Limited Collection Brand in Marks & Spencer - Essay Example

Limited Collection Brand in Marks & Spencer Vision (mission ment) Marks and Spencer Group (M&S) is a retailer of clothing, foods and Homeware. It operates through owned stores and franchise stores. The company has two reportable geographic segments: UK and international. M&S operates through a chain of 622 stores across UK and 278 international outlets throughout 34 countries worldwide The company's operations can be categorized under two divisions: food and general merchandise including clothing and home ware. The food division focuses on fresh, natural, healthy food; special celebration products; authentic ready meals and exceptional everyday food such as Oakham' chicken and Aberdeen Angus steaks. It chain of 205 franchised Simply Food' stores operates in railway stations, Heathrow Airport and motor service areas. These stores offers its customers an opportunity to shops between visits to the company's main stores. The clothing division product portfolio includes women's wear, men's wear, lingerie children's wear and footwear. Hong Kong, India, Bangladesh, Sri Lanka and Turkey offices provides the raw materials to the division. This division offers some prominent brands which includes: Autograph, Limited Collection, Cellozione, Blue Harbour, Girls Boutique, Per Una and Ceriso. The home division product and services caters homeware and home accessories; kitchen and tableware; lighting; and furniture products. The division also offers catalogue and online services (Company Overview 2009) The vision of this project would be to bring up the Limited collection brand of Marks & Spencer the most sought after product in the market. This research will put up strategies which in turn make the limited collection brand to be most popular in both UK and international segment. 2. Aims a. Rebrand the Marks and Spencer Limited Collection to resonate with the brands long standing vision. b. Expand the brands current target market. c. Create an in-store environment that represents the aspirations of the brands target consumer. Market research is an orderly, objective way of learning about people -the people who buy from you or might buy from you (AG strategies 2003). This research will mainly aim at setting market targets against which results can be evaluated. It also works out the time needed to make the presence felt. To calculate the right price as the price is the value of the product we offer and a sum which can be afforded by the customers. 3. Objectives; Tactics a. Expand the brands target audience to the demographic of women aged 30-45 over 12 months, aiming for a 15% increase in sales within each 6 months period. b. Develop and maintain successful relationships with its target customers in order to capture a value from customers to create profit and customer equity. c. Exploiting the opportunity to mace process of comparing the company’s products and processes to those of competitors or leading firms in other industries to find ways to improve quality and performance. 4. SWOT Analysis Situation Analysis Internal Analysis a. Corporate Social Responsibility at Marks and Spencer has traditionally been interpreted as a paternalistic regime for the large labour force of shop assistants which provides a provision of quality and value for money for the customers. As 90 per cent of these were women cared for by women supervisors, perhaps ‘maternalistic’ would be a better word. The welfare facilities were no doubt appreciated by the Company’s numerous retail workers (Chapman, S 2004). b. Though the clothing market faced a difficult year many factors, Marks & Spencer remain the number one brand on the High Street. M&S continued to develop their brands, with particular focus on improving their value, while injecting newness and style across their ranges. c. The three fold aim we had at the time of beginning the women’s wear brands two years ago have been established and fulfilled successfully. They were mainly to clearly segment all our brands in line with our clear customer profiles; to keep our brands fresh; and to offer great quality and value at all price points. d. ‘In 2000 Sir Harry Djanogly, Chairman of Coats Viyella, announced to an incredulous textile world that it was no longer profitable to supply M&S. Then Charnos closed its dedicated factories for the same reason, whilst Bairds, Gents and Bentwood were axed by new bosses at M&S head office, and Dewhirsts sharply cut back and were forced to close several factories. The chain store group finally decided it could manage with three major British clothing suppliers (Coats Viyella, Courtaulds and Dewhirsts) but when the first of these severed the connection, M&S was left with serious problems’ (Chapman, S 2004). e. The market we are dealing with very little lead time so that we need to get new products into the stock more frequently than anticipated. External Risks and Opportunities Concentrating solely on the youth may not be the wisest thing to do. As the youth can be very unpredictable, moreover now the youth are sheltering back home due to the recruiting freeze. The demographic between the young and the retired will provide the best opportunities. In our ageless society, for those in their late 30s and beyond looking or feeling young has retail appeal. Appealing accessories will also help to put the limited collection to the main stream of sought after brand. Peroni's latest promotion offers customers the chance to win an Antonio Berardi leather laptop case (Birra di Moda), pitching this accessory as something aspirational and exclusive. In reality, a series of factors might make the man bag an increasingly practical and popular purchase. The trends of 50’s and 80’s now again making an uproar, if one exploit the opportunity in a right manner on could capture the attention of potential buyers. 5. PESTEL Analysis Political Analysis a. The global nature of the crisis will make it far more difficult for many countries to rely on devaluing currencies to make their economies more competitive and increase export volumes. Deflation will affect emerging economies especially if the national currency is depreciating sharply. There is also then a danger that imported inflation will get out of hand. That said raising interest rates to strengthen the local currency in a time of recession and low liquidity is pure poison for the respective economy (Verdict 2009). b. Among the Top Five economies, the major mature economies of western Europe (Germany, France, the UK, Italy and Spain), rankings remained stable – with the UK ahead of France. And in the Top 10 Poland’s consumer expenditure has leapfrogged Belgium’s. However, Greece has displaced Austria in the Top 10 and has overtaken Sweden in the process (Verdict 2009). Economical Analysis c. ‘Marks & Spencer is the leading retailer in the clothing market, with a market share of 10.4% in 2008. It has wide price architecture and targets a broad customer base through its variety of sub brands, though mainly attracts older, more affluent customers. Intense competition from value players as well as other department stores has placed Marks & Spencer under great pressure, particularly in clothing where the difficult economic environment is forcing consumers to be much more selective about what they spend their money on’ (How Briton Shops 2009). d. ‘As an effect of the recession customers have become savvier in their shopping habits and are increasingly concerned about value. As a result, shoppers are buying from a bigger pool of retailers to ensure they are getting the best value for money. Though Marks & Spencer continues to focus heavily on the value of its clothing, its offer is not as enticing as those of value retailers Asda, Primark and Matalan, which have all increased their main user shares’(How Briton Shops 2009). Social Analysis e. ‘However, customers mainly visit other clothing stores that are at the value end of the market. Five of the eight other clothing stores used by loyal main users of Marks & Spencer are value retailers, highlighting how important it is for the retailer to stay competitive on price while also offering superior quality to ensure its success’ (How Briton Shops 2009). Technological Analysis f. ‘Opportunities for cross-shopping across departments remain. Though it sells electricals, food, footwear and homewares as well as clothing, Marks & Spencer does not appear as the main store in these categories for its main customers for clothing. Footwear in particular should be a focus for the retailer, given the close proximity of the department to clothing and the opportunity to point out to customers co-ordinating themes for outfits (How Briton Shops 2009). g. In menswear, M&S has looked to differentiate with technical product innovation, such as water and stain repellent Stormwear finish in trousers and a silver finish on the Freshfeet range of socks said to reduce the presence of bacteria that cause smelly odours (Mintel 2009). 6. Competitor Analysis According to Verdict research report 2009, Next is observed to be positioned in the second largest retailer after Marks & Spencer with 7.1% share of the market in UK. Their main target market is aimed at 25-45 years old women and men consumers. They offer a wide range of products such as women’s wear, menswear, children-wear, accessories, footwear, homewares and furniture (Verdict, 2009). While the other retailers have dropped their price and launched valued products During the recession in 2008, Next’s marketing strategy had been successful by retaining their products at same level of quality, design and price where other retailers have launched value ranges and dropped price. By assuring their quality and design, they also achieved positive impression on their brand image from the customers. However, they are still failing to attract young customers ranging 25-34 year olds. Over the past two years, Next had achieved very strong and solid online sales as known as the Next Directory, which ranked them as the highest online market share among the competitors. As one of Next’s marketing strategy, Next does not use their brands to target different segments of its customer base. Unlike Marks & Spencer and Debenhams, Next limits and narrow its apparel resulting low loyalty from consumers. 7. Strategy & Tactics Segmentation We want our customers to get what they are looking for. Mintel international group has announced that M&S is the destination for clothes shopping for the over-45s, according to our consumer research, and is thus well placed to benefit from the expected ageing of the population. Where as the under 25s group had very limited appeal to the product M&S carried. It is very clearly with in the plan that the aim of new strategy will be to make it appealing to the all three segments with more frequent stock updates at least by each week. On the one hand this means keeping the door open to the 30-somethings, encouraging an easy transition to M&S shopping later. The recently launched Indigo range of casualwear and denim suggests a step in this direction, but the range falls short of offering anything really attention grabbing, in Mintel’s view. However, the more catwalk-led autumn 2009 collection could succeed in this. A strong childrenswear offer could also contribute, by bringing mums into the stores (Mintel 2009). The 40-somethings of today are the contemporaries of supermodels like Naomi Campbell and Claudia Schiffer, while the 50-somethings share their birth decade with Madonna, and while they may not aspire to look like these celebrities, they are influenced by the whole younger for longer trend. Catering for increasingly young attitudes with flattering cuts and materials is likely to be key, and something we believe the new Portfolio range has not fully succeeded in yet (Mintel 2009). Market segmentation is the real Identification of portions of the market. It is crucial because the needs an expectation of the entire market may not be the same. Thus the segmentation allows the firm to better satisfy its customers. Today’s market will not be satisfied with the offerings of the firm unless on purpose or without purpose the firm’s offering satisfies the customers personal and intimate needs. The drawback of mass marketing is that customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers. The segmentation can be based on many variables such as Age Gender Family size Family lifecycle Generation: baby-boomers, Generation X, etc. Income Occupation Education Ethnicity Nationality Religion Social class On this limited collection marketing plan the variables such as Age, Income and social class are given major preference of classification, as the project aims to promote the sub brand on fashion called limited collection. The identified segments on this project are durable. It is going to be there for long term of profit making for the firm. it will be, once positioned, identifiable with the offerings its going to make for the appealing groups. The potential customers in each segment will made accessible for research of market from time to time. And the segments will be significantly large to have accepted the promotions and melt them. Now the targeted segments will be a) 18-25, b) 25-40, c) 40-50, 50 and above as far as the age concerned. The 18-25 segments will be the one that is shying away mostly from the wants they have due to the economic down turns and the alluring styles and pricing will be crucial for the revival of that segment to the expected out come. Targeting Here is where the key segments are going to be concentrated up on. Target marketing can be the key to a small business’s success. The beauty of target marketing is that it makes the promotion, pricing and distribution of the products and/or services easier and more cost-effective. Target marketing provides a focus to all of the marketing activities (Susan Ward, nd). Targeting is going to adopt a special selective specialization strategy for the targeting. Selective specialization strategy This is a multiple-segment strategy, also known as a differentiated strategy. Different marketing mixes are offered to different segments. The product itself may or may not be different - in many cases only the promotional message or distribution channels vary (Net MBA). A sub brand that is seeking to enter a market and grow should first target the most attractive segment that matches its capabilities. Once it gains a foothold, it can expand by pursuing a product specialization strategy, tailoring the product for different segments, or by pursuing a market specialization strategy and offering new products to its existing market segment. Here the question is not of getting a foot but to expand the market against the current. M&S has always gone out of its way to adopt an international design stance with very few nods to particular trends that happen to be current in the UK market at the time. This is a major advantage, now when they are targeting the fashion market, in the wider global arena because it makes it more accessible to fashion customers in other countries. As long as it maintains its investment in unique design this will continue to be a key competitive advantage. Positioning Each concerned groups is in fact a special group because they carry a desired unique position in their needs and thoughts. Positioning is the act of designing the company’s offering and image so that they occupy a meaningful and distinct competitive position in the target customer’s minds (Kotler). Market Positioning “ABC1 consumers over the age of 45 come across as M&S’ core audience in clothing, in our consumer research. Despite efforts to boost the brand’s fashion authority, its appeal among the under-35s remains limited. While the group must be aware of ageing with its shoppers, and continue to attract new generations of 30+ shoppers, we feel it has little to gain by joining the battle for the hotly-competed under-25s. While the group has looked to sharpen its value credentials with competitive opening price points, its offer is mainly geared towards the ‘better’ segment or mid-mass market. Positioning the sub brand Limited Collection To better segment the offer and inject more fashionability, a portfolio of exclusive clothing sub-brands has been developed in recent years. The sub-brands divide the collection by fashionability/quality and, to a certain extent, by price, though segmentation of the offer in-store sometimes falls short of supporting this to maximum effect”. ( Mintel Research) Limited Collection ‘Hot off the catwalk’ - Stylish and contemporary – limited runs of ‘wearable’ fast fashion, with new stock weekly. Includes Maternity, Accessories, footwear, lingerie The research conducted by Mintel spreads light on the plans to excite the customers of different segments. Positioned as a modern, stylish collection for the cat walk, Limited Collection, launched in 2009. Customer response needs to be pleasing, with plans to expand Portfolio into a full lifestyle brand. The brand seems to have benefited from lack of competition targeting this age bracket. Two new womenswear sub-brands are launched in 2009, as the company will look to inject excitement into its offer and strengthen its appeal to the 30+ customer. 7. Marketing Mix Making best use of the 4Ps Product The product offer has now expanded beyond the capacity of any individual store, underlining the importance of seamless integration between the physical stores and the back catalogue. While M&S reports that it is trialling in-store ordering, Mintel feels this is an area where ensuring ease of access across channels would maximize synergies (Mintel 2009). M&S has traditionally been all about one brand show room for clothes They always had From underwear to outerwear Across occasions from casual through business to formal Across price points in the middle mass market For almost all ages (perhaps with the exception of teens and young adults) Including footwear and accessories Now this has got to change a bit more appealing to today’s tastes to make it an impacting product stock. The sub-brands divide the collection by fashionability/quality and, to a certain extent, by price, though segmentation of the offer in-store sometimes falls short of supporting this to maximum effect. Price 2005 saw M&S realign its prices to offer customers better value, with benchmarking of opening price points against key competitors and good, better, best pricing across ranges Across the M&S clothing offer, positioned in the broad middle mass market, the product and price architecture has been stretched downwards (especially with the ‘outstanding value’ basics), while sharpening the top-end offer under the Autograph collection (Mintel 2009). Price is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service. Pricing is one the most important decision processes that the fashion marketer undertakes. Customers are becoming increasingly price savvy all the time and therefore are unlikely to be fooled by false value claims and deliberate price confusion. In more tangible terms, the pricing structure must be evident through out the limited collection category, Such as Women’s formal trousers range from £9.50 to £59, with some 40% of the range priced at £25-30. In footwear, lingerie section the prices start at £8.50, climbing to £39.50, with 38% of the items in the £25-30 bracket. In women’s jeans, the prices run from £12-45, with more than half of the range priced at £25-30. “Value has regained importance in the economic downturn, with M&S ad campaigns adopting the tagline “Quality worth every penny” in both food and non-food. The “Dress for less” campaign with Myleene Klass in early 2009 featured five wardrobe staples put together to create five distinct outfits, aiming to underline value for money ‘per wear’. In the run-up to Christmas 2008, M&S looked to sharpen its value credentials with two ‘One Day Christmas Spectacular’ events, offering 20% discounts on clothing, home goods and wine in-store and online” (Mintel 2009). Marketing will play a major role in the refreshing and repositioning of the brand, supported by rapidly rising ad spend. Marketing costs were cut in 2008/09, with further cuts expected in 2009/10. The web based net system that will have a significant role in the marketing and communication. All in all this makes for a user-friendly experience, the customer reviews and ratings providing useful feedback for the company and leveraging the power of word of mouth. References AG Strategies (2003) Agriculture Business Strategies: Market research; Alberta Agriculture food Food and rural development. Chapman, S (2004) Socially Responsible Supply Chain; Marks and Spencer in Historic Perspective. The university of Nottingham. Company Over view (2009) Marks and Spencer Group Plc. Global Market Direct Inc. How Briton Shops (2009) Datamonitor, Verdict researches. Mintel (2009) Clothing Retailing UK October 2009; Marks & Spencer. Susan Ward (nd) Target marketing; about.com small business Canada Verdict, 2009. How Britain Shops 2009 Clothing, Verdict Research Ltd. Verdict (2009) The Impact of the Credit Crunch on European Retail; Verdict Think Retail and Think Verdict. Read More