to be 25% sweeter.

M&S have also introduced the red ‘super sprouts' last month. It contains selenium, a mineral known to improve fertility. It naturally contains higher levels of vitamin C than green sprouts. M;S’s Plan A is based on 180 commitments the company wishes to achieve by 2015, with the ultimate goal of becoming the world's most sustainable major retailer. M&S are also involved in charity work.

They have been working with the Breakthrough Breast Cancer since 2001 and have raised over ? 15 million for Breakthrough’s vital research, campaigning and education work. (http://plana. marksandspencer. com/about/partnerships/breakthrough) They have also launched ‘Forever Fish’- a campaign helping customers and their children learn more about fish, clean the British beaches and protect UK marine life. Introduced www.

marksandspencer. com/recycle to encourage customers to recycle unwanted electrical items e. g. mobile phones and MP3 players in exchange for M&S vouchers.

The aim is to reduce 1 million tonnes of electronic waste produced in the UK. Competitors If we try to look at the competitors of M&S, it can be considered in two ways. The company is well known for their clothes, so competition may include companies like BHS and House of Fraser. It can also include smaller high street retailers such as Next, River Island and Oasis.

However, if we consider food, then there is Waitrose (closest for comparison) and other supermarkets including Sainsbury and Tesco. M&S have a market share of 15. 6%, but Excel has rounded it off to 16%. If we look at the breakdown, Clothing contributes 11. % whilst food only 3.

9%. The John Lewis Partnership, which consists of John Lewis and Waitrose have been heavy competition to M&S. Looking at growth figures it can be said that M&S have outperformed them by 1. 6%. The sales growth of JLP is 6.

4% whilst 8% for M&S. Looking at the market share, people often prefer to invest their money and buy shares in stronger performing companies such as Tesco and Asda rather than M&S. However, Tesco’s Big Price Drop promotional campaign has hit its share of the UK grocery market. The company said it was cutting the cost of 3,000 everyday goods.It led to negative media coverage as Tesco were advertising falsely.

M&S stock chart above (Source: The guardian) shows that the company has enjoyed higher growth during the years before recession in 2008 and the individual shares were sold at over 700p. The share prices of M&S stands at 313. 40p which means that for every 100 shares you wish to buy, you have to pay 313. 40p.

This can be resulted from higher sale performances. However, M&S have been unable to compete with other supermarkets such as Tesco and Asda effectively, because of higher prices of their products.Tesco and Asda offer their own brand products with lower prices, which have appealed to customers. But M&S plan to reduce the number of non-brand products from 400 to 100 so they can market their own brand range better. (Annual report) Marketing strategies: Marketing is extremely vital in promoting the company and increasing sales. An example includes advertising on M&S Insolia footwear technology which then saw sales increase by 186%.

M&S have implemented many other strategies in order to do so. (Annual report 2011)M&S wishes to transform into an international multi-channel retailer by 2015, and have already started to take steps towards achieving this goal. They have opened a flagship store in Champs-Elysees, Paris, and launched the M&S's French website which is the first transactional website overseas. It is part of its international 'bricks & clicks' strategy. The strategy allows customers to order products online or purchase them in stores; enables store pickups in the local branch and home delivery. It can be seen as an easier way to create an online presence through e-commerce.

Marks ; Spencer have launched a bespoke online video channel for M;S Money, its financial services offering. M;S Money TV sits on the retailer’s website and includes "call to action" buttons for further information and icons to share videos with friends via email, Facebook and Twitter. Amanda Newman, M;S Money head of marketing, said: "With the increasing popularity of digital and social media channels, the way people consume and share information is changing” (Source: Marketing Magazine). M&S have introduced their mobile web and increased flexibility of Shop your way.

They have also signed-up to O2’s “You Are Here” location-based marketing service, which sends targeted text/MMS messages to O2 customers when they enter areas ‘owned’ by brands, retailers or services http://corporate. marksandspencer. com/media/press_releases/mssmoothieoffer) In Conclusion, the Internet has added a new dimension to the way we shop. M&S has taken full benefit of this through in which they market themselves through their technological innovations and mult-channels. They have created their own identity and are successfully maintaining it.

However, they may wish to strengthen their food brand further so they will be able to compete against other supermarkets. For the time being, there is no need to change their strategy, as effects will show in the long term, and they are earning increased revenue each year. References: Websites: http://annualreport. marksandspencer. com/financial-review/financial-review.

aspx (used 8th-13th ) http://www. guardian. co. uk/business/marksspencer (13th) http://corporate. marksandspencer.

com/page. aspx? pointerid=1dc2796575b445fea477b44bb8f0dcfe (13th) http://corporate. marksandspencer. com/media/press_releases/mssmoothieoffer (13th) http://www.

uardian. co. uk/business/2011/aug/16/supermarkets-market-share-kantar (12th) http://www. retailgazette. co. uk/articles/33133-ms-grows-market-share-in-all-areas-in-good-year(12th) http://www.

prospects. ac. uk/industries_retail_overview. htm (8th) http://social. marksandspencer.

com/food-drink/red-brussels-sprout/ (11th) http://plana. marksandspencer. com/about/partnerships/breakthrough (12th) http://www. marketingmagazine. co. uk/news/1098148/ (11-12th) Databases: * FAME- Brunel University E-Library.

Financial report, Marks & Spencer 2007-2011 * Mintel- Brunel University E-library. Product innovations, Marks & Spencer 2007-2011