(Table 1 Adopted from SWOT Analysis environment)
PEST ANALYSIS
PEST is outside factor of conduct the marketing environment, he acronym PEST (or sometimes rearranged as “SETP”) is used to describe a frame work for the analysis these macro environment factors.
POLITICAL FACTOR
Political factors include government regulation and legal issues and define both formal and informal rules under which the firm must operate. Union government policy is beneficial for Primark. In UK Primark pay more taxes to government so using the benefits which are provided by other countries like India, Africa and etc.
ECONOMICAL FACTOR
Primark sell things Like to like to cut prices of the clothing chain. Associated British Foods (ABF), the chain's parent company, said that the tougher economic climate had put the brakes on the business as shoppers juggle the rising cost of food, petrol and higher energy bills(Hawkers and Jameson, 2008). The sharp fall in sales during June pushed the value of the pound lower as expectations rose that the next move in UK interest rates would be down. (BBC News, 2008). Primark provides cheaper things to customer so it has major market retailer.
SOCIAL FACTOR
The social and cultural influences on business different from country to country. People are altering their life style very quickly. They consent the change without any hesitation. Primark render very cheaper and latest fashionable cloths to customer so it attracts the more customers. But latest issue of Primark child labour is very shameful. It has created very bad impression on consumer.
Figure 2 (Associated British Food plc,2008)
TECHNOLOGICAL FACTORS
Primark make new trendy clothes using new technology. As an immediate step, this meant that Primark had to devise a method of translating stock and sales information from the One Up stores into something that would be meaningful to them. Primark decided to withdraw its One Up’s technology and replace it with Primark’s front and back end packages and install new software and hardware. This technology changeover had to be masterminded at some speed and was in fact, completed for the sixteen stores in about four months. To complicate the process, all stores had to have the new systems introduced during non-peak trading periods because of the lead-time needed to train staff and stabilise the new systems. (Business, 2000)
CONCLUSION
SWOT and PEST analysis of the environment of Primark shows the position of Primark in retail market. It gives the idea of their relation with customer, government and other competitor markets retailers. SWOT and PEST shows Primark future and recent changes in market to give better service to their customer.
Chapter 2: Vision, Mission & Values
All successful retail brands have a clear vision. The vision is translated into differentiating store format. A vision needs to be short and sharp and as concrete as possible. Drastic changes are met the vision scan be the driving spirit behind the company’s strategy. The corporate value and the core competences of the company are the framework within which the brand mission is formulate. The way in which the target group reacts to the brand identify will be expressed in the financial results of the retail company. (Floor, 2006)
VISION
Organizations sometimes summarize goals and objectives into a Vision statement: A Vision statement outlines what a company wants to be. It concentrates on future; it is a source of inspiration; it provides clear decision-making criteria. Keeping this in view Primark has dreamt or vision itself to be the leading apparel and home decor company in the ever growing competitive markets.
MISSION
A mission statement is a brief statement of the purpose of a , or . Companies sometimes use their mission statement as an , but the intention of a mission statement is to keep members and users aware of the organization's purpose.
Primark’s mission is to maximise the value of its supplies offered by delivering to customers competitive and innovative products. Its mission ‘Look Good, Pay less’ in the competitive market is no doubt attracting customers in large numbers. New products go on shelf every week; a part of a mission ensures that the retailer is not perceived as being the same as everybody else.
VALUE
The company values which in my opinion will help them to achieve their mission include; building on the exiting reputation for reliability and service, strong customer focus, team spirit, and dedication to transparency. Primark is demographic or the border value end of the market for customer. Primark offers customer high-quality merchandise at value for money prices, backed by its service promise.
The rapid growth of some of the discounters has also been halted with Matalan and to a lesser extent with Primark all feeling the chill wind of supermarket competition. M & S, Woolworth, Littlewoods, and C&A have also lost ground in some categories to growth of supermarket. Both C&A and Littlewoods withdrew from the UK retail clothing market in 2002 and 2003 respectively. Independent retails have also out in rise of supermarket fashion. Supermarkets have in many respects taken a fresh look at where they can extract value from their existing customer base. The average age of the supermarket consumer buying women’s clothing in UK is between 35 and 55 years but this does not mean that people younger or older are excluded. None of this has gone unnoticed by supermarket buyers and merchandisers keen to fill their increasingly larger retail space with more non-food ranges that potentially offer greater profitability.
CHAPTER 3: MARKETING STRATEGIES
One of the most important concepts of the marketing planning process is the need to develop a cohesive marketing strategy that guides tactical programs for the marketing decision areas. In marketing there are two levels to strategy formulation: General Marketing Strategies and Decision Area Strategies. These set the direction for all marketing efforts by describing, in general terms, how marketing will achieve its objectives. There are many different General Marketing Strategies categories : market expansion, market share growth, niche market , status quo, market exit. These are used to achieve the General Marketing Strategies by guiding the decision within important marketing areas like product, pricing, distribution, promotion, target marketing . On entering a new market with new products may be supported by Decision Area Strategies. There are so many tools to conduct market position of any company or product. Like SO strategies, ST strategies, WO strategies, WT strategies, Ansoff Matrix, BCG matrix, Porter’s Generic Strategies.
SO, ST AND WO, WT
SO, ST, WO, WT strategies are combination of strengths, opportunities and threats. Then the WO and WT strategies are give the idea of weakness with opportunities and threats. Like most of the Primark stores in high streets so it is beneficial to them to introduce their own store cards, which is also attract people to buy more things from Primark. Frequent locater and international coverage can provide new supplier and new talent to Primark. All Primark stores have large trading space so it has good opportunity for them to introduce automatic self scan area. Primark strengths threats are good experience in retail market for last 40 years but price competition is tuff for them to survive in the market.
Primark has many weaknesses and threats but as well as so many opportunities. Primark do less promotion activity for store and company, that’s why it is helpful to them more advertisement and promotion which is links them to various other shops. Most of Primark’s retail selling is dependent on suppliers so they also introduce new talent and new suppliers. Primark most shops are crowed so ethical practice may endanger for them. Mismanagement of clothes and accessories give more loss to Primark.
ANSOFF’S MATRIX
The Ansoff Matrix is a tool that helps business decide their product and market growth strategy. Ansoff Matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.
(Figure 3, Adopted From Ansoffs)
The output of Ansoff tools are Market Penetration and Market Development in existing products and Product development and Diversification in new products but Market Development and Diversification is New Market , market penetration and product development is existing market.
Market penetration occurs when a company penetrates a market with its current products. It is important to note that the market penetration strategy begins with the existing customers of the organisation. This strategy is used by companies in order to increase sales without drifting from the original product-market strategy (Ansoff, 1957). Primark current products are fashion clothes like Atmosphere , Girl 2 Girl Denim co, and so many brands. Primark give cheaper things to customer so it is gaining competitor’s customers. Market development may entail exploration of new segments of a market, new uses for the company’s products and services, or new geographical areas in order to entice new customer (Lynch, 2003 A). Primark’s clothes, accessories and homewear are the existing products which attract fashionable people under 35. Primark provide chip chic fashionable products to customers. But they don’t improve their service to customers like their products.
The product development strategy include competitive entry, maintain the company’s reputation as a product innovator, exploit new technology, and to protect overall market share (Lynch, 2003 B). Primark is very much conscious on their cost of production. They regularly scrutinize suppliers cost. Primark has 15.7 market share (Mail online, 2008). While diversified businesses seem to grow faster in cases where diversification is unrelated, it is crucial to note that the track record of diversification remains poor as in many cases diversifications have been divested (Porter, 1987). Primark has very poor relation with their customer. Their employers are not behaving very well.
CHAPTER 4: SEGMENTATION, TARGETING & POSITIONING STRATEGIES
No organization has the resources to serve every customer in every market. Research and customer knowledge is thus used to identify specific subgroups that can be effectively targeted through marketing. Segments may be as small as one consumer or business customer or as large millions of customers in multiple nations. Next decision parameter is targeting approach. Primark is expanding by targeting the same segment in other countries, where it competes with major brands such as Matalan, Asda etc.(Wood, 2007) It does need to be recognized ,however that for many organization the strategic issues of market segmentation, market targeting and positioning often take on only a minimal role.(Wilson & Gilligan, 2005)
SEGMENTATION
A market segment is a group of customers who have similar needs that are different from customer needs in other parts of the market. (Jhonson, S & W, 2005). In market there are four different segmentation geographic, demographic psychographic, behavioural segmentations.
(Figure 4 Adopted from marketing segmentation)
In Primark we can see there is less geographic segmentation because Primark started business from Ireland and expanded it only in Europe. So it is not much popular around the world. In Europe it has 127 stores in Europe.
DEMOGRAPHIC SEGMENTATION
Demographic segmentation is include age, gender, occupation, religion, income, life-cycle, education, nationality. Clothing retailers primarily target larger men and women respectively. Other retailers have to get their mix of stock size right to meet seasonal demand. Marks and Spencer, for example, undertook a survey of 2500 women and found that the average dress size is now a 14 whereas in 1980 it was a 12. (Brassington & Pettitt, 2003) Primark more scope on age, gender, life-cycle, income are much related to its market segmentations. More highlight on age and gender in Penny stores, we can see all different department for men, women and children. They are also arrange cloths to attract the people of all age group. It provides cheaper chic things to people so it is very economical for all people.
(Table – 2, for demographic segmentation)
Primark provide variety of wear for all age group, it divided his clothes in three part men wear, women wear and children wear. Men wear starting from 11 to 35 year, women wear size divided on year basis like 11 to 35. Children wear variety start from born baby wear to 10 years old children
BEHAVIOURAL SEGMENTATION
The third major approach to segmentation is based on a series of behavioural measure including attitudes, knowledge, benefits sought by the buyer , a willingness to innovate loyalty status, usage rates and response to a product. By applying this approach the market planner begins by attempting to measure consumers’ value systems and their perceptions of various brands within a given product class. (Yankelovich, 1964) (Wilson & Gilligan, 2005).
TARGETING
Market targeting decided how best to segment the market , the strategist is then face with series of decision evaluating market segmentation analyse with size and growth, consider structural attractiveness and company objective and resource. Primark have limited publicity like it popular only in Europe. Primark targets Germany in plan to take on Europe" .Thus Primark make very big target to expand their store in other part of the world. In the present, Primark targets are make people stylist and so on. Their target is customer, they are young and fashion conscious .Primark is now targeting a four to six week turnaround from design to shelf, sourcing primarily from Asia. It challenge now is to carry its Oxford St success into its smaller stores and to deliver the same value equation off-shore where it really is going to have to work hard to fend off the Spanish masters of the fast fashion game. Primark to overtake Asda’s George in value clothing stakes. They targeted at the fashion conscious under 35s.
POSITIONING
Positioning is therefore the process of designing an image and value so that customers within the target segment understand what the company or brand stands for in relation to its competitors. (Wilson and Gilligan, 2005 A) After the organisation has selected its target market, the next stage is to decide how it wants to position itself within that chosen segment. Positioning refers to ‘how organisations want their consumers to see their product’. What message about the product or service is the company trying to put across? Primark is known for selling clothes at the budget end of the market. The company's success is based on obtaining provide cheaply, making clothes with simple designs and fabrics, only making them in the most democratic sizes, buying stock in huge bulks and varieties but most importantly Primark do not advertise their products. This store states that "Primark targets young, style-witting under 35's, offering them high quality, fashion basics at value for money prices."
Different brand and name reserved different positioning in market. UK retailers have set out to establish distinct market position. Like Tesco and Sainsbury occupy the quality, breath of range, and convenience position in retail market.
CHAPTER 5: MARKETING MIX
The mix is a bundle of variables which are offered to the customer. These include the product or service itself; its availability (the place where and when it is available, delivered or distributed); its image (the way it is promoted) and, of course, the price which should be charged. The major marketing decisions can be classified one of the following four divisions:
- Product
- Pricing
- Place
- Promotion
These variables are known as the Marketing Mix or the 4P’s of Marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The marketing mix is portrayed in following diagram:
(Figure 5,Quick MBA, 2008)
The firm attempt to generate the positive response in the targeting market by blending these four marketing mix variables in an optimal manner.
PRODUCT
The term ‘product’ is used to refer both to physical goods and to intangibles: brand name, styling, functionality, quality, safety, warranty, packing, report and support. Effective product management is to very large extent, based on an understanding and application of two major concept portfolio analysis and product life cycle (Wilson and Gilligan, 2005 B). In discussing the nature of the product there are three distinct element Product attributes, Product benefits.
BRANDING STRATEGY
A decision about how to brand new products is especially critical, a company has a number of options that could be categorized in to three choices: (1) It can develop new brand elements for the new product; (2) it can apply some of its existing brand elements; (3) it can use a combination of new and existing brand elements (Kotler, 2007). General brand strategies- a firm that decides to brand its offerings must choose which brand names to use. Four general strategies were identified by Kotler.
A fundamental element of any product is the role played by the brand. A firm’s branding strategy reflects the number and nature of both common and distinctive brand elements it applies to the products it sells. When the firm uses an established brand to introduce a new product, the product is called new branding extension. The first branding strategy decision is whether to develop a brand for product. Today branding is such a strong force that hardly anything goes unbranded. (Kotler, Keller, 2008). A decision about how to brand new products is especially critical, a company has a number of options that could be categorized in to three choices: (1) It can develop new brand elements for the new product; (2) it can apply some of its existing brand elements; (3) it can use a combination of new and existing brand elements (Kotler, 2007).
General brand strategies- a firm that decides to brand its offerings must choose which brand names to use. Four general strategies were identified by Kotler, which are;
(Figure 6, Adopted from Marketing Mix)
Corporate name combined with individual product names-
The company name legitimizes, and the individual name individualizes, the product. This legacy often goes back to the people who first developed the brand or to a single founder. Further, he notes that a company founder, alive or deceased can have a very dominating influencing on the brand. This is incompliance with the Primark as, the initiator Mr. Arthur Ryan was concentrating solely on the clothing sector. Hence the business grew from a single Penney store on Mary Street in Dublin into a chain with 122 stores in Ireland and the UK, making £140m profit and brought the company brand image to present status.
Primark has family branding strategy, its provide variety of product for all member of family. Primark always provide new designs and fashionable product for all ages of people up to 35. Primark has variety of range in cloths, accessories and home wear product. Development cost is less because there is no need for ‘name research’ or expensive advertising to create brand name recognition. Furthermore, new-product sales are likely to be strong if the manufacturer’s name is good; this means instant recognition for a new product. Primark doesn’t follow this, as they do not introduce new lines very often. In Primark, they have many variety of own individual brands in clothing, home wear accessories. Atmosphere and Opia brand in accessories. Primark home is home items. Atmosphere, Girl 2 Girl’ Young Dimension, brands for women and girls wear. Active, Denim Company, Rebel Junior, Butler & Webb, Rebel active are the brand for younger boys, men wear. Primark Essential is their own individual brands which they can provide at very low-cost.
PRICE
Price determination should take into account profit margins and the probable pricing response of competitors. Pricing not only include the discount, but also the discount financing and other option such as leasing. Primark provide thing as cheaper as possible so its pricing strategy attract the people. Primark also tempted people to buy thing at very less price. I mean of course there Tills are doing so well, coz when you buy a top or something that cheap, its only going to last a couple of washes and then you’re going to go need to buy something else. Clothes like from new look used to be Quality, yes u had to spend a bit more, but they are defiantly lasted a lot longer than today clothes. Its like buy something, wear it, was it couple of time and then it needs disposing of, month to month disposable fashion. People are ending up in the long term spending more because of this. (Marie Claire, 2008).
PLACE
Place is very vital that accessibility of Primark is readily available to all customers across the country if the marketing strategy is to be successful. Busy high streets and shopping malls are ideal locations where the Primark products can be sold. Since Primark has targeted the ‘under 35s’, the internet can also be used strongly for sales purposes. It shouldn’t be allowed to sell Primark cloths whatsoever in just any other shops or outlets at any price as it can damage brand reputation. These products should be available throughout the country only within the network of Primark stores.
Place purposes are associated with channels of distribution that serve as the means for getting the product to the target customer. The distributing system performs transactional logistical and facilitating functions. Most of Primark stores are situated in high street so it attract the more people. Primark all stores have suitable location which connect Primark with other competitive retailer clothing and footwear. In the high street there are most of the persons are fashion conscious they are always attract to buy new things from the market which customer get from Primark.
PROMOTION
Promotion strategy plays a dominant role in the marketing mix. This is a mode which is been used by a company to communicate with the other individuals and organizations, advertising play a critical role in doing so. Primark usually do little advertising and it is in the newspapers, along with advertising in-store. Therefore, Primark should look into the possibility of inflating its advertising budget to win more customers. Promotion provides added incentive, encouraging the target to market performs some incremental behaviour. Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements – advertising, public relations, word of mouth and point of sale ( Hiebing, Cooper, 2003). Primark has less advertising in electronic media or print media. Primark gives cheaper things to customer so it maintains very good relation with public. Primark name we can hear each and every persons mouth. So it manages their promotion in market with help of public. At present Primark is a high sales product seller in retail market. Because of it get good response from customer.
CHAPTER 6: RECENT AND FUTURE CHANGES
The world in its dynamic form is changing rapidly in every aspect. People are also adapting themselves to this fast changing world to avoid being kept behind. In this era, businesses are facing immense pressure from many angles. The marketing environment faced by organizations can be divided into two parts, the micro and macro environments. As a giant retailer in the UK market, Primark has also taken the toll of the different changes in its marketing environment.
At present there are so many form of changes in Primark gone through and will be going through in future. Changes in the marketing environment such as eco-environmental, social, legal, economical, political and technological changes have made Primark come up with several plans, short term and long term some of which have already been implemented
The latest change in Primark is the introduction of the Code of conduct. And it includes the following. They choose their employment freely. Freedom of association and the right to collective bargaining are respected. Primark has safe and hygienic working conditions. Child labour shall not be used. No secretion is practise In Primark there is no harsh or inhumane treatment is allowed. It provide very regular employment. Primark joined the ETI (Ethical Trading Initiative) in May 2006 and defined an ethical strategy. This includes assessing of working condition of employees of the supply chain, risk assessing of all new suppliers, share the suppliers with their competitors, etc.
Throughout the company, core demands for all managers are safeguarding the workforce and the products, minimising the environmental impacts and ensuring legal complains. The priorities are to reduce the number and hardness of workforce injuries. Ensure energy and raw materials are used efficiently with minimum wages. Primark continue independent auditing of operating sites and independent verification of key data.
Primark recognises the impact that it has on the environment. Therefore, as a minimum, they have complied with current applicable statute law of the countries in which they operate. In future Primark should concentrate more on the environment as the future customer’s will be more environmental concern. To fulfil their needs the trader has to stick to their environment policies. A testimonial for Primark to increase the revenue is to start up food. Since the parent company of Primark is already in the food business, Primark could gain huge advantages. As Primark is known as value for money, they have already gained a customer base. Therefore the cost of marketing will also be minimum.
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