Supermarkets compared - Pricing Low to high pricing Quality of the product and customer service. Availability 24 hours a day, easy to get, in stock Market segmentation

Task D

External influences are things that a business has to react to. These could be drops in share prices, prices going up for oil etc; the main areas of influence are competitors, Political/Legal/Economics and Environmental/ Social.

If competitors make their prices lower but still offer the same quality then its competitors have to react to this change and lower the prices as well and try to still give good quality. If a competitor opened more shops then the other business may have to open more stores in order to stop from loosing its customers.

If people consume more products are being made then the shop will loose out on sales and customers. If a company does something wrong then they may be taken to court this would be bad advertisement and they would want to keep it out of the public eye.

If socially people stopped shopping and instead they started driving more then the business would have to adapt to this new fashion to keep money coming in. If suddenly it changed back to clothes they would have to adapt back to clothes. If people became more eco-friendly then the business would have to become eco-friendly so as to keep it’s customers happy and keep them coming in.

All of those affect other businesses by trying to increase market share. The areas this affect are:

Pricing – Low to high pricing

Quality – of the product and customer service.

Availability – 24 hours a day, easy to get, in stock

Market segmentation – businesses focusing on small segment instead of the whole market.

Marks And Spencer’s

Marks And Spencer’s competitors are located all around the country; Waitrose is Marks and Spencer’s main competitor. Other competitors are Tesco, John Lewis, Sainsbury’s, Debenhams, Next, Laura Ashley.

Waitrose – Their Pricing is low competitive prices and they do have ...

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All of those affect other businesses by trying to increase market share. The areas this affect are:

Pricing – Low to high pricing

Quality – of the product and customer service.

Availability – 24 hours a day, easy to get, in stock

Market segmentation – businesses focusing on small segment instead of the whole market.

Marks And Spencer’s

Waitrose – Their Pricing is low competitive prices and they do have high quality goods. They check the prices of 1000’s of every day items i.e. toothpaste against other supermarkets. They often have offers. They have shops all over the UK and you can order over the internet or in John Lewis for some products. They belong to the Tertiary segment; they sell food, flowers, insurance etc. They have impacted on Mark’s and Spencer’s by having good prices and high quality and stressing about their good quality this resulted on 9th January, 2008 with their sales being 4% higher than Marks and Spencer’s. This meant Marks and Spencer’s has had to make their products higher quality and keep the same prices to compete with them. They could make more food items at lower prices in order to improve.

Tesco – Their Prices are checked everyday against their competitors (Asda, Sainsbury’s And Morrison’s.)They have shops all over the UK and you can order on the phone, in store or on the web. They belong to the tertiary segment and sell Clothes, Food, Electrical, Children’s Toys, and Flowers. Their Pricing and Quality Is High, Medium and Low (value) so as to suit all types of customers. They often have offers on Products and Provide Medium Good Quality Products. They have impacted Marks and Spencer’s and Mark’s And Spencer’s have had to react by making medium quality items and having to lower prices and open more stores and advertise more to compete with them because people have less money to spend on food and clothes because they are trying to pay off debts. They could have the same quality but lower the prices in order to improve.

John Lewis – They have shops all over the UK you can order over the phone from a catalogue, Web and in the shop. If you buy over the Phone or Web you have to pay postage except on standard delivery which is currently free. They belong to the tertiary sector and they sell electronics, clothes, children’s toys, flowers and food. They have high prices and high quality. They check their prices often. They have impacted Mark’s and Spencer’s by opening more stores and taking some of their customers, Marks and Spencer’s have reacted to this by having more ranges and updating stores. They could open more shops in order to improve and aim their products at more people; this would bring in more money.

Debenhams – they have shops all over the UK. You Can Order In store, over the phone, over the internet or can buy in store. They regularly check their prices against their competitors. They are in the tertiary sector and sell Beauty products, Clothes, Electrical, Home, Furnishings, Gifts, Weddings and Flowers. They sell medium to high quality items at medium prices. They have impacted Marks and Spencer’s by doing similar ranges and having lower prices, Marks and Spencer’s have had to react by lowering prices. They have impacted Marks and Spencer’s by

Next - They have stores all over the UK and sell clothes, shoes and some beauty products and jewellery. You can order in store, buy in store, order over the phone or order from a catalogue. They are in the tertiary segment and sell life style products which you can use or wear everyday. They have medium to high quality and have medium prices. They have impacted on Marks and Spencer’s because they targeted the same customers as Marks and Spencer’s. This caused Marks and Spencer’s to try o change their style of clothing (products) to match Next.

Laura Ashley - They have shops all over the UK and are in the tertiary segment. They sell clothes, shoes, jewellery, accessories and home furnishings. You can order off of the internet, out of catalogues, out of store, and over the phone. They have medium to high prices and high quality. They have impacted Marks and Spencer’s by targeting the same segment of customers, Marks and Spencer’s have tried to change by introducing new ranges that are targeted at different segments of the consumer market and also by trying to adapt into the same style as Laura Ashley.

Peer Reviews

Here's what a star student thought of this essay

danielbeal

2nd of Apr 2012

Quality of writing

The term 'External Influences' is described poorly. An external influence is any action that impacts on the business, which is outside of their control. For example the wages of their customers fall, thus the amount of money spent may reduce. The report does contain a number of spelling/grammar errors which should be corrected before submitted to the examiner.

Level of analysis

The report states that Marks & Spencer's main competitor is Waitrose, although why is this the case, and not others? The report could include 'Marks & Spencer's and Waitrose supply food items of high quality for a reasonable price, although the price has an small 'premium' for the high quality of their products. Thus, Waitrose is their rival, as there promote/market their products to the same consumers. It's quite difficult to acquire these consumers, as there is almost always one other retailer wanting the sales of that target audience'. The student does state that there have 'low prices', although this isn't the case. The retailer does try to 'match' others, but there do not under cut their rivals and have cheaper products. They only 'match' prices.

Response to question

In summary, the report is quite good. The report does state the processes that a number of retailers undertake. The student does link their academic understanding to their commercial understanding, which is a great aspect of the report. However some parts are lacking detail, and the student doesn't understand the case study of Waitrose, as clearly as She/He should. The student states that external factors could decease the share price. However this isn't too external. This is due to that the share price will increase/decrease based upon the businesses operations and how successful the business is. If the business were to undertake beneficial actions, there can allow the share price to become stable or increase/decrease. On the flip side, the student understands that if a competitor were to decrease their prices, this may attract consumers to their competitors. The business may have to decrease their own prices to 'price match' their rivals, and this may cause the business to loose profits.

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