In business, different companies, in different industries and different markets, have prioritised managing and building brand equity. Brand equity is an important source of competitive advantage that can reduce an organization’s fragility to crisis and competitors as well as influencing the value of the organization and consequently, its financial results (Karbasi & Rad, 2014). “Companies can obtain customer loyalty and huge profits from strong brand equity, and thus the rewards of maintaining a strong brand are clear” (Keller, 2000).
Most businesses build brand equity by creating unique products or service with superior quality which result in customers developing a preference for them, this results in customers being keen on paying extra for them. A brand can then acquire a higher market share figure in their industry from the growth in customer base. “A company has high brand equity when customers would rather buy their name brand over its generic equivalent ” (Kivak , 2009). Keller (2009), also suggested that brand equity represents the end result of marketing communication activities.
They following report will utilise Kevin Keller’s Brand Report Card to evaluate the Marks and Spencers brand. Kevin Kelle, a marketing professor at the Tuck School of Business at Dartmouth College in America established ten mutual qualities that all the world’s strongest brands share, which are known as the “Brand Report Card”. The brand report card characteristics can help create an informative and useful report to asses if a brand is being managed well. Using the ten qualities retailers brand Marks & Spencer as example and combines with Keller’s brand report card to examine and evaluate its brand portfolio and its branding strategy. “The strategic brand management process starts with a clear understanding of what the brand is to represent and how it should be positioned with respect to competitors” (Keller, 2000).
Fig 1. image from MARKS AND SPENCER GROUP PLC 2018 Annual Strategic Report
Marks & Spencer is a British international retailor that specialise in food, clothes, homeware and other industries. It is widely known in the UK with over 450 stores and its largest store at Marble Arch, London. They sell into 57 countries from 1,463 stores and 20 websites around the world. They employ 81,000 people serving about 32 million customers. The brand was first opened in 1884 by Michael Marks in a Leeds, as a market stall, he later partnered with Tom Spencer. They both specialised in selling only British made goods, the brand continued this policy until 2002. Fig 1 shows other industries the brand venture into. Along with food, clothing and home the brand extend to finance service and property investment. The Marks & Spencer brand is mainly associated with retail, they also have M&S bank which is managed by HSBC Bank, they provide current account and savings accounts, mortgage, currency exchange ( travel money) and insurance. They also have a property portfolio worth £2.4 billion. They also have customer data that can be sold for insights. Their main competitors are other retailers and supermarkets such Debenham, John Lewis Partner, Tesco Asda etc. Their main online competitors are Amazon and ASOS as stated in their annual report.
Fig 2 Customer Based Brand Equity Model for Marks & Spence
Fig2 (created by author)
How Marks & Spencer deliver benefits customers desire.
Fig 2 shows the Customer Based Brand Equity model for Marks & Spencer. Using this model the brand will be able to identify what makes their brand strong and manage customer expectations and desires. Their brand aim to build on core values of quality service, innovation and trust. Their mission is to make aspirational quality accessible to everyone, through the depth and range of their products. They pride themselves on providing high quality products which set themselves apart from others. In 2014 they were voted as the most authentic brand in the UK. They evaluate their customers’ needs and offer products of service to meet them, this had been at the core of their brand identity from the beginning. In 1934 Marks and Spencer was first British retailer open laboratory dedicated to researching new fabrics. They also launched their own Food Technology department in 1948 working closely with suppliers, producers and farmers. In 1954 their research lab undertook the first ever methodical survey of women’s leg sizes, to create a new and improved sizing system for stockings. This shows that they have always been a brand that is focused on giving customers the benefits they desire. They have been utterly dedicated to delivering benefits customers truly desire. Marks & Spencer are constantly innovating their brand. Last year their customer insights showed them that their customers want a deeper, more nourishing pizza without skimping on the fillings, in larger pack sizes that can feed a family. In response in September, they launched six new Deep & Loaded Pizzas inspired by the famous pizzas of Detroit. From the Whole Hog, with smoky sausage, spicy pulled pork and barbecued burnt ends, to the Meatball Marinara, topped with mini meatballs and sautéed onions, these deep pizzas priced at £6 are perfect for families to share they sold 1.2 million pizzas in the year. In addition they have loyalty programs “Sparks”, which maintains customer engagement.
Marks & Spencer stays relevant
Maintaining a strong brand means striking the right balance between continuity and change (Keller, 2000). Forging a lasting relationship with their customers has also helped the brand stay relevant. The brand has incessantly upheld an intangible sense of “special”, which has been a long running theme in their marketing campaigns and core values. They are also investing in their digital market to be on the same level playing field with some of their biggest competitors and reducing their impact on the environment. Social and environmental policies are at the hearth of the brand, their new campaigns show how their product sourcing is done so ethically and environmentally friendly. Their “Behind the Label” campaigned showed how they focus on Fairtrade. Being ethical is a trend several business have recently adopted even though they still produce products that are toxic to the environment. Marks and Spencer still sell un recyclable coffee cups in their instore cafes. The has brand recently implemented the “ Life. Spend it Well” campaign which was a different direction from their usual mantra of putting quality above price. This campaign was the brands attempt to get with the times. From their annual strategic report they pointed out how they wanted to focus more on broader-family audience but they understand that they are economic issues that are affecting their customers disposable income such as Brexit and other aggravating factors such as the rise in living cost. They are still providing quality product but encouraging their customers to spend well, still focusing on great value for money. Without compromising their core values Marks & Spencer has been able to tweak their intangibles to fit the times. “M&S has always been famous for our innovation, and sourcing and technical skills are industry leading. Our intention is to accelerate the innovation pipeline but focus more strongly on high volume, popular family product.” (Annual Report , 2018)
Mark & Spencer’s Pricing Strategy
From the marketing mix, price is essential. Over the years Marks & Spencer has been successful in charging higher prices for their products compared to their competitors. Whilst their competitors compete of offering the lower price and pricing wars, Marks & Spencer’s opted for the opposite they deliberately charge higher prices in the hopes that their customers will be loyal to a brand that focus on quality rather than price. They also use the high price tag to convince their customers that their products are superior quality so customers will get their money’s worth. Marks & Spencer are known for sourcing the best raw materials and ingredients so customers can justify paying premium prices so they know those products will have higher operating costs. High quality distinction in something Marks & Spencer has always focused on in most of their marketing campaign such as “ this is not just food, this is M&S food” campaign which has now become part of their brand equity and point of difference so customers expect to pay more. Even with the premium price according to their 2018 Annual Report they M&S retains market-leading positions in core categories such as lingerie, denim, business shirts, suits and Back to School in their clothing department. However because the quality of their products match the high prices some customer treated their products “special” which mean they products become might be a one off purchases or as treat for products they usually by from their competitors. Over the years the brand has been faced with multiple possible seizures and they have had to close some of their stores across the country this could be a result of customers not affording these premium prices anymore because increase in living costs.
Mark & Spencer’s Brand Positioning
“The brand positioning is a process of creating its own image, distinctive properties, positive associations and values in consumers’ mind in order to create a sustainable trademark image and ensure consumers’ attachment to this trademark” (Fayvichenko, 2016).
Band reposition in one of the most import element of marketing strategy. Good brand positioning will aid in guiding marketing strategy by revealing brands’ point of difference, similarities to their competitors and why they should be the customers choice over the competition. The perception quality associated with the Marks & Spencer brand brings loyalty. This brand positioning for Mark & Spencer of focusing on premium quality and prices can be a limitation to them in terms of the number of sales they could be attaining. Products that are branded as special can be limited to special occasions or one off purchases as opposed to repeat constant purchases.
In their current annual report the brands chairman Archie Norman, states that they focus on British heritage and premium quality product “special and different”. Being a heritage brand means they create engagement using emotion with the customers and having the brands own produced for them by local suppliers. Some of their competitors like Debenhams and John Lewis are British heritage brands.
Marks & Spencer is Consistent.
Marks & Spencer have been successful at creating a consistent narrative associated with their brands and this has helped their customers connect with them in a substantial way. Along with being consistent with their messaging they have been consistent in their products quality. They have the same core values throughout their stores and different product ranges. It is their dedication to brand purpose which aids them to maintain their position in the market even with the increase in new global competitors. Although their brand message has been consistent over the years their new campaign “Life. Spend It Well” is complete different direction from their usual campaigns which usually focus on them sharing their values of quality, trust, and luxury with the world. This can be perceived as inconsistency because they are now diverting from their usual stance of focusing on quality to now focusing on spending well. The director clarified that this campaign was a result of the brand researching and listening to their audience expect from Marks & Spencer. This also demonstrates that the brand in consistent meeting their customer needs.
Marks & Spencer’s Brand Portfolio and hierarchy.
Marks & Spencers Plc has diverse products within the M&S brand for different market segments. Their main target audience is families. They understands that within families they have individuals with diverse preferences so the brand try to cater for all these needs. Within singular industries they are involved in they have variety of inhouse brands such as “Simply Foods” and “ Count on Us” which are one for regular products and the other one for healthier or less calorie foods. Their food market is their specialty and also their main source of revenue. Their products are made specifically for M&S and this unique position means they are not comparable with their competitors. Fifty eight percent of their income in 2015 and 2016 was from their food market. In the past, the brand has had issues with their clothing department and looking at their current annual report it’s still the one area they are struggling with the most even though M&S retains market-leading positions in core categories such as lingerie, denim, business shirts, suits and Back to School. They have to many clothing lines and trying to focus on different segments at once. In the report the director understand that they are known for basic essential but collection such as AUTOGRAPH which compete with other trendy fast fashion brands fails because trendy fashion is not part of their brand equity. They also have online competitors such as ASOS and Amazon which offer similar style for cheaper prices. Even though Mark& Spencer offer these different range their narrative is the same across all.
Marks & Spencer use different range of marketing activities to build brand equity.
Fig. 3 Marks & Spencer logos
The brand utilise different marketing activities to build brand equity. Different marketing activities can accomplish different results. They use different platforms including print, television, online and social media for marketing to increase their brand awareness. Marks & Spencer invested a substantial amount of their marketing budget into television adverts especially for their food market. They had the ads running with the famous tagline “ This is not just food, this is M&S food”. The adverts showcases the quality of the product they source for their customers. This helped build their brand equity of quality and “special” produce. They also push their instore free publication which showed a further in-depth information on the quality of their products. The have recently started collaborating with quintessentially celebrities to enforce their heritage image which is part of their brand equity. Being associated with premium quality can detour potential clients because they will assume it will cost more even though they have products which cost the same as their competitors. Fig 3 shows the evolution of the brands logo, the brand have use the changes int heir logo to reinforce customer awareness. The current logo has the year the brand was started, they use this to enforce British heritage brand as part of their brand equity. By doing this they are creating an emotional engagement, they are transferring history and packaging it as part of their brand.
Marks & Spencer’s managers understands what the brand mean to consumers.
Marks & Spencers managers understand the customers expectation for their brands and what it means to them. They understand that for customer M&S means special and unique and is what they expect from them and the managers set out to manage these expectations.
Mark & Spencer’s is given proper support and that support is sustainable over long run.
Mark & Spencer is given proper support to help with it running of the business. To help with the struggling none-food market they recently hired Jill McDonald who has successful worked in the business industry. Mark & Spencer also focus on innovation
Marks & Spencer monitors sources of brand equity.
Best brands frequently undergo brand audit which will aid in monitoring sources of brand equity. Marks & Spencer is value thir
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