Essay: Primark Marketing Analysis (SWOT and PESTEL)

Primark is one of the most recognizable brands on the high street, due to their affordable prices which appeal to most people looking for fair prices and a likewise decent quality. Primark was first founded in Dublin, Ireland in 1969 by Arthur Ryan under the vision of replicating catwalk fashion at a relatively affordable price, which has been achieved throughout its entire era. The company is also known as Penney’s and is parented by Associated British Food Plc. In 2009, the first-ever Primark store was opened in Dublin and subsequently, the business has branched out into several different countries, some of which include Spain, Portugal, and the United Kingdom. As of today’s date, Primark has 367 stores located across the world and plans to open many more soon, of this figure, the UK consists of nearly half of the stores with 174 in total. Primark also employs approximately 30,000 directly in their outlets and contribute to the employment of over 700,000 across 4 continents, it is also estimated that they indirectly employ 2.4 million across the globe. Overall, Primark are one of the leaders in the fast fashion world, due to their low costs, in the last 5 years Primark have went from being the 4th biggest clothing retailer in the UK to the 2nd by January 2018. It is also projected by January 2019 that Primark will become the biggest clothing retailer in the UK. The outlet offers extremely affordable clothing prices to their customers, all of which is fashionable, and the company is always creating collaborations with massive social media stars such as Stacey Solomon and Kem Cetinay, further increasing their presence online and furthering their appeal to a younger demographic.
The company is hugely recognized as a clothing brand, but they also branch out into other areas, such as accessories and homeware, also branching out into the technology industry, not allowing themselves to be restricted to one certain niche. This enforces Primark’s vision to enforce their style, quality, and price into everything they manufacture to become one of the most recognizable brands in the world. One of Primark’s core aims is to enable regular people to achieve fashionable looks when purchasing outfits, not having to overspend when doing so.
Primark provides high-quality training to all its employees, ensuring that they maintain the image of the company whilst representing it, also providing the opportunity to progress through the ranks within the company. The management system within the business is also full of potential, with many of the managers being promoted internally, highlighting the rich sea of opportunity that is available within the high street outlet. With all of this to benefit the company, they are setting their sights on further expanding their market share and setting a benchmark for all their high street competitors, in 2017 the retailers turnover grew by 15% to £15.5 Billion from 2016, whilst profits reached a 22% increase to £1.3 Billion all of which can only be achieved if the system established works as effectively as expected.

‘We aim to achieve strong, sustainable leadership positions in markets that offer potential for profitable growth, and deliver quality products and services that are central to people’s lives’ (Associated British Foods plc, 2014)

Business Mission

The business mission of Primark is to provide cheap quality good to consumers, whilst also retaining the levels of growth they have been progressing at continually each year. Focusing solely upon in-store sales and ruling out a transactional website, the retailer (owned by ABF) are choosing to branch out into the US and expand their presence in the international industry. In the US, the company aims to attract entirely new customers, providing to them the exact same high-level quality of goods that they supply already across the globe.

‘With a unique combination of the latest fashion and lean operations, Primark offers customers quality, up-to-the-minute designs at value- for-money prices’ (ABF, 2013)

Marketing Audit

PESTLE Analysis

For Primark to identify the external areas in which they may need to prepare for, due to them holding the ability to affect the company in the future, a PESTLE analysis was conducted to gain a thorough insight, these areas can also be further exploited through the marketing planning process.
Political
In June 2016, the UK voted to leave the European Union, causing political turmoil and putting into question the stability of several businesses when the time does come to leave the union. Brexit has caused severe uncertainty in the business envoirment due to the financial markets dropping well below projected levels. Following the collapse of the Rana Plaza factory in Bangladesh there have also been several new regulations firmly set in place to prevent said tragedies from ever occurring again, all of which have greatly affected Primark. It is now required of companies to set aside funds to ensure that the safety deficiencies are amended instantly, this means that Primark must now look to negotiate better deals commercially with the factory.
Economic
Following the Brexit decision by the UK, the value of the pound fell to its lowest value ($1.23=£1) in 31 years, this decision may have a positive effect on Primark as people will be forced to choose more cost-effective choices of clothing and the foremost retailer for this is Primark. The core consumer age group of Primark are also choosing to save as opposed to the stereotypical profligate spending that many associate with that age range, due to the economic uncertainty currently looming and the pound also falling in value, meaning that Primark are in a very advantageous position.
Social
With the shifts in population, Primark will need to closely monitor the closing age range of 15-24-year olds, which is falling at a rate of 6% in the last 5 years. Primark will need to alter their marketing strategy to appeal to the more quality focused 65+ demographic, which makes up 20.4% of the UK population (Office for National Statistics, July 2017). The rate in which consumers use electronic devices to shop is also at an all-time high, in the UK 87% of consumers make retail purchases online in 2018, up 7% from 2017 (Ecommerce News, 2018). The other options such as click & collect are as becoming much more advertising to consumers,
Technology
The drive to reduce queue times within stores is pivotal and this is being achieved through integrating digital systems able to process payments on the shop floor, avoiding the queues altogether. There are many different means in which this is being achieved by competitors, such as Monsoon and Schuh, who have integrated a mobile point of service in which sales assistants can take payments and find stock on the shop floor. The progression of technology in the retail sector has drastically affected the consumers purchasing habits, it is particularly crucial for Primark to adapt with this change considering more than half of their customers are aged 35 or below.
Environmental
in the modern age the public have become more concerned with the protection of the envoirment and sustainability regarding production materials and methods. This drive means that companies now need to focus their efforts on their business methods, to increase their customer-based loyalties and status within society. A wide selection of businesses have already invested funds into ensuring this, one pf which is H&M (direct competitors of Primark) and they have put measures into place to move towards using only sustainably sources materials and recycled materials by 2030 (H&M, 2018)

SWOT Analysis

Strengths

• Creates several B2C interactions using stars in their marketing campaigns (Stacey Solomon, Kem Cetinay)
• Massive social media presence means that they can promote their products to millions every day. A free social media platform means they benefit from little to no marketing costs at all.
• Primark offers a wide range of products within their stores that competitors are unable to capacitate, such as children’s clothing, accessories, home wear, hosiery, clothing (men’s & women’s wear), confectionary and technology. This means Primark can target a much larger consumer base with their range of products.
• Primark is a part of the Ethical Trading Initiative and are continually making steps towards ensuring workers’ rights are protected. Some of its core objectives are to ensure “employment is freely chosen” and “living wages are paid” (ETI Base Code, 2014). They also organise several fundraisers internally throughout the year to raise funds for their chosen charity of Macmillan cancer charity

Weaknesses

• Primark has no established customer benefit scheme within their store, which has been adopted by almost all other major competitors. Customers are more inclined to continually purchase at stores where they are rewarded for their continued loyalty (K. Black, 2017).
• Consumers are unable to shop online with Primark, restricting their marketing methods greatly. It was reported by IBA that ‘adults within the UK now spend 7 hours and 56 minutes consuming media each day’ this is a clear indicator that there is a strong need to branch out into the online market to stay relevant in the technology driven future.
• There is a lack of innovation in some of their stores in terms of visual merchandising. In the London flagship store there are several digital billboards across the store as well as trending sections to promote the best fashion pieces in the moment. The smaller stores are much less innovative than this store, with cluttered advertising on the walls and an overall messy aesthetic that may turn some consumers away.
• Due to the mass production of products and wide accessibility in all the retailers stores there is exclusivity with the products that Primark creates and there is also a stigma that the goods are of poor quality, meaning some consumers may avoid the clothing due to the negative image.

Opportunities 

• Grant customers the opportunity to place orders in store to reserve stock and/or have it delivered to their homes.
• Improve upon the general appearance of the stores. ‘a stores layout is on the key strategies in its success’ (B. Maté, 2017) Creating a store which is much more visually appealing and welcoming for the consumers is a huge area to improve on.
• Utilise methods such as loyalty schemes, getting customers to purchase clothing items in greater quantities with the benefit of more exclusive rewards based on the number of items purchased (D. Jobber and F. Ellis-Chadwick, 2016)
• Personal shoppers in store to help consumers in selection the ideal fashion pieces for them, sales assistants also can place orders for the customers on the spot with on the floor tablets, securing sales that may have otherwise been lost.
• Find ways to penetrate new cliché markets to secure new customers that are in search of that new products. Can be achieved through collaborations with alternative luxury brands to attract customers willing to mix fashionable items at ranging costs.

Threats

• Competitors are beginning to lower the costs of their goods, to adapt to the current financial climate, whilst offering a higher quality of goods to Primark.
• Questionable brand reputation due to past incidents (Rana Plaza Factory disaster) may affect some consumers decision in purchasing at the store.
• Other brands utilise several different advertising methods to increase sales within the store and online. Primark does not advertise in anyway and so the opportunity is none existence for the retailer.
• The showrooming trend hugely affects Primark as customers are choosing to shop around several different stores for their favourite products and then purchase it online when they get home.

Goals & Marketing Objectives

Primark’s overall goal is to further increase their profits, maintain their loyal consumer base and increase their market share. Furthermore, they aim to become the most recognisable brand in the UK, whilst also progressing boundaries and social norms.
The marketplace situation has been clearly outlined by the external and internal analysis which drew attention to the key strengths, weaknesses and opportunities that all affected Primark as a business. A table below consisting of SMART objectives displays the short and long-term strategies that Primark will need to aim towards to meet their overall goal for the future.

SMART Objectives Rationale

• Achieve an online transaction revenue of an 50% increase each year (after the initial launch). After 5 years achieve an overall profit increase of 250% Prove that the initial venture into the online market was worthwhile for Primark and the targeting of more technology-able consumers was beneficial for the longevity of the brand.
• Increase customer satisfaction through targeting suitable fashion pieces towards them based on their background profiles, which is achievable through personal shoppers. Also ensure that customer feedback on the response slips provided instore are all positive (WOW responses). An increase in brand familiarity and customer loyalty will greatly affect Primark’s social status.
• Will enable Primark to achieve a higher market share, progressing past M&S (7.9%) to the highest spot in the UK.
• Increase the footfall that the UK stores are receiving by 20% in the next 2 years. Solidify the stream of profits that the brand is receiving through this means of trading. Also prove that the physical store locations are not being neglected in pursuit of promoting the new online website.
• Gain 500,000 new customers through the online site, averaging a visiting time of 20 minutes per customer and a cart size of £150 Proves that the online site was worthwhile for the company on a profits level. Maintain the relevancy that Primark has maintained over the last 10 years.

Core Strategies

Establishment of a transactional website with advanced features to make the shopping experience entertaining
As a country, the UK is driven by shopping and more and more people and multichannel shoppers (D. Jobber & F. Ellis-Chadwick, 2016). A report by the ONS shows how since 2013, the percentage of retail sales made online have rose 6.8%, additionally, 73% of adults have made online purchases, with 56% of these purchases being on clothing items. The core strategy within this marketing plan is to re-vitalise the already established website of Primark which is as of now a more exhibition site, where as the aim is to transition it into an online marketplace. This will allow Primark’s customer to avoid the obdurate inconvenience of instore purchasing and grant them the ability to purchase pieces whenever they want.
Primark effectively utilises Maslow’s theory on the hierarchy of needs by taking advantage of people’s desire to have a strong sense of esteem, tailoring their in-store marketing to achieve this. The main issue that Primark faces is that their profits make dip due to the loss of customers making the same impulse decisions, purchases that offline customers regularly make within Primark. The new site will aim to encourage customers to make impulse spending on the site and completely avoid the idea of ‘rationale buying activity’ completely, with the use of an extremely engaging and interactive experience for the customers when browsing. Overall, the features will give Primark the edge in B2C selling that no other retail company currently possesses and will add further value to the growing market share of Primark.
19.11.2018