Essay Examples - Marketing Essays
Marks and Spencer Communications Strategy
Motivation: I have covered the main concepts that stand behind the idea of communication strategy in order to find ways to improve M&S performance.
The problem: This report has tried to solve is finding the best mix of communication tools that could improve M&S performance.
Approach: I have investigated the preferences of the consumers in relation to fashion retailing.
Results: I found that consumers prefer fashion to quality and based on that M&S should invest more money in designing fashionable clothes and create a brand image for its products.
In all societies, clothes have three main functions: Utilitarian, esthetic (Beauty) and symbolic. We can give a definition to the fashion as styles of cuts, colour and stuffs that are socially acceptable for certain social roles and especially with the recurring changes in these life styles Britt, S(1970, p188)
Michael Marks and Tom Spencer founded marks and Spencer in 1894, Tom Spencer started with a stall at Leeds Kirk gate market, Marks and Spencer. In 1930, the company opened its store in Marble Arch and that was the beginning of the expansion in London. Marks and Spencer depended on selling what it called timeless products, timeless products are products which can be worn anytime, such as suits.
Where is Marks and Spencer now compared to other fashion retailers?
Marks and Spencer's problem stemmed from the failure of the company to understand that the market has changed and that its customers are constantly looking for fashionable clothes. Quality and value attributes, which Marks and Spencer built its corporation on are no longer the sole motivators for taking the buying decision. GAP, H&M, Top Shop and other stores are called fashion retailers instead of clothes retailers. The success of these companies depends on their ability to understand the fashion trends in the society as well as delivering their clothes in the right time and place and to the right customers.
Customers are prepared to pay for fashion but not for quality alone because fashion is temporary and once fashion changed, people will buy new clothes so on average people do not wear clothes for more than one season, that is why quality is not an issue any more.
Fashion retailers do not respond to fashion trends but they also create fashion by sponsoring celebrity stars and having an excellent communication mix strategy. Marks and Spencer is still concentrating on manufacturing good quality clothes at fair prices, M&S considers fashion a secondary issue, and this philosophy is failing Marks and Spencer. Marks and Spencer is considered passive in relation to fashion trends and creating fashion.
M&S established its first marketing department in 1998; the advertising budget for Marks and Spencer was too little compared to other fashion retailers. The lack of understanding to the current market needs made M&S deliver the wrong message to its customers through its communications mix. All these problems were caused by the lack of interest of the contemporary marketing communications in Marks and Spencer. Marks and Spencer is currently stuck in the middle between cheap fashion retailers and branded fashion retailers such as Levi's and Woodhouse.
Where does M&S want to be?
Fortunately, the clothes market is never saturated; people need to wear clothes all the time, and fashion is making the clothes life cycle shorter. M&S has to make a fundamental change in its core principles, M&S should re-innovate itself by endorsing fashion and quality as a philosophy. The fashion and the quality should be conveyed through M&S communication strategy to the consumer. Having a fashionable clothes and an excellent advertising campaign will make more people switch to M&S and this will achieve the following objectives:
How could we achieve our objectives by developing the best communication strategy?
We have to realise the link between the corporate strategy and the communication strategy. The communication strategy is based upon the corporate strategy; we have to investigate the equity of M&S strategy first:
Fashion retailing Positioning:
Positioning a company entails choosing the best strategy that is viable in the long-term and able to face competitors and maximise long-term revenues. Every retailer including Marks and Spencer has to choose between two strategies in order to position its company:
1- Differentiation: Building a brand name via massive advertising in order to get the loyalty of the customer: this strategy concentrates on advertising and it rarely uses promotions to sell its products since promotions only attracts one-off customers who are searching for cheap bargains, customers who are looking for cheap bargains are not Marks and Spencer customers because they are not prepared to pay for the brand and for the fashion.
2- Cost leadership: this strategy involves selling products at discount prices in order to encourage customers buy more and attract new customers who are looking for cheap bargains; this strategy is followed by H&M, Prime mark and
Marks and Spencer strategy was trying to follow the first model of strategy (differentiation); M&S did not differentiate itself by embodying fashion and the contemporary spirit in the clothes, that is why M&S is failing.
Why we could not choose both of the above strategy?
There is a trade off between sales and advertising campaigns, the both should be mixed in a way that could help the company achieve higher profits. Fashion retailers could not have high level of advertising and high level of sale promotions. Advertising is considered an expensive investment, which aims to increase the turnover in the long-term by increasing brand awareness.
Sale promotions are considered the quickest way to sell the remaining stock of clothes and getting cash to get new range of clothes, sales promotions involves sacrificing profit in order to get quick cash. No fashion retailer could afford advertising and making sales promotions at the same time because his profit will be cut twice. M&S should allocate its marketing communication budget to spend more on advertising and building its brand equity again.
Market segmentation:
In the above section, we have explained how M&S will compete. In this section, we will try to discover where M&S will compete.Markets could be segmented according to different factors such as: demographic factors, buyers needs, channel needs and many other factors. M&S should segment the market according to lifestyles and self-image; different life styles of people are the main motive in taking the purchasing decision, Porter, E(1985, p 244).
This type of segmentation is one of the most difficult choices because it is very difficult to know what product enhances the self-image of the consumer and why and how does that change?
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.
Buyer Behaviour:
In this section, we will study the consumer behaviour of M&S in order to see why consumers buy M&S and how to make them buy more products. The young male and females who buy M&S products buy the products because they want to enhance their social image and get more recognition among their peers.
These young people want to look fashionable and they are highly affected by the media especially the TV, they do not take rational decisions in their purchasing. Young consumers depend on their purchasing behaviour on the classical conditioning theory, consumers will repeat there buying decision when they get exposed to more advertising, East, R(1997, p 13). The working males and females, who want to buy working clothes for good price, are taking more rational decisions in their purchasing decisions because they are looking for a product which has a good quality for a reasonable price.
The working class depends in their buying decision on the managerial approach, which means that they collect information about the product and they visit different stores and then they compare between the different alternatives and then they take the buying decision, this is because buying a suit is an important decision and people do not buy suits as frequently as they buy other types of dress and suits are more expensive than the casual dress.
This type of buying depends on reinforcement learning, reinforcement learning theory is based on the principle of trial and error learning, when people are faced with many product options they learn from their previous errors about who is the best retailer and in this case it is more likely that M&S is the best retailer because one of M&S core principles is the Quality and value for money, East, R(1997,p 15).
Role of Branding:
A successful Brand is an identifiable product, service, person palce..its success results from being able to sustain those added values in the face of competition, Blythe, J(2003, P 127).
Brand is important because it builds loyalty between the customer and the company; loyalty is based upon positive attitude towards the company and its products. People become loyal to a certain brand because they do not want to take the risk of switching and trying other brands or because they get convinced that the brand they use is the one that maximizes their utility and give them more than what they pay for.
Loyalty must be rewarded; M&S has been collecting information about the purchases of its customers and rewarding them with points, which will be converted to vouchers. Vouchers have been used to encourage customers to switch from other retailers to M&S.
M&S has lost the core meaning of its brand; people do not view the value of M&S products as unique or different. People view the products of the company as traditional and boring; advertising in the case of M&S became a waste of money because it delivers a message that customers are not wishing to listen to. Branding is equivalent to pulling the customers to the shops.
Evaluation of communications strategy:
Usually communication strategies are based on striking a balance between push and pull strategies. The current communication strategy is based more on push strategy; push strategy depends on the company's sales force in creating demand for the company's products. Selling is one of the most important tools in marketing; having a trained and experienced sales force could put in place a successful marketing communications strategy.
The employees of M&S are loyal to their company and they have developed excellent product knowledge and direct selling skills. M&S provides its employees very good package (pay, holiday, sick pay) compared to other retailers. M&S should not invest too many resources to improve the selling skills of its sales force.
The selling strategy should be complementary to the branding strategy; the selling strategy has the push effect on the customers, sale assistants should push customers to buy. M&S should spend more on designing fashionable products and branding because branding fashionable products is the key to the market.
Integration of communication approach:
Each element of the communications mix should integrate with the other tools of the communications mix so that a unified message is consistently reinforced in a cost effective manner Smith, P (1993, 21).
Companies that spend more on advertising tend to be more profitable than companies that spend on promotional sales; the reason for that is the fact that advertising helps develop and build bran loyalty. The communication strategy in M&S should communicate the value of M&S products to customers. This value has to be essential to customers; the communication approach should consider the following factors in order to be fully integrated with the organization.
1- Budget: the mix of tools that the communication approach will use has to fit the budget of M&S and be able to maximise the revenues resulting from this spending.
2- Work force: M&S should allocate the communication mix labour force in favour of branding and advertising efforts in order to pull the customers to the shops.
3- Time scale: the time scale of every campaign is one season; this will leave the chance to M&S to learn from its previous errors and improve the quality of its branding and advertising.
4- Measurement: the effectiveness of the campaign should be measured by the increase in sales, M&S should develop a formula in order to measure the increase of sale resulting from branding and advertising; this measurement is very important in evaluating the effectiveness of the communication strategy.
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What media do they use to promote?
M&S promotes itself through TV advertising and posters. Reward points and vouchers are very important ways of encouraging customers to spend more and reward their loyalty. M&S is using its web capabilities to promote itself by making shopping easier. M&S is promoting tax-free shopping for tourists.
Was it successful?
So far the company has not been successful because it has not conveyed the right message to the consumer. The advertising channel is not an issue here because M&S is sending consumers the wrong message, the company should change the content of its advertising.
How company market their products through communications mix?
M&S is using a mix between TV advertising, Sales promotion at the end of every season and vouchers. Printed press is very important to catch the audience attention. Printed press is sometimes more important than TV because TV especially if M&S want to deliver a specific message about its products and services.
Creating fashion by Sponsoring:
Creating fashion by sponsoring celebrities is easier than predicting fashion trends. M&S should be a key player in creating fashion trends, by following this way M&S can increase sales and reduce the unsold stock which is subject to reductions.
Sponsoring celebrities by M&S is crucial in pulling customers and setting fashion examples to M&S clothes. Sponsoring celebrities will make M&S more attractive to M&S target market of young male and females. Sponsoring will also help in setting higher prices because the audience think that fashion adds an extra value not the quality so when young males and females see a celebrity wearing clothes from M&S, they will give an extra value to the products and the price could be pushed higher.
The best mix for M&S is TV advertising, Sales promotions for the unsold stock and vouchers for encouraging customers to switch and reward loyalty. Word of Mouth: If these things happened people will recommend M&S to each other.
Conclusion:
Marks and Spencer should design fashionable clothes and then try to increase its investment in advertising in order to build its brand image on the values of fashion.
Reference:
1- Blythe, J(2003, P 127): Essentials of Marketing communications, Pearson Education.
2- Britt, S(1970, P 188): Consumer Behaviour in Theory and in Action, John Wiley & sons, Inc.
3- East, R (1997,p 13&15): Consumer Behaviour: advances and applications in marketing, prentice hall.
4- Porter, E (1985, p 244): Competitive Advantage: Creating and sustaining superior performance, free press.
5- Marks and Spencer, History: www.marksandspencer.com
6- Smith, P (1993, p 21): marketing communications: an integrated approach, Kogan page limited.
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