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Company Background

M&S is a British institution with a worldwide reputation as a high quality retailer – nicknamed ‘Marks and Sparks’ by the irreverent British consumer. It is also a global business with operations in Canada, the USA and Caribbean, Europe, North Africa and Southeast Asia, and owns Brooks Brothers and Kings Super Markets in the USA. The ‘Britishness’ of M&S is such that when Princess Diana died in France, it was the Paris M&S store on which thousands of Parisians converged to pay their respects. M&S has consistently been Europe’s most profitable retailer.

The core product area for the company is clothing, and it has dressed a substantial proportion of the men, women and children in the UK for five generations, from their underwear outwards. M&S has around 25% of the UK i?? 15 billion clothing market. The company is renowned also for its high quality grocery selection – it has become the UK’s largest butcher, fishmonger and greengrocer – taking 3-4% of the i?? 60 billion UK food market, traditionally concentrating at the high margin end. M&S also sells a range of household products and furnishings, as well as becoming a major financial services supplier.

– it has 5. 5 million charge

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card holders – and the consumer trust in its brand is so high that it can sell investment products alongside clothing and food. The company operates 373 M&S stores, 85 M&S franchises with partners outside the UK, 173 Brookes Brothers stores and 40 Kings Super Markets stores, as well as operating some direct marketing activities. M&S’s mission statement for the next five years is to become again the leading company in clothing, furnishing and food industry in the UK and Europe.

Furthermore, it must develop its financial services programme in order to become more competitive and increase its market share in this industry. The core product area for the company is clothing, and it has dressed a substantial proportion of the men, women and children in the UK for five generations, from their underwear outwards. M&S has around 25% of the UK i?? 15 billion clothing market. The UK clothing market has changed in important ways. Consumers are buying ‘aspirational brand names’ or discounted goods. M&S is trapped in the middle of the market offering neither brands nor discounts.

The overwhelming pressure is value for money – either in added-value brands or low prices. M&S admits it has lost track of what its customers want and how much they are prepared to pay. The company is renowned also for its high quality grocery selection – it has become the UK’s largest butcher, fishmonger and greengrocer – taking 3-4% of the i?? 60 billion UK food market, traditionally concentrating at the high margin end. Furthermore, the home furnishing market covers all the furniture a house can have. M&S sells a range of household products and furnishings, as well as becoming a major financial services supplier.

– it has 5. 5 million charge

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card holders – and the consumer trust in its brand is so high that it can sell investment products alongside clothing and food. M&S has no major direct competitors. The main competitor of M&S in the clothing market for the young with more street credibility is Gap, and in the middle of the market are Next, Debenhams and Principles. Also, Boots competes M&S in brightly coloured children’s clothes and gifts. Furthermore, in the market of home furnishing, the main competitors of M&S are Debenhams and Laura Ashley.

Moreover, the main competitors of M&S in the food market are Tesco, ASDA, Sainsbury, Kingfisher (in the UK), and Wal-Mart from the USA and Carrefour in France. Finally, the main competitors of M&S in the financial services market are Lloyds, Natwest, Barclays, Midland and other banks. It is estimated that about 40 million customers, men, women and children, shop in M&S each year. M&S’s clothes has dressed a substantial proportion of the men, women and children in the UK for five generations, from their underwear outwards. The customer knows M&S as a company with a good brand name, reputation, and reliability.

The perception of customer for M&S is in a high level (e. g. Rolce Royce, Ferrari, etc. ). The consumer trust in its brand is so high that it can sell investment products alongside clothing and food. M&S is often as a prime example of a company delivering a strategy of superior customer value through excellent customer service and high customer loyalty, satisfaction, closely managed relationships with customers. M&S knows where its customers live, their income, their needs and on and on. Its aim is to find out who the customer is and what he wants, in order to satisfy him.

The ability of the company to anticipate and meet customers’ needs depends on responsiveness and in turn on the relationships the company has with its suppliers. From the 1920s onwards, M&S has created an intelligence system about consumers, monitoring sales, getting customer reactions to new products, supplemented by informal interpretations from staff in stores who are in direct contact with customers. By the autumn of 1998, Greenbury had seen falling customer confidence. Furthermore, by the end of 1998, establishing a customer loyalty card programme had become top of the agenda to try to win customers back from competitors.

Moreover, by 1999, M&S had been shocked by consumers paying high prices for clothes in branded fashion retailers, but refusing to pay full prices for M&S products. One serious strategic mistake of M&S was the fact that it lost sight of what consumers wanted. Consumers are buying ‘aspirational brand names’ or discounted goods. Finally, in 1999, middle-aged customers alienated by M&S pandering to teenage fashion while offering them less choice, while the young were unattracted by the M&S image and name.

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