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Marks and Spencer Food

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by

Anna Bucknell

on 4 April 2014

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Transcript of Marks and Spencer Food

Marks and Spencer Food
Company Background
Marks and Spencer started in Leeds in 1884, selling food right from the beginning
Their five principles are 'Value, Quality, Service, Innovation and Trust'
They sell a range of quality food products aimed at the more affluent consumer
Food accounts for 54% of Marks and Spencer's UK turnover and last year had a revenue of £4.9bn
Many of M&S's stores sell food and there are also 419 simply food shops
PEST Analysis
There is a stable political background and favorable economic conditions for M&S to operate in
Green agendas continue to grow and this is an important factor for M&S's thinking process
Both e-commerce and m-commerce are increasing along with other advanced technologies
SWOT Analysis
Market Environment
Porter's Five Forces
M&S is very vulnerable towards competition because of UK's broad food sector, facing competition from Waitrose, Tesco, Sainsbury's etc.
M&S is differentiating from competition by positioning itself as a higher-quality value for money brand
Low threat of new entrants. The market is mature and a new entrant would have to offer something radically new
Customer Relationship Strategies

M&S's main
strength
is a combination of quality and one of the widest ranges of food in the UK
A big
opportunity
would be to start selling food online
However a
weakness
is their size in comparison with their competitors and their small range of branded products.
And they face the
threat
of competition from other quality food retailers such as Waitrose, particularly in terms of online sales
Customer
Acquisition
Acquisition is process of gaining new customers or converting existing prospects into customers. The process is specifically concerned with acquiring as many customers as possible at the lowest cost
Customer
Retention
Customer retention is the maintenance of continuous trading relationships with customers over the long term
Customer Development
Customer Development is the process of growing the value of retained customers by attempting to cross-sell and up-sell products to their customer base.
Customer Life cycle
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Marks and Spencer's CRM Strategy
Conclusion and Recommendations
Conclusion
Marks and Spencer focuses mainly on the acquisition of new customers as well as the retention of current ones

Although acquisition is a more expensive process, it is vital for the company to continue into the future, especially as food is currently the best performing division of the business

The strategy that Marks and Spencer's food department has chosen is sustainable, in particular their use of social media and commitment to quality and provenance.
Recommendations
Online shopping with home delivery with possible use of a third party deliverer such as Ocado
Implementation of loyalty cards
Perks for customers with loyalty cards such as free tea and coffee
Macroenvironment
Economic instability – could continue
Focused on current customers – producing range of quality food at a premium price.
If slow growth economy continues – M&S may not get a new customer base but could also lose current customers to cheaper competitors.

Investment in Quality Goods
More customer awareness
Creates a demand for short traveled food
M&S capitalize by promoting their commitment to sourcing
All meat is produce in the UK and Ireland
Can be used to the acquiring of new customers

Social Media
Communicating with existing customers
Creating brand awareness to attract new customers.

Unique Selling Points
M&S has a similar way of operating as its main competitors like Waitrose.
M&S has some unique selling points like their forever fish campaign.

Overall
The strategies are sustainable to attract new customers
Replenishes customers who have stopped using the M&S’s services.
Keeping their current customers happy and informed of any changes or new products or services.
Could develop their customers more and get them interested in other parts of M&S – such as clothing and general merchandise.

Free Recipe Cards
Recipes online and instore
Encourages extra purchases
All contain less than 400 calories
Food to Order
Range of party/ entertainment food and cakes
Can only be picked up instore
Offers a connection with the core consumer
Also an opportunity for development
Use of Leaflets
Wide range of leaflets for other M&S services such as flowers and their bank
Placed in strategic areas
Offers an opportunity for development
Customer Help and Information
Stores contain a help desk
Extensive online help and FAQ section
Receiving information is easy for customers
Increases customer value
Giftcards
M&S have giftcards available for a range of amounts
Can be used in the food department
Increases brand awareness
Also ensures that all the money is spent in store
Strategies Used
Wide Range of Food Offered
M&S offer a wide range of foods such as healthy meals and foreign cuisines
Extensive range of convenience and ready meals
Also sell many sandwiches and lunch items
Example of understanding their consumer
Independent Weekly Price Matching
Every week M&S match their prices with their competitors
Allows them to remain competitive and also acquire new customers
They also offer promotions on products such as 'Dine in for £10'
Quality Sourcing of Produce
The company have a big commitment to provenance
High quality food offered and a responsible supply chain
Were not involved in the 2013 horsemeat scandal
All meat and fish sourced from the UK
Partnership with the Marine Conservation Society
M&S donate to the MCS through their forever fish campaign
M&S are recognised as having 90% of their wild fish as coming from sustainable sources
Use of Social Media
Presence on many social media sites
Pages are for the whole company but contain food related posts
Raises brand awareness - in particular to a younger generation
M&S also now have an app
Overall Strategies
Overall Strategy
The majority of the strategies used by M&S are a combination of Acquisition and Retention.
Acquiring customers depends on how effective the organisation is able to build a comprehensive relationship with the customer.
Retaining customers depends on customer satisfaction, resolving customer problems/disputes, and keeping customers coming back.
Development is also followed as a strategy by M&S but not as much as the combination of acquisition and retention.
Is this Sustainable?


M&S will gain New Customers
It could block competition
Build Customer Loyalty; Sell Aggressively, Growth Will Follow
Market power
High cost
Value may not be added for the acquirer.
Financial consequences
Unrelated diversification
Too much focus
Advantages
Acquisition
Disadvantages
Cross selling and up selling
Offering upgrades, special deals and free gifts (such as three for two) is a great way to convince customers to spend a little more
It costs less to sell to existing customers than it does to find new business
Beneficial word of mouth
No need of establishing reputation, improving skills or quality of products, customer is already convinced
Too much focus on retention of existing customers rather than on the acquisition of new ones
Risk of customers feeling overwhelmed
Divided loyalty
Potential risk of customers leaving M&S and shop elsewhere
Retention
Advantages
Disadvantages
Full transcript