OPPORTUNITIES
- Men still spend far less on clothes than women and this sector of the market remains underexploited.
- There is still plenty of potential for further consolidation in the market.
- The strength of brands such as Dorothy Perkins and the expertise of British retailers suggest that there is potential for further expansion abroad, particularly in the new EU member states.
- The ending of the MFA should lead to further reductions in the cost of products, which could boost retail sales overall and/or cause consumers to trade up to items once beyond their means.
- As the number of working women continues to increase, they will not only need more clothes for work but are also more likely to have the financial independence to make clothes purchases.
- The industry continues to encourage a 'teenager' market for fashion-conscious 8 to 12 year-olds.
THREATS
- Clothing chains from overseas, particularly those from Europe, such as Zara, have successfully invaded UK high streets.
- Traditionally successful retailers, like Marks and Spencer, will have to adapt or face the loss of further market share to aggressive groups such as Arcadia.
- Both manufacturing and retailing are labour-intensive and are affected by legislation regarding minimum wages and working hours.
- The increasing involvement of grocery multiples in clothing retailing is adding low-price capacity to the market.
- A downturn in the economy could cause men, in particular, to cut back on overall spending in this sector.
Current Business Communications
M&S’s has a long established promotional mix. The major components of this mix are personal selling, advertising, public relations, direct marketing and sales promotions.
Advertising is defined as being any form of paid non-personal presentation and promotion of ideas, goods or services through mass media such as newspapers, TV, magazines, or radio by an identified sponsor. As with all businesses, M&S want to communicate specific messages to various target markets. It is a good way for them to inform and persuade to get consumers to purchase their “higher quality” products. But it is mainly used to stimulate response from consumers of M&S’s products. Since 2000, M&S has made use of various advertising campaigns
Sales promotion consists of short-term incentives, in addition to the basic benefits offered by the M&S’s products and services. They encourage the purchase or sale of their products. The difference between advertising and sales promotion is that advertising offers a reason for buying a product or service whereas sales promotions offer reasons that would help M&S achieve immediate sales to boost its drive to lose the surplus stock. This kind of promotion would seek to motivate the customer to buy now. M&S currently have trade promotions such as “double discount day” on certain days, etc.
In the past M&S have relied on good public relations as a basis for mass-promotion. Obtaining good publicity, building up a good corporate image and handling or heading off unfavourable rumours, stories or events was key to helping M&S reach a level at which they felt comfortable with against its competitors. Good publicity can have a strong impact on public awareness at a much lower cost than advertising, as M&S will not have to pay for space or time in the media.
Personal selling remains a key aspect of M&S’s potential in taking profits. The majority of the shop floor staff that are employed in the 300+ stores all come into contact with customers regularly and so must be well trained enough to be able to build goodwill or educate customers.
Current and Potential Marcomms Channels
The current marcomms portfolio for M&S contains a broad range of mediums. These include:
- Mailpacks sent by post containing details of new lines to existing members, i.e. mini-brochures, with full colour pictures and informative text.
- Teaser cards designed for in-store and for customer mailings. Also launch announcement leaflets featuring key products and positioning statements. These have played a key role in the most successful product launch in M&S's recent history.
- National TV campaigns on both terrestrial and satellite stations with a 30-second commercial, focusing mainly on the food sector of the business. The main emphasis was placed on the slogan: Marks & Spencer – Extraordinary food everyday’.
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National Press campaign involving the placement of adverts in national tabloid newspapers such as The Express, The Mirror, etc. Also the same ad’s are run in specialist magazines such as hello and ok that appeal to the core target market.
- The launch of M&S magazine, showcasing the latest products whilst serving as a medium through which it can target the people who are interested enough to actually read the magazine in the first place.
Having successfully fought off Philip Green's takeover bid, Marks and Spencer should increase advertising and promotions, reduce prices and renew ranges. The company's profits have already been hit by the need to cut prices in an attempt to compete against a tidal wave of high-profile advertising and low-priced clothing at Green's Bhs and Dorothy Perkins chains. The company launched a new advertising campaign in September 2004 with the catchphrase `Your M&S', which was designed to highlight the quality of the products on sale in Marks & Spencer outlets.
Competitor Analysis of Marcomms Materials
Clothing brands benefit from considerable main media advertising by manufacturers and retailers, which use the daily press, lifestyle and fashion magazines, television and posters. They often use personalities such as models, actresses and sports stars to endorse their brands. In the year ending March 2004, £65.1m was spent on advertising clothing and accessories in the main media. However, the success of the Spanish retailer Zara suggests that the role of advertising in this market might be overstated. The company does not use advertising (marketing accounts for 0.4% of Zara's total expenditure), it has no press offices outside Spain, and it does not even lend clothing samples for editorial fashion shoots.
Main media advertising in this market is dominated by sportswear/leisure wear and women's fashions. In the year to March 2004, these accounted for 28.5% and 21.3%, respectively, of total expenditure, their total investment amounting to £32.4m. Sportswear and leisure wear advertising was dominated by Adidas, Nike and Puma, which together accounted for 68.6% of expenditure in that sector. Expenditure on women's fashions was much more evenly spread, and the highest expenditure in the year to March 2004 was Christian Dior's £1.4m.
Although expenditure for men's fashions is much lower, it is nevertheless significant, amounting to nearly £8m in the year to March 2004. The brand with the highest main media advertising budget was Slater’s (£702,000).
Recent Campaigns
Armani
In May 2004, an advertisement for the designer fashion brand Armani was criticised by the Advertising Standards Authority (ASA) for 'sexualising children'. The advertisement featured a photograph of a long-haired child sitting down, wearing just a pair of baggy jeans and a necklace. The image, to promote Armani's Junior childrenswear range, resulted in 74 complaints to the ASA after it appeared in a magazine. Orthet, which holds the UK licence for the Armani Junior brand in the UK, did not comment to the ASA on the complaints but agreed to withdraw the advertisement in light of concerns. The company also promised not to use it again.
Bhs and Arcadia
After losing his battle to take over Marks and Spencer, Philip Green is expected to unleash a new marketing campaign that will directly target the company. In July 2004, Green was in the process of appointing a new advertising agency, while in his Arcadia business, Dorothy Perkins was about to burst on to television screens in an effort to woo Marks & Spencer customers.
French Connection
In July 2004, the ASA told French Connection Group that it would vet its FCUK advertisements for the next 2 years, following a complaint about a poster campaign for the brand's radio station, FCUK FM, which read: `FCUK FM. FROM PNUK TO RCOK AND BACK. NON STOP FNUK. FCUK FM'. The ASA had already warned the company that it would ban advertisements that encouraged the implication of the four-letter expletive.
Pringle
Pringle has used advertising to turn itself into one of the world's most fashionable brands. Its new image was cemented in 2004 by advertisements in leading high-fashion magazines that showed a pair of scantily clad twin models in tops displaying the company's distinctive diamond patterns. The advertisments highlight the company's changing image, which used to be synonymous with suburban, middle-class and middle-aged men. Pringle has also re-established a presence on the catwalks of London, Paris and Milan, and has opened flagship stores in Manhattan and Moscow. It has used supermodels such as Heidi Klum, Sophie Dahl and Callum — the son of footballer George Best — to help project a new fashion-conscious image.
Media Opportunities
A number of different media opportunities are available for M&S to explore. However, it is important that the right medium is used to attract the right people.
The table shows that if this campaign was carried out over the course of a year the total cost would be £27,506,640. However, I feel that this would be the most appropriate mediums to advertise in as they are all aimed at M&S customers. The reach of the adverts would be greater as we are targeting people who are likely to respond.
Web/E Marketing Opportunities
Non-personal communication between M&S and its customers should attempt to be persuasive in nature about the products and services that it offers. The best way to do this would be through banner ads and buttons, which are the predominant forms of online advertising. M&S could also consider the use of sponsorship as another form of web advertising. To help facilitate the movement of products from their stores to customers and potential customers, M&S should also consider e-mailing customers about sales promotions, coupons and new lines. The current website for M&S is recognised as one of the worst in the retail sector. A complete overhaul will be required to rejuvenate the look of the website, improving the aesthetic appeal and ease of use. It should be designed to serve as a “public relations vehicle” that offers comprehensive information about the company and their products.
A powerful approach would be to use the integrated direct marketing approach which would involve using multiple-vehicle, multiple-stage campaign to ensure a good response. The current “one-shot” direct marketing approach used by M&S is largely in-effective cost wise and doesn’t yield enough responses to merit spending large amounts of the budget on sending emails to customers. A better way to generate response would be to generate and stimulate enquiries by sending the emails first with contact details. Customers who enquired further would then be sent direct mail, with a phone call being made by M&S to the customer seeking an order a few days later, either by phone or through the website. The advantage of this method is that M&S could achieve improved response rates and profits through adding media and stages that contribute more to additional sales than to additional costs.
Enhancing the Business
In order to help take M&S forward, a wider range of product diversification will need to be explored by M&S’s board of directors. This would also help rejuvenate its corporate image in the eyes of consumers, which normally would not shop in M&S. Possible ideas that may enhance the business could be:
- The development of a more upmarket fashionable range that is able to compete with more popular designer labels.
- On the financial side, the company currently does not have the facility to offer mortgages. If they could offer competitive rates to young first-time buyers they may be able to find a gap in the market for this kind of service.
- The opening of smaller food and clothing stores, similar to the “simply food” stores the company experimented with. Places such as railway stations would be good places to open kiosk type stores.
- The introduction of a more ethnically inspired clothing range may appeal to a whole new market possibly giving them a foothold in an as yet untapped market.
Customer Relationship Marketing
Building relationships with customers is an important part of M&S future. In the past, they did have a good rapport with consumers in general but since the start of the decline in sales in 1999 a series of bad publicity has meant that consumers have lost faith in M&S ability to provide appealing products. On way to bring back these customers is to offer financial rewards and offerings. For example, offering vouchers or money-off coupons for spending a certain amount of money in the store acts as an effort on the part of M&S to build a financial bond with customers. A cheaper rate on loans, competitions with money as prizes or even having discount days would also help build bridges with customers.
Another way to bring these customers back is by attempting to stimulate social interaction with customers. This involves ongoing communication with individual consumers and also It may incorporate an aggressive pricing strategy. An easier way to employ this method of building customer relationships would be to offer holidays, tickets for concerts or football.
Bibliography
Fill, C. (2005) Marketing communications; engagements, strategies and practice. 4th ed., Harlow: Financial Times Prentice Hall
Belch, B. (2004). Advertising and promotion. 6th ed., London; McGraw Hill
Blythe, J. (1997) The essence of consumer behaviour., Harlow: Financial Times Prentice Hall
East, R. (1997). Consumer behaviour; advances and applications in marketing. Harlow: Financial Times Prentice Hall
Hart, N. A. (1995). Strategic public relations. London: Macmillan
Hart, N.A. (1998). Business to business marketing communications. 6th ed., London: Kogan Page
Kitchen, P.J. (1997) Public relations; principles and practice. London: International Thomson Business Press
Kitchen, P.J. (1999). Marketing communications., London: International Thomson Business Press
Nilson, T. (1992). Value added marketing. London: McGraw Hill
Rimini, M. (2003). Advertising works. Vol. 12. Henley-on-Thames: World Advertising Research Center.
Books
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, Strauss, Judy, 2001
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, Fiore, Frank, 2000
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, 2000
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, Foxall, Gordon R., 1977
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marketing, 2000
Reports
- BRAD Journal, March 2005
- Keynote Market Report Clothing Retailers Sep 2003
- Mintel Market Report Clothing Retailers Oct 2004
Websites
Misc
