Marketing Breakdown and Evaluation for Primark

Marketing Breakdown and Evaluation for Primark According to Hollensen (2007) ,  «Ã‚  global marketing consists of finding and satisfying global customers needs better than the competition, and of coordinating marketing activities within the constraint of the global environment  Ã‚ ». Then, when it come to internationalise , a manager has to think if the capabilities and the resources of the company are sufficient to answer to the need of the consumers in a new market environment. In that essay , it comes to think about: In what way Primarks strategy could correspond to the needs of French customers. In other terms, is there an opportunity to Primark to establish itself in France seeing the French environment. This essay will take in account only the clothing part of Primark and not the home part of Primark seeing the fact that the two markets are singular in an analysis. Irish clothing retailer founded in 1969 under the name of Penneys (still in Ireland) , Primark represented in 2008 3,9% of the global clothing retail value in United Kingdom. (Eurominitor, 2009). With a revenue which have reached 2,314m  £ in 2008, Primark count today 206 stores split among England as a majority with 144 stores ,Ireland Spain, Portugal, Germany , Netherland and more recently in Belgium. (Associated British Food Annual report and account 2009). Source: Primark website, Primark stores in Europe Retail part of the Associated British food group in which it represent in 2009, 25,5% of the entire revenue of the group, Primark enjoy the stability and the power that ABF group bring to the retailer. With a strategy of good quality for cheap price, Primark is after 40 years of experience recognised as a giant in the retail Industry. With a gloomy economic climate which encourage people to look after the opportunity to buy cheaper, some leaders of the French fashion as Zara, Kiabi and HM keep watching close this giant that is surrounding France and that nothing seems to stop. In today competitive market, satisfied the customers are seen as the only source of the firm profits. Well target our market seems to be the key success factors. In Segmented a market, factors such as geography ,demography, Psychographic and behavioural would be relevant to analyse .(Doyle, 2006). Today, Primarks strategy is to propose an entire concept through all these stores.Allowing to realise economy of scale in the production and marketing Primark is able to propose low price. Then, in the target market analysis, it is relevant to analyse if the target market of Primark in UK would be suitable and have an opportunity of growth in France.( because change the target market would bring to much costs for Primark). This table will, through the characteristics of Primarks strategy define the basics of Primarks target market. Primark strategy Target market Men and women clothes lines Women essentially but men Young fashion Under 35 years old Low price : Until 30% less than in HM (lefigaro, 2008) Limited incomes Fashion clothes Fashion conscious Fast moving merchandise New product every 6 week (Business week, 2009) Fashion addict or Heavy users of clothes and footwear always looking for novelty. In 2008, French population from 15 to 35 represented an important part with 38,7% of the total population.(Insee, january 2010) . In terms of clothing consumptions, men consumptions in clothing for the 15-25 is 3,9millliardsà ¢Ã¢â‚¬Å¡Ã‚ ¬ exactly the same than women. (La lettre à ©conomique, October 2010). Moreover, after gloomy 2009 year with a decrease of the consumption on clothing, 2010 represent the stop of the degradation of the clothing consumption with a tiny increase of O,2%. With a young population in expansion, a target market still buying clothes and a general consumption of clothing which restart, there is an opportunity of growth for Primark in France. Sources If we look at the Internationalisation motives of Hollensen (2007), one of the proactive reason which push a company to internationalize is the managerial urge that he define by a reflection of general entrepreneurial motivation of a desire for continuous growth and market expansions. In the recent year, Primark showed the desire of conquest the western Europe by entering in new country such as recently Belgium. According to Bason John, financial director if AB foods, the performances of our new shops in the Iberian peninsula gives us the impulsion to continue our development in the European continent. (fashion daily news, January 2010). Then, the first motive which could bring Primark in France could be the desire to become an European player of the fashion through it expansion all over Europe. One of the others proactive motives present by Hollensen is a foreign market opportunities and market information. Analytical tool such as PESTLE which allowed to get this information. PESTLE SCHEMA Political: Both part of the European union, UK and France benefit from the common European Union policy which facilitate exchange and trade. However, through state aid and by encouraging mergers between French firms to prevent takeovers by foreign firms, French government act against EU policy and still maintain a kind of protectionism.(datamonitor, 2010). Taxarion in france Politic clothe in france Economic With an increasing unemployment rate and a decreasing consumption the last years, it seems that the crisis could represent an ally for Primark. While an IFOP study about the purchasing power shows that 49% that the under 35years old thinks that their purchasing power has strongly decreased (IFOP,2008), the consumption habits of French goes forward the last opportunity to buy cheaper. As a study of clothing in France explain, the success of the sales periods shows that the sales drop mainly due to purchase power constraints but not as a faction rejection.( Datamonitor,October 2009) With it strategy  «Ã‚  sales price » all the year round, the change in french consumer habbits could represent an opportunity . However, the consumer expenditure on clothing is a lot more higher in UK than in France with an expenditure for 2009 of 37805mnà ¢Ã¢â‚¬Å¡Ã‚ ¬ decreasing in comparison with 2008 in France against 40472mn £ in UK ( à ¢Ã¢â‚¬ °Ã‹â€  46542à ¢Ã¢â‚¬Å¡Ã‚ ¬) increasing in comparison with 2008 (Euromonitor, 2010). While expenditure in UK continue to growth when it decrease in France , it could make Primark think that the clothing consumption habits between UK and France are different and then could represent a threat to Primark implementation. Finally for the consumption, aaccording to the clothing in France report 2009, by 2013, clothing sales are forecasted to reach 26,980à ¢Ã¢â‚¬Å¡Ã‚ ¬millions, a 2,1 % rise in constant value compared to 2008 which let hope for primark a brigh future.(Datamonitor,2009) In spite of the fact that Primark is an Irish company, from a market research and data point of view it is more relevant to analyse the accessibility of the French market through the comparison with the English implementation which is more important than the irish one (144 shops in England instead of 38 in Ireland ( Primark website) . However, from a financial side , it is more relevant t deal with the Irish headquarter company where the money is going because Ireland is in eurozone. By dealing with Ireland, primark escape the risk of change rates. Social : In France, fashion remind an important part of the culture. Then , according to a study , French people are still attached to the brand and the luxury in the fashion sector and would prefer after use the sales period ( 41%) , buy cheapest brand (33%).(IPSOS,2008). Then, even if that trend does not automatically represent Primark target market (under 35)which can not necessarily afford luxury brand, French culture in the fashion sector could represent a threat for Primark. France has to face to the ageing of it population. Until 2050, 1/3 of the population will be ageing more than 60 years old. (insee, 2006) Whike some of Primarks competitors such as kiaby (which propose a fashion for the whole family), could begin a  «Ã‚  senior marketing  Ã‚ » by proposing clothing for senior, Primark could not enjoy this opportunity risking to break it strategy and positioning and lost it target. In an article about the factors of primarks success, Susan Segal-Horn says The focus part of Primarks strategy is the specific customer segment it focuses (open2,2005).With a clear positioning , Primark answer to a special target marget needs. En tentant de profiter de cette tendance forward the senior marketing. It ageing of population represent an indirect threat for pirmark because it not concern it target but it coulb beneficy to it competitors which could gain a competitive advantage. Technological : In spite of the fact that the technological aspect is not the most relevant in the implementation of Primark in France, it is important to notice that the evolution and increase of the new technology influence the consumers to purchase more technological product to the detriment of others goods such as clothes + references sur ca. In Primarks case ,legal and environmental factors are linked.. According to a study, fashion industry remain one of the most exploitive in the word, both to people and environment (euromonitor, 2009). However, consumers are more and more aware of the environmental aspect of goods. Often critics for this workers conditions, Primark is now part of Ethical Trading initiative which which guarantee the protection of workers and environment. (primark website) textille France report bureau) Porter pour competition analysis in an industry p 106-107 Analysis an environment , it also analysis the competitive environment to be able to gain a competitive advantage. According to Michael porter, competitive strategy must grow out of a sophisticated understanding of the rules of competition that determine an industrys attractiveness. (competitive advantage, 1985). Sources : The five competitive forces that shape strategy by Michael E. Porter , Harvard business review , January 2008 Power of suppliers: Always looking to reduce is costs, primark has got buyers team in UK and Ireland travel internationally to seek out the most competitive suppliers. Then primark has got a lot of small suppliers instead of a big one which made the power of suppliers really low. Cf citation pour dire que voyage partout. Threat of new entrants : Low because of the hogh costs set up et high competition. Power of buyer: As there are multiplayers in the markets and now customers are more sensitive towards the price so they visit every shop and they make decision and the switching cost is also not to high Substitutes product: High because others company are offering similar product with low price and now it is very easy to customer to switch from one product to other as ther have become more choosey. Rivalry: To get a well understanding of the opportunity that primark has in France, a SWOT analysis will be helphul Strengh weakness Opportunity Threats Conclusion sur competition : france competitive mais uk aussi et primark se demarque. CCL PARTIE ANALYSE: ACCESSIBILITY DU MARCHE cf p 247 Laccessibilità © du marchà © francais pour primak est donc bonne bien que representatn un challenge. According to clothing in France report,  «Ã‚   In terms of market share, the leader have the ability to adapt quickly to market demand by offering many different collection => Primark Representing in 2010 0,7% of the global brand share in the retailing sector in UK (euromonitor international, 2010)