CHAPTER 06: COMPETITIOE ANALYSIS AND THE DEVELOPMENT OF A BRAND ADDITIONAL CASE STUDY
COMPLACENCY CAN BE THE BIGGEST ENEMY OF RETAILERS
"There's no need to ask the price - it's a penny" was the proud claim of Marks and Spencer a hundred years ago. From the start, it had developed a unique position in its market - an emphasis on low price, wide range and good quality. Over time, the Marks and Spencer position has been steadily developed, along with its profitability. By the 1990s it looked unstoppable as a retailer, as it progressively expanded its product range from clothing to food, furnishings and financial services. The world seemed to be waiting for M&S to exploit, and despite disappointing starts in the US and Canada, it developed steadily throughout Europe and the Far East. Then, just like any star who has been put on a pedestal, the media began to savage the company. After a sudden drop in profits and sales during 1998, critics claimed that the company had lost its position in the market place. It appeared to be like a super tanker, ploughing straight ahead with a management that had become much less adaptable to change than its nimbler competitors.
Many observers had commented on the fact that the company did not have a marketing department until 1998. Marketing, at least in terms of advertising the brand, had become so important to its competitors, but had never been high on Marks & Spencer's agenda. According to Media Monitoring Services, M&S's total media spending between Dec 1997-Nov 1998 was just £4.7 million, almost a drop in the ocean compared to the spending of Sainsburys (£42.1m); Tesco (£27.5m); and Woolworths (£21.5m). While other retailers had worked hard on building a brand image, M&S has relied on the quality of its stock to do the talking. The argument was that everyone knew what they were getting with M&S underwear or shirts - good quality at fair, but not cheap, prices. Similarly with food, M&S's offering was about quality...
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