Atlantic Marketing Journal

Marketing Principles
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Contents
Introduction................................................................................................................................2
Macro factor analysis.................................................................................................................2
Micro factor analysis..................................................................................................................5
Target Audiences.......................................................................................................................7
Market Positioning.....................................................................................................................8
CSR and ethics...........................................................................................................................8
Recommendation......................................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................11

Introduction
Primark is an international retailer which offers the latest fashion, beauty and homeware
products to their customers at the best value on the high streets and has presence in UK
market. They mainly famous on providing high quality products to the customers at
affordable prices. Primark set up its first store in Dublin in 1969 under the name Penny’s and
currently they operate over 370 stores in 12 countries of Europe and America. Primark is
considered as one of the largest retailers in UK owing to their size and owing to the wide
variety of products and services which are offered. Primark is a subsidiary of the food
processing and retail company Associated British Foods and in 2017, they reported revenue
of £7,477 m with operating profits of £843m. Also sales and marketing in UK during 2018
for Primark was reportedly higher than previous year with 5.3% more sales and like for like
sales was 1.2% more which presented rise in share of their overall clothing market in UK
(ABF, 2019b) In this report, analysis of Primark will be presented in context of their macro
and micro factor examination, identification of their target market and strategic position in
market as well as assessment of their CSR policies. Further ethical issues that are or may be
faced are discussed followed with recommendations of their future growth prospects.
Macro factor analysis
Macro environment analysis of Primark using PESTEL framework identifies the following
issues and impact on firm that needs to be considered:

Source: Self-made (2019)
 Political: after the exit of Britain from European Union in 2016, considerable impacts
are likely on Primark due to political and economic risks and disruptions as this exit
led to political turmoil across major markets where Primark operates like Europe and
UK. These political disturbances have created uncertainty in financial market and
business environment, which have potential impact on operations, policies and
revenue generation as well as growth of Primark. Also this Brexit event has created
lot of disturbance over business operations of Primark specifically in their European
markets. Though Primark has gained from weakening of Pound valuation that
dropped against Euro and Dollar after Brexit, but as per Associated British Foods,
which is parent enterprise of Primark, it has been presented that decision to quit EU
has been impacting operations and business of firm due to rising uncertainty in
environment and capital markets (Eisenberg, 2019). There may be likely negative
transactional impact on profit generation of Primark over their sales in Europe in
coming months as their overall revenue has been affected since Brexit. Also as
Primark is private limited firm, so they have to pay corporation taxes and since exit
from EU, these taxes have changed, leading to considerable impact and in future these
changes may influence even their revenues and policies.
 Economic: after exit from EU, the value of pound has dropped to its lowest against
dollar since ever 31 years as financial uncertainty enhanced post-Brexit and these
likely affected Primark’s business. Nonetheless, this leveraged Primark due to reality
that drop in exchange rates meant translation benefits but these incidences on other
hand have likely exerted pressure on Primark’s business specifically in UK as several

investors have shown poor interest in funding and growth plans for Primark in future.
Contrastingly also commercial property rates in UK after Brexit have been extending
which has its impact on business operations and costs of Primark and rent rates have
increased by 0.25% in 2018 against that of 2017 specially for high retail outlets and
shopping centres (Eisenberg, 2019). These rent rates are in rising trend and may
increase in next few months which can have potential impact on cost and revenue of
Primark.
Fig: Rent prices in UK between 2017-18
Source: Researchgate (2018)
 Social: UK is witnessing rising obesity trend and more of their population is ageing
and these socio-cultural patterns largely influence fashion retailers such as Primark.
As UK is currently refereed to as “ fat man of Europe” with 7 out of 10 males and 6
out of 10 females being categorised as obese in UK, but several of this customer
segment avoid shopping with some retailers due to unavailability of plus size varieties
(Schwarz, 2010). Certain prominent fashion retailers such as Zara and Top Shop still
do not offer plus size clothing variety, which on other hand has presented emerging
gap market scope for fashion retailers like Primark who serve to plus size people.
Further as this obesity pattern in UK is rising so it has been forecasted that about 50%
of UK population would be obese till 2050, which presents potential influence over
Primark and they should start investing in more of plus size range. Secondly UK
population and labour demographic is modifying rapidly due to ageing population and
median age has risen from 33.9 years in 1974 to 40 years in 2014. Also UK has seen
double digit rise in people between 55-64 years age by 2019 with number of 65+
years also rising to around 5th of UK population. This data represents ageing

population growth which even comes with rising business scope as these pension aged
customers have more income as they had been in employment since longer and hence
have greater disposable income (Wood, 2013). This trend has presented potential
influence over Primark as it is primary growth scope.
 Technological: a rising trend is observed in e-commerce which has opened up more
competition over traditional brick & motor fashion retailers in UK due to presence of
online firms like Amazon, Asos, Boohoo. Also this rising medium of distribution has
opened up competitive expanse because of their respective ease and low cost
operating base and the reality that traditional brick and motor fashion retailers such as
Primark do not have robust presence and hold on e-commerce website, has made them
more susceptible (Chaffey, 2012). Further there is 51% rise in online shopping
through website or mobile app over store purchases (Foley, 2014). This can lead to
drop in outlet sales as more of technological advancement is seen shaping retail sector
which can have potential influence on Primark which may lose out profit.
 Environmental: there is rising consciousness in people and corporates towards ethics,
sustainability and environment due to which fashion retailers like Primark have
adopted several measures and practices to embrace ethical sourcing and environment
protection initiatives due to continued social demand and pressure from advocates
(Lu, Bock and Joseph, 2013). Paper packaging and recycled materials, organic
farmed cotton and other environment sustainable practices like green and energy
efficient lighting are utilised at Primark (Bolton, 2013). Like Primark started
Sustainable cotton program first in 2013 and this has grown to fivefold and in 2019,
the firm has committed to train 160,000 independent farmers in sustainable farming
across three of their primary sourcing markets by 2022. In 2017, Primark launched
women pyjama range under Primark Care’s program and since then 14mn pairs have
been sold, along with over 3mn pairs of jeans and 6mn duvet covers and towels made
from sustainable cotton. In coming months with Primark’s extending cotton program
it is expected that they will get closer to their long term goal of utilising 100%
sustainable sourced cotton across all their product ranges (Associated British Foods,
2019)
 Legal: the fashion retail industry in UK is getting influenced by a current employment
law that was launched with new Workplace Pension. This has been influencing
retailers like Primark as now it is mandatory to contribute around 3% to their staff’s
workplace pension for all eligible British staffs (Eisenberg, 2019). Further gender

equality, particularly gender pay gap regulation introduced in 2017, has made Primark
to adjust their wage structure and these can have potential influence in coming
months’ time.
Micro factor analysis
Micro environment factors that need to be considered by Primark and their potential impact
includes:
 Customers: The customers who are targeted by Primark majorly includes those who
seek for wider assortment of fashion clothing at affordable rate, so as to purchase
larger variety in huge quantity. Also Primark’s customers mainly includes females
and youngsters who look for rising street fashion ranges that are stylish and all-the-go
but available at less prices (Jahn, 2012). Although Primark even has large range for
kids as well as men and the distinctive behaviour that is observed among customers of
Primark is that they prefer purchasing wider selection of clothing at a certain price
instead of purchasing single assortment of clothing at that price. Further as customers
presently expect clothing range that are high in standard in terms of quality yet
fashionable, chic and available at competitive pricing, so all these factors have
potential influence over Primark’s offerings (McCormick and Livett, 2012).
Moreover, as customers presently seek for more valuable purchase in terms of money
and after Brexit, even these customers have become more price conscious in terms of
product choice which all exert influence over Primark.
 Competitors: in UK the prime competitors of Primark within fashion retailing are
Tesco and Morrison and other local brands, however in Europe their rivals include
ASDA, H&M, Zara etc. who pose immense competitive pressure to which Primark
has to respond continually and these will influence in coming months’ time too. Apart
from established rivals in Europe’s international market, there is no large scope of
rivalry as entering into retail fashion is tough for new brands due to more saturation
and large need for capital (Charlton, 2013). Other than these Primark is facing
competition from e-commerce firms like Amazon, Boohoo etc. Even a rising
inclination is observed towards online and mobile app shopping which has posed
considerable effect on stores sales. Though Primark has ventured into online platform
but they are yet to tap the potential online market and appeal them with their online

platform based on convenience alike masters of e-commerce brands (Moore, 2012).
These have potential impact on sales and business of Primark and this is expected to
be seen coming months.
 Suppliers and distributors: Primark’s major suppliers and distributors are from Asian
countries like India, Bangladesh because they have large number of suppliers having
skilled craftsmen required for designing trendy fashion clothing’s. Moreover suppliers
in these nations have low cost labour and abundant raw materials that are needed to
maintain Primark’s production capacity, so it imports finished items of high standard
from these supplier networks at economical prices that enables Primark to sell wider
clothing variety at low prices for customers. Further gain for Primark due to these
imports include that they do not have to over-depend on limited number of suppliers
to meet their production capacity as these supplier countries have both large number
of distributors as well as labour (Matzura, 2018). All these factors have positive
influence over their business and in coming time, Primark’s focused approach to train
more farmers in supplier networks like India, Bangladesh etc to source sustainable
cotton product to cater to rising demand of customers in UK and Europe will have
better sales prospects and more prospect for suppliers.
Target Audiences
Primark’s taregt audience belongs to these segments:
Psychographic segmentation: based on lifestyle factor, Primark targets young customers
mainly students as well as beginner professionals who have less contact time and remain
more inclined to browse online fashion clothing’ (Fahy and Jobber, 2019). This target
audience pays for their fashion needs with earnings from part time or initial low salary and
are interested in socialising, lead busy lifestyle. Based on attitude and opinions are those
customers who have grown with technology and are savvy to integrate this in their regular
lives as well as get bored simply (Kotler, 2012). Also they are more environment sensitive
and have large consideration for health, community and planet.
Demographic segmentation: based on factors like age, income etc, Primark’s another target
audience belong to age group mainly between 16-24 years and are mainly generation Y or
millennial customers (Valentine and Powers, 2013). This segments are either students or

young workers and have low annual income or are else dependent on student loans or parents
for financial assistance (Lancaster and Massingham, 2011).
Behavioural segmentation: based on factors like consumption and loyalty, Primark’s other
target audience are regulars who are mostly price sensitive and largely prefer to buy from
high street retailers giving low prices (Valentine, 2013). These are frequent purchasers and
are interested in On-Trend FAD products and seek variety outfits for every specific occasion.
They have low level of loyalty and perceive fashion products as disposable and are triggered
by wider assortment of diverse brands (Posner, 2011).
Market Positioning
Fig: Perceptual Map
Source: Self-made
As shown the market positioning of Primark is weak compared to their rivals mainly in
context of digitalisation and application of technology, which presents that they need to

consider their offerings through website, app etc to retain strong market position in future
while still maintaining to offer quality, trendy and value for money products (Eisenberg,
2019).
CSR and ethics
Primark’s CSR policies mainly focuses on investment in people, assisting community and
improving their supply chain and protecting environment. For insuring safety and welfare of
their staffs, contractors and other they work with, Primark has developed diverse and all-
inclusive workplace culture where all are respected, encouraged and empowered. Primark’s
investment in people mainly includes practices like maintaining their people health and
building and engaging workforce. Like till present Primark has employed 138,097 people,
invested £ 29mn in improving safety risk management at workplaces and have promoted
gender diversity where 52% of their overall employees are women and 36% includes in
senior management roles (ABF, 2019). Another practice of Primark is towards supporting
society and improving supply chains, where they have donated around 2,519,077 meals
through surplus to food banks, engaged over 28,000 farmers into Primark’s sustainable cotton
initiative and have given around 10,864 hours of training to suppliers. Other practice is
towards protecting environment where Primark’s 52% energy consumed has been derived
from renewable source, 80% waste created was recycled or reused or was offered to
beneficial usage and 169mn m3 of reused water was consumed in their operations (ABF,
2019a).

Fig: CSR Practices of ABF and their business units
Source: Associated British Food CSR report (2019)
One of the ethical issue faced by fashion retailers presently is protecting human rights and
eliminate modern slavery from supply chains. Primark has built online training sessions on
modern slavery to encourage awareness and offer tools to train people in supply chains. For
example, Primark is experimenting mobile app in China offering over 6,000 employees
across 10 suppliers unit with access to digital wage slips, confidential grievance support and
micro training to overcome issues of unethical labour and slavery which are active practices
till date made by Primark in this issue (ABF, 2019a).
Recommendation
Based on Ansoff matrix the recommendations that can be considered for Primark for their
future prospects include:
Market penetration
 Primark can enlarge their existing
offering by strengthening digital
Product development
 Primark can develop their mobile
app to extend their B2C involvement

focus on their websites
 They can launch more digital
innovation features (Manlow, 2013).
Currently Primark has launched
flagship stores in Tottenham court
road, in future more such outlets can
be extended to enhance interest in
products within their existing
markets
which will even permit their
customers to buy merchandise
online over more interactive features
to enlarge experience of shopping
and establish interaction with brand
Market development
 As analyst present that Primark’s
international sales would reach
£10bn by 2024, so they should
continue their international market
development procedure by exploring
future prospect in BRIC which are
emerging markets and this will
enhance their worldwide presence
(Research and Markets, 2019). Such
initiative will need greater digitally
advanced product offerings for better
reach within markets
Diversification
 Primark has scope to diversify by
customising their offering to a
specific market being exploited
during their internationalisation
process.
Conclusion
Hence it can be concluded that though Primark has strong market presence in UK but it needs
to consider the impact of different elements in its operating environment by assessing and
responding adequately to their macro and micro environment elements, so as to secure their
growth and revenues. Also they need to carefully understand their target audiences demands
and their emerging expectation to respond properly as well as to cater to their needs.
Moreover, Primark needs to extend their digital landscape and online based platform to
expand distribution of their offerings in different markets by targeting more of tech-savvy
and online shopping customers. Further it can be stated that Primark needs to develop, plan

and control their CSR and ethical practices to protect human rights, deliver sustainable
products, conserve resources and environment for sustained development.
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