Marks and Spencer's Micro Environment

University Degree Business and Administrative studies

Customers:

For Marks and Spencer their customers are the key to their sales. As customers are very important for the company to succeed, Marks and Spencer need to monitor their customers’ needs and to anticipate what actions are needed to be taken to ensure customers continue to shop with them.

Customer Relations Management is essential to a business as the company are able to analyse their customers, within in this analysis the company would need to look at three perspectives that contribute to the overall CRM, these are:

Information Technology
Customer Lifecycle, and
Business Strategy

Marks and Spencer like most companies have gone along with the vastly changing pace of technology and made their company available for connection on the Internet with the use of IT. For customers who shop with M&S, they have a number of customer touch points and these are vital for M&S as they focus on the customers’ needs now and in the future. At Marks and Spencer, their contact points are their employees within the store; store newsletters, email updates, company website and telephone help if necessary for the customer.

“Marks and Spencer is hunting a lead agency to develop a more strategic focus for its below-the-line work, as it plans a dramatic acceleration of its customer relationship management activity” taken from [Accessed 04/04/2010] proves that Marks and Spencer in 2000, wished to improve their customer relationship and to make their products and services more readily available and accessible to their customers, through the help of agency.

Customer Lifecycle

A customer lifecycle and product lifecycle are similar in terms of marketing analysis. The CLC is more focused on the lifetime value of the customer to the company. A CLC is the summary of the key stages in a customer’s relationship with a company.

Figure 1. Example of Supermarket Customer Lifecycle taken from

http://www.business-strategy-innovation.com/uploaded_images/Customer-Lifecycle-from-Gary-Hawkins-786923.png

CRM and the Business Strategy is made up of three key phases; customer acquisition, customer retention and customer extension, as well as three contextual factors – marketing orientation, value creation and innovative IT.

Customer Acquisition is the process of attracting customers for ...

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Customer Lifecycle

Figure 1. Example of Supermarket Customer Lifecycle taken from

http://www.business-strategy-innovation.com/uploaded_images/Customer-Lifecycle-from-Gary-Hawkins-786923.png

Customer Acquisition is the process of attracting customers for the first time to the company. For M&S this would be offering customers a special first time customer offer, to ensure customers would be intrigued to want to see the offer and then make their first purchase. Following on from this, M&S will continue to see the number of first time customers grow via methods of market orientation and value creation.

Customer Retention is the process of keeping the customers returning to the company. M&S achieve customer retention by gaining the information from customer feedbacks and regularly updating reports on what customers are purchasing and what price ranges are accepted by most shoppers and ensuring that the quality of their products are better than competition to ensure they remain the key players within the market. Again growth is needed for M&S to extend on to the next stage known as Customer Extension.

Customer Extension is when customers regularly return to the company to purchase products from them. Within customer extension, M&S offer their loyal customers rewards for continuing to return to their store to buy their products.

Figure 2. Customer Relationship Management figures in 2008

As shown in the image above, Marks and Spencer have a high percentage of Customer Relationship Management skills which is essential to a business as “changing consumer taste requires companies to put a lot of effort in brand management and to implement solid customer relationship management” [Accessed 04/04/2010].

Marks and Spencer have brought out a report called ‘Plan A’ and within this report, it shows the customer all the improvements M&S are looking to carry out throughout the next 5 years from 2010 to 2015. Within this report customers are able to view what plans M&S have to improve services offered to them.

“Under that plan, 1500 sales assistants have been trained in the UK to advice customers on healthy food options in the stores” as mentioned on [Accessed on 04/04/2010] This shows that M&S are ensuring they are looking after the wellbeing of the customers and educating them on healthier food options which may be a need for many of their customers.

Publics:

Publics are a mixture of different people and attributes that all add up too have the biggest impact on Marks and Spencer. Within the Publics field are:

The Media
The Government
Internal Public – Employees and Customers
Suppliers

Many of these groups have already been mentioned in detail as to how they can affect the rise or fall of Marks and Spencer.

The media play a big part in the advertising of Marks and Spencer, as the media reaches a wider audience than any other dsue to the number of forms of media there are. The media report on the companies’ performance and other things which will be useful to the customer. What M&S need to avoid is a bad image being portrayed within any form of media as the customers may resort to shopping at Marks and Spencer competitors which will in turn affect the overall rating of Marks and Spencer.

The Government have influence on the overall costings of products within M&S as they control the prices of VAT and other taxes which M&S then pass on to the customer, so when the VAT fell to 15% due to the Government and recession; this was passed on to the customer ensuring that they had full use of the Governments proposition.

Intermediaries:

All companies have a number of intermediaries which are third parties which offer services between two trading parties. An intermediary can either be a good or service offered by a supplier to a consumer. Many intermediaries offer added value to the transactions offered by them which may not be offered if the consumer had gone to direct trading. Intermediaries usually include the insurance and financial industries with products such as mortgages, insurance and investment products are sold. Intermediaries can be classes as either merchant intermediaries or accountant intermediaries.

For Marks and Spencer, their intermediaries are products such as car insurance; as mentioned on http://www.officefile.co.uk/iwengines/car-insurance-marksandspencer.htm [Accessed 04/04/2010] “BISL Limited act as an insurance intermediary who provide insurance products from a range of insurers.” Marks and Spencer Money offer information on car insurance administered by BISL Limited and these intermediaries are passed on to the customer via the M&S website . On this site, it offers the customer various types of insurance available via M&S and their intermediaries.

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