Primark Marketing Strattegy & Marketing Mix
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Student Number: 1303501 MBA BEM 702: Marketing Management
PRIMARK MARKETING STRATEGY:
AN ANALYSIS
Image 1: NDebted, Applying Marketing in a Business
Mohammed Rohim
Reporting Consultant
PRIMARK MARKETING STRATEGY:
AN ANALYSIS
Image 1: NDebted, Applying Marketing in a Business
Mohammed Rohim
Reporting Consultant
2
CONTENTS:
1.0 Introduction 3
1.1 Primark: An Overview 4
2.0 Situational Analysis 5
2.1 The 3 Model analysis 6
2.2 Concluding the situational analysis 7
3.0 The Primark Strategy 9
3.1 Target Market and Segmentation 9
3.2 Competitive Positioning and Advantage 10
4.0 The Marketing Mix Discussion 11
4.1 Price 11
4.2 Place 11
4.3 Promotion 12
4.4 Product 12
4.5 Other Considerations 12
5.0 Corporate Social Responsibility: Who Profits? 14
6.0 Consultant Recommendations 16
7.0 Concluding Statement 18
8.0 Appendixes
8.1 Appendix 1: Marketing Consensus Map 19
8.2 Appendix 2: Product Life Cycle 20
8.3 Appendix 3: Boston, GE and Ansoffs Matrix 21
8.4 Appendix 4: CSR Triangle 22
8.5 Appendix 5: SWOT Analysis 23
8.6 Appendix 6: PESTEL Analysis 24
8.7 Appendix 7: Porters 5 Forces Analysis 26
9.0 References 27
CONTENTS:
1.0 Introduction 3
1.1 Primark: An Overview 4
2.0 Situational Analysis 5
2.1 The 3 Model analysis 6
2.2 Concluding the situational analysis 7
3.0 The Primark Strategy 9
3.1 Target Market and Segmentation 9
3.2 Competitive Positioning and Advantage 10
4.0 The Marketing Mix Discussion 11
4.1 Price 11
4.2 Place 11
4.3 Promotion 12
4.4 Product 12
4.5 Other Considerations 12
5.0 Corporate Social Responsibility: Who Profits? 14
6.0 Consultant Recommendations 16
7.0 Concluding Statement 18
8.0 Appendixes
8.1 Appendix 1: Marketing Consensus Map 19
8.2 Appendix 2: Product Life Cycle 20
8.3 Appendix 3: Boston, GE and Ansoffs Matrix 21
8.4 Appendix 4: CSR Triangle 22
8.5 Appendix 5: SWOT Analysis 23
8.6 Appendix 6: PESTEL Analysis 24
8.7 Appendix 7: Porters 5 Forces Analysis 26
9.0 References 27
3
INTRODUCTION:
“The enigma of marketing is that it is one of
man’s oldest activities and yet it is regarded as
the most recent of business disciplines”
(Baker, 1976)
Marketing is a crucial element to the success of any business, especially in this modern era, though,
as Baker (1976) has suggested the application of marketing has been around since long before it was
recognised as a business function. Though there are differing definitions as to the purpose of the
marketing function in any business, leading thoughts in the industry stem around being able to
“maintain, develop and grow relationships with consumers with the aim to identify, anticipate and satisfy
customer requirements profitably” (Chartered Institute of Marketing, 2012) whilst other thought leaders
believe it is an ‘exchange of ideas, goods and services’ and Kotler and Armstrong (2010) believe it is
an exchange of values.
This report, therefore, has been compiled with the purpose to critically analyse and comment on the
strategies being implemented by Primark, a subsidiary company of Associated British Foods (ABF).
This report investigates and evaluates the strategies being adopted to effectively promote and
strengthen the clothing brand through marketing applications.
The focus of this report is to explore the decision-making processes, business environment, the
positioning and competitive advantage of one of the fastest growing retailers across Europe and as a
new market entrant to America.
The exploration of their current strengths and weaknesses, opportunities and threats as well as looking
at the internal and external business environment through a PESTEL analysis and Porters 5 forces will
be undertaken to ascertain the company position by using the ‘Marketing Strategy Process’ adapted
by Hooley et al (2008).
Recommendations about marketing strategies and the future growth potential of Primark will be
suggested after critically analysing the effectiveness of the Primark marketing strategies.
INTRODUCTION:
“The enigma of marketing is that it is one of
man’s oldest activities and yet it is regarded as
the most recent of business disciplines”
(Baker, 1976)
Marketing is a crucial element to the success of any business, especially in this modern era, though,
as Baker (1976) has suggested the application of marketing has been around since long before it was
recognised as a business function. Though there are differing definitions as to the purpose of the
marketing function in any business, leading thoughts in the industry stem around being able to
“maintain, develop and grow relationships with consumers with the aim to identify, anticipate and satisfy
customer requirements profitably” (Chartered Institute of Marketing, 2012) whilst other thought leaders
believe it is an ‘exchange of ideas, goods and services’ and Kotler and Armstrong (2010) believe it is
an exchange of values.
This report, therefore, has been compiled with the purpose to critically analyse and comment on the
strategies being implemented by Primark, a subsidiary company of Associated British Foods (ABF).
This report investigates and evaluates the strategies being adopted to effectively promote and
strengthen the clothing brand through marketing applications.
The focus of this report is to explore the decision-making processes, business environment, the
positioning and competitive advantage of one of the fastest growing retailers across Europe and as a
new market entrant to America.
The exploration of their current strengths and weaknesses, opportunities and threats as well as looking
at the internal and external business environment through a PESTEL analysis and Porters 5 forces will
be undertaken to ascertain the company position by using the ‘Marketing Strategy Process’ adapted
by Hooley et al (2008).
Recommendations about marketing strategies and the future growth potential of Primark will be
suggested after critically analysing the effectiveness of the Primark marketing strategies.
4
PRIMARK: AN OVERVIEW
Primark, founded as Penneys in Ireland has fast established its position as a major retail group
employing over 68,000 people across 11 countries. “It offers customers quality, up-to-the-minute
fashion at value-for-money prices” (Associated British Foods [ABF] PLC Annual Report and Accounts,
2016, p.3). The company has enjoyed continued increase in market share and profits (ABF, 2016, p.3)
since its launch in 1969 despite negative press in the last few years over working conditions in
Bangladesh and other countries where its clothes are manufactured. Primark continues to pride itself
by offering customers up-to-date fashion that is made available at the cheapest of prices in comparison
to competitors thus making it a leader in the value market (Ross and Harradine, 2010).
The desire for value clothing lines is increasing and the recent recession in the UK has proven that
such business models can still perform well under such financial conditions (Mohsin, 2009) due to the
cost of items not requiring people to have large amounts of disposable income. The idea of value costed
goods in retail also allows consumers to make guilt-free and subconscious decisions when purchasing
items from Primark. The interest and purchase power in value markets has increased rapidly in the
European markets and where its new market (USA) is concerned, the company is still learning about
the environment and exploring their segmentation and competitive advantage (ABF, 2016)
Image 2: https://merchesico.wordpress.com/2012/04/23/shopping-in-peckham/
PRIMARK: AN OVERVIEW
Primark, founded as Penneys in Ireland has fast established its position as a major retail group
employing over 68,000 people across 11 countries. “It offers customers quality, up-to-the-minute
fashion at value-for-money prices” (Associated British Foods [ABF] PLC Annual Report and Accounts,
2016, p.3). The company has enjoyed continued increase in market share and profits (ABF, 2016, p.3)
since its launch in 1969 despite negative press in the last few years over working conditions in
Bangladesh and other countries where its clothes are manufactured. Primark continues to pride itself
by offering customers up-to-date fashion that is made available at the cheapest of prices in comparison
to competitors thus making it a leader in the value market (Ross and Harradine, 2010).
The desire for value clothing lines is increasing and the recent recession in the UK has proven that
such business models can still perform well under such financial conditions (Mohsin, 2009) due to the
cost of items not requiring people to have large amounts of disposable income. The idea of value costed
goods in retail also allows consumers to make guilt-free and subconscious decisions when purchasing
items from Primark. The interest and purchase power in value markets has increased rapidly in the
European markets and where its new market (USA) is concerned, the company is still learning about
the environment and exploring their segmentation and competitive advantage (ABF, 2016)
Image 2: https://merchesico.wordpress.com/2012/04/23/shopping-in-peckham/
5
SITUATIONAL ANALYSIS
The driving forces behind businesses are in the applied strategies of the marketing and financial
departments (Kourdi, 2011). Marketing will typically spearhead the way in which it foresees the
requirements of consumers and how they respond through their products and meeting the needs of a
fast-paced fashionable world. In 2010, Primark released their motto of “look good, pay less” and has
since grown their ranges and adapted their clothing lines by introducing new products to attract their
target market to meet their long-term goals (ABF, 2016).
Unlike other retail giants, Primark invests very little in marketing and instead relies on their customers
to “do the talking” (ABF, 2016) with their “big bags” (Mohsin, 2009) taking advantage of “big savings to
pass on the message” (Mohsin, 2009). Their decision to remain as physical stores rather than having
an online transactional website has so far not affected sales growth (Arvaniti, 2010) but questions
certainly arise as to whether sales could increase further, perhaps, exponentially, with an additional
website because “technology has played a strategic role in gaining competitive advantage in the
market” (Arvaniti, 2010).
At the top of the organisational hierarchy, they promote and pride themselves on being able to promote
that “decisions are made locally” (ABF, 2016). This allows each component of Associated British Foods
to conduct thorough research into their markets. Despite not spending a significant amount on
marketing, they have developed a unique understanding and insight into the consumers they target in
every country of operation except the USA where Primark is at an early stage of launching.
Understanding the environment, market shifts and analysing strategy, competitive advantage and the
economy will allow Primark to maintain their large market share and position as the largest retailer in
the UK (ABF, 2016).
The Marketing Strategy process displayed in Figure 1, adapted from Hooley et al, (2008) demonstrates
the various stages that an organisation can partake in, to establish and deliver an effective strategy
that will produce results in line with the organisation’s aims and objectives and ultimately to contribute
to the increase and maintenance of profit. The strategy allows internal stakeholders such as directors
to reflect and plan, implement and evaluate using the three elements- analysis, strategy and
application.
SITUATIONAL ANALYSIS
The driving forces behind businesses are in the applied strategies of the marketing and financial
departments (Kourdi, 2011). Marketing will typically spearhead the way in which it foresees the
requirements of consumers and how they respond through their products and meeting the needs of a
fast-paced fashionable world. In 2010, Primark released their motto of “look good, pay less” and has
since grown their ranges and adapted their clothing lines by introducing new products to attract their
target market to meet their long-term goals (ABF, 2016).
Unlike other retail giants, Primark invests very little in marketing and instead relies on their customers
to “do the talking” (ABF, 2016) with their “big bags” (Mohsin, 2009) taking advantage of “big savings to
pass on the message” (Mohsin, 2009). Their decision to remain as physical stores rather than having
an online transactional website has so far not affected sales growth (Arvaniti, 2010) but questions
certainly arise as to whether sales could increase further, perhaps, exponentially, with an additional
website because “technology has played a strategic role in gaining competitive advantage in the
market” (Arvaniti, 2010).
At the top of the organisational hierarchy, they promote and pride themselves on being able to promote
that “decisions are made locally” (ABF, 2016). This allows each component of Associated British Foods
to conduct thorough research into their markets. Despite not spending a significant amount on
marketing, they have developed a unique understanding and insight into the consumers they target in
every country of operation except the USA where Primark is at an early stage of launching.
Understanding the environment, market shifts and analysing strategy, competitive advantage and the
economy will allow Primark to maintain their large market share and position as the largest retailer in
the UK (ABF, 2016).
The Marketing Strategy process displayed in Figure 1, adapted from Hooley et al, (2008) demonstrates
the various stages that an organisation can partake in, to establish and deliver an effective strategy
that will produce results in line with the organisation’s aims and objectives and ultimately to contribute
to the increase and maintenance of profit. The strategy allows internal stakeholders such as directors
to reflect and plan, implement and evaluate using the three elements- analysis, strategy and
application.
6
“The establishment of an effective marketing strategy starts with
assessment of company capabilities, strengths and weaknesses and
the opportunities and threats in relation to the environment”
(Hooley et al, 2004)
The 3 Model Analysis
The three models informing the following analysis can be found here:
Appendix 5: SWOT Analysis
Appendix 6: PESTEL Analysis
Appendix 7: Porters 5 Forces Analysis
As the foundation forming the Marketing Strategy process has informed us, there are many strengths
and opportunities (internal to Primark) that can be further developed however the weaknesses and
threats may also stem from the political, economic, social, technological, environmental and legal
standpoints, thus informing a PESTEL analysis.
The costs associated with political and legal factors such as ensuring working conditions are met, and
laws are followed in relation to minimum wage payments being met will result in a restriction in the
budget that could have perhaps been spent on other avenues such as company expansion or ‘digital
development’ which would have been a strength and opportunity to Primark to take advantage of
(Brignall, 2014). However, such conditions and requirements may lead to an opportunity for Primark to
negotiate with its suppliers since manufacturers are shared with other retailers, a joint force and retail
network may lead to Primark having a strong position in negotiating cheaper prices and costs. This
could also have an adverse effect because costs are expected to rise and better conditions may result
in higher costs on the supply side, posing a multitude of issues that can rise (Hall, 2014).
Current affairs in Europe and the decision for Britain to leave the EU will impact the operating
environments and trade as well as the currency exchange rates which have dropped significantly since
the UK EU Brexit referendum vote. This will drastically impact the price, cost and profitability of Primark
and their clothing lines. It is questionable whether in such climates they can maintain their market leader
position as largest retailer and whether their prices for clothes and products will increase to make up
for loss in currency conversions as well as operating in different legal jurisdictions. However, such
currency fluctuations will lead to lower interest rates and higher disposable income levels as highlighted
in the Economical and SWOT analysis. This may not be an advantage for Primark though as customers
may prefer to make other purchase from rival competitors that they may not have previously been able
to do (Allen, 2014).
A closer analysis of the shares of Associated British Foods reveals that share prices have increased
up due to the success of Primark (ABF, 2016). This share increase will need to be maintained to keep
their position in the market to strengthen their position and advantage. To do this, Primark and the
wider company, Associated British Foods need to consider adopting an effective long-term strategy to
exploit the potential profits surrounding future growth (Wood, 2014).
Given that online sales are reported to increase twofold by 2019, the question about online sales still
exists and the decision not to sell online may hinder and become a threat to Primark as they are not
able to keep up with the modern 16-24-year-old segment; one that is changing rapidly (Mintel, 2014).
Primark has strengthened their communications on their company ethics and social responsibility
making it a big feature on their website- a strength so far as the social considerations are concerned.
An opportunity may exist for Primark to make more a feature in their stores by promoting more of their
ethical trading initiatives, programmes and partnerships – perhaps by print on their recycled bags to
increase the awareness leading to a differentiation between Primark and its competitors.
“The establishment of an effective marketing strategy starts with
assessment of company capabilities, strengths and weaknesses and
the opportunities and threats in relation to the environment”
(Hooley et al, 2004)
The 3 Model Analysis
The three models informing the following analysis can be found here:
Appendix 5: SWOT Analysis
Appendix 6: PESTEL Analysis
Appendix 7: Porters 5 Forces Analysis
As the foundation forming the Marketing Strategy process has informed us, there are many strengths
and opportunities (internal to Primark) that can be further developed however the weaknesses and
threats may also stem from the political, economic, social, technological, environmental and legal
standpoints, thus informing a PESTEL analysis.
The costs associated with political and legal factors such as ensuring working conditions are met, and
laws are followed in relation to minimum wage payments being met will result in a restriction in the
budget that could have perhaps been spent on other avenues such as company expansion or ‘digital
development’ which would have been a strength and opportunity to Primark to take advantage of
(Brignall, 2014). However, such conditions and requirements may lead to an opportunity for Primark to
negotiate with its suppliers since manufacturers are shared with other retailers, a joint force and retail
network may lead to Primark having a strong position in negotiating cheaper prices and costs. This
could also have an adverse effect because costs are expected to rise and better conditions may result
in higher costs on the supply side, posing a multitude of issues that can rise (Hall, 2014).
Current affairs in Europe and the decision for Britain to leave the EU will impact the operating
environments and trade as well as the currency exchange rates which have dropped significantly since
the UK EU Brexit referendum vote. This will drastically impact the price, cost and profitability of Primark
and their clothing lines. It is questionable whether in such climates they can maintain their market leader
position as largest retailer and whether their prices for clothes and products will increase to make up
for loss in currency conversions as well as operating in different legal jurisdictions. However, such
currency fluctuations will lead to lower interest rates and higher disposable income levels as highlighted
in the Economical and SWOT analysis. This may not be an advantage for Primark though as customers
may prefer to make other purchase from rival competitors that they may not have previously been able
to do (Allen, 2014).
A closer analysis of the shares of Associated British Foods reveals that share prices have increased
up due to the success of Primark (ABF, 2016). This share increase will need to be maintained to keep
their position in the market to strengthen their position and advantage. To do this, Primark and the
wider company, Associated British Foods need to consider adopting an effective long-term strategy to
exploit the potential profits surrounding future growth (Wood, 2014).
Given that online sales are reported to increase twofold by 2019, the question about online sales still
exists and the decision not to sell online may hinder and become a threat to Primark as they are not
able to keep up with the modern 16-24-year-old segment; one that is changing rapidly (Mintel, 2014).
Primark has strengthened their communications on their company ethics and social responsibility
making it a big feature on their website- a strength so far as the social considerations are concerned.
An opportunity may exist for Primark to make more a feature in their stores by promoting more of their
ethical trading initiatives, programmes and partnerships – perhaps by print on their recycled bags to
increase the awareness leading to a differentiation between Primark and its competitors.
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