M&S decreased in sales and profits

During last week's Business lesson, we've been talking about the falling in M&S sales and profits. It's an interesting topic to discuss and Im also curious about it as M&S shops in Taiwan has closed down in about 2 months, which is a short period of time!

M&S sales and profits are falling, WHY? As we can recall that market research is really important, then one of the crucial reasons is that there are too many competitors in the market. By comparing the prices, M&S may have higher prices. For instance, Waitrose can be a powerful competitor from M&S food.

In the mean time, I think clothes selling in M&S have limitation in age, which consists in elderly women at about 30 to 40 years old. This has brought up a good point in cutting their original amount of consumers.

So far, we can now tell that there's a result which consumers demand would be elastic, therefore consumers' income is related to the business as it called income elasticity of demand; in addition, consumers could always go to another store and buy the same product with the price they can afford.

On the other hand, think more deeply to see that if the result can also related to price elasticity of demand. Firstly, we all know that M&S sells clothes (including shoes, accessories...etc.) and food. What are the normal goods and inferior goods? If price of all products went up, more of food will be consumed or clothes? Let’s think of this way, food is a necessity of our daily life that we buy them everyday but clothes aren’t. Therefore food is a normal good in which the price of elasticity would be inelastic. Conversely, the price of elasticity of clothes would be elastic because they’re usually inferior goods!

However, if M&S has starting to decrease their price, there might have some concerns from the customers to which they would think the quality of the products have been lowered. Thus, an in-depth market research should be done over and over until they can achieve the goal of not losing their customers by staying at the same price.

ASDA and Morrisons are the competitors of M&S. They all sell food therefore it would easily to be compared among consumers. M&S has higher price than these two but does that mean the quality of products are also higher? Not quite. In fact, they all got the same quality food but M&S has got different prices. The possible reason is that they live with their famous branding; in addition, this is a way of how they survived in the market. For example, imagine buying instant coffee in ASDA, Morrisons and M&S with their own labels. I believe that most people would buy it from M&S with its own label because as everyone knows that ASDA and Morrisons are usually cheaper than M&S, therefore they might not have better quality.

Overall, they should’ve consider about the importance of getting a clearer knowledge of qualitative research which is to investigates consumers’ behaviour/attitude toward the service; also quantitative research is the numerical information of showing how many people buy certain products.

To be aware in a competitive market, they must consider that if there are too many same kinds of product has been sold already? Or even they should have constant promotions for clothes or food? Meanwhile, having clothing segmentation would be a considerable suggestion that might help to increase the amount of customers.

To keep an eye on the position as we called it not to keep ‘head in the sand’, which we must be clearly acknowledged and understood about what has been going on; in both internal and external environments are crucial.