Select a retail sector with which you are familiar. What is the likely impact on the sector of a downturn in the growth of consumer spending- What strategies should a (named) retailer in the sector adopt to minimise the threat?
Following the financial and economic crisis in 2007, the reduction in consumer spending had a significant impact upon major high street fashion brands including Marks and Spencer, which saw sales and profitability fall significantly. In response to this, M&S adopted a strategy of contraction, which entailed the closure of a number of stores, particularly in the Simply Foods outlet sector. However, despite the fact that this ostensibly led to a reduction of costs, it can be argued that this approach also had an adverse effect upon the marketing mix and competitive advantage of the business. This was proven by the fact that M&S lost market share as a result of this strategy while other fashion stores, such as Primark and Zara maintained their growth pattern through this period.
在2007年的金融和经济危机之后，消费者支出的减少，对包括Marks and Spencer在内的主要高街时尚品牌产生了重大影响，其销售和盈利能力大幅下降。为此，玛莎百货（ M&S ）采取了收缩策略，包括关闭一些商店，特别是在Simply Foods的直销店。然而，尽管这显然降低了成本，但这种方法也对营销组合和企业的竞争优势产生了不利影响。事实证明，由于这一战略，M＆S失去了市场份额，而Primark和Zara等其他时装店在此期间保持了增长模式。
It is considered that the strategy M&S should have adopted should have been based upon a more proactive approach. In this respect, there are two elements that the corporation needed to address. The first of these is to ensure that a policy of value chain management is re-enforced, which would reduce costs and therefore prices, while at the same time allowing the business to maintain its profitability levels. For example, had the marketing message for M&S been more focused upon delivering consumer savings rather than news of store closures, which forces additional cost on the consumer in terms of travelling to the store, it is likely that consumer loyalty would have been maintained at a higher level. Secondly, there was a need to ensure, through appropriate marketing research, that the products being offered met with the changing demands and needs of the consumer during this period. Similarly, it is likely that had the marketing focus for the business during this period been more directed towards lower cost elements and savings available to the consumer that this would have also contributed in maintaining its market share within the fashion sector. In other words, the corporation needed to adopt a proactive rather than reactive approach to marketing during the economic downturn.
There is strong movement amongst supermarkets to buy in consumer products which are not traditional supermarket lines (e.g., TV sets). The supermarkets do not carry a full range of these items and are not committed to carrying them all the time. What are the strategic reasons for this kind of activity? What are the risks?
Over recent decades, Supermarkets in the UK have continued to diversify the range and scope of the products and services they offer to their customers. This has included an expansion into non-food products, such as technology and entertainment goods, home furnishings and even the inclusion of service based products, such as banking and insurance offerings.