Franquicias Internacionales En Mark&spencer

Marks & Spencer had used a simple marketing philosophy.

Company´s competitive edge has eroded and the marketing philosophy has come under attack

Marks & Spencer is a general retailer that sells clothes, gifts, home furnishing, and foods in the Uk, Europe, the Americas, and Far East.

Marks & Spencer started as a stall in 1884.

The company stressed value and low prices as a hallmark for development.

By 1901, the company had acquired 35 outlets and a new partner (Tom Spencer)

By 1949, all the company´s stores carried mostly private label products produced by British suppliers.

The company´s mission had been to offer consumers quality, value, and service. The company relied on five operating principles to achieve its mission.

Marks & Spencer gained the support of British producers, consumers, and workers.

The textile industry owes a large part of its existence to Marks & Spencer.

A british writer described Marks & Spencer as a “quintessential British institution, woven into the fabric of our national life, as firmly lodged in our psyches as furniture in the front room.”

Marks & Spencer had achieved impressive growth rates and market shares in many of its business segments.

By 1994, the firm had 18% of the UK retail market, 33% of the women´s undergarment market, and 20% of the men´s suit market.

By the late 1990s, the company had 40% of the nation´s underwear market and 14% of the clothing market.

In 1998, the company´s stock price slipped 34%.

In May 1999, the company reported full year profits of L630 million, a 50% fall from 1997-1998 (Financial Times 1999). Warburg Dillon Read, an investment bank, reduced its profit expectations for M&S by 10% for 1999-2000

The company blamed consumer confidence and a strong pound for the decline in sales and company’s value.

M&S Press Release (1999) stated that the deterioration in 1998-1999 profits has been the result of (1) a shortfall in expected sales, (2) a slowdown in overseas markets, and (3) the purchase of Littlewoods stores for L90 million.

M&S stock has underperformed other British retailers by more than 25%. They blamed M&S management for dull merchandising, poor inventory control, and lagged response time to competitive environmental conditions

The core values of M&S: quality, affordability and service came under the greatest attack, not from critics, but from competitors.

Retailers such as Top Shop, Kookai, Miss Selfridge, Jigsaw, Oasis, Warehouse and the Gap offer more fashionable designs and trendier labels. Other retailers, such as Next, Debenhams and BhS, offer better values. Food chains, such as Tesco, Waitrose, and Sainsbury’s have moved into prepared foods

M&S has not changed quickly enough to react to accelerating competition, which resulted in unacceptable fall in profitability and market share

M&S products can be divided into three lines of business: (1) general merchandise, (2) foods, and (3) financial services.

The St. Michael brand name has been used on most of the products sold through M&S

M&S expertise has been delivering consistently high quality products under the St. Michael brand name.

A commentator in Financial Times (1999), however, suggested that the company follow the example of Debenhams (a competing retailer) and use sub-brands to target specific segments of its market.

Marks and Spencer followed a value price strategy from its inception, starting with Michael Marks who put all his products for a penny in one side of the store with a sign saying "Don’t ask the price, it’s a penny.”

M&S was able to maintain its value by developing strong economic bonds with suppliers. Through its economies of scale in buying, M&S has been able to require manufacturers to adhere to strict quality standards and to bargain lower prices for its customers

Due to the recent strength of the sterling and the large British manufactured content in the stores, profit margins has substantially declined in recent years. Yet, M&S has managed to remain moderately priced.

The company features prices both in local currency and Euros in its European stores. It also has limited conversion tables by the cashiers.

M&S stores come in two basic formats. The first format is a general merchandise store, with its basement dedicated to foods, while the second offers foods only.

In recent years the firm has been aggressively increasing square-footage of their stores

M&S tries to locate its stores on the Main streets of major cities

Paris, the most significant market in Europe, for example, hosts 20% of the country’s population and 10 out of the 20 M&S stores in the country

In 1994, M&S started to aggressively focus on building distribution networks to supply its growing global operations. The focal point of this network, however, has remained in the United Kingdom.

M&S has mostly tried to avoid advertising and has relied on word-of-mouth.

In the past the company used advertising only in rare cases

M&S’ media spending was about L4.7 million, compared to L18.8 million of 10 other leading retailers

After recent years of bad financial statements, the company has significantly increased the advertising budget to about L20 million (Jardin 1999a). The company has already invited advertising agencies to pitch and is planning its second-ever television campaign focusing on M&S products (Marketing 1999).

M&S experimental involvement with internationalization began in the 1940s. the company began exporting its St. Michael brands overseas as a way to test the waters.

In 1955 the company was exporting about $1,146,000 worth of merchandise

Internationalization was, therefore, seen as a tool of diversification. Out of the export business, some international franchising relationships were formed. Importers of the St. Michael brand, who were familiar with the success of the brand in their countries, also bought the business format (including store layout and operating style) from M&S.

By the early 1990s, St. Michael franchises were operating in 14 economies including some emerging countries

By 1996, the company had 645 outlets worldwide, most of which (58%) were in the UK, Europe and Canada

service firm become increasingly international as they gain experience, willing to commit more company resource and take additional risks.

Retailers will use relatively less risky modes of entry, such as exporting and franchising, in markets where market and political risk are high

M&S utilizes various types of modes of entry around

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