This assignment is about marketing, where I will produce a marketing strategy for a new or existing product. This unit introduces the major principle and functions of marketing; I will look on customer needs, and creating a suitable strategy or marketing mix, which will satisfy customer needs. In this unit I will experience the marketing process from carrying out initial research about a market, investigating the principles of functions of marketing and the way in which it contributes generating income/profit in a business.
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. Marketing also involves analyzing customer needs, securing information needed to design and produce goods or services that match buyer expectations, and creating and maintaining relationships with customers and suppliers.
Marketing is essential to the success of any business. Its primary aim is to enable businesses to meet the needs of their customers and potential customers, whether then it's for profit or not. To make my strategy successful for business it must:
> Understand customer needs
> Understand and keep ahead of competition
> Communicate effectively with its customers to satisfy customer expectations.
> Coordinate its functions to achieve marketing aims
> Be aware of constraints on marketing activities
I will also be considering the importance of developing and maintaining a relationship with its customers, potential customers and other stakeholders.
I will look upon on establishing customer needs, methods of analysing marketing opportunities, and the marketing mix (that would meet customer needs)
As part of marketing department, I will analyse to create marketing strategy on Marks and Spencer food mainly Indian ranges, and look at other such as Italian range, Eastern cuisine range, and British regional food ranges and. The Indian range would be ready to eat/cook food. I will be creating marketing strategies on Marks and Spencer's food as to meet the customer needs and to analyse in ways I could meet the strategies successfully. The ready to cook food would be invented for the simplicity to people and to break into the market with more of these inventions in much more variety. I will be creating strategy on Indian food range, on chicken tikka masala curry and chana masala and such, so all the customers whether vegetarian or non-vegetarian can get taste of Marks and Spencer's food, which are experimented by owner, director and chef of Benares, Atul Kochhars who has a passion for Indian food. He travels to India three or four times a year and recently accompanied Marks & Spencer and a team of development chefs to India, to share some of the things, Atul has developed four regional varieties of garam masala, and much, much more exclusive to Marks & Spencer, which gives our new Indian dishes a unique flavour
Marks & Spencer Plc is an international retailer with 718 locations across 34 countries. The group sells clothing, footwear, gifts, home furnishings and foods under the St. Michael trademark in its chain of 294 stores in the United Kingdom. Marks & Spencer is one of the UK's leading retailers of clothing, foods, home ware and financial services, serving 10 million customers a week in over 300 UK stores. The Company also trades in 30 countries worldwide, and has a Group turnover in excess of £8 billion.
History on marks and Spencer
Our company values of quality, value, service, innovation and trust are not new - they are the principles on which our business was founded.
884-1907
Michael Marks formed a partnership with Tom Spencer.
908-1931
The St Michael trademark was registered.
932-1955
Café Bars were introduced in many stores.
956-1979
The first stores in Continental Europe opened in Paris and Brussels.
980-2001
We launched our first website.
2002-
Marks & Spencer announced that it is the first ever food retailer to use only free-range eggs in its products.
The aim of marketing is to have, the right product, at the right time, at the right place, and at the right price, and also to understand the customer needs, by which it could be met.
Principle of marketing:
Understanding customer needs:
Identifying customer needs is important for any organisation, its necessary to identify what the existing and new customers want, and its necessary to be able to anticipate future trends and developments which could influence customers, such as the Marks and Spencer's food need to give good taste and quality with more ranges, anticipate an rise in the market, and increase the food range.
The principle of marketing also involves constant reviewing of all aspects of product or service, to ensure that it continues to satisfy the customers and requirements, by having the right product, price, and at the right place, so companies like Marks and Spencer can meet their objectives. The starting point for any business is to corporate goals of a business, depending on whether the product/service is new, established, or a market leader. Typical objectives might include targets regarding sales revenue, profit levels, market penetration, market share or for growth.
Three years ago, Marks was suffering widespread criticism from analysts and market commentators for having taken its eye off the ball and losing its traditional market, but now is back on track only because of the new products and services, which has made the potential customer and new customers to come and buy the products such as in the food, where we have introduced ranges of food to suit the customers, and the their tastes.
Keeping ahead of the market
This is only possible if new product is introduced, by which the customers continuously buy it, by which it should tackle the competitors and convince the customers that the Marks product have the best quality.
The launching of any new product include deciding on most important of the product for target customers, such as type of size of the packaging, variety of tastes, and on how much it should be charged, and how it should b promoted in order to create awareness to customers.
Communicate effectively with customers
Communicating effectively with new and potential customer is very important to Marks and Spencer, in order to satisfy their needs. Effective communication involves the exchange of information to achieve mutual understanding and may be to promote actions. It centres on the use of advertising, public relations, sales promotions and direct marketing activities. Marks and Spencer does it effective communication through advertising in various sorts and also the public relations. Every new product that Marks and Spencer launch aims to influence purchasing decisions of specific customer or groups, which is called as target audience. The main important thing in communication is to obtain positive publicity, to enhance its public image, like Marks would do when the new product hits well on the market.
We have a strong built-up relationship with our customers. We know their requirements and expectations. The reason why Marks & Spencer's are making sales is because it understands its customer needs. Having learnt from their mistakes they are approaching customers in a different manner. They are bringing in new schemes and new product ranges. One of the reasons why Marks & Spencer's lost out in last couple of years was because they didn't meet their customer needs. They didn't offer what their customers wanted.
Before launching any new products the customers require information before making purchase such as:
* That the product exists- making sure its available all the time
* Where it can be bought
* Details about product or service
* Its prices and features
This kind of information has to pass through number of stages of communication and the practical problems is that it is essentially one way, it offers little opportunity for potential customers to provide feedback to the seller, which then makes it difficult to measure the effectiveness of marketing, another problem would be that there's not complete control of communications about the product, because the customers get reviews from different sources such as newspapers, television, radio, magazines, which influence the views of others by making recommendations and giving advice.
Marks and Spencer's objective:
A marketing objective is a measurable goal that an organisation attempts to achieve for a target market within a specific time period. The below is my marketing objectives:
* Achieve a target level of sales,
* increase market share,
* keep ahead of competitors,
* enter new markets
* Increase product awareness among the target audience by 30 percent in one year
* Inform target audience about features and benefits of our product and its competitive advantage, leading to a 10 percent increase in sales in one year.
* Targeting particular audience
* Focusing on marketing mix to implement marketing strategy, which meets customer needs
Marks and Spencer builds on the following three things:
My objectives are appropriate because it looks at future trends as well, my objective builds up for every one coming year, by which I have set target audience, and looked at other aspects such as achieving the target level of sales, which would be better then the previous year, increasing market share, which would be by increasing sales, keeping ahead of competitors, which I think its important, because if we keep a ahead then its more likely that customers would want our products, increasing product awareness, by different ways such as advertising, informing customers on the product which is also creating awareness and which will also increase on the sale, as he features and benefits will have to be good and correct. I chose too set that particular target audience, because the product ranges vary, and not all children's prefer those kind of food, so I targeted the younger and teenagers and mainly older ones, as most of the food is ready to eat food.
There are only three marketing strategies needed to grow a business
) Increase the number of customer 2) increase the average transaction amount 3) increase frequency of repurchase.
Adopting a marketing approach:
Organisations can be categorised as being either Product-oriented or customer oriented. Marks and Spencer is a customer-oriented company, which focuses on development, assessing, monitoring and responding to change in the market in order to keep ahead of its competitors. A customer oriented will have a highly developed marketing strategy, which would acknowledge to its customers needs and wants. It strives to find out what customers want, what causes them to buy the product or service, such in Marks and Spencer we would research on the benefits to customers from the products and persuade customers to get the product in different ranges and to get more customers, and to get the sales higher. The organisation also considers what the product or service really means to them as consumers.
Within the Product Orientated Business the statement is that consumers will prefer products / services which offer the most quality, performance, and range of features. If your product is the best, then people will buy it. Management in such businesses therefore focus on Research and Development of product improvements. Such companies believe that technical advantage is the key to business success. The product oriented organisation will focus on product rather the market, organisations might assume that the existing range of product I the best on the market and the sales will follow automatically, and there might be no need for product change or modification.
Marketing involves anticipating and manipulating, there are several things which companies like ours might have to consider such as:
Consumer demand- these include specific factors such as price, income, taste, preference, seasonal changes in demand.
Customer expectation- what do customers expect of a particular good, which then will be satisfied. Providing good information on product, this has to be accurate, good presentation.
Business reputation- building up the reputation, which the Marks already has, providing good customer service, persuading customers to buy and to make them think that they are gaining value for money.
Competitive reactions- need to judge on the possible was in which rival business will react to a new product.
Businesses will always react to threats to their market, whether its centre on price, promotions, advertising, changes to product and such, below are the main internal and external constraints.
Internal and external constraints:
Internal constraints- are those that arise from inside of the organisation and are within the control of the business. The main internal constraints involve the product itself.
Product: if the right product or service is not available then it's a constraint, business such as ours need to make a choice between a low-cost, mass-market product
and a high cost, differentiated product (products among a similar group that are
different from one another (under the group food retailers we have Asda, Waitrose, who provide similar food types, but are different providers) who would be our competitors in food retail.
Personnel: having right staff and right amount of staff, for the customers, and making sure that the staffs we have are trained, expertise, skilled, and who cope with new products in markets so they are in good benefit to provide information to the customers if needed.
Finance: this might include not enough finance available, opposition to the use of finance in risky ventures. Large organisations like ours will have to compete with production, human resources and other departments.
External constraints- arise from factors outside the business and which are outside its control. The main external constraints are caused by the competition in the market, government and such.
The levels of existing competition: the business such as Marks and Spencer is likely to be doing one of the two things as listed below:
- Opening up a new market- in which case other business maybe attracted to it, if it's successful. (Legal barriers such as patents and copyrights may also be used)
- Trying to enter an existing market- in which case competitors will react to the new competitor.
Government legislation- this can restrict or encourage the sale of certain products. This means some products can only be bought to the specific age if any.
The need to act fairly: we have to use right methods to test the product, which should be advantage to the human.
The key to good marketing is to spot what trends are likely to bring before they happen and to make sure that products are available to fill any new demand
Achieving marketing aims is important for any organisations; the various functional departments in our business will need to be coordinated in order for it to meet its marketing objectives. Management has a responsibility to ensure that all departments are able to contribute to an overall marketing strategy.
In our Marks and Spencer we have board members for each department such as the chief executive, chairman, chief financial officer, director of food, director of clothing (outlets and international), director of Marketing and E-commerce these are all part executive directors, and along with them work the non-executives, who are to report to the executives, there are lot more others who work with these groups, in order for Marks and Spencer to meet its objectives and strategies. The above diagram shows how the functional department in any organisation is coordinated or how it could be coordinated.
Marketing research
Marketing research provides information that helps us recognise and respond to market opportunities, and to develop suitable product to meet market needs. It enables us to find out which goods and services people want, the price they are prepared to pay, where they preferred to buy. Market research is the collection and analysis of information about markets, organisations and people to support better business decisions.
By market research organisation can identify key factors, which relate to:
- Core benefits associated with a product, which is what the customer seeks to obtain by buying it.
- The product specification, including branding, packaging and quality (the product specification should be detailed in order for customers to have a knowledge of product, which should satisfy the customer)
- The additional benefits associated with after sales, service, advertising, customer advice, financing, and delivery.
Market research can never be completely accurate, as businesses will never be in a position to ask all of their customers the same questions or neither all customers responding to them.
There are two sorts of research, primary research and secondary research.
Primary research- Primary research describes information gathered through interaction with other people. Primary research can be gathered through meetings, one-on-one interview, focus groups, and surveys etc...which are designed for a specific need.
By customizing tried-and-true approaches, focus groups, surveys, field tests, interviews or observation gain information about the target market. For example, you can investigate an issue specific to your business, get feedback about your Web site, assess demand for a proposed service, measure response to various packaging options, and find out how much consumers will sell out for a new product.
Primary research delivers more specific results than secondary research, which is an especially important consideration when we are launching a new product. In addition, primary research is usually based on statistical methodologies that involve sampling as little as 1 percent of a target market. This tiny sample can give an accurate representation of a particular market.
Primary research can be as simple as asking customers or suppliers how they feel about a business or as complex as surveys conducted by professional marketing research firms. Direct mail questionnaires, telephone surveys, experiments, panel studies, test marketing, and behaviour observation ...
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Primary research delivers more specific results than secondary research, which is an especially important consideration when we are launching a new product. In addition, primary research is usually based on statistical methodologies that involve sampling as little as 1 percent of a target market. This tiny sample can give an accurate representation of a particular market.
Primary research can be as simple as asking customers or suppliers how they feel about a business or as complex as surveys conducted by professional marketing research firms. Direct mail questionnaires, telephone surveys, experiments, panel studies, test marketing, and behaviour observation are all examples of primary research.
Primary research is often divided into reactive and non-reactive research. Non-reactive primary research observes how real people behave in real market situations without influencing that behaviour even accidentally. Reactive research, including surveys, interviews, and questionnaires, is best left to marketing professionals, as they can usually get more objective and sophisticated results.
Secondary research- if you're considering extending your business into new markets or adding new services or product lines, start with secondary research.
You can find much of this kind of information in local libraries or on the Web, but books and business publications, as well as magazines and newspapers, are also great sources.
Although secondary research is less expensive than primary research, it's not as accurate, or as useful, as specific, customized research. There are many sources of secondary research material. It can be found in libraries, colleges, trade and general business publications, and newspapers. Trade associations and government agencies are rich sources of information.
I am going to do a primary research as they give more accurate results then the secondary research, because by doing secondary research I won't be able to ask exactly the questions that I might be able to when doing primary research, it would have been cheaper but wouldn't be as accurate. There are many primary researches which could be carried out such as questionnaires, telephone, and focus group, panels of customers, testing, observations, and personal feedback. By doing primary research there are many advantages such as:
* it can be targeted
* will be up to date
* can ask the precise questions to obtain the precise information that is needed for marketing.
In doing primary research there are advantages as listed above, but I have also considered the disadvantages such as:
* it will be costly
* it can produce biased results
* It may need to be validated by cross-referencing it with other, historical, data.
Marketing research information is either Quantitative or Qualitative. I need to structure the primary research in attempt to get the most accurate information as possible.
The resulting information will be either Quantitative or Qualitative in nature. Quantitative data is quantifiable numerical and statistical information. Whilst Qualitative data, is subjective information about features of the market including consumer attitudes, opinions, motivation, and behaviour.
Quantitative vs. Qualitative
Experimental
Laboratory-like
control
Logical Positivism
I would go for quantitative data because is experimental and easier to carry out and also easier to produce statistical information quantitative data will be more useful for me, and easy to know the results, if I do face to face interview or questionnaires and surveys or any other research I think qualitative research will be more useful, because it wont be just numerical, yes there might be few questions which will contain qualitative questions, which will depend on the question asked, so combination of two and more of quantitative structure will give me useful information.
In order to develop its marketing strategy, I will have to explore the needs of customers and the activities of the customers and competitors by conducting research in a number of areas such as:
Product development: organisations such as Marks and Spencer need to undertake research into both the development of new products and the improvement of existing ones. Before any changes are made products are put through a series of tests to investigate features such as design, materials, and ingredients, ease of handling and operating capacity.
Research into distribution: I need to consider how consumers prefer new or existing products to be made available. Research into distribution can provide useful feedback on other aspects of an organisations marketing strategy. Research can be undertaken to investigate the effectiveness of different methods of distribution, by which it will build upon strong distribution.
Research into promotion: I need to determine the effectiveness of various promotional and advertising activities in persuading customers to buy the product. This could involve advertising in different ways such as brochures, flyers, TV, sales demonstrations and such.
Research into customer behaviour: business organisations can only successfully divide the market into different groups and position the product by giving it a distinctive appeal to particular buyers. I need to conduct research into consumer behaviour to build up a picture of customers behaviour may be by investigating into
culture, class, personal characteristics, and psychological factors. This all might be useful in knowing what kind of food will different culture prefer, this would help to increase sales, because if its Indian food then it would be distributed in certain area where Indians live, and also considering personal characteristic, such as lifestyles, the job, as for e.g. an office worker would buy more of frozen food or ready to eat food, which would make it easier for them.
Research into market and competition: the market in which a business operates can be defined as the total group of all actual and potential buyers who share the same income, it is important for a business like ours to define and develop an understanding of its market. Information on the rate of growth and overall size of the market helps a business to determine whether its existing or potential market is growing, declining or saturated, this can be done by comparing sales figures from previous years to recent to see the increase or fall in sales.
It's important for us to research the competitor's performance, strengths, and weakness to determine potential threat. Information on available substitutes can be used to help determine a suitable price or promotion method. By adding a unique selling point whether by quality, design, availability, which can be used to promote the product for it face the competition.
Target market/ market segmentation
In the market segmentation approach, a firm chooses to focus its activities and resources on a particular sector of the market where it might be able to excel. Targeting a particular market segment allows a firm to offer a product or service, which utilises its resources, cost effectively and satisfies a group of consumer's common needs.
Market segmentation is one of the steps that go into defining and targeting specific markets. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mixes.
There are several ways that a business can chose to segment its market:
* Demographic: which is by age, class, sex, education etc...
* Geographic: by region, (north, south etc...) or by area
* Psychographics: by lifestyle, personality
* Usage: by number of purchases which are made
Once a business has identified its market it needs to evaluate which market area it is going to target. Essentially a business can choose to target one of three key market types
* Mass market- businesses which target the mass market do not distinguish between consumer when promoting and targeting their products and services.
* A particular market segment- a firm chooses in focus its activities and resources on a particular sector of the market where it might be able to excel. It can segment its market by age, class, education etc... which is called demographic or by geographic, where it's by region or area, it could be segmented by lifestyle, personality, called psychographic and by usage, which means by the number of purchases made.
* Niche markets- niche markets are small markets, in which only a few competitors might operate. Businesses which target by this, benefit from the fact that consumers are usually prepared to par a premium price to have their particular needs met.
I am going to target on age, which falls under particular market segment, by demographic, the reason I didn't go for mass market because is complex and difficult as I have try and develop strategy which satisfies a variety of customers, and that the mass market approach assumes that all customers have the same preferences and needs, which don't suit out business, because Marks and Spencer have variety of customers with different tastes and needs. The niche market is for small markets, and Marks and Spencer is big and well established. I would target mainly, young teenagers and adults and older ones, as Marks and Spencer have variety for ages as such and also people from different backgrounds.
In the near future Marks and Spencer segmentation would be part of demographic as well as geographic, because the product would be segmented and distributed in all the Marks and Spencer's stores, which are located regionally so the customers could get, hold of the product from all the M&S stores, which sell food. The stores, which would have more of these products, would be the stores like Wembley, Brent cross and such and more on simply food stores so there are more purchases, and all can get taste of the newly launched product.
Market segmentation allows Marks and Spencer to 'identify different groups of buyers who share similar definable needs and behaviours.' Marks and Spencer segment its market based on simple variables such as Demographic and Geographic's
This has been identified by associating the number of Marks and Spencer stores. the reason Marks and Spencer is not targeting /segmenting earners at the upper end of the market, and segmenting itself toward the social groups of A, B and C1, because the price would be reasonable for everyone to buy the product and with promotions.
The use of Geo demographics is a fast and efficient way of identifying trends within certain geographical areas, allowing Marks and Spencer to divide a market into different groups based on age groups and regions characteristics.
Primary research methods:
As I have chosen to do primary research, there are different methods of primary methods; below are few of the primary research methods:
Face-to-Face Interviews
Information can be collected by researchers conducting face-to-face interviews. The researcher will record response to the questioned asked on a questionnaire. Such interviews can take the form of Door-to-door interviewing or in-depth, pre-selected personal interviews.
Advantages
* In Person: The respondent can see and be seen by the researcher. These interactions can be valuable in building relationship, eliciting cooperation.
* Depth or length of interview: An hour-long interview in a respondent's home or office is expensive but usually pleasurable for the respondent. An hour interview on the phone can be too boring.
* Show and tell: A wide variety of visuals can be used-demonstrations, feature trade-outs, catalogues, videos, computer screens.
Disadvantages
* Expensive: door-to-door interviewing has almost become extinct due largely to its high cost compared to telephone interviewing.
* Quality control: Supervising an in person interview is more difficult than monitoring telephone interviews.
* Slower: It usually takes more time to individually find and interview respondents in person.
Postal Surveys
Postal surveys use questionnaires sent to respondents through the mail. The respondent completes and returns it, often in return for some gift or payment.
Advantages
* Less costly: Mailing out a bunch of questionnaires is usually the cheapest way to do research.
* Can show visuals: Pictures, drawings or graphics can be included in the mailing. These are sometimes helpful to explain or show concepts being researched.
Disadvantages
* Low response rates: mail questionnaires are typically returned by less than one in five recipients. Bias may occur since the respondents can be largely self-selected.
* Turnaround: Mail-outs typically take weeks or months. Phone surveys can be completed in days or even overnight.
* Disclosure to competition: If a competitor gets your questionnaire, they can replicate your research by mailing copies to a similar population and processing the results. At the very least, they'll know what you're asking.
* Data limitations: Many mail-out questionnaires are returned with incomplete or obscure answers.
Focus Groups
Focus group research uses small group discussions to learn about a topic. Group's sizes will vary, but normally in the region of eight respondents are selected to sit in on the discussion. Focus groups are conducted by at least one researcher (or moderator). During the course of the discussion, participants are asked a specific set of questions. The researchers will listen carefully to the responses and ask follow-up questions to learn about the underlying issues, attitudes or beliefs. The discussions are, often video recorded, and later analyzed to learn about participants' opinions, perceptions, reactions and points of agreement and disagreement.
Advantages
* Qualitative data
* Data that would not uncover information, you would not obtain in a questionnaire
* Can be used to 'elaborate' on information from surveys.
* In-depth: Focus groups can get at information that cannot be obtained in other ways. Participants not only discuss their own opinions, they also have an opportunity to react to the ideas of others
* Hands-on: There is also opportunity for wide direct investigation. Products can be tried out, food tasted, concepts reviewed and reactions observed and probed.
Disadvantages
* Misused: There is often a temptation to consider focus group results a substitute for survey data. Focus group research investigates the nature of attitudes and motivations, not their frequency in the population.
* Poorly managed group dynamics: Conducting focus groups requires skill, insight and experience. Not everyone can be a moderator.
* Difficult to set up and schedule
* Cannot quantify data
* Difficult to interpret
Questionnaires
Is a form containing a set of questions; submitted to people to gain statistical information Questionnaires are an inexpensive way to gather data from a potentially large number of respondents. There are things which I will consider when writing the questions such as:
* Using simple, positive language
* Ensuring clear meaning
* Keeping the questions brief
Advantages:
* Easy to develop and manage
* Lots of data
* Quantitative data is usually satisfactory
* Inexpensive
Disadvantages
* Low response rate
* Self report data may compromise quality of data if questions relate to performance and outcomes
* Qualitative data may be variable in helpfulness
These are some of the primary research methods, other include, test marketing, sampling, personal interviews, telephone interviews.
I have decided to do questionnaire as my primary research, because by looking at the advantages, it's inexpensive, easy to manage, flexibility to ask different questions, whether long or short, although knowing that some information will be biased, but will deliver specific results then if I was to conduct secondary research. I think questionnaires will be much easier to hand out and carry out rather then adopting any other primary methods.
I have to set out the structure of the research before carrying it out. The structure can be outlined through deciding:
who to ask
how many to ask
what to ask
how to ask
how to present the information
The information which will be obtained will provide customer profile for the product, which then could be established.
The types of questions asked are important where in some it will be qualitative and some quantitative responses. The most common types of questions are:
Closed questions- where a limited number of answers are possible, some closed question will only have a single answer
Open questions- used for qualitative answers. Generally is asked for a statement or opinion.
Psychologically based question- such questions is asked of individuals or focus groups to try to get a feeling behind purchases.
Specific questions- some questions are designed for specific responses, for e.g. a question to mark a product out of 10.
My questionnaire will mainly contain closed questions for me to give statistical information, to look at on what the customer's choices are, towards the questions to be asked, which would help to understand the needs of customers.
I will be asking 10 customers, because I think asking 10 people would give me the average information which will be useful for me, as I would have a rough idea to what the customers want or what they think, by looking at the statistical information's considering the highest rated answers.
The next page shows the questionnaire.
Marks and Spencer's
Food
Questionnaire
This questionnaire will help us to improve our products, from potential and new customers. Please fill out the following questions, which will help us tremendously, and a chance to consider views of our customers. Please tick ONE answer in the following questions.
Age:
Gender: Male Female
Ethnicity:
) Are you
A) Vegetarian
B) Non- Vegetarian
2) How often do you purchase Marks and Spencer's food?
A) Everyday
B) Once a week
C) On occasions
D) Other
3) What food range do you purchase?
A) Indian
B) Italian
C) Oriental
D) Other
4) Do you purchase
A) Ready to eat food
B) Frozen food
C) Fresh food
5) What type of food do you eat?
A) Spicy
B) Mild
C) Sweet
D) Other
6) What other food stores you purchase?
A) Sainsbury
B) Tesco
C) Asda
D) Waitrose
E) Other
7) What price do you currently pay for your ready to cook food?
A) Less than £2
B) Between £2 - £5
C) More then £5
8) What other food range should Marks and Spencer consider?
A) Eastern cuisine
B) Steam cuisine
C) More of Ready to roast food
D) Other
9) Do you buy certain food range because of it's...
A) Quality
B) Freshness
C) Reliability
D) Packaging
0) Would you prefer Marks and Spencer food?
Because of it's...
A) Quality
B) Taste
C) Ingredients
D) Other
Thank you for taking your valuable time to fill out the questionnaire, your views will make a difference to our company.
The above is the questionnaire I created for the customers to give their opinion, it has variety of questions which would be produced in a bar graph, to look on the moderation in the results. The main purpose of the questionnaire that I created is that to find what customers think and what they looking for, which is appropriate for this campaign as its all about meeting customer needs and satisfying them, by the results produced I would know what kind of food customers like, the price so then I could create my strategies according to that.
My prediction:
My prediction before carrying out the questionnaire was to find out about Marks and Spencer's food. One reason for my research is to find out if people did shop at Marks and Spencer's to buy their food. I also formed questions to customers to where else they buy their food product, this particular question will give me an idea of where people purchase, for e.g. I predict that majority of people would shop in Asda because their products are value for money, and at price they normally pay for the product, which I think would be more of between £2 - £5, which would then help to me build on my pricing policy. However from the result I'll get after carrying out the questionnaire, will give me an idea to see whose top of the league, which by then I can look at their marketing strategy and target it to approach in order to break into the market.
Results of the questionnaire
According to the prediction I made to where the customers would go to buy their products was Asda, as they were value for money, and after carrying the questionnaire and making a statistical graph, I found out that customers also prefer going Sainsbury as much as Asda, and less of Waitrose and others. The results above show the variations, for each question, which is easier to figure out to see which are the top answers, which I will consider when making a strategy and meeting the 4p's, as now I know how much customers pay for their product and other such as why customer buy the product and the taste they prefer. This questionnaire helped me to see what the customers want and easier for me to make a strategy to meet the customer needs.
S.W.O.T
S.W.O.T stands for strengths, weakness, opportunities and threats. This analysis enables an organisation to place itself and its products into perspective. It helps to highlight the main internal strengths and weakness of the organisation, together with any external opportunities and threats. If the factor is outside the control of a business it is an external factor. If it is within the control of a business then it's an internal factor. SWOT analysis would suite most of the businesses, as its good at focusing attention on competitors actions and on other external challenges, which it must face., as well as a key role in an business strategic planning, assisting in short term and long term objectives.
Strength- firm strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Such examples are:
Business reputation among customers
Strong brand name
Product range
Cost
Weakness- the absence of certain strengths may be viewed as a weakness, such as:
Poor reputation
High cost
Poor employee relations
Product problems
Opportunities- the external environmental analysis may reveal certain new opportunities for profit and growth, such examples are:
New methods of production or distribution
New methods of communication and technologies
Unfulfilled customer need
Threats- changes in external environmental also may present threats to the firm, threats can come form competitors, or outside bodies such as governments. Such as:
New laws and regulations
New products, substitute products
Factors, which have affected consumer, demand
There few questions that I could consider to make it an effective method of identifying Marks and Spencer's SWOT
Strengths:
What are the advantages?
What do we do well?
Weakness:
What could be improved?
What is done badly?
What should be avoided?
Opportunities:
Where are the good chances facing us?
What are the interesting trends?
Threats:
What obstacles do we face?
What is our competition doing?
Is changing technology threatening our position?
Do we have bad debt or cash flow problems?
Marks and Spencer's SWOT analysis:
Strengths
Weaknesses
* Own Labels
* Work Delivery Scheme
* Fresh/ Quality Food (own farms)
* Wide Range of products
* Service
* Online-Shopping
* Expansion is difficult due to existing store coverage
* Very dependant on the performance of own labels
* Over staffing
External
Opportunities
Threats
* Internet shopping
* New methods of production or distribution
* Expanding on food stores
* Filling the unfulfilled customer need.
* Overseas groups entering the market
* Manufacturers are still seeking to legally slow down the penetration of own brands
* New laws
* Levels of taxation
The strengths of marks and Spencer are that we have our own branding, which has a good reputation among customers and in the market with wide range of products, where the food is produced with own products. The weakness of our company would be that there are many staffs, and because of online shopping there problems which occur such as billing problems, website problems and such. Many stores therefore expansion is difficult, Marks is totally dependent upon its own performance in own labels, as all the products are made and produced by us. The market provides the opportunities or by changes in demand, such as new method in communication, where we Internet shopping, having more stores, which only cover food. Other opportunities for profit and growth is that filling the customer needs and introducing new methods for production and distribution, by which there is more demand. The threats which is an internal and external factor, competitors entering the market, new products entering the market, which affect consumer demand, governments introducing new laws and regulations on level of taxation are threats to our business.
PEST
The PEST analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business. A PEST analysis is a business measurement tool. PEST is an acronym for Political, Economic, Social and technological factors, of the external macro-environment, such external factors are usually beyond the firm's control, sometimes called threats. A PEST analysis measures a market. By analysing the trends firms can spot new market opportunities and threats.
Organisations operating environment can be analysed by looking at:
* External forces (those factors that an organisation has no control over),
* Internal forces (factors that an organisation has direct control over)
Political factor:
Governments have major affect on business and markets by creating demand for particular products or for consumer items in general. Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate, some of the examples include:
* Tax policy
* Employment laws
* Environmental regulations
* Trade restrictions and tariffs
* Political stability
Depending on its role and functions within the department, a unit has to consider issues such as: -
- How stable is the political environment?
- What is the government's position on marketing ethics?
- What is the government's policy on the economy?
Economic factors:
All businesses are affected by economical factors nationally and globally. This factor affects the purchasing power of potential customers and the firms cost of capital. The following are examples of factors in the macroeconomic:
* Economic growth
* Interest rates
* Exchange rates
* Inflation rates
Marketers need to consider the state of a trading economy in the short and long-terms, some of it, which should be considered, is:
- Interest rates
- The level of inflation Employment levels per capita
- Long-term prospects for the economy Gross Domestic Product (GDP) per capita,
- Budget allocation
Social factors:
This includes the demographic and cultural aspects of the external macro-environment. These factors affect customer needs and the size of potential markets. Some of them include:
- Health consciousness
- Population growth rate
- Career attitudes
- Age distribution
- Emphasis on safety
Technological factor:
Changes in technology maybe either threat or opportunities. It can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some of which are:
R&D activity
Automation
Technology incentives
Rate of technological change
Technology is vital for competitive advantage, and is a major driver of globalisation. Considering the following points:
- Does technology allow for products and services to be made more cheaply and to a better standard of quality?
- Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc?
- How is distribution changed by new technologies e.g. products via the Internet, auctions, etc?
- Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc?
PEST analysis on Marks and Spencer
Political:
Government has big effect on business, and the laws are changing, which makes it difficult. There are internal and external factors in this, where external factors are out of control. Our company does not involve with GM food product, we decided to make 5,000 changes to our products and packaging, and remove GM products, or ingredients and derivatives from GM plants, from our foods. Planning Policy Guidance notes (PPGs) set out the Government's national land use planning
Policies for England.
Economic:
A standard measure of a country's economic performance is Gross Domestic Product (GDP) this measure defines the total value of goods and services produced by the economy, usually expressed annually and per capita - the total value divided by the population of the country. GDP is useful broad indicator of the size of a national market, and provides a measure of comparative living standards in different countries; we while decide where to locate, what to stock and pricing strategies use this type of information.
Social:
Largely involve demographic changes, covering age, ethnicity, and other characteristics. They reveal trends, which can influence demand for particular products. Most of our customer's shops by car, about 3/4 of customers are car shoppers, and we also do delivery at certain amount. We also have organic and healthy eating food products for the benefits to customers. Strict regulations mean our growers have to farm any land organically for two years before any of the crops grown can be sold as organic.
Technological:
The ready to eat, Indian range food product could be affected by the cost of machinery, upgrading old machines to improve the company or new machinery that is better and the need to get it to keep up with competitors or gain an advantage, the new machinery could be more efficient in the making of the product. This could be a machine that makes more of food in the same time or one that makes fewer mistakes.
We have made a website, which advertises the product and gives lots of useful information and could be accessed any time of the day, which gives lots of flexibility this is good because it has been up to date and shows that Marks are doing well in the technological factor. And also stores now use bar code, and barcode reader as new technology, and tills get upgrades once in a while, with better technologies, which make it easier for our staff, and also for stock management.
Political
Economic
* Free of GM-Food
* Planning Policy Guidance (PPG)*
* EU Competition Law
* Previous year Market value
* GDP
Social
Technology
* Organics and healthy eating
* Eating out & take-away
* Environmental conscious
* >3/4 of shoppers travel by car
* Communication/ IT
* Internet (own website)
* Supply Chain Optimization
* Transport/ Cool Storage
* Bar Code/ Stock Management
Market segmentation:
In the market segmentation approach, a firm chooses to focus its activities and resources on a particular sector of the market where it might be able to excel. Targeting a particular market segment allows a firm to offer a product or service, which utilises its resources, cost effectively and satisfies a group of consumers common needs.
Market segmentation is one of the steps that go into defining and targeting specific markets. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mixes.
There are several ways that a business can chose to segment its market:
* Demographic: which is by age, class, sex, education etc...
* Geographic: by region, (north, south etc...) or by area
* Psychographics: by lifestyle, personality
* Usage: by number of purchases which are made
Marks and Spencer's market segmentation would be demographic and geographic, because the product would be segmented and distributed in all the Marks and Spencer's stores, which are located regionally so the customers could get, hold of the product from all the M&S stores, which sell food. The stores, which would have more of these products, would be the stores like Wembley, Brent cross and such and more on simply food stores so there are more purchases.
Marketing mix
The initial research stages a business undertakes allow it to match its marketing mix - the combination of product, price, promotion, and place, to factors such as the socioeconomic class, age, household type, gender and etc... This combined with an analysis of marketing opportunities, helps to determine the most suitable marketing strategy. The different strategies are usually grouped under 'marketing mix'. This is the mix or balance of various strategies used to sell goods or service. The parts of marketing mix include:
* Product - my product
* Price - what 'I'll charge customers for products
* Promotion - how will I promote or create awareness for my product in the marketplace
* Place (distribution) - how will I bring product together with my customers. Which includes both getting products to right place and the places where customers may buy the product
The marketing department in our Marks and Spencer develops an appropriate marketing strategy by identifying the most important components of the marketing operation, so as to determine the best marketing mix of the four P's for its target market. By targeting a specific segment, it is possible for an organisations such ours to develop a marketing mix, which satisfies the needs to a set of customers.
Price: pricing is the only aspect of marketing mix that directly produces revenue; the other aspects all involve costs. One of the first decisions that a business has to make is what price it will charge? Organisations as ours should understand what level of price customers would pay and communicate this price to them. It must satisfy the expectations in terms of what they expect for that price, i.e.: value for money.
Cost- based prices
Cost-plus pricing. The business adds up the various costs of making the product and then ads on a percentage of 'mark-up' for profit. Price is the cost of manufacture plus profit.
Marginal pricing. Is where a business calculates price so that it will cover the variable costs of production and make a contribution to fixed costs. Once fixed costs are covered, the product then makes a contribution to profits. Using these pricing businesses can see how well each product that it produces is doing and alter strategy accordingly.
Competitions or marketing based prices are more usual than cost based ones.
A business as ours is likely to choose a price that both covers costs and is competitive.
Competition based prices
competitor- based. Where the business chooses to set price, not according to costs, but according to the prices that other businesses are charging.
Market- based. Sometimes the business has no choice but to accept the price set by the other businesses in the market. If price is set by a leading business, this is called price leadership. If it is set by market it will be due to the competitive nature of that market. If the business prices above the market price, it makes no sales. If priced below market price, its stock is cleared and it leaves the market this way, but low price is unlikely to cover the business costs.
Market penetration pricing- is often used by firms trying to establish themselves in the market. They may set low prices in order to build up brand loyalty and gain a share of the market. The strategy may be used producing a new market or introducing an established product into a new market.
Marks and Spencer's Pricing:
Pricing is the only mix which generates a turnover for our organisation. The remaining 3p's are the variable cost for the organisation. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Our price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship.
As Marks and Spencer have gained a brand loyalty, have a market penetration pricing is not suitable to establish ourselves, and having price which is based according to the prices that other businesses are charging is not appropriate for this campaign because we produce our own food, own packaging, so if I was to keep the same price as the other businesses then there wouldn't be much sale and keeping a low price wouldn't cover the business costs, so having a market based price is not suitable.
for this appropriate campaign I think having a marginal pricing under cost based price would be suitable because it would cover the variable costs of production, and once the fixed costs are covered the it will make a profit, by this I will be able to see how well the product is doing in the market which would help the business in various ways such as the company can know if to produce more of products in the same categories r to alter the strategies.
By doing the primary research by the questionnaire I have found from the result that the people pay less than £2, but there was an equal result between less than £2 and between £2- £5, which should be value for money.
As it is ready to eat/cook food for chicken tikka masala for non-vegetarian would be charged accordingly to make profit as all our fresh poultry comes from our Select Farms so we know exactly where every single bird is produced and what they've been fed since they were hatched. All will have been fed on a diet including maize and soya from strictly non-GM sources.our poultry range such as:
* Turkey -we've selected farms in the UK and Ireland who produce high quality birds fed on a cereal-based non-GM diet.
* Organic chicken -our organic range is produced on special farms like Justin Scale's in the Pembrokeshire National park. We converted to organic in 1998 we can ensure our chickens are reared to the highest standards
* Special poultry - this includes corn-fed chicken, organic Bronze turkey, poussin, organic free-range chicken and Poulet Noir.
The chicken tikka masala and chana masala and more of curry's would be part of main dishes and by looking at other product ranges in chicken main dishes such as chicken korma, chicken kashmiri are priced as £3.79, so for the chicken tikka masala and more of these sort of product would be priced little bit less because although is from the same farm, if the price is less then the other product then more sales will take place. The price of the curry would be £3.50. This pricing strategy is right as this determines the financial success of a particular product and contributes to long term viability of our company and value for money, which is want customers want. And by looking at the questionnaire I can tell that people would pay around £3.50, as there same amount people paying £2-5 to less than £2.
Product- when designing a product strategy, it is important to identify precisely what is being purchased in terms of customer benefits and how these help to satisfy a particular need. A product or service may provide satisfaction at three levels, which are:
Marks and Spencer's Product
Marks and Spencer's newly launched Indian food range, which is ready to cook/eat food for the curry's like chicken tikka masala, chana masala.
We do not permit the use of growth-promoting antibiotics in the diets of any animal used in our fresh meat, poultry, eggs or milk.
At Marks & Spencer we know exactly where animals used for our food come from and what they've been fed. This helps us ensure they're provided with a suitable, safe and nutritious diet. We don't allow meat, bone meal or any unauthorised feed products in any of our livestock diets. In addition we've removed GM ingredients from the diets of animals, which produce our fresh beef, pork, lamb, chicken, turkey, eggs, farmed salmon and milk.
We spend time researching, which ingredients are authentic for particular dishes, and make sure we use exactly those genuine ingredients - we're now using about 5,000 different ingredients in our foods. These all come from known, approved sources and are used only in the products we choose
Our aim is to avoid using additives in our foods, unless it's essential to provide quality or safety. If they are necessary, we only use the smallest amount possible
Product ranges:
Having different types of product range is good for high sales, to show customers that we do research into different cultures of different quality for the different market segments so we have the right taste in different food types, which should satisfy the customers.
American range: We have developed a new range of regional recipes with bold American flavours including some lighter eating products ideal for the summer. We have 38 products in American range, ranging from snacks (loaded cheesy nachos, spicy chicken roll, to meal and sandwiches (tex mex style chicken enchiladas).
Barbecue range: Ready cooked, our barbecue dishes only need a quick burst on the barbecue, the product ranges from jumbo barbecue drumsticks, Chinese style pork ribs, sticky barbecue style pork ribs and many more.
British regional range: Each ingredient represents the "Best of British", with Aberdeen Angus Beef, Channel Island creams, West Country hams and Lincolnshire sausage all making an appearance, as well as great condiments such as Tewkesbury mustard sauce. Ranging from 7 products.
Italian range: All our breads are created with authentic Mediterranean ingredients and make the perfect accompaniment or starter. We have many ranges in Italian range varying from Speciality Bread (Lightly Salted Bruschettine, Italian Garlic Bread), Speciality Rolls (Panini Rolls, cheese Rolls) Speciality Cakes (Cappuccino Torta) Chilled Breads (Cheese and Garlic Baguette, Garlic Dough balls)
Eastern cuisine: ranging from Japanese cuisine, (Sushi Selection, Prawn & Salmon Nigiri Selection), Chinese cuisine (Singapore Noodles, green Thai stir fry sauce) Thai and Malaysian cuisine (Coconut Rice, Thai Red Curry Paste)
Oriental range: Highlighting the spectrum of colour, taste and texture in fresh vegetables, our stir-fry selection includes shitake mushrooms, which in Asia were grown on shiii trees,
Steam cuisine: Steam Cuisine is the modern day version of a pressure cooker, but it's for cooking in your microwave. The specially formed and tightly sealed plastic pack contains fresh vegetables, pasta, potatoes, rice or couscous, chicken or fish, and a sauce. As the pack heats in the microwave, it creates steam from the water in the vegetables. (Scottish Salmon, Minted New Potatoes, & Vegetables, Chicken and Mushroom Stroganoff)
These are all part of food ranges that we have, but according to my product strategy on Indian food range on chicken tikka masala and chana masala, we have more of Indian ranges such as:
For starters we have vegetable samosa, onion bhajia, tandoori chicken etc... more of main meals such as Chicken Jalfrezi, prawn makhani and kadhai, chicken biryani, and more with accompaniments like bomaby aloo, tarka dal, including little items such as poppadums, naans, and chutneys...
Branding helps to identify a product and differentiate it from the competitors. It used to establish consumer loyalty; it also conveys a feeling of quality and reliability.
Packaging: packaging can combine with branding to differentiate the product. It also helps to attract attention, describe the product and make sales.
Food supplies are packaging waste, refrigeration systems and road transport. Ninety percent of our food packaging is recyclable, and we're installing the latest ozone-friendly refrigeration systems throughout our stores.
e.g.:- of our packaging
Labelling- We go out of our way to provide clear and comprehensive labelling on packaging so our customers can make informed choices about what they eat. Labelling: Each Marks & Spencer product has its own unique specification, which includes
the ingredients, the approved manufacturing processes, quality standards and testing procedures. Contributes to perceived quality of the packaging and the product, because it helps to identify the product type and the brand clearly
As everything we sell is our own brand, we are able to make things far simpler for our customers than many other retailers, as we can provide standard layouts for all the information and advice we offer. our labelling information goes well beyond current legal requirements. For example, we provide a full breakdown of ingredients and highlight any key allergens that may be present we also give comprehensive nutrition labelling together with guideline daily amounts recommended by nutrition professionals.
Nutrition Panel
This tells you how much energy (Calories and kilojoules) and nutrients are present in the product. Labelling regulations dictate the order and nutrients included here.
Energy: This can be useful if you are trying to lose weight.
Protein: You might be surprised how much protein there is in cereals and milk, not just meat and fish.
Carbohydrates are broken down to show the sugar content. This can be sugars naturally present in foods such as milk (lactose), fruit and vegetables or can be from added sugars such as honey, table sugars, and syrups. The remaining carbohydrate is made up of starches, which are essential for energy.
Fat is broken down so you can see the amount of saturated fatty acids. On some products such as butter and fat spreads polyunsaturated and mono unsaturated fatty acids are shown too.
Fibre: This includes both soluble fibre (helps to lower blood cholesterol) and insoluble fibre (promotes good digestion).
Sodium and salt: Salt is made up of sodium and chloride. Because of the recommendation to keep salt levels to a minimum for good health, we list both the salt and sodium content so you can track how much you are eating.
Ingredients
Provides clear and comprehensive information on what the ingredients are
in each product.
Guideline Daily Amounts:
This shows the recommended average daily amounts of calories, fat and salt for adult women and men, so you can compare how the product fits within the recommended amount.
Contains
If you have intolerance to certain ingredients this will help you quickly identify which foods to avoid, by showing when a product includes allergens such as cow's milk, wheat, eggs, etc... It will also mention the presence of phenylalanine and salt substitutes such as potassium chloride.
Icons:
For customers to know what the product has or who it is suitable for.
Product life cycle
In order to formulate effective short-term and long-term strategic objectives, it is important for an organisation to be able to evaluate the current and potential position of its products and services. The position of a product in this cycle will determine how important marketing expenditure is, how much expenditure should take place.
The standard five phases of the product life cycle are:
Product development stage- the business is receiving no revenue from the product but is spending on research and development. This is likely to be qualitative research through interviews and focus groups.
Introduction stage- product introduced, promoted and advertised. Sales slowly pick up. R&D costs largely absorbed profits. Marketing data could be gathered through questionnaires, surveys, or focus groups. There will be also feedback on sales from sellers.
Growth- the business experiences growing volumes of sales rapidly, when the product is accepted on the market.
Maturity- competitors will have entered the market and the original product will find that it has to compete on price and quality, so there is a slow down in any further growth, profits begin to decline.
Decline- the product has reached the end of its useful life cycle and no one now is interested in buying it. It has been replaced by better products, which lead to a drop in profits; product would eventually be withdrawn from the market.
An organisations marketing strategy for product should reflect the stage it has reached in its cycle. Our organisation typically experiences varying levels of sales and profits.
* The development requires heavy expenditure on market research, we usually loose during this stage.
* When the product is introduced in the market, it takes time for it to become established and profitable. There are slow sales at this point with promotional expenses.
* To sustain the growth, it increases the quality of its product and adds new features.
* To sustain the maturity growth, our organisation can adjust the price, the promotion or modify the quality or features.
The chart below show's different phases on product life cycle for the new Indian range ready to cook/eat food product.
As the product life cycle shows, the product is now at growth stage, after going through development and introduction stage. We did not make any profits during the development stage and introduction stage because the marketing objective then was to create product awareness to offer a basic product, the sales started to grow a little bit on the introduction stage, when the product was introduced and advertised, but were no profits as there was high distribution expenses and advertising. The product then reaches up to growth stage, when the product is being accepted in market, with rapidly rising sales and profits, with price to penetrate the market and increasing the distribution outlets. The product is now at the growth stage reaching to maturity stage, so to look at the outcome of the product in the future, I have shown on the product life cycle that it would have high sales as much as profits to maximise the profits while defending the market share, where potential sales would have been achieved, but would be a slow down in any further growth, reaching to decline stage as the product would have increased costs to fight competition, where the profits would be dropping, reaching to decline stage, where there low sales and profits, the marketing objective at this stage would to reduce expenditure, maintain reposition, or to drop the product because on the increased competition.
The Boston matrix
The Boston matrix was developed by management consultants in Boston, USA. A means of analysing the product portfolio and informing decision making about possible marketing strategies. it allows a business to see:
* Which products are
* achieving their potential
* Which products may need to be helped with extra advertising or marketing expenditure
* Which may need to be dropped altogether.
The Boston matrix suggests that there are four basic types of products:
* Question marks/ problem child
* Dogs
* Stars
* Cash cows
Question marks- products have low market share in a high growth market, need money spent to develop them, may produce negative cash flow
Dogs- products in a low growth market have low or declining market share (decline stage of the PLC) associated with negative cash flow, may require large sums of money to support and no longer profitable so need to be withdrawn
Stars- products in markets experiencing high growth rates with a high or increasing share of the market potential for high revenue growth, at the growth stage of the PLC
Cash cows- high market share, low growth markets (maturity stage of PLC) low cost support, high cash revenue and positive cash flows.
A well balanced business like ours needs to ensure that it has products in the right categories only then it can survive and expand under changing market circumstances.
Importance of maintaining a balance of products in the portfolio at different stages of the PLC- Boston Matrix helps with the analysis. It can adapted to show the level of turnover being achieved by each product so that the relatively importance of each can be seen even more clearly.
Marks and Spencer's Boston Matrix
Relative Market Share
High
Low
Rate of Market Growth
High
Stars
Question Marks
* Non-Organic foods
* Ready to eat/cook food
* Online shopping
* Indian own brand foods
* Services
Low
Cash Cows
Dogs
* 'Perfectly Balanced' Own Brand Label Products
* Counter sales (Fish, Cheese, Pattisserie, Meat etc...)
* Frozen uncooked foods
* Fruits
Promotion- involves communicating the existence, features and benefits of a product to new or potential customers directly. The intention promoting a product is to do one of three things:
* Increase or create customer awareness of products
* Encourage customers to remember the product
* Persuade customers to buy the product
The main promotional tools are sales promotions, public relations, and advertising. The marketing department has to: identify and target the require market segment, establish the purpose of the promotion, take decisions on a suitable promotional message for the target audience, and evaluate the promotional activity by measuring feedback.
The choice of promotional activity ultimately is determined by what the organisation can afford to spend, the type of product and market, and the stage reached in the products life cycle.
Advertising promotion- is an important part of organisations promotional activities. It is one of the most effective ways to inform, persuade, publicise about the product. In deciding the appropriate method of advertising Marks and Spencer need to:
* Decide on the purposes of the advertisement, persuading new consumers or reminding the existing ones.
* Fix the budget for the campaign in the context of sales and the amount spent by competitors
* Identify, design and evaluate the required message
* Decide on the medium or media to be used, including the following:
Newspapers- Britain have a large coverage of national tabloid and broadsheet newspapers. The most popular daily is the, The Sun. Advertising agencies can give advice by providing readership profiles for newspapers which identify typical buyers in terms of social class and income. Regional and local free newspapers also provide extensive coverage, this sort of information helps to determine where an advertisement should be placed, so as to have he most impact on its target audience.
Magazines- Britain have a wide range of magazine aimed at the mass market. Advertising agencies can give advice on readership profiles and supply details of other types of magazines. One of the major advantages of placing an advertisement in a magazine is that the publication is likely to have a longer 'life' meaning that it may be reread over many months, and seen by many more people among the target audience.
Television- most of the UK households have television. Television is particularly attractive to advertisers as it allows a combination of music, speech and pictures to create brand interest and identity. The growth in the number of television channels has tended to spread the viewing audience across a wide range of programmes, this makes it more difficult to target a particular market segment, but the placement in advertising is important to place in vital appropriate program.
Cinema- cinemas provide advertisers with a captive audience which can be reached relatively cheaply. Lot of audiences can be targeted in advertising in cinemas.
Radio- provides a local and increasingly a national medium for placing advertisement. Radio is rapidly growing advertising medium and has the advantage over television of having much lower production costs. Local radio can help to develop a strong community feeling which small local businesses may benefit from in buying advertising.
Public relations- is a means of publicising and promoting a positive image of an organisations achievements with a view of influencing customers to buy products, investors to buy shares, and the government and others to act in ways helpful to the organisation. Major retailers such as ours spend a great deal on public relations to promote a responsible, caring and high quality image. Organisations may decide to use one or more of a number of activities in a public campaign:
Press release- may be issued to draw attention to the successes of the organisation. An advantage of press release is that it offers the organisations version of a particular event.
Briefings- may be provided for people who speak on the organisations behalf, to ensure that its case is presented effectively on television, and other events.
Public appearance- can be used to promote the name and activities on an organisation. This may involve television, and radio appearance.
Sponsorship- may be offered to link the name of an organisation to a particular event. Sponsorship is popular means of publicising the name of an organisation.
The other types of advertising is by catalogue, leaflets, outdoor displays in places like trains, buses, hotels, retailers and others.
Sales promotion- is an attempt to communicate directly with potential consumers or distributors in order to encourage them to purchase. Consumer promotions are used to encourage potential consumers to try a product and hopefully to purchase it again, this may involve:
* Free trial samples of a product
* Discount coupons or vouchers
* Bargain packs
* Free gifts with product
* Point of sale displays or demonstrations
* Competitions
* Prizes, bonuses and other inducements to sales forces
Trade promotions are aimed at distributors to encourage them to stock a particular product.
They may involve the use of cash incentives to display and advertise a particular product, sales promotions are used to:
* Introduce a new product
* Encourage consumers to buy more of existing lines
* Challenge competitors
* Increase sales
* Regain former customers.
For a sales promotion to achieve its objective it is important to ensure that it keeps within the budget and clearly targets the potential group of consumers or distributors.
Marks and Spencer's Promotion
To communicate effectively with new and existing customers, different types of advertising and sales promotion will be carried out.
This will depend upon a number of factors:
• the size of the market
• the cost
• the type of product
• the audience reached
• the advertising of competitors
• the impact
• the law
Our goals of promotion will be:
The AIDA is the qualities that effective advertising should have. The AIDA stands for:
* to attract Attention
* create Interest
* develop Desire
* and lead to Action
our organisation are going to carry both broadcast media which includes television, which is most effective but its also expensive, but the wider the audience are reached.
The reason our organisation didn't seek to do radio advertisement is because although it's cheap but it is not as effective as television, it doesn't have impact of visual or any movements.
The published media which includes newspapers and magazines can gain the benefits of being targeted.
Public relations are most important for product awareness and also for sales, as by word of mouth customers can give opinions to each other where there more awareness.
In order to encourage them to buy the newly launched Indian range, I will run a TV advertising campaign, to promote the product which would be in like BBC 1, 2, 3 and also Bollywood channels such as Zee TV, B4U movies as this product relates to Indian ranges, by which there will be more sales. The advertisement would be carefully planned to give the right information to the customers about the product, considering that it would need lot of investment to make a TV advertisement and to publicise it.
I would also go for sales promotion attempt to communicate directly with potential consumers in order to encourage them to purchase, where I would have free samples of the product, which would be only in Marks and Spencer store in all big shopping centres where there likely to be more customers. To increase the sales and create product awareness I would also go for advertising promotion to have coupons/vouchers to up to 10% discount for the Indian range product in newspapers and food magazines, so more people would buy it if it's a discount price then its normal set price.
The main promotion would be in store to give sample products but also to give leaflets out, have store advertisements to create the product awareness.
In July 2002, we ran our first major Food TV advertising campaign, which was successful in promoting a wide selection of our foods. One of the highlights offered our customers the juiciest and sweetest cherries available. We are 100% own brand; we can control quality, animal welfare and food safety from farm to store. This has fuelled customer demand for fresh baked bread and pastries, while continually introducing new products has helped us increase market share in speciality breads and rolls and ready to eat/cook food.
Other main part of advertising will be on internet, as we have out own site, we could advertise on internet for free, but this would only as effective if customers visit the website or have access to internet.
Place: the marketing department has to 'deliver' the product to the consumer as and when it's required. The extent to which this is achieved depends upon decisions regarding the location of the production organisation, the availability of the product and the method by which it is distributed.
Location- decisions on location should take account of the convenience of access for customers. Customers expect to be able to buy a range of products from one location, to obtain all their needs 'in one go'. The logical development of meeting customer needs is that businesses which provide complementary products or services will seek to locate close to each other. Similarly food outlets, pubs etc... may combine to create an area for entertainment.
Product availability- organisations make decisions regarding place which ensure the availability of products when customers need them and in the quantity they require. For e.g. we should make Indian food range available for all coming out of date product, so customers have benefit of keeping it longer.
Distribution systems- the channels and system of distribution determine the way in which products reach the market. The marketing department seeks to establish the most efficient system so that the product is available at the right time and in the right place. A successful system would depend upon, efficient transportation, quality of packaging, etc... the effectiveness of the distribution system also depends upon the channels the product may go through to reach the market.
Direct marketing- the marketing mix does not just compromise decisions about location and distribution. There are ranges of techniques that allow businesses to approach potential customers directly. By using communication channels like the telephone, post and the Internet, a company can target potential customs anywhere in the world. The direct marketing methods include:
Direct mail- involves posting information about an organisations good and services to actual or potential customers.
Telemarketing- involves the organisation communicating with customers directly by telephone.
The internet- offers new opportunities for advertising and direct selling. Large firms have their own website, which offers customers digital shopping, sales through the Internet enable the company to target new customers and receive product feedback.
Leafleting- the door-to-door distribution of leaflets can provide an effective way of targeting a particular area.
Marks and Spencer's Place
The place element for us in marketing mix involved decisions about the location in which goods services can be purchased. As we already have 300 UK stores, where nearly all the stores have food department which have high sales then other departments such as textiles and such, so the launch of the product would be in all Marks and Spencer stores, but as we have opened newly simple food stores, where it has most sales on food would have more of these products and more product availability. But there are ethnic groups who would prefer this curry's such as Indian ethnic, white ethnic, so in some stores where customers who fall in these go and shop would want to these products available so, stores such as Wembley, Brent cross, and other simply foods would more of stocks in the stores.
As we sell only our own brand, we're able to control our supply chain more easily than other retailers. We search for the best quality available in the world, but always choose UK produce first if the quality is right we get almost three-quarters from the UK and Ireland. We're also are going to monitor our transportation network carefully in an effort to reduce pollution from road transport as most of our food will be transported by road as this is the only way of reaching our stores. However, we are committed to using other forms of transport, such as rail, as much as we can. Working with our suppliers and the Strategic Rail Authority we've set up a rail system to deliver wines from France directly into our Midlands distribution centre, usually twice a week and make deliveries to our store in Inverness.
One of our direct marketing methods would be the internet, to offer our customer with new opportunities, direct selling. The large internet site of ours would offer customers digital shopping, sales through internet would enable us to target new customers and receive product feedback. We also provide ordering form online, by which customers could use and hand it in store, it's in a way for ordering the food which would also help us to target customer.
Summary of my strategies:
The strategies I made where:
* To regain dominance especially in food, by translating our scale and authority into superior quality, and value
* Build on unique customer relationships through new products and services, particularly in financial services
* Shape our stores locations, product offer to meet changing needs of our customers
* Reassert our position as leading socially responsible business
I think I have made a good marketing strategy, because following these strategies would meet customer needs, which is the marketing is about, by meeting customer needs and satisfying the needs. The strategies look upon different things, such as to build customer relationship, having a good position, well financial services, and bringing good value and quality to the products.
Evaluation
The product would make a good success and make profit because the product is ready to eat/cook food which is want customers would want rather then cooking it, and my pricing policy for that is also suitable because its not more then £5 or less then £2, it covers all the processes by which the product is made to make enough profit.
I also have right objectives where it looks at future trends as well as increasing market share, keeping ahead of competitors and such.
The features which make it effective are the ingredients in the products and its packaging, because the packaging provides all the information which a customer would need or want, and considering the environmental issues its reusable and microwavable.
The elements which could be improved is on the promotion, to get more sales and focusing on other types of advertising such as radio, billboards and such and not just focusing on TV advertisement, magazines and newspapers.
The information which I haven't collected are the secondary research, this would have helped me more in creating the strategies to meet customer needs and to satisfy it.
Store location decisions are frequently considered to be the single most important elements of retail marketing. Although a good location is unlikely in itself to compensate for average overall strategy, a poor location can be a shortfall that is very difficult to overcome. Even very small physical differences between locations can exert a major influence upon the stores' accessibility and attractiveness to consumers. Planning the selection process as carefully as possible and using methods described
should maximise the success. Marks and Spencer pays particular attention to social and geodemographics, along with consumer spend, before deciding on a location.
Own brands are desirable products to offer, as they offer profitable margins and a high level of control over the marketing aspects of management. Efficient use of these products can increase store loyalty.
As I did a oral presentation I used few pictures and such to show the packaging design, as I talked about the other product and the company, and mainly on one of the marketing mix 'the product'. My presentation could have been bit longer with more details and also posters to show big images then small ones.
Candidate name: Payal Khajuria Centre number: 12302
Candidate number: 7114 Centre name: Alperton community school
Unit: 3: Marketing
