MARKS AND SPENCERS – PLACE
Distribution Channel 5-6
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It has also been asserted the way M&S channel members are selected, trained and motivated and that M&S has three distribution strategies which are intensive, exclusive and selective.
Marks & Spencer uses the Vertical Marketing System to control the flow of its products. The Vertical Marketing System (VMS) is one of two channel organisation which only evolved recently and provides channel leadership. VMS is a distribution channel structure in which producers, wholesalers and retailers act as a unified system. One channel member owns the others, has contracts with them or has so much power they all cooperate. (Kotler et al: 2005:863).
M&S (the retailer) in controlling the flow of its products holds the power in the channel of its distribution. M&S has no manufacturing capacity in the UK and is purely a retail business. As Whitehead clearly outlines it and also states, “M&S conforms to the typical centralized structure, merchandising and buying decisions are made centrally and goods are then distributed to stores. In view of the strength of relationship M&S has with its suppliers, it enables them to operate on the Vertical Marketing System”. (Whitehead.M-1994:39). This position is reinforced on M&S’s own website as in the statement; “we hold regular meetings with our major suppliers and have a programme of visits and conferences. Our expectations are detailed in contracts and supported by a library of technical specifications for each type of product”. (marksandspencer.com)
There are three main types of Vertical Marketing System which are Contractual, Corporate and Administered Marketing System. M&S has a tailored style -specific to its business needs of how it controls its product flow. This has evolved over a period of time. M&S employs aspects of the three types of VMS but much more inclined to the Corporate VMS combines successive stages of production and distribution under its control. This position is reiterated in Crewe and Davenports article where it states that,’ M&S has a well founded reputation for exercising close control without the burden of ownership, and part of its success results from having close and long term
Relationships with its supplier firms’. (Crewe and Davenport 1991:89) They further entrench this position by ensuring ‘any clothing or Textile Company seeking to supply to M&S could expect the company to become involved in every aspect of the manufacturing process, from choice of fabric and close attention to colour, styling and finishing’. (Crewe and Davenport 1991:89)
From the observation conducted by the group it has been concluded that Marks and Spencer’s operates a sophisticated channel of distribution. Information on selection of channel members is only privy to company employees because of fierce competition within the industry. M&S has incorporated training into their quality management systems where ‘‘success comes from helping suppliers to help...