Marketing Mix of Marks and Spenser

INTRODUCTION

Mark & Spenser Plc, is a leading international retailer, having over 560 stores located throughout the UK and 150 stores globally, covering almost 30 countries. In addition M&S is serving 10 million customers throughout the stores in UK.

Marks & Spenser has been the first retailer in Britain who made pre-tax profit over 1billion in a year (BBC news 1998). Although a couple of years later they were hit by the credit crunch which made a dramatic effect on the firm as they fight back in the current economic situation.

Marks and Spencer offers perhaps the best quality food in the UK market. M&S Simply Food stores offer extremely tempting and delicious food. When Marks and Spencer entered food business there was a lot of speculation and scepticism about the prospects of its success and the very wisdom of this decision. However, within a few years of its launching, M&S Simply Food was among the leading food chains with superior quality and irresistibly tempting taste. Due to high prices M&SS Simply Food has enjoyed success mainly in the relatively richer community niche markets. This is age of marketing. Now the people are much aware in term to manage their life style culture health food and their standard of living.

The Macro Environment

"In analysing the macro environment, it is important to identify the factors that in turn affect a number of variables that are likely to influence the organisation's supply and demand level and it costs"( Kotler and Schlesinger 1991).

PEST Analysis

PEST analysis has been considered as an efficient strategic tool to be recognising the market growth and decline, potential and direction for operations. The PEST analysis is useful for business as well as product development, marketing planning, and strategic planning. As PEST factors such as Political, Economical, Sociological, and Technological of the external macro environment, those elements are often away from the control of the organization, sometime it is called threats.

Political Factors: Government have strong influence on markets and business by making demand for consumer items or for specific products in common. Political elements comprises government regulation, and legal issues ect., a few example include:

 Environmental regulation

 Tax procedure

 Employment law

 Restriction on trade and tariffs

 Political stability

I. The Impact of Political environment on M&S:

The political environment in UK and Europe is stable. The Govt support retailers and reduces VAT that directly affects the price. Since 1999 M&S has had a strict policy of selling only non-genetically modified products. They are the only major UK food retailer that has been able to guarantee that no genetically modified ingredients are used in the manufacture of any of their foods. Recently the government of UK introduced energy saving organisation such as 'Green tax' and 'Climate change Levy' on using energy to cut down CO2 by 2010 by 20% against 1990 levels. M&S has brought up plan to help reduce climate change. They introduced plan called plan A. They say it is our 5 year, 100-point eco plan to deal with the biggest challenges facing our business world.

M&S say they work both with suppliers and customers to fight with climate change, decrease waste, trade ethically and construct a healthier nation. M&S has removed 200 tonnes of salt from their food in the last 12 months. By doing this they met the salt reduction targets met by the British Retail consortium.

A few months ago M&S they have been charged for ignoring health and safety regulation after a door fell on their staff and he was allegedly injured. M&S did not abide the British safety standards.

According to BBC M&S will be the first major retailer to go down the fair trade route both on food and clothing. They launched the fair trade policy, include reduce fat and salt in the foods, and recycled packaging and animal protection which they have been awarded by the hyperactive children support group.

The Guardian reports, Jan 2009 All biggest supermarkets has to face stricter govt. Control- including fines for misreading suppliers after they refused to creation of an ombudsman to police relationship in the retail industry.

Although they fight back in the current economic situation they gained reasonable profit margin in last year under the CEO Stuart Rose. This will influence future decision making boost up the company.

Economical Factor: Economic factors affect the business nationally and worldwide. The firm's potential customer's power is affected by this factor. This includes:

 Inflation rate

 Exchange and interest rate

 Economic progress

The Impact of Economic Environment on M&S

At present the economic position is very uncertain and this could affect retail sales since people do not have sufficient money to spend on luxury items such as clothing. M&S has been hit by this and closed a number of stores recently. Due to this they had to make job cuts of 2% of their 70,000.

In the early Jan 2008, as the retailer reported about £1.6 billion was wiped off the value of M&S owing to its worst Christmas for 3 years and its share price was came down by 19% to 409p. The organisation expects that the company may have survived the slowdown consumer spending and advice that trading may not improve up to spring 2009.

Another important factor that may affect M&S is interest and exchange rates. M&S reveal slump in sales due to high interest rates. They revealed food sale fell 5.9% and non food mainly clothing has fallen by 6.1 %.

Despite, M&S claims in the 2008 annual report their total revenues has gone up 5.1% by performing well in UK and international business. (Times online)

The food an fashion giant was stopped in its tracks By severe a mixture of economic elements, ranging from increasing petrol and massive debts of British shoppers to bad credit in the US. (The Guardian)

Social Factors comprises cultural and demographic characteristic of the external macro environment. Some examples are:

 Life style trends

 Growth