Case Study

1. Marks and Spencer en
China
Group 9:
Ankur Mukherjee(2014007)
Khayal Dave(2014023)
Abbas Bhinderwala(2014002)
Krati Jain(2014091)
Priti Kumari(2014162)
Mousumi Dey(2014154)
Sumpunn Kapoor(2014060)

2. Facts
 Broad retailer
 Women’s and men’s clothing, children clothing, housewares, foods and gifts under
various brand
 Origin-United Kingdom but has footprints in Europe, the Middle East and Asia
 By 2012, M&S had 337 stores in 41 countries
 1100 stores in United Kingdom and in 43 other countries
 Which employed 80,000 employees worldwide
 Vision
 To sell high quality , great value clothing and home products and outstanding quality
food

3. Best Practices
 Adapted entry strategy according to market
 Acquisitions in Canada, JV with Marinopoulos Group in Greece, Russia, Bulgaria and
Switzerland
 Franchise model in Middle East (Bahrain, Egypt, Kuwait, Libya, Oman, Qatar, Saudi
Arabia, Turkey and United Arab Emirates)
 Started with acquisition of Brook Brothers(supermarket chain) in Japan and later
wholly owned subsidiaries
 Wholly owned subsidiaries in China and JV with Reliance (Govt. regulations) in India
 Developed Two Management Teams : One Focused On UK market and the other on
International Markets

4. Director of International
Operations
Director MiddleEast Director Asia
Head Business Development
China-Country Head
Director Europe
International Team
(Merchandising and Marketing)
Best Practices(Continued)
 Tailor product to a country’s needs
 Shorter skirts in Greece and longer ones in Turkey
 Snugger fitting clothes, French wines in France
 Discontinued policy to sell only British-made goods
 Cheaper to source from India, Pakistan, China and Vietnam
 Simplified, focussed and accountable hierarchy

5. Problems In China
 Chinese consumers thought that M&S clothing were directed towards 40-50 year olds
 Because clothes were expensive & older people were less reluctant to spend money
 Stores located in faraway suburbs populated with senior citizens
 Have to increase sales in China
 Shopping market expected to grow from 609 Bn Euors in 2011 - 950 Bn Euors by 2015
 Shift towards purchasing of expensive foods coupled with strong economic growth
 Pricing
 Core values of quality, affordability and service
 Unaffordable to most Chinese consumers (even food was comparatively expensive)
 Imbalance as in the case of rice and wine

6. Problems In China(Continued)
 Unprepared launch in China
 Poor paint job, scuffed walls, poor collection, customs problems etc.
 Lost on first impression
 High power distance & low collectivism
 This might make them think that western clothes are still aspirational and not actually
affordable
 3 stores in 2011-12 were located on the outskirts of Shanghai
 Was contradictory to their convenient location strategy

7.  Lack of Market Research
 Low local responsiveness (Sizing mistakes, dull merchandising, outdated,
unfashionable)
 Consumers were not educated about M&S products (Chinese crackers mistake)
 Other minor problems included no promotional material, western looking mannequins,
photos etc.
Basically they didn’t research the Chinese market thoroughly as China has many cultural,
behavioural differences as compared to other countries as well as differences within China
itself
Problems In China(Continued)

8. Solution
 Branding
 Choose local brand ambassadors to improve connect with consumers
 Stores should be bright and new collections need to be put on display to attract
young to middle-age population
 Local specificities
 Need to design and switch clothes according to local needs
 More intensive market research and feedback from customers are needed
 Locations
 Stick to convenient location strategy as it will increase visibility
 Stores should be larger in size (1500 sq. ft v/s 3500 sq. ft) to show product ranges

9. Solution
 Local Employment
 Employ more local employees so that they get the sizing and pricing right
 Focus groups
 Understand Chinese consumers better to understand fashion trends, store layouts, food
preferences and tastes etc.
 Test markets
 New strategies should not be universally implemented across China but should be
implemented in regions doing well and with continuous feedback they can tweak
products as needed

10. THANK YOU