1 Market Analysis Assignment Sample
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INTRODUCTION
This research work is an attempt to suggest feasible recommendations to one of the largest supermarket chains of the UK which is Marks & Spencer. The focal organization of this research work is Marks & Spencer which engages in selling clothing, gifts, home furnishing and others in various geographies such as the UK, Europe, Americas and Far East. The organization initiated its operations in 1884 and was founded by Michael Marks. By 1901, the organization acquired 35 stores and also had a new partner Tom Spencer. The vision with which organization operated comprised of rendering consumer with higher quality, value and service. It has nearly 300 stores in the UK and has recently ventured into offering food related items as well. This is to render the much required boost to overall sales and profitability volumes.
This research work will exclusively shed light on its redy meal offerings which are new on its board. It has been put forth by the retail chain that almost all of its offerings are benchmarked to make sure that they are up to the mark. The organization is dedicating its efforts and resources to come up with offerings that taste better, look better and are healthy to consume. The organization has taken the onus on itself to foster healthier lifestyles for its consumer segments and thereby there has been a phenomenal shift in the way store approaches a healthy and ready to eat food. The organization engages in rendering lip smacking ready to eat offerings by rendering a plethora of healthy options to choose from. (Axiom Foods, 2015)
It is to be noted that M&S is undergoing a complete image makeover this year. It is to be further taken into context that varied in-house brands of M&S are gaining prominence in the market owing to fierce competition levels present in the market. It is an evident fact that in-house brands are gaining significance owing to increasing competition. (Barnes, 2002)
BENEFITS FOR THE END USERS
As earlier stated in the research work, M&S has come up with brand new healthy eating offerings after it found in a research that almost 6 out of 10 people regularly indulge in eating at their desks or while on the move. It was further found out that 90% of the UK people are of the opinion that they make unhealthy food choices owing to their busy schedules and lifestyles. This range has been introduced in London and leverages new emerging trends in the market in reference to personalized eating plans. In order to ease shopping for busy and health conscious segment, M&S has come up with fit lifestyle zones in its stores and website. (Mintel, Consumer Food Packaging – UK – January 2015, 2015) Also, it has colour coded offerings as per five varied bands so that end users can easily make out which offerings suit their diet plan. They will also be able to count calories of offerings on the app. (Barnes, 2002)
This offering is a complete package by M&S to help its customers to foster their respective health and wellbeing. They have intentionally withdrawn confectionary from checkout points along with removing calories from their offerings to foster shoppers move towards a healthy lifestyle. The healthy offerings are such that they will help people who are wishing for a long term and short term weight loss plans. (Euronomitor, 2015b) In fact, M&S has become the first retail giant in the UK to move out confectionary offerings from its checkout points so as to foster end users make healthy choices. The overall new range has two variants that include-
- Healthy Living- Big On Taste, Lower in Calories which is apt for people aiming to shed weight. All the offerings have at least 30% lesser calories as compared to their counterparts.
- Healthy Living- Beautifully Balanced- It is for those who are attempting to maintain their weight or wish to aim for healthier choices(M&S, 2018)
M&S works on feedback rendered by its customer segments and thereby it has not only tested but also refined its offerings by incorporating suggestions given by developers, nutritionists and chefs to make sure it has plethora of offerings without compromising on taste. They have added bigger assortment of vegetables as its end users wished for more variety. They have even replaced sugar in their certain offerings by Stevia which is a natural plant based sweetener to foster reduction in sugar levels along with rendering a great taste. (Doole & Lowe, 2008)
POTENTIAL OF HEALTHY AND PACKAGED FOOD MARKET IN THE UK
It is an evident fact that convenience and healthy trends are the two prevalent food consumption trends in the UK market as it has been observed that nuclear households are ardent followers of this trend. Marketers now clearly know the significance of higher accessibility of healthy offerings in healthy food market and convenience food market but these are non- overlapping markets. The future will be guided by these two trends. (Mintel, Winning over customers with personalised deals, 2015c)
It has been further observed that more than 72% of the UK shoppers are inclined towards purchasing healthier foods that has lesser quantities of salt, sugar, fats and calories. Almost 50% of UK shoppers indulge in purchasing organic foods which is quite high in comparison to their proportion three years ago. (Mintel, Market Drivers, 2015e) People are happy in spending in purchasing organic foods as compared to other healthy food options. There has been an increase in people who are preferring vegan options but very few people are inclined to spend higher amount for this choice. (Department of Environment, Nature and Energy, 2015)
There has been a significant rise in number of people purchasing ‘free from’ food varieties along with 1/3rd of shoppers opting to purchase. The offerings are free from either lactose or yeast or gluten. This research work has further put forth that 19% of end users will spend even more on these offerings in the coming year. (PWC, 2015)It has been further put forth that one in five British shoppers wishes to make sure that they are purchasing addictive free food and one out of three shoppers goes through the list of ingredients and nutrition label before purchasing. People are increasingly concerned about quality, safety and well being of food that they are purchasing so as to make sure that they are successful in losing weight. Obesity is increasingly becoming a complex challenge and thereby it is quite heartening to see that people are willingly opting for losing weight by consuming healthy offerings. (Eat Natural, 2016)
As per the research report by IRI, this presents a highly lucrative opportunity for food retailers to signify health advantages and come up with new product lines. Healthy offerings along with organic, free from and vegan food is not a niche market and there is an immense opportunity for manufacturers to innovate and render more shelf space to healthier food offerings which comprises of in-house labels. (Mintel, Winning over customers with personalised deals, 2015c)
PEST ANALYSIS OF HEALTHY AND PACKAGED FOOD MARKET IN THE UK
Political Factors
There are various political factors that have a bearing on the food retail industry. Various political moves regarding tax structure in retail industry will affect industry’s competition and strategies. In specific terms, UK food retailers are supposed to abide by various food hygiene regulations to meet the food safety requirements so that it can be ensured that the food is safe for human consumption. There are various regulations that need to be abided by in reference to transportation, distribution, quality, hygiene, maintenance, advertising and selling of food offerings. The regulations and specifications mentioned in Food Hygiene Regulations (2006) and HACP has to be strictly adhered to. There are specific rules charted out by Competition Commission and Office of Fair Trading that have to be followed by organization to avoid monopoly, oligopoly and cartels. The retailers further need to abide by planning law to foray into newer places. Hence, any kind of political decisions pave way for higher complexities in legislations pertaining to labour costs in the industry and decrease profitability. Also, non-adherence to any regulations can pave way for long term impact for retailers. (Euronomitor, 2015b)
Economical Factors
Various economic facets, situational contexts and incidents affect food retailers as consumer spending is affected. Various economic factors include consumer spending, disposable income, inflation rate, taxation rate, rate o interest, unemployment rate, monetary issues and any kind of economic turmoil. These have a definitive impact on retailers operations. It is an evident fact that the financial crisis that took place in 2008 paved way for significant changes in food retail sector. Owing to recession, end users started dining out less and consumption of food at home increased. Also, due to rise in sales of organic offerings, sale of specialized offerings and expensive offerings declined. Although there is rise in fierceness of competition and growing consciousness about healthy food, but the trend will remain same is doubtful owing to higher uncertainty and increase in level of taxation on personal income.
In macro-economic sense, after a fall in GDP, it has begun to recover as well. Food retailers will be in a position to command higher margins. These factors will pave way for supermarkets to offer basic offerings at lower prices and rendering offers to sustain desired levels of consumer spending. (Euronomitor, 2015b)
Social Factors
Social factors include various factors such as demographics, lifestyle, and culture and population trends. Various European nations including the UK are witnessing a rise in grey population. This trend will continue to rise in the years to come. This particular trend has variety of implications for food retailers. (European Commission, 2011) Firstly, elder population tends to consume at a lesser speed than younger population as income from pension is lower than remuneration. Also, elderly people shop from cheaper discount retailers and this will fuel the growth of big 4 retailers. Further, varied additional needs of this age group will foster online and distance shopping which will mark the rise in number of home grocery deliveries. Hence, the operational costs relating to sustenance of supermarket operations will increase owing to rise in expenses pertaining to vehicles and people. Ageing population will also need new product lines that are especially meant for elderly people. Another significant issue that needs to be taken into context that ageing people will require exclusive product lines as people may be suffering from varied chronic elements which are common among elderly people. (Mintel, 2015a)
Another significant issue that needs to be managed pertains to obesity. There is a rise in number of obese people even in children in the UK. The various health related challenges have paved way for the UK government and organizations to foster a healthier lifestyle among the people in the UK. Hence, there has been a subsequent rise in health awareness among consumers and they have inclined towards healthier options. Also, there has been in a rise in number of females joining the workforce which has further fuelled the need for ready meals as lesser time is required to prepare and consume such foods. This has led to creation of new food categories that are cost effective, low on calories but super in taste. Further, the presence of people from varied ethnicities and cultures has altered the society’s structure in the UK which clearly implied varied habits and preferences. Hence, food retailers need to render offerings from across the globe to serve these needs. (Euronomitor, 2015b)
Technological Factors
Various technological advancements have altered varied industry categories such as end users, environment, costs, distribution and logistics. In the last 10 years, supermarkets have leveraged the opportunities rendered by the advent of internet to the best of their capabilities. This has paved way for reduction in human capital costs for the super markets. This has led to minimization of costs along with increasing profits.
Also, organizations are making use of IT related technologies to manage operations and further augment efficiency and profitability for the organization. By capitalizing on technology, cost and paper work has been reduced significantly along with increasing efficiency. The deployment of technology has been beneficial for organizations as well as end users. (Euronomitor, 2015b)
RECOMMENDATIONS FOR M&S
It is extremely crucial for M&S to sustain market share despite the decline in shopping owing to new shopping habits. It has to engage in revamping and reposition itself as a healthy brand. It should reorganize its stores to emphasize on greener and healthy options it has to offer. (Beaumont, 2011) Regarding its convenience outlets, it should invest in this segment and it can also come up with healthy options through its online store as well especially mobile segment to serve people on the go. In reference to its online channel, the organization should come up with 24 hour click and collect Pod to ease the purchasing process for consumers. It should also aim for serving consumers healthy options while they are in transit as a new report has established that people spend majority of times in transit. This clearly implies that M&S can experiment with newer forms of retail to attain phenomenal success. (Hall, 2015)
This research work is a comprehensive attempt to put forth feasible recommendations for M&S. It is important for M&S to undertake marketing of its new healthy range of offerings in a new manner by reaching out to lifestyle users and health conscious segment alike. This can be done by stressing on manufacturing the product in a manner that is high on protein content and is devoid of gluten and fats. Such offerings need to be displayed at point of sale to lure attention of users. It has been observed that consumers still prefer physical stores for making grocery purchases and thereby it is important to have stores and personnel ready in a manner that they can educate consumers about healthier alternatives. (Eat Natural, 2016)
The organization will have focus groups to discuss about the packaging, variants, nutritional value and pricing of the offerings. The feedback rendered by this group needs to be considered and changes need to be made accordingly. The offerings will be made up of natural ingredients along with chocolate based snacks as it is a great stress buster and wil help people to have full tummy with just one snack.
The USP of these offerings will be higher nutritional value and great taste at pocket friendly prices. Hence, the offerings will be rich in peanuts, cashews, dates and coco. Milk content will be removed to sustain affordable price levels.
It is further significant to augment the customer base by rendering all natural, high nutritional offerings that are gluten and dairy free. The emphasis will be on offering soy protein based offerings so that they are tasty, rich in protein and suffice the overall purpose. Certain offerings will also have brown rice as a base to serve high protein requirements of gym enthusiasts. This will help this segment in fuelling fat loss and toning of muscles. (Euronomitor, 2015b)
The organization should engage in rendering “creating your own snacks” in online medium. This should have an explanation of the ingredients on offer and what kind of nutrition can the serving provide so that customers are clear about the assortment created. This facility will let customers have a free account and receive promotional offers to carve out their healthy food/ snacks on the move. This will let customers have personalized offerings at discount. This will also help in augmenting customer loyalty and hence higher revenues in the long run. It is to be further considered that lifestyle users have immensely contributed to the growth of green segment. The label will exclusively project ‘new natural’, ‘gluten free’ and others to signify the utility of the offering. The products will have eco-friendly and recyclable packaging. (Doole & Lowe, 2008)
It is to be further noted that packaging will be neutral in presentation with earthy colours to depict natural quotient. All these aspects will help in augmenting sales volume greatly for M&S. It has been further observed that people engage in purchasing such offerings online and thereby web based sales will also increase. (The Economist, 2015)
CONCLUSION
It is an evident fact that food retailing in UK is established, mature yet profitable industry. Food is one of the quintessential human needs and thereby food providers cannot be replaced. Also, food and its providers play a significant role in people’s lives and society. Food and related offerings are augmenting their spaces in retail industries across the globe. This industry proved its mettle while every other industry segment was badly hit by the economic turmoil. People across the globe have realized the significance of healthy living and the role the food plays in attaining fitness which has led the retail players to revamp themselves and their offerings to cater to new needs of the customer segments globally, especially the UK market. (Malesh, 2011) The industry is further impacted by varied socio-cultural altercations and technological advancements that need to be considered and acted upon so as to leverage the opportunities in the best possible manner. Further, intense level of competitive rivalry has waged price wars which has further fuelled the financial risks for various retailers. Technological advancements have led the retailers to venture into online shopping which has further threatened the very existence of physical stores. Hence, in order to sustain industry’s strength, the retail giants such as M&S need to adapt fast in terms of healthier alternatives and market them fast while aligning them with customer and environmental needs to face off the competition in effective manner. (Craft, 2004)
Thus, in order to delight its end users, M&S has clearly recognized the varied groups of Healthy Eaters in the market and is dedicated to serving their different needs and tastes. Hence, it is important to respond to segments market by rendering offerings that suffice needs of healthy eating consumers. In a nutshell, M&S can do wonders with its Healthy Foods if its segments and markets properly. (Health and Social Care Information Centre, 2015)
REFERENCES
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Beaumont, J. (2011). Households and families. Office for National Statistics. London: National Statistics.
Butscher, S. (2002). Customer Loyalty Programmes and Clubs. . Gower Publishing.
Craft, S. (2004). The International Consumer Market Segmentation Managerial Decision-Making Process. . SAM Advanced Management Journal.
Department of Environment, Nature and Energy. (2015). Environment and Health. .
Doole, I., & Lowe, R. (2008). International Marketing Strategy: Analysis, Development and Implementation. Ohio: Cengage Learning.
Eat Natural. (2016). Eat Natural Fruit and Fibre with coconut, apricots, oats and spelt flakes. .
Euronomitor. (2015b). London: The New Mecca for Health Food Lovers. Euromonitor Passport .
Fitness, Muscle & Body Building. (2015). ‘The Protein Challenge: Why Whey is Growing More Expensive’,.
Hall, J. (2015). Online food shopping expected to double in five years. BBC News .
Health and Social Care Information Centre. (2015). Statistics on Obesity, Physical Activity and Diet. .
Malesh, S. (2011). Take-off of online marketing: casting the next generation strategies. Business Strategy Series.
Mintel. (2015). Consumer Food Packaging – UK – January 2015.
Mintel. (2015e). Market Drivers.
Mintel. (2015a). The consumer – Factors that prompt purchases of new food products.
Mintel. (2015c). Winning over customers with personalised deals.
M&S. (2018). About Us.
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