Marketing Strategies Implemented by Primark: A Comprehensive Report

This report provides a comprehensive analysis of Primark's marketing strategies, focusing on its unique approach to pricing and its target market. It delves into Primark's cost leadership strategy, examining how the retailer maintains low prices through efficient supply chain management and minimal marketing expenditure. The report explores various pricing tactics, including psychological pricing and loss leader strategies, and how these contribute to Primark's sales growth. It also covers the company's marketing mix, including product, place, promotion, people, process, and physical evidence. Furthermore, the report examines Primark's target marketing approach, highlighting how the company caters to specific customer segments based on age, lifestyle, and income level. Overall, the report provides valuable insights into Primark's successful marketing practices in the competitive fashion retail industry.

Running Head: PRINCIPLE AND PRACTICE OF MARKETING
1
Principle and Practice of Marketing With Reference
to Primark
(Student Details)

PRINCIPLE AND PRACTICE OF MARKETING 2
Executive Summary
The report is about the marketing strategies implemented by a fashion retailer. Primark is the
selected brand who is doing well in the retail sector by applying unique pricing strategies and
marketing tactics. The report clearly defines the pricing strategies of Primark, its target
customers and stores information. With this study we can develop how pricing strategies are
implemented in situational cases. Primark has a unique strategy of offering basic collection in a
lower price than that of its competitors; it bears the cost by saving more in warehousing,
transportation and marketing department.
It spends every little in marketing and put all its attention in driving the customers to the store
through pricing policies. The report highlights how Primark applies marketing theories, such as,
psychological pricing strategy and loss leaders pricing strategy to increase sale and accomplish
its desired objective.

PRINCIPLE AND PRACTICE OF MARKETING 3
Contents
Task one......................................................................................................................................................4
Introduction.............................................................................................................................................4
Primark’s Marketing Strategy..................................................................................................................4
Pricing Strategies of Primark.......................................................................................................................6
 Cost leadership strategy...............................................................................................................7
 Primark’s situational pricing strategy..........................................................................................7
 Online pricing strategy.................................................................................................................8
 Expansion pricing strategy...........................................................................................................8
 Target Marketing Approach for determining the price of the product..........................................8
Marketing Skills used by Primark to increase sales.................................................................................9
Part two.....................................................................................................................................................11
Marketing theories.................................................................................................................................11
 Psychological Pricing Theory....................................................................................................11
 Loss Leaders Pricing Theory.....................................................................................................13
Conclusion.................................................................................................................................................15
References.................................................................................................................................................16

PRINCIPLE AND PRACTICE OF MARKETING 4
Task one
Introduction
The report is about the principle and practices of market adopted by the fashion retailer, Primark.
It will reflect the pricing strategies and marketing of Primark’s product in today’s dynamic and
modern environment. The reason behind selecting Primark is that it survived during the worst
recession time. The study highlights an evaluation of strategies that Primark applies in order to
enjoy sustainable growth in the competitive market.
Primark is an Irish clothing fashion retailer with headquarters in Dublin. Its first store was
established by Arthur Ryan on the street of Dublin, Ireland (Odih, 2016). The first store is still in
operations. It offers a variety of products, such as, women wear, men wear, and children’s
clothing. Apart from clothes, it offers home ware, footwear, accessories, confectionery and
beauty products. It has about 350 stores and the largest store is in Birmingham. The company
started to expand rapidly in the year 2000. It has its stores in Austria, France, Belgium, United
Kingdom, Italy, United States, Portugal, Slovenia, Spain, Italy, Netherlands and Germany. The
CEO of Primark is Paul Merchant and it has more than 70,000 employees (Primark, 2019). It
follows the ethical trading policies and has a collaborative organization structure to facilitate
collective working environment.
Primark’s Marketing Strategy
Primark’s marketing strategies can be explained by mentioning the marketing mix (7P’s)
strategy of Primark:
 Product
Primark is amongst the leading clothing retail brand offering men’s wear, women’s wear and
children’s wear along with footwear and accessories. It is more focused on women’s wear as the
maximum share of its customers is women. It has few sub-brands, such as, Cedar wood estate,
Opia and Atmosphere. It engages customer by putting attractive clothes in the new arrival
section and generate curiosity about the recent trends and fashion lifestyle (Egan, 2014). To
display product with extreme uniqueness it has started a limited edition stock to target particular
customers and increase the perceived value of the brand.

PRINCIPLE AND PRACTICE OF MARKETING 5
 Price
The pricing strategy of Primark is very attractive. It focuses on keeping the price low and
increase the market share. The customers spend more on Primark knowing that the price would
be low keeping a mark on the quality and trend. The low price cost is balanced by reducing cost
of transportation and distribution cost.
 Place
Primark position is often referred as tweens. It means that it offers the latest trend keeping the
budget constraints. It targets the people of age group 16-30 years, and has its prime stores located
in Manchester, Spain, Belfast, New Castle, Oxford Street, Cardiff and Liverpool; and similar
stores in various other places. It offers products with low price by using economies of scale.
 Promotion
Primark’s advertising cost is very low as it keeps a minimum budget for advertising its product.
Recently, in order to attract more customers it featured actual customers in its new ad campaign
to enhance its customer base for street style collection (Sciarretto, 2018). The brand strategy of
Primark is very strong as it has clearly created the awareness about its existence to its customers.
It maintains a clear understanding of its primary target customers, competition product mix and
uncommon selling proposition.
 People
This fashion retailer has employees over 70,000 and a good pay, similar to its competitors like
H&M and Zara pay to their employees. It targets teenagers, as people from this age group are
more aware, updated about the product and fashion conscious.
 Process
It follows a strong channel for distribution to ensure product delivery on time for online orders.
During the peak season, the in-store experience of the customers is not very pleasing as there’s a
lot of rush and shopping in crowd becomes difficult. The top management of the company is yet
to solve this issue.

PRINCIPLE AND PRACTICE OF MARKETING 6
 Physical Evidence
The biggest evidence for its physical existence is its stores. Initially, the merchandiser hesitated
to introduce its online presence due to low price strategy (Masterson, 2014). When the price of
the clothes is low, the overall profit earned rom sales is also low; the merchandisers thought that
the shipping cost would be very high; thus it will make the company face a heavy loss. This fact
will discourage the buyers to purchase its product online unless the order amount is in bulk to
balance the delivery charges.
Pricing Strategies of Primark
Primark’s strategy is to keep the price low and to focus more on offering high trend clothes to its
customers. Its competitors are always looking for ways that how do Primark manage to offer
good standard product with low prices. The main pricing strategy of Primark is to do business in
a different way than that of its competitors. It keeps the price low, by following the rules given
below:
o It sells more products, this means that Primark aims at making bilk sales to balance the
cost of the products.
o It spends very little amount for advertising
o It designs clothes following the latest trend but uses less expensive hangers, labels and
tags to maintain the cost
o Keeps the distribution channel small. The suppliers are asked to pack the clothes in such
a way that it can directly be displayed in the store for sale (Primark, 2019)
Primark strategy is to save money at each step of supply chain and keep the price of the clothes
at a lower price and thereby, maintain the standard of clothes fabric and stitching. The pricing
strategy of Primark makes the brand very successful. The brand has known its DNA and stick to
it in all its phase. The internal and external structure of the brand is properly designed in order to
create the value for its customers (Kraaijenbrink, 2019). It strongly competes on price.

PRINCIPLE AND PRACTICE OF MARKETING 7
 Cost leadership strategy
Primark is considered to be the most affordable brand in UK. The level of competition between
the competitors is very high and intense. The company has set its target segment for customers
falling below the age of 35 years. It can achieve more profit than the normal rates, either by
establishing cost leadership or product leadership (Mayabi, 2019). The company opted for
applying the strategy of cost leadership and offers clothes at comparatively low price than that of
its competitors. The company was impressed by the cost leadership strategy applied by
Southwest Airlines in the United States and decided to follow the same.
Cost leadership maintenance is not very easy for Primark, it has to put focus on buying the
products from its suppliers at a reasonable rates, reduce logistics and supply chain costs for
smooth application of this strategy. The company has hired a team of professionals, whose job is
travel the world and determine cheap supply source of clothes. Primark has established its
manufacturing unit in India, where the labor cost is comparatively low than any other country.
As a result the company can save a huge amount.
Primark follows a specific strategy in order to reduce the time taken to reach the market. The
company uses technological assistance, that is, computerized warehousing for custom clearance.
It uses a very strong warehousing network and distribution channels; its warehouse is run by
TNT which is purely dedicated to handle stock distribution for Primark (Cheng, 2010). To bridge
the gap between sales demand and stock maintenance, Primark has linked the stock fast selling
items with the distribution system through computerized warehousing. This helps the company
to gain knowledge about stock information and daily sales.
To maintain its cost leadership strategy, Primark has made a number of acquisitions and grown
inorganically. To capture the market position, it ensures high level of efficiency and strict cost
controls on a regular basis.
 Primark’s situational pricing strategy
In the modern world, the value players like Primark have to create a far more base for shopping
to satisfy the customers. It just cannot rely on pricing strategy solely; it has to amend new
strategies and decisions depending upon different situations and availability. Few situational
pricing strategies of Primark have been explained below:

PRINCIPLE AND PRACTICE OF MARKETING 8
 Online pricing strategy
Recently, the more emphasis is put on e-commerce existence and the policies for store that
should be digitally innovative. Primark’s low price has proved to be the key rational for the
hesitation to start offering its product online. This is mainly because of extortionate charges for
product de3livery. This can be explained with an example, it is difficult to sell a t-shirt worth £3
and spend the same amount for its delivery. The company solved this problem by offering high
priced products in order to warrant the cost of delivery. The company is focusing on collecting
the purchasing power and behavior of its customers so that they have an access to those products
online that they are capable of buying (Snowdon, 2015). This information can be gained by
applying advanced technology used for data generation.
 Expansion pricing strategy
The expansion strategy for Primark is very simple; it enters into a new country or market by
following the same pricing policies. It keeps the prices low than that of its competitors available
in the expanded market. It reduces cost by establishing its manufacturing unit in a nation that has
cheap labor supplies, cheap raw materials and high manufacturing facilities (Ivanov, 2016).
Primark makes mass production and spend fewer amounts on advertisement; therefore, its
expansion to a new market has always been a success.
 Target Marketing Approach for determining the price of the product
Primark always focuses on achieving the differentiation advantage over its competitors by
meeting the needs of the customers, thus gaining a competitive advantage over its competitors.
Primark establishes its pricing strategy by closely understanding the needs and requirements of
its customers. It expands into the market that is comparatively attractive than other market. This
strategy reduces over all cost for the company.
Primark’s most valuable and leading is clothing items followed with footwear. Therefore, the
market segment and pricing strategy is designed keeping in view the sales of its clothing items.
Primark uses differentiated marketing strategy as its targeting strategy, because it has a variety of
items to be offered. The different segment is identified on the basis of age, life style, sex, social
status and income level (Quix, 2016). The company has many product portfolios that can be used
to target these segments. This can be further explained with the help of an example; Primark
keeps the price of basic clothes and trendy garments very low. The reason behind keeping the

PRINCIPLE AND PRACTICE OF MARKETING 9
price low for these products is that the teenagers and young people can easily afford the clothes.
Whereas, the price for formal clothes and premium quality products is comparatively high, as
such clothes is generally preferred by working people having high income and lifestyle.
The brand positioning of Primark is different from its competitors. Primark has emphasized on
its in-store sales, and tries to improve its service and convenience in the store. It gives minimum
attention to expand its online sales and existence. Therefore, the company keeps the price as such
that can immediately attract the customers who visits the store.
Marketing Skills used by Primark to increase sales
 Use of social media
Primark has increased its social media existence because of the fact that it has a high brand
image in the global market. It does not believe in promoting its products through ad campaigns
or advertisements but it spreads the good words about the brand through word of mouth. Primark
Facebook page is very active and has attracted many followers, it has an average of 1.7 million
posts and 1.75 million people are talking about it (Engagecustomer, 2019). The company updates
the new collection or trendy offers on its Facebook page to make the mass aware about the same.
It highlights all of its work on social media immediately by putting a catchy headline on the
page. It also posts the price along with the product on the Facebook page, unlike other
competitors who certainly fails to do so. The social media manager of this brand accepts the
feedback given by its customers and conveys the same message to its top authorities to amend
the changes and fulfill the customer demands. Therefore, social media platform is the perfect toll
for Primark to highlight its pricing strategy and engage with users and facilitate customer
encouragement.
 Chance of getting featured
Another strategy used by this brand to increase its sale is the introduction of “Primania”
(Discountcoupons, 2019). Primania is a special section on its website, where the customers can
upload their picture wearing Primark clothes and win a chance to get featured on its page and
website. They do not make any contract with the celebrities to advertise their products, rather
features the common people who are its customers.

PRINCIPLE AND PRACTICE OF MARKETING 10
 Promotional offers
Primark offers coupons to the customers to enhance its sales (Arnold, 2009). Some of its
promotional offer for the current month can be highlighted to explain its promotional strategy for
better understanding.
 Sign up offers
15% off if the customer signs up for its newsletter and gets update details on news and other
exclusive offers.
 Discount offers
50% sale on selection items
 Point of sale
Primark makes appropriate use of point of sales strategy, it displays complimentary items near
the garments to increase sale. It displays footwear and accessories near the garments section as
people usually tend to buy matching items when they see it. Another strategy is to place toys and
kids item near women garments, this way the mothers end up buying kids item.
When Primark showed same number of sales due to low pricing strategy, it applied the strategy
of constructing a new store, which is bigger and fashionable than the earlier ones. It was
recorded as the biggest fashion clothing store in the world (Russell, 2019). Its main strategy was
to hold the customers to spend more time in the store and end up making a purchase. This is the
biggest marketing solution introduced by Primark.

PRINCIPLE AND PRACTICE OF MARKETING 11
Part two
Marketing theories
Marketing theories have a very important role to play in the marketing practices. Different
organizations have different characteristics, and depending upon it they have to choose an
appropriate theory to make its marketing practices effective and successful in order to
accomplish the desired goal (Caldwell, 2005). The two theories of marketing are explained
below:
 Psychological Pricing Theory
Psychological pricing refers to that type of price marketing strategy, dependent on the theory that
a particular price has a greater impact on consumers as compared to other factors (Wilson, 2018).
This theory allows the application of following strategies.
o Charm pricing
Charm pricing refers to the process of reducing the left digit of the price by one. It involves
pricing a product with the number that ends with 9 or 99. The customers see this pricing
everywhere but do not pay any attention to it. For example, the brain processes different values
for $2.99 and $3.00, the brain takes $2.99 as $2.00, which is comparatively cheaper than $3.00
(Boachie, 2016).
o Prestige pricing strategy
This strategy is totally different from charm pricing. In this the price is converted into round
figures, that is, using $100 instead of $99.99. This theory often leads the retailers into a dilemma,
but the reason behind it is that Kuangjie Zhang conducted a study in 2015 and found that
rounded figures more frequently encourages and processes the reliance on the feeling of the
customers when compared to the non-rounded numbers. The round figure feels right, and often
the purchase is made by listening to the feelings.
o BOGOF strategy

PRINCIPLE AND PRACTICE OF MARKETING 12
This strategy means buy one and get one free. This psychological theory is totally greed based.
Once the customer gets knowledge about this offer, they focus on availing this offer, rather than
focusing on the item or price. This strategy helps the retailers to get creative with the discount
offer. Such as, buy one item and get a discount of 25% on the next purchase, buy two and get
four bonuses valued at $50 and purchase one and get the other two for free.
o Comparative pricing
This means to place the expensive product near to the standard item. It is termed to be the most
effective pricing strategy. This strategy develops a psychological game in the mind of the
customer, when they have to choose between similar products but has variation in price. It is
most suitable for the fashion brand, as the customers tend to pick the expensive item in
consideration that it would be better than the standard price one.
o Visually highlighting the price variation
The retailers place the sale price with different fonts, style and color due to which the customers
can easily make out that the product is offered for in a discounted rate, irrespective of the price
difference. They do not check the variation between the prices and instantly make a purchase.
Effective implementation of psychological theory by Primark
Primark has successfully applied Psychological theory in its marketing practices. Most of its
sales and profits are generated by applying the comparative pricing theory. A person who has
higher income tends to purchase the product having higher price as compared to the similar
product having lower price. This is because they assume that the quality of higher price product
will be better and attractive.
Effectiveness of this tactic
This concept is considered to be the most effective strategy for the fashion retailers, because this
theory distracts the attention of customers from the product to the price of the product. A
customer ends up buying those products even if it was not in their shopping list. As a result it
will increase the sale and bring profit to the organization.