Retail marketing and new retail idea - Marks & Spencer

Essay, 2008

23 Pages, Grade: 1.0



1. Management Summary

2. Profile of Marks and Spencer
2.1 Location
2.2 Type of retail business
2.3 Target segment
2.4 Product mix/variety
2.5 Layout of store

3. Results of the market research

4. The proposed new idea

5. Conclusion

6. References & Bibliography

7. Appendix
7.1 Further Ideas
New product/service
New layout
7.2 SWOT analysis of the new technology idea
New Location
New position and target Segment
7.3 Environment
Figure 5.0 Mintel Report, 2007
7.4 Market research questionnaire analysis
7.5 Store Locations

1. Management Summary

The retail market is changing rapidly from click to click (Price Waterhouse Cooper, 2008). and the “online market is developing at an astounding rate” (Internet Advertising Bureau, 2008).For example the online advertising has overtaken direct mail with a market share of 11.8% (Internet Advertising Bureau, 2008). Many retailers are using innovative ideas to help them be distinct from their competitors and to meet the needs of consumers. For example an extreme sports store in Florida has its own surfing stimulator inside its shopping mall (Springwise, 2008). The retail sector is a highly dynamic market offering customers more choice and retailers are consistently competing in a highly competitive environment.

M&S is market leader in the field of predominantly non-food middle market and a large company with more than 650 stores world wide. It is a challenge for M&S to meet the needs of customers as customers shopping habits are always changing. “Customers often switch retailers as they become increasingly familiar with and bored with a retail store” (Babson, 2007) and there is consistently a desire for constant newness (Mintel Report, 2007). The result is a melting product life cycle and a high pressure on the retailer. M&S have to scan both the internal and external business environment to identify long and short term trends and develop a strategy with both aims and objectives to remain a successful high street retailer.

This coursework is based on comprehensive primary and secondary market research which will allow the group to develop a greater understanding of the current market situation. The focus of this coursework is on the non-food clothes home market of Marks & Spencer, because, concerning Michael Porters’ Diamond Model “it suggests that the national home base of an organization plays an important role in shaping the extent to which it is likely to achieve advantage on a global scale” (Michael Porter, 1998).

The objectives of this coursework are as follows;

- To discuss the profile of the existing retailer
- To recommend an effective methodology approach which can be taken by M&S to identify if our idea is feasible.
- To demonstrate our new proposed idea is feasible for the retailer to undertake in terms of offering an additional and enjoyable service to consumers and to gain a competitive advantage.

2. Profile of Marks and Spencer

2.1 Location

Marks and Spencer has “over 500 stores located throughout the UK providing nearly 12.5 million square feet of selling space” (Marks and Spencer, 2008). They not only have stores in the UK but they also have “150 stores worldwide, including over 130 franchise businesses, operating in 27 countries”. Their largest store is Marble Arch in London. (Please see appendix which shows the number of stores both in the UK and internationally).

As well as having stores on the high street, they also have outlet stores outside of town. The reason for this is due to recognising location is very important. For example a significant number of theorists give reasons for why location is important. Sullivan and Adcock, 2002 stated “you can be the best retailer in the world, but if you set up your shop in the wrong place, you’ll never do much business”. Newman and Cullen, 2002, P14 also stated “successful retailers make a range of products and services, often from distant locations, accessible to the consumer”.

2.2 Type of retail business

The UK’s favourite store Marks & Spencer operates in the predominantly non-food / generalists market but 49.8% of its turnover arise from the food segment (Mintel Report, 2007 and Annual Report, 2007). This hybrid and overall trend is to be recognised in many retail concepts, e.g. ASDA and TESCO are getting stronger in the field of clothing, and although they are typical predominantly food stores (The Guardian, 2007). The clothing sector will continue to grow from 18.4 %, to 34.4 billion in 2012 (Mintel Report, 2007 and Annual Report, 2007). Further trends are also an increase in service demand and offer as well as the further market differentiation in value providers and specialists. Figures 1.0 and 1.1 shown below show the overall market share of M&S in both main segments.

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Figure 1.0

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Figure 1.1

Figure 1.0 and 1.1 from Annual Report, 2007

2.3 Target segment

The company’s annual report states “our core customers continue to be those aged 45 plus, social-economical group ABC1 and the loyal 1-2 shop shoppers as well. In fact 75% of turnover comes from this group” (M&S Annual Report, 2007). The company do however recognise the need to broaden their customer appeal and target all age groups. Hare et al, 2002 also recognises the importance of targeting different age groups as he stated “age can be a valuable segmentation, and interest is extending both to younger and older groups”. Whilst interviewing the manager for Womenswear, he said M&S did not target a particular segment but he discussed the importance of encouraging customers to visit different departments within the store instead of just one.

2.4 Product mix/variety

M&S offer a wide range of products and services to their customers. They “provide a wide choice of great value, quality food, clothing and home products, which all sourced and made responsibly” (M&S annual report, 2007, P1). M&S are consistently improving their product offering as they stated in their annual report, 2007 “our technologists work closely with suppliers to introduce new, innovative products, which have real practical benefits for our customer”. This helps M&S to retain its customers and to gain a competitive advantage.

Aclantis and Papastathapoulou, 2000, P27 also discussed the importance of new products as they stated “the systematic planning for new products has become the lifeblood for organizations that wish to remain competitive”. M&S are responding to new trends and are providing more choice to consumers by offering fashionable clothes and stylish home ranges. Another trend which M&S is responding to is consumers are becoming more aware of ethical issues. For example many retailers “have incorporated fair trade products into their offering” (Comfort and Hillier, 2003, P800). M&S offer “over 70 Fairtrade certified food products” such as wine, coffee, tea and fruit.

2.5 Layout of store

“Through careful design of the store layout, a retailer can make the best use of available space and also manipulate traffic flow within the store to maximise exposure to the merchandise” (McGoldrick, 2002, P468). M&S can be seen to be doing this in practice as their stores are very spacious and the Womenswear manager said that the company decided whilst refurbishing the Princes Street store, to have an escalator placed centrally within the store so that customers can move easily.

In last year’s annual report, M&S discussed the improvements they were making to the layout and design of the store. For example they introduced a store modernisation programme “which involves radical changes, going beyond changes to fixtures and fittings. Alongside major construction work, new flooring and refrigeration, we are also making changes to how we lay out our stores and guides customers through departments” (M&S annual report, 2007, P22). This is regarded as being important as “the authors argue that positive store atmosphere is crucial in order to offer experiences rather than products and services” (Backstrom and Johansson, 2006, P419).


Excerpt out of 23 pages


Retail marketing and new retail idea - Marks & Spencer
Edinburgh Napier University  (Napier University Edinburgh- Business School)
Retail marketing
Catalog Number
ISBN (eBook)
ISBN (Book)
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748 KB
Coursework 2008- “ a new retail opportunity for an established retail company”
Retail, Marks, Spencer, Retail
Quote paper
Sven Hallbauer (Author), 2008, Retail marketing and new retail idea - Marks & Spencer, Munich, GRIN Verlag,


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