To the Marketing Manager,
Marks and Spencer Co Ltd
I shall be obliged if you consider my report on communications problems in Marks and Spencer company.
Marks and Spencer is a renowned British food and apparel trader. It even has several branches outside the UK. It also has a third line of business of selling home wares such as bed linen, curtains, drapes, towels etc. over 450 stores of Marks and Spencer are spread throughout the United Kingdoms, this includes the largest store at Marble Arch, London. On top, the Company has about 150 branches spreading throughout the globe, including over 130 franchise businesses, operating in 30 countries. Over recent years Marks and Spencer has proactively diversified into new product and new market opportunities. It has been a period of rapid expansion which, although very successful from a profit perspective, has been handled very poorly from the communications perspective. As a result, Marks and Spencer, appears to have lost touch with its customer base, which has grown and changed considerably. The emphasis on supplier/customer relationships presented here derives from the interaction approach to marketing and purchasing strategy. To take account of this a framework has been proposed for analysing customers
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Customer segmentation captures these different customer behaviours, and creates a number of homogeneous groups for classifying and describing customers. A customer segment includes registration information, address information, demographics, purchase history, customer culture, and other miscellaneous attributes which define a dynamic group of customers or accounts. It is required for the marketers understand the differences in their customers, and to envisage meaningful customer segments. Customer segments serve as targets for advertising, suggestive selling, and promotions. Customer segments have to be created and kept in mind while creating campaigns. Marks and Spencer has its business all over the world. People of various countries, communities and religions are its customers. The higher income customer segment, average income customer segment and lower income customer segment form the key customer segments for Marks and Spencer as a company. (Drake, 50)
The creation of economy based customer segmentation is based on dissimilarities in buying behaviour of people of various economic statuses. Higher income customers always have a tendency to look exceptional and better to others. Thus they usually purchase exclusive, uncommon, glamorous and expensive clothing, which can easily attract other’s attention. They always look for best quality, hygienic, healthy and expensive food. Average income customers have a tendency of buying clothes and food of standard quality, which are available within their capacity. The average income customers get easily influenced by advertisements. They try to buy clothing, which are affordable, but look expensive. The lower income customers have very limited money. The have a tendency of buying the cheapest cloth and food available in market. Neither luxury, nor comfort, but necessity forms the basis of their demand. While buying food they generally look for cheap food and do not care for health or hygiene.
Analysis of buying behaviors of the customer segments
The higher income people generally live in higher societies. These people have a higher life style. These elites want to interact with people, who are of similar status, have similar ideas, attitudes and knowledge. These people have tendency to remain in peer groups comprising of elites. As said by Moschis, peer group play a significant role in their life style. Like other socialization agents, peers either directly or indirectly affect these high class consumers’ socialization. Studies by Riesman suggest that the higher class people get acquainted with the symbolic meaning of goods and consumption from their peers. According to Bearden and Randall, these higher income people tend to buy expensive and exclusive clothing in order to maintain their social status and prestige. Higher income customers always have a tendency to look exceptional and better to others. For them dressing up is a very important way to display their status. Competition between ladies of higher society keep them searching for exclusive clothing. Thus they usually purchase exclusive, uncommon, glamorous and expensive clothing, which can easily attract other’s attention. The higher income people generally look for best quality, hygienic, healthy and expensive food. These people consult with dieticians, who guide them in their food habits. These people are generally health conscious. They generally avoid high cholesterol, unhygienic food. Thus these people prefer healthy and diet food, which are no doubt expensive. (Dos, 225)
The middle class form the major part of the society. These people are the average income customers. These people have limited earnings, but still they posses desire for expensive clothing. Thus they try to buy clothes, which are affordable, but look expensive. These people try to follow the life style of the higher society people. The buying behaviors of the middle class people are greatly influenced by advertisements and campaigns. Generally these people buy healthy and hygienic food, which are affordable. Now days hike in prices has declined the buying capacity of the average income customer segment. These people generally avail price reductions and sales for buying expensive clothes.
Lower income customers are basically daily wage earners. Neither luxury, nor comfort, but necessity forms the basis of their demand. These people tend to buy cheap clothing and affordable food. Now days hike in prices has declined the buying capacity of the Lower income customers and have compelled them to suffer in poverty. Thus buying tendency of these people has reduced to minimum.
The teenagers belonging to both upper and middle class have a great tendency of buying modern and trendy apparels. In addition, researches found that there is a strong correlation between teenagers’ various consumer-related behaviors such as information seeking, brand awareness and brand preference and the frequency of communication with peers. As such, children learn the basic knowledge of consumer behaviors by interacting with parents. Moschis and Churchill (1987) discovered that the greater the interaction between the teenagers and their parents about consuming behaviors, the more economically sensible the young people’s consumer choices would be. Even though some studies reported that parental influence decreases as children grow older, studies found that parental influences remain important in relation to teens’ purchasing behavior. Moschis stated that no other agent of consumer socialization has received more attention than the mass media. TV advertising provides the teenagers knowledge and insights in their products and behaviors. Moschis also said that through interaction with mass media (TV), young consumers may develop perceptions toward products and brands. Thus the mass media greatly influence buying habits of the teenagers. (Dos, 225-8)
Description of the impact and effect of the DMU and the DMP
Decision making in Marks and Spencer involves the adoption of the objective and the selection of the means; and later on the necessity of the adjustments whenever some change occur in the normal anticipated situation. The decision-making unit (DMU) of Marks and Spencer has laid down some strategies for the Benefit of the organization. These strategies intend at increasing the efficiency of the company to effectively manage a complete marketing communications program, including customer retention efforts, create the perception of product leadership, identify the most profitable market segments to target, optimize the cost/value relationship in all areas of the marketing communications mix, construct revenue-generating strategies that gain management support.
The buying decision making process (DMP) of Marks and Spencer follows the strategies like understanding marketing communications like the marketing process, the elements of a marketing mix, how to plan, control and evaluate a marketing communications strategy, Pinpointing the communication goals like budgeting, winning management support, determining the optimum strategies of marketing, communications options, media choices and ROI, maximizing the value of direct selling through a targeted communications events like the role of direct response vehicles, combining mass media and targeted marketing into a unified marketing plan, evaluating the effectiveness of the strategy by testing the company’s messages, offers and the media chosen by using an integrated database management system. (Goddard, 174-6)
The decision-making unit (DMU) and the buying decision making process (DMP) of Marks and Spencer has greatly affected the organization’s communication mix. Facing strong competition, global retailer Marks & Spencer (M&S) decided to turn its already strong customer service operation into a highly competent system that responds more quickly and effectively to customer needs. An innovative accentor solution helped Marks & Spencer make over operations at its Head Office Customer Services call center. M&S Head Office Customer Services now has powerful, fluid capabilities that enhance the way the company serves its customers. In a continued drive to improve customer service, Marks & Spencer has just completed two evaluation projects to select strategic partners to provide an in-store Radio Frequency (RF) infrastructure and hand-held terminals for their General Stock Management (GSM) system. IT mostly depended on advertising for promotion of its products. This is quite expensive. It applied extensively personal selling, Sales promotion, and Public relation methods in its sell strategy without setting promotion budget or deciding suitable time-span. These were relatively inexpensive, represents a long-term commitment and not effective at building long-term brand preferences. As a result costs of products of Marks & Spencer increased. Thus the products became unaffordable for average and middle income people. However, extensive advertising made its products very popular and trendy among teenagers. Due to high cost and popularity its products became status symbol among the higher income people. Thus demand for its products increased among the teenagers and higher income class. (Bell, 154-5)
Uses of communications in developing good customer relations
Communications could be used to develop good customer relations and create good customer loyalty for Marks and Spencer. The Marketing Communications Mix is the specific mix of advertising, personal selling, sales promotion, public relations, and direct marketing a company uses to pursue its advertising and marketing objectives.
When deciding how to properly utilize the marketing communications mix to meet the marketing objectives of Marks and Spencer, it is essential to consider the relative strengths and weaknesses of each component of the mix. Further, the total budget must be defined at first in the Marketing and/or Business Plan and then find the best way of leveraging the different elements of the mix to maximize the return on the investment. Balancing the various parts of the communication mix creates an integrated approach to the marketing communications. But Marks and Spencer must also devote enough resources for each component to be successful.
Advertising reaches large, geographically dispersed audiences, often with high frequency; Low cost per exposure, though overall costs are high. Consumers recognize advertised goods as more genuine. This dramatizes company/brand, builds brand image, and may stimulate short-term sales. Thus in spite of the fact that, this impersonal one-way communication may prove to be expensive Marks and Spencer can rely on advertising for promotion of its products.
Personal selling is the most efficient tool for building buyers’ preferences, confidences, and actions. Personal interaction provides the scope for feedback and adjustments, and buyers become more attentive. Personal selling can make the business of Marks and Spencer Relationship-oriented.
Sales promotion may be targeted at the trade or ultimate consumer. This makes use of a variety of formats such as premiums, coupons, contests, etc. Marks and Spencer can depend on sales promotion, for the reason that it attracts attention, offers strong purchase incentives, dramatizes offers, and boosts sagging sales, stimulates quick response.
Public relation is highly credible, very authentic procedure and has many forms such as news stories, news features, events and sponsorships, etc. It reaches the missed prospects via other forms of promotion. In Marks and Spencer it can dramatize the company or product.
Direct marketing has several forms such as telephone marketing, direct mail, online marketing, etc. Four typical characteristics of direct marketing are that, it is Nonpublic, Immediate, Customized, and Interactive. It is well-suited to highly-targeted marketing efforts and thus essential for Marks and Spencer.
Steps to be followed to develop a communications/promotion program in Marks and Spencer are identifying target audience, determination of promotion objectives, setting promotion budget, to decide on suitable time-span, designing the message, to decide on promotion mix and allocate budget, to carry out promotion plan and to measure and analyze results. Market research and market segmentation will assist Marks and Spencer in identifying the audience for its product or service. The company should have information on how large the audience is, where they are located and hopefully some idea of their needs, attitudes and preferences and the benefits they require from its products. The objectives of the promotion mix are realistic, attainable, attributable, and measurable. The objectives can bring about promotion in Marks and Spencer by creating awareness, obtaining enquiries, obtaining company name on file, creating company image. (Dollard, 311-18)
Importance of obtaining customer feedback and how ICT
Customer feedbacks provide one of the best ways to mark untapped markets, common tribulations, and opportunities for new products and services. However, feedbacks arrive through many channels, and in many forms. Without a process and tools to gather and manage it, any company cannot transform it into real insight for your strategy team and sales staff and appropriate technology.
The Information and communication Technology is the design, development, implementation, support or management of computer based information systems, particularly software applications and computer hardware. This technology can be used to deal with customers online, display products, take orders, receive payments and feed backs, etc. (Bell, 156-7)
Use of ICT in sustaining good customer relations
The Information and communication Technology can be used to sustain good customer relations. To manage customer feedback well, Marks and Spencer can make the information quantifiable, provide its customers with user-friendly tools, such as feedback forms on its Web site that automatically return their comments in a structured form, or conduct a Web-based survey. To analyze and report on it, the company can Import the results of its own online survey applications into its CRM solution. It can deliver critical customer service information at a glance with dashboards based on the key performance indicator (KPI). The company can use the Business Data Connection (BDC) Libraries and Web Parts included in Office Share Point Server 2007 to let the users poll data from another source, such as an e-commerce database or the results of a third-party survey application, and present it on a Share Point Web page. The company can also share the results of its efforts across its business, and ask its employees how they think the company should act on them. All these processes contribute to the company’s continuous improvement and are possible with the application of Information and communication Technology. (Drake, 51)
Bell, L; Man and Management Techniques (New Haven and London: Yale University Press. 2006) pp 154-7
Drake, S; Evaluation of Techniques in Management (ABP Ltd. 2006) pp 47-51
Dos, M; Advent of Motivation (Alliance Publications; 2005) pp 225-8
Dollard, John; Zenith and Zero Point (New Haven and London: Yale University Press. 2004) pp 225-8
Goddard, J; Management: Making the Most Out of It (Howard & Price. 2006) pp 174-6