Marketing In Primark Essay Example

in the industry. This model allows them to compare their brand with others by analyzing product offerings and competitors. In the fashion industry, internationalization and diversification strategies are considered essential for effectively managing product portfolios and brands. The Primary business unit holds a strong position in this sector (refer to Figure 1 on page 2). According to the GE model (Porter, 1982; Babel & Hammond, 1986), factors such as market growth rate, size, demand, profitability, competition,and international opportunities determine industry attractiveness (see Table 1 on page 2). The Primary business unit excels in all these areas.

Table 1: Industry Attractiveness of Primary (micro environment)

• Market growth rate: The global fashion industry is experiencing double-digit growth, especially in emerging countries, from 2014 to 2020 (Keller et al., 2014).
• Market size: The market has expanded due to trends like the rising buying power of Asian customers and their desire to use clothing as a way to express their lifestyle. Additionally, there is an increasing demand for travel and shopping. The market size was 192,334 million Euros in 2013 with a growth rate of 2%.

In comparison with 2011, customer demand in the fast fashion industry has increased by 75%. This change is driven by the change in customer lifestyle and the growing need for differentiation (Barnes and Greenwood, 2006). Fast fashion brands like Ezra, H&M, and Unique have experienced rapid growth as evidence of this increased demand (Christopher et al.,2004). The fast fashion industry has experienced a decrease in profitability due to strong competition, leading companies to reduce prices as a way to maintain a competitive advantage. By implementing efficient supply chains, these companies have been able

to increase efficiency and lower operational costs,resulting in higher profitability rates (Sherry et al.,2012;Bradshaw and Farther ,2010).

According to Lambert (2014), the intense competition within the industry has led companies to prioritize cost reduction in order to gain a competitive edge and maintain profit margins. This focus on cost reduction is particularly important for fast fashion brands, who have opportunities for international expansion as noted by Fashion (2013). Globalization is seen as a means for companies to capitalize on untapped markets with the help of IT advancements and maintain market share while achieving growth (citation ???).

Business Unit Growth, according to Porter's GE model (1982) and Babel & Hammond (1986), is determined by factors such as market share, distribution channel, production capacity, and profit margins compared to rivals. Primary's Business Unit has experienced significant growth in terms of these primary features. In 2014 alone, Primary achieved a growth rate of 16% and now ranks among Europe's largest clothing retailers. The company has expanded its operations to various countries including Ireland, the UK, Spain, Germany, the Netherlands, Belgium Australia, and France. With a total of 278 stores worldwide, Primary focuses on reducing operational costs through efficient supply chain management in order to maintain competitive prices. Additionally, the company emphasizes ethical policies in order to sustain relationships with suppliers and employees. In terms of profit margin for the full year 2014, Primary achieved a rate of 13%.According to an external analysis of the US retail market, approximately 4% of efficiency in their value chain, which includes warehouse and distribution centers, can be attributed to macro factors such as PESTLE (Political, Economic, Social, Technological Legal and Environmental). The political

factors in the US make it one of the most powerful and successful markets globally. However, there are differences between US politics and those found in other developed countries according to the Country Analysis Report from 2010. This report provides guidelines for foreign retailers looking to expand within the country. The upper house of the US legislature holds more power and has a broader scope of authority.

In terms of demographics, white Americans account for 72.4% of the population while African Americans make up 12.6%, and Asians make up 4.8%. A majority (78.2%) identify as Christian with other religions comprising 3.7% and those with no religious affiliation at 16.2% (source: PAW'S, 2014). The US is experiencing increased diversity due to Asian immigrant children born in the 1990s and early 2000s leading to a shift in shopping preferences towards elements that enhance the overall experience (PAW'S, 2014).

Retailers are expected to target young people and families using multi-marketing strategies by 2020 (P'C, 2014). Furthermore, US customers have significant purchasing power with growing demand (PWS,2014) (Figure2: Percent of Population by Race source: PWS,2014).The global economy is currently experiencing and will continue to experience a significant trend of technological advancement (Figure3, p.6). Among regions, the United States ranks third in terms of internet user growth (p.253). To adapt to this trend, marketing activities now utilize the Internet and social media platforms to attract more customers. The retail industry has seen a rise in popularity of online shopping worldwide (Figure3: The Internet user in world from 2000-2011 Source: Insolate et al., p.253). When expanding into international countries like the US, companies must adhere to regulations and respect legislation related to the

retail industry. Therefore, it is crucial for businesses entering the US market to have a comprehensive understanding of all laws and regulations that apply.

Various laws have had an impact on the US retail industry. Advertising laws require companies to provide accurate information about their products and services or face significant financial penalties. Additionally, customer protection laws oblige retailers to avoid deceptive marketing programs aimed at increasing sales. Regulations are also in place to prevent retailers from offering non-existent discounts.

Furthermore, environmental and health concerns are now prioritized by customers who demand support for environmental efforts from companies. As a result, businesses are expected to incorporate environmental considerations into their offerings.

When examining the industry as a whole, it is important to take into account different customer segments as well.According to Iconic (2014), Primary primarily focuses on attracting young bargain hunters who prefer high-quality products at lower prices. In addition, the brand offers a wide range of products for men, women, and children in categories such as home fashion, accessories, and beauty items. The goal is to establish itself as a reputable fast fashion label similar to Ezra, H&M, and Unique by providing updated styles with diverse designs while maintaining high quality standards. While the primary target demographic is young people aged 20 to 40 in the US market, Primary also caters to customers of all ages. The company can take advantage of the growing trend of technology placement and e-commerce among its target customers. In terms of competition on a global scale, Primary faces other fast fashion rivals like Ezra, H&M, GAP, and Unique (Figure 4 p.7). Within the US market specifically – which is highly desirable

for fashion brands worldwide – Primary's main competitors are identified as Ezra,H,and Unique due to their strong development and competitiveness (p.7). According to Jon-Wan et al (2011), Figure 4 illustrates the top 10 global fast fashion companies from 2006-2010.Ezra has shown growth in the US market by increasing both store numbers and revenue in 2014 compared to 2013According to the Annual report (2013), Ezra had 548 stores in the US, an increase from its previous count of 482 stores in 2012 (Figure 5, p8). They expanded by opening both company-managed and franchise stores (p.8). Revenue for Ezra increased from $2.1 billion in 2012 to $2.3 billion in 2013 (Figure6,p9). Figure 5, sourced from their Annual report (2013, p.181), shows the number of Ezra stores. Additionally, Figure 6 displays the revenue of Ezra sourced from the same annual report (p.184).

H's annual report in 2013 reveals that they launched in the US in 2000 with a total of 305 stores at that time. In that year alone, they opened an additional 36 stores as part of their expansion strategy. H&M entered the market after Ezra but has successfully established its brand image among US customers and recently launched an online website according to Dishpan(2013) as a means to increase revenue and market share.

Fast Retailing(2014) states that Unique entered the US market later than both Ezra and H&M by opening its flagship store in Soho, New York City in 2006.However,it experienced rapid growth by strategically opening large stores like Fifth Avenue which opened its doors in 2011According to Unique's annual report from December 2013, they currently own 17 stores and have plans to open up to 100 more

in order to become the leading casual wear brand. It is interesting to note that Unique launched an online website before H in 2012, taking advantage of the US market. The ABA Website from 2014 provides information on Corporate Associates British Foods (ABA), a company with a strong presence in various industries including sugar, agriculture, retail, grocery, and ingredients. One of ABA's retail sectors is represented by Primary, a fast fashion brand that was first launched as Penny's in Ireland in 1969. Primark offers affordable trendy clothing and has gained popularity among European shoppers. As of 2014, Primark had over 270 stores across eight European countries and planned to open its first US store by the end of 2015. ABA has announced expansion plans for Primark which include constructing a large store in Boston and increasing the overall number of stores by next year. A SWOT analysis emphasizes Primark's strengths such as being well-known under the Associates British Food brand and having an extensive distribution network consisting of its 270 European stores. Furthermore, Primark has experience operating internationally and is recognized as one of Europe's top ten fashion brands worldwide.Primary is renowned for its high-quality, reasonably priced products with modern designs that are particularly appealing to customers under 35. Despite the need to address weaknesses, Primary has achieved a significant market share through its cost leadership strategy. One of their tactics for reducing operational costs is Word Of Mouth marketing. However, despite having numerous stores, their 2011 annual report reveals that they have not fully utilized online shopping benefits as a distribution channel. Nonetheless, there are opportunities in the US market due to its fashion

appeal and high demand from both local customers and foreign tourists. To capitalize on these opportunities and enhance brand image, Primary can explore alternative marketing approaches such as offering reasonably priced products with modern designs of high quality. Utilizing diversified marketing tools is crucial for reaching customers, while opening stores in prime locations helps build brand image. Nevertheless, the US fashion industry faces intense competition from fast fashion brands like H, Ezra, and Unique. Understanding customer needs and preferences can be challenging due to changing behaviors influenced by various factors. To effectively compete with rivals, Primary could benefit from adopting a cost leadership strategy while leveraging their experience operating in different cultures to understand the evolving behavior of US customers.By employing various marketing methods, such as distribution channels and campaigns, Primary is able to reach a diverse range of customers, including local patrons and foreign tourists. The passage discusses the importance of conducting a situation analysis for companies that want to expand into new markets. This analysis involves evaluating both external and internal factors in order to comprehend the company's resources, strengths, and market characteristics. The PESTLE and ACS models are utilized to analyze the external environment from macro and micro perspectives respectively, while the GE model is employed to gain an understanding of industry attractiveness and Business Unit. Furthermore, a SWOT analysis is included in the report with the purpose of identifying strengths, weaknesses, opportunities, and threats. The strategic findings emphasize the significance of offering high-quality products at reasonable prices, utilizing marketing tools effectively, and reaching customers through large distribution channels. Part B of the text focuses on Porter's Five Forces framework to examine

the Competitive Environment. According to Liana et al (2007), competitive forces play a vital role in organizational competition within specific markets and industries. These forces can arise from both internal and external environments. Based on an understanding of these competitive forces, companies formulate their strategies and carry out organizational activities (Low & Change 2006).Porter's Five Forces, proposed by Porter (1985), are essential tools for identifying the competitive forces that impact companies. This analysis integrates an understanding of the industry environment and companies' internal capabilities. In the fashion industry, customers have significant leverage and can negotiate favorable terms with Primary. Factors such as rising demand for travel and shopping, along with increasing purchasing power in Asian and developing countries, contribute to this leverage. Additionally, Primary's inclusion in the list of global fashion brands strengthens consumer bargaining power. Threats from substitute products and competition among existing firms also pose challenges for Primary.

The US fashion retail industry is highly competitive, with numerous brands being launched, especially fast fashion brands like Ezra and H. This results in a wide selection of products and services available to US consumers, making it difficult for Primary to attract customers despite their market power. Furthermore, amidst intense competition, Primary faces threats from substitute products offered by rival brands with large distribution channels and online shopping websites.

Although Primary has strengths such as high bargaining power with suppliers and few threats from new entrants, they also struggle with customer power.To address these challenges, Primary utilizes marketing strategies based on the UPS model framework. According to Contain and Romaine (2005), companies must consider the decision between standardization and adoption when developing their product strategies. There are

four options available for this strategy:

1. Standardization involves maintaining consistency in products compared to domestic ones.
2. Existing products sold domestically can be adjusted by making modifications in size or color to cater to foreign customers.
3. Companies can develop new products specifically designed for foreign customers, aiming to meet their needs through new product development.
4. Global selling of new products that satisfy multiple countries can also be implemented to generate increased demand.

For Primary in the US market, it is recommended to use a combination of standardization and adoption strategies considering changes in customer behavior and the desire for cost-effectiveness achieved through high-volume production. Primary should make adjustments to their existing products by incorporating suitable colors and sizes while also focusing on research and development efforts to create appealing designs that satisfy US customers.

Price strategies play a crucial role in achieving success, and Primary has implemented two strategies in the US market.Primary utilizes two strategies to enhance its business. The first strategy involves seeking affordable materials by leveraging supplier bargaining power and exploring new markets for establishing new suppliers. Additionally, Primary applies innovation in production and design to offer customers updated designs that align with their preferences.

Primary distinguishes itself from other fast fashion brands like TX Max by not relying on advertising or celebrity endorsements. They also do not resort to seasonal campaigns or big promotions when they run out of stock. Instead, Primary adopts marketing communication strategies as their promotion approach, which attracts customers through a focus on new products and brands.

To ensure effective promotion, Primary integrates all the main tools within marketing communication: advertising, promotion, PR, direct marketing, and Point of Sales. By doing

so, they aim to mitigate the problems and disadvantages associated with each tool.

Integrated Marketing Communication (MIMIC), defined by Shims (1997) and Stewart (1996), plays a vital role in Primary's promotion strategies. MIMIC involves utilizing all communications channels such as TV advertising, PR, internet, and media to deliver messages to target customers. Each strategy within MIMIC has specific objectives and tactics that will be mentioned and analyzed further.