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. 2008-2009; 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...