1.0 Introduction
Primark Stores Ltd. Is a value fashion retailer that was founded in 1969 and operates as a subsidiary of Associated British Foods plc. Primark sell a wide variety of product from clothing to homeware catering for all ages and sizes. Primark is recognised as ‘the leading value fashion retailer in the UK’ (Mintel, 2011) and with 232 stores currently operating across the UK and Europe, in addition to more opening every few months, Primark is expanding quickly and predominately in the industry.
2.0 Nature of the business
Primark have adopted a price leadership strategy, which has helped define the brand and market position within the retail environment. The Primark brand aims to cover every product area their target consumer could want for, in turn eliminating the threat of competitors. Primark source products from several overseas suppliers and then have the goods shipped/air freighted back to be sold in the UK and Europe. When selecting appropriate suppliers, Primark’s main focus is on price and lead times. Primark tend to source garments that can have a long lead-time such as basic repeat lines, from the Far East as the prices are unbeatable and the brand can afford to wait for long shipment. Sourcing supplier strategy differs slightly when looking to source ‘fashion’ products as to keep ahead of its competitors Primark may look to source closer to home, such as Turkey, to ensure they don’t miss out on bringing in a potentially success trend ahead of its competitors.
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3.0 Market position within the industry as a whole
The rise in fast fashion and the decline in the economy have seen a major increase in the number of consumers turning to value, fast fashion retailers in substitute for the more expensive high street brands. Since 2006, Primark has ‘doubled its market share’ (Mintel, 2011), making it the fastest growing of the major specialists. Although the industry appears to have been fluctuated with value retailers, Primark has always managed to remain in top position with its competitors striving to hold onto the market share they currently occupy. Some may class Primark at the lower end of the fashion industry as its not high end designers but
4.0 Main objectives of the business
Primark main objectives are to provide the latest fashions with the shortest lead-time at the best prices. There is no set mission statement that Primark ‘live’ by just a general ethos of high volume buying and then selling at the cheapest prices. Primark are constantly trying to gain market share in the industry and are continuously introducing new product lines i.e. shape wear for women to help cover more potentially areas of growth for the business as a whole.
5.0 Quality standards & approaches for service quality
Primark demand good quality from the products it puts it name too and not just low prices. Recent developments have seen ‘Garment Technologist Specialists’ assigned to each of the buying department to help monitor, assess and combat any potential issues that may arise on products coming from suppliers overseas.
6.0 Customer profile & target market segment
Primark’s core target market is ‘the fashion conscious under 35s’ (Mintel, 2011).
The typical Primark shopper likes to be able shop quickly and easily, picking up the latest trends and fashions whilst maintaining a certain budget. The way the stores are laid out, is designed to enable an easy shopping experience for consumers who are looking to make fast fashion purchases.
7.0 Competitor profile & marketing methods
Primark’s competitors can be counted as the supermarket clothing ranges (George at ASDA, TU at Sainsburys, F&F at Tesco) along with Matalan as each of the brands offer value for money clothing. Primark remains unbeatable at price in comparison with almost all products it offers and if not the quality of product is often found to be superior. Unlike other fashion retailers, Primark do not use marketing strategies to attract interest and customers as the brand try to keep overheads to a minimum in order to sustain the best prices for the consumer. Primark market its products using its store window displays, which are changed twice a week to showcase the newness in product currently in store. There are also a few weekly magazines that showcase Primark womenswear’s latest products, but this is done independently and Primark play no part in marketing these products themselves.
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9.0 Employment practices & investing in people
Primark head office consists of a large HR force that sits to ensure that not only appropriate new recruits are selected to join the Head Office workforce, but also to ensure that current employees are. As an employee of Primark and working within the head office there are many training courses that are provided to help develop skills such as Yarns to Fibre training, excel training, management training and negotiation training. All head office employees are also given a review every 6 months by their department manager which allows the employee to get feedback on their performance at work as well as raising any issues.
10.0 External influences which impact on the business and your role in the business The most influential external influences currently affecting Primark come from within the outside economy. The recession has a huge affect on all retailers, generally a negative one, however with Primark’s ethos of charging the lowest prices, they are one of the few retailers who seem to have benefitted from the recession. Primark reported a 14% year-on-year rise in sales to £2 billion for the 2010 financial year. This large increase was attributed to people ‘trading down in the recessionary climate’ (Mintel, 2011)
As Primark source almost all products from abroad, the exchange rate can have a major impact on the price of garments and this can be very negative in such hard times as a drop in the exchange rate inturn, can mean a drop in profit margin.
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Most people that are common shoppers have encountered a situation where the product that they were seeking to buy was not available. It is very easy to see that certain products do have an ample supply due to many reasons. Other than the price of that product, there are six major non-determinate factors of supply. These factors are: Number of Sellers, Technology, Resource Prices, Taxes and ...
Another external factor that has affected Primark in recent years, is the rise in cotton prices, it has meant that there has been an increase in cost price for products and this was subsequently reflected in an increase in retail selling price. One of my job roles is too ensure that cost prices being offered, going forward, are starting to lower as cotton prices start to stabilise again.
11.0 Products & Services
Over the years Primark’s product range has grown considerably from selling just clothing and footwear to now offering specialist shape wear garments, homeware products, novelty gifts, stationary and wrapping paper. Primark cater for all age ranges and sizes and this helps attract a wide range of consumer.
Over the past few years, Primark has made a conscious move to occupy large buildings to utilize the large quantity of shipment deliveries under one roof to ultimately maximize sales and keep overheads to a minimum, as it is cheaper to have 1 large store rather than 2 medium sized stores. There has been recent speculation over whether or not Primark will ever decide to offer online shopping facilities, as it stands this is not something Primark would venture into as it would be more costly for the consumer in either having to pay for postage or Primark increasing garment costs to cover the postage.
12.0 Conclusion and Opportunities
This report has given an insight into the value fashion retailer, Primark and how it has evolved as a company. Over the last decade, Primark has incurred massive expansion helping the brand to pave its way as the leading fashion retailer in the UK. With no plans to relax the speed of the expansion, Primark should increase market share and continue to keep introducing new products to help keep competitors at bay. Primark is already a company of vast size with a large workforce and a significant store presence both in the UK and Europe. It is well managed with the head office in Reading managing and controlling deliveries to allow for correct distribution when the goods enter the UK. The product range Primark offers is wide and as the UKs ‘leading value fashion retailer’ they must sustain their ability to buy cheaply in bulk and sell in huge volumes. As Primark continues to expand across Europe, it needs to maintain its good reputation to ensure consumers are not loss to already established competitors as well as combatting the threat of new competitors entering the industry.
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