Marketing Activities That Have Contributed to Primarks Success - Case Study Example

Primark Analysis Name Unit Date Lecturer Table of Contents Table of Contents 1 Introduction 3 Marketing activities that have contributed to Primark’s success 3 SWOT ANALYSIS 5 Strengths 5 Weaknesses 5 Opportunities 6 Threats 6 Segmentation 7 Targeting 7 Positioning 7 Mix Strategy 9 Price 9 Product 9 Place 9 Promotion 10 Conclusion 10 Reference list 11 Introduction Primark is a leading fashion retailer with presence in several countries. The clothing retailer has a reputation of providing clothes at a reduced cost in its outlets. The company started in Dublin on June 1969 and later spread to various countries through provision of fashion using the right market segmentation. The company has been able to employ a workforce of more than 10000 people from different nationalities. Primark has continued expanding and is expected to have an increase in the workforce by 2015 to reach 30,000 workers. To maintain low prices, the company outsources their labour in the developing nations such as Bangladesh. This leads to reduced cost of manufacture hence low prices. The company is part of Associated British Food Groups. Primark has been termed as the second largest clothing store after Marks and Spencer in Britain. The company has been able to record profits while its peers are losing market. This report will analyse Primark Company using the case study and other credible sources. The analysis will help in understanding the cause of company success in the clothing sector (Primark official website, 2014). Marketing activities that have contributed to Primark’s success Primark clothing company has been involved in several activities which have helped it capture the market. These marketing activities include recent online marketing, promotions, buying in bulk price reductions and seizing market opportunities. The company launched its online marketing in the year 2013. This was a marketing activity that was highly welcome as there has been a surge on online marketing by competitors. Through online marketing, the consumer is able to purchase the products without being physically available at the stores. Online marketing is also a strategy that has attracted new customers into the company. The company has managed to sell their products online through catalogue system. Online marketing has thus helped the company expand their market share (Primark official website, 2014). Promotion is utilised by many companies to win customers. Primark has been able to carry out promotions to its loyal customers. The main objective of promotion is to make sure that the customers are able to utilize the company products and develop a positive attitude toward it. This has been achieved through awarding gift cards and coupons which are redeemable in the company outlets (Macmillan & Tampoe, 2000). The company reduces prices occasionally to make sure that their products are affordable. This has made the company gain client base from different status of life. The company uses direct marketing in making sure that there is the interactive communication between them and consumers. The company advertisement method has shunned the use of prime media. The company mostly relies on word, brand strength and consumer loyalty. The opening of the internet sales has acted to increase the company advertisement (Primark official website, 2014). Purchasing in bulk is another market activity that has helped Primark in its success. Making purchases in bulk help the company to purchase at a low price. This also helps in maintaining a strong relationship between the supplier and the company. The company products are made depending on the needs. Primark utilises software that helps in determining which products is on demand. Through use this software, the company is able to make huge income by satisfying the customers depending on needs and avoiding wastage (Macmillan & Tampoe, 2000). The company was able to seize the fast fashion opportunity before its rivals which is described as ‘the era of cheap chic’. This helped the company leap profits ahead of the competitors. SWOT ANALYSIS This is done to determine the business strength, weakness, opportunities and threats (Macmillan & Tampoe, 2000). Strengths Primark is able to offer quality products at a low price; this attracts more customers into the business. This is achieved through outsourcing of labour from developing countries such as Bangladesh. The company have a clientele between the ages of 16 to 35 years. This group is fashion conscious hence provides a continuous market to the company. The company have the ability to provide diverse products to the clientele. These products ranges from foot wear, accessories, children’s wear and men wear. This helps in serving different peoples with different needs under the same roof (Kotler, 2007). The company has a well established code of ethics which is translated in 26 different languages. Having a well drafted code of ethics helps in maintaining good workers relation and avoids conflict of interests (Primark Ethical Trading, 2014). Weaknesses Primark does not advertise their products aggressively, but relies on word of mouth and customer loyalty. The company has also been blamed for having poor working conditions. There have been issues where some of the company facilities lacked basic washroom. The critic also unearthed issues of child labour in the industry. The resultant negative publicity has made the company to struggle in maintaining its public image. There have been concerns due to the fact that most of the shops did not have adequate fitting rooms. This leads to consumers leaving to avoid long queue. The company security is also poor as evidenced by several cases of customer theft (Hooley, Piercy & Nicoulaud, 2008). Opportunities The clothing industry has a lot of opportunities for Primark as it expands its market. The company will be able to expand their overseas presence through globalisation. There has been an increase in demand for fashionable clothing over the years. This leads to increased demand for Primark products globally. The company was among the first to utilise fast fashion before other clothing companies. After opening its online marketing, Primark has opened doors to international markets where buyers will be able to access and purchase their products virtually. This is an avenue which the company can use to market themselves more aggressively (Kotler, 2007). Threats The company main threats are competitors, cost of raw materials and negative publicity. The company faces strong competitors who have been in the market for a long time. The competitors are all well endowed with resources as compared to Primark. The main competitors have strong brand names which make the competition tough. The cost of raw labour and raw materials such as cotton has led to increased cost of production. The increased cost of production makes it hard to determine the pricing for the company produce (Hooley, Piercy & Nicoulaud, 2008). The company has been under attack for violating child rights. Use of child labour has led to criticism which can lead to negative perception on company products. Events such as financial crisis have a strong effect on the clothing industry. The 2008 crisis affected clothing industry in a way that is still felt today (Primark official website, 2014). Segmentation, Targeting and Positioning Segmentation This refers to dividing the existing market into distinct groups depending on their response to the products. The company has to establish the most important criteria to use in determine the segments. Primark products can be categorised into clothing and footwear. The company segments their customers depending on age, sex, gender and financial status. Among the target groups, they are arranged according to their importance. The women segment is considered to be the most meaningful in the marketing segments as compared to other segments. This is due to fact that they spend more on fashion (Hooley, Piercy and Nicoulaud, 2008). Targeting This is a process in which one of the market segments is taken and resources are directed to it to achieve required marketing mix. The success of market segmentation depends on whether each of the segments is distinct. Primark uses differentiated marketing mix in their targeting so as to make sure that multiple products together with consumers are put into multiple segments. The company has multiple products which are supposed to be targeted to multiple distinct segments (Hooley, Piercy and Nicoulaud, 2008). Positioning Positioning refers to the way a product is perceived by customer in comparison to the competitor’s. The product should have characteristics which attracts the customer to it. To make appropriate positioning market research is very important. Primark has been able to maintain their position of selling at low price, quality and customer friendly (Hooley, Piercy and Nicoulaud, 2008). Product/Market development The performance of a product in the market is directly related on how it is marketed. Primark has been able to sell in the penetrated market as it has already known the customers needs and competitors’ information (Pearce & Robinson, 2007). The company has the ability to make sure that they maintain their market share through pricing, promotions and advertising more aggressively. The company method of pricing has enabled it to maintain the market despite competition. Market development involves discovering and selling the company products into new markets. The company has been able to do this by opening new branches and online marketing. There have been low efforts in products development. This involves coming up with new products and introducing them to the existing markets. The company can try to diversify their products. This requires doing enough research on the market before bringing in a new product (Pearce & Robinson, 2007). Competitive positioning The clothing industry has a lot of competition. The company faces competition from other major players such as Marks and Spencer, Next, Zara and Matalan. Primark has an advantage since they have been able to gain a large market share and hence are stronger than most of the competitors. The main weakness of Primark lies in technology and style of management. There have been rise in other companies like Matalan which have the capability to sell products at low price. The rivals have better marketing strategies. Primark does not advertise its products; this is in contrary to the competitors who advertise aggressively. Marks and Spencer are known to advertise heavily and offers services such as loyalty cards. Primark should invest more on advertisement. The company launching of online market is a great step toward defeating their competitors who had establishing it earlier. Primark has shown higher sales volume as compared to competitors despite the weakness. The company has a higher sales growth (Kerin, Mahajan &Varadarajan, 2007). Mix Strategy The marketing mix helps in understanding the marketing strategy of a company. Primark has been able to attract a large number of customers. Marketing mix is used in achieving the set goal. Marketing mix is divided into 4 P’s. The four P’s are Product, Price, Place, and Promotion. The four P’s are used in attracting customers into the business (Kotler, 2007). Price Primark charges low prices for quality products. This is a strategy that enables the customer to gain value for money. The strategy enables most of the population to afford the company products’ (Kotler, 2007). Product The company has been able to make quality products which cater for a wide range of clientele. The product is of good quality and latest design. The products are supplied using popular brand names, packaging and with warranties (Primark official website, 2014). Place The location of a business is very important. Primark is located along major streets and centres. These are places which are accessible though private or public means of transport (Kotler, 2007). Promotion Primark have promotion schemes using gift cards. The introduction of online marketing will increase their promotion scheme. The gift card is redeemable in their outlets hence enables the consumers to save. Through marketing mix, the company is able to make decisions. This also helps the company in gaining a competitive edge in the industry (Primark official website, 2014). Conclusion Primark has been able to succeed in providing customers with quality products at a cheaper price. This has enabled it to have a wide customer base. The company has been able to compete favourably with its competitors due to its marketing strategy. The shoppers are more attracted to cheap quality clothing. The recent launch of online marketing has been a great step that has kept the company at par with the competitors. This has led to increase in the market share and also maintaining the current market. The company has a strong brand name and a wide base of loyal customers. This gives Primark a competitive edge over the competitors. The recent accusations of child labor and poor advertising are major challenges that the company has to deal with. The business world is dynamic and Primark should be more flexible to change. This report has been able to establish that by utilising the right marketing strategy, Primark has been able to make it in the clothing industry. Reference list Hooley, G., Piercy, N & Nicoulaud, B 2008, Marketing Strategy and Competitive Positioning, 4th edn, Pearson, Harlow. Kerin, R, A., Mahajan, J & Varadarajan, R 2007, Contemporary Perspectives on Strategic Market Planning, Boston, Allyn and Bacon. Kotler, P 2007, A Framework for Marketing Management, London, Prentice Hall international. Macmillan, H & Tampoe, M 2000, Strategic Management, Oxford, Oxford University Press. Pearce, J & Robinson, R 2007, Strategic Management, 10th ed. England, McGraw Hill Irwin. Primark Ethical Trading 2014, ‘Helping Our Customers Recycle’, Viewed 25th February 2014, http://www.primarkethicaltrading.co.uk/ourwork/c/helping_our_customers_recycle Primark official website 2014, Primark, Viewed 25th February 2014, < http://www.primark.co.uk> Read More