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Marks and Spencers

Growth through Marketing

PESTEL
Political generally favourable free trade Economic consumers increasing spend Social healthy eating habits Technology improving comms & IS Environmental global warming Legal - favourable

5 Forces
Bargaining power of Customers High lots of supermarkets and brands Bargaining power of suppliers Low many suppliers Threat of substitutes High competitive market Threat of new entries Medium fairly high barriers to entry Competitive Rivalry - High

3 Cs Kenichi Ohmae

Customers

Healthy Eating Interested in Quality Premium brand Brand loyalty Own Brand products Good CEO Quality foods at reasonable prices Quality network of producers Standards builders

Corporation

Competition

Cheaper / Low cost providers Local convenience Choice

PLC (BCG Matrix)

Re-launched local market back into maturity

Grow business by extending reach of main portfolio

SWOT

Strengths
Strong brand Financial resources Leadership (Vision) Good communications

Weaknesses
Only stock own brand Few outlets Not 100% global

Opportunities
Growth of International Markets (China) WTO Chinese entrance

Threats
Political issues Competition Late entrance into global market

Objectives

Marketing Objective

Growing turnover fourfold in four years


Current revenue 8bn (2005/6) Required revenue 32bn (2009/10)

Competition

Current
Walmart - 80bn Carrefour - 70bn Tesco 42bn

Projected Marks & Spencer - 32bn

Gap analysis
24bn shortfall How to close gap?

Ingor Ansoff - Growth Strategies


Market Development (grow into China) Product Development (cultural aesthetics)

STP

Segmentation
Market segmented by geographic region Focus on China

Targeting
Major cities, middle class consumers Chinese middle class

Positioning

Premium brand

Strategy

Differentiation
Own brand products Premium brand appearance

Market Development Product Development

Marketing Mix
Product own brand Price - affordable Place distribution outlets, ecommerce Promotion - ATL People Well trained professional staff Process Quick service; integrated CS Physical Evidence Good ambiance

Place

Current International presence, especially China is poor


Recommendations to focus growth in Chinese market

Current Modes of Entry

Wholly-owned stores

Republic of Ireland 11 Hong Kong 8


Asia Pacific 65 Europe 60 Central Europe 45 Middle East 18 Central Asia 9 Bermuda 1

Franchised stores

Chinese Market Entry

Grow market by 1.3 billion customers greatly extending reach of brand Acquisition strategy
Grow business through acquisitions for fast market development Quick growth requires quick returns

Budget
Year 1 - 10% of 8bn - 0.8bn first year Year 2 10% of 16bn - 1.6bn 2nd year Year 3 10% of 24bn 2.4bn 3rd year Year 4 10% of 32bn - 3.2bn 4th year Overall budget NPV 8bn = 7.47bn Chinese Market/Product Development

5bn allocation over 4 years.

Focused Chinese 5bn Budget


Acquisitions - 4bn FMCG Marketing - 1bn

ATL 70% - 700m BTL 15% - 150m B2B Market research 10% - 100m Staff 5% - 50m

Market

research emphasised due to new market development

Balanced Scorecard

Financial

Expected acquisitions returning within 2 yrs 4bn/quarter - growth


Brand recognition in Chinese market

Customer perspective

95% brand recognition & customer satisfaction from year 1

Learning & growth

Skills development in customer service Improved processes for supply chain management and CRM

Innovation

Controls

If balanced scorecard targets are missed

Increase expenditure on ATL


Given

extremely high planned growth extra investment over and above the planned rates are contingent

Push promotions across China