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Company Structure

Marks and Spencer PLC is one of the UK’s leading retailers of clothes, food, home products and financial services, with over 375 stores. In addition, the company has 155 stores managed under franchise in 28 territories, mostly in Europe, the Middle East, Asia and the Far East, as well as stores in the Republic of Ireland and nine wholly owned stores in Hong Kong. It also owns the US supermarket group Kings Super Markets. Current and Future Developments In July 2004, Marks and Spencer became the subject of a i?? 9. 1bn takeover bid by the billionaire retailer Philip Green.

However, Green withdrew his bid after failing to win sufficient support from shareholders. Green had hoped that investors would use Marks and Spencer’s annual meeting in mid-July to voice support for his offer. Instead, they gave their backing to the current board and chief executive. As part of its efforts to fend off Green’s unwanted attentions, Marks and Spencer announced plans to return i?? 2. 3bn to shareholders. The management also admitted that it had taken its eye off the ball amid increasingly fierce competition, while the Marks & Spencer brand was seen as ‘formal, middle class and boring’.

The management’s decision

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was to go back to basics, with a focus on high-quality, stylish clothing targeted at its core customers – women between the ages of 35 and 55. The company also announced it had agreed to sell its financial services business to HSBC Holdings for i?? 762m, with the business being run as a joint venture with the two companies sharing the profits. Marks and Spencer also reported that it had agreed a deal to buy the Per Una womenswear business and brand, already found in its stores, from its creator George Davies for i?? 125m. The firm added that cost savings would total i??

320m a year by 2006/2007. Financial Results In the year ending 29th March 2003, turnover at Marks and Spencer PLC fell by a marginal 0. 7% to i?? 8. 08bn, but pre-tax profit almost doubled from i?? 335. 7m in the previous year to i?? 674. 3m. Marks and Spencer announced disappointing results for the year ending 3rd April 2004. On a 52-week basis, turnover grew by just 1. 7%, while underlying group profit increased only marginally. Like-for-like sales across its UK business fell by 0. 4%. Clothing accounted for i?? 4bn of the i?? 7bn of sales the company generated in the UK.

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. Read Marks & Spencer market structure

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.

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