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The Primarks Stp Strategy Marketing Essay

1612 words (6 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Introduction

Primark is now a household name in the UK retail market. The UK retail market which faces intense competition which serves as a home for high street brands such as Burberry, Louis Vuitton, etc to local and cheaper brands such as Sports Direct, Pull and Bear, Primark, etc. Among all of these brand names, the most common and sought to brand can be considered as Primark. Primark established itself in the UK market by entering through Belfast in 1971. Ever since, Primark has been market leaders in providing good quality products at a reasonable price. Initially starting as purely a clothing store, Primark has now ventured into producing household goods as well. Primark thus presents an excellent example of their motto “Look good, pay less”.

Strategic marketing is all about obtaining maximum product and/or service differentiation over their competitors in meeting customer needs, gaining, retaining and sustaining competitive advantage and capitalizing on corporate strength and capabilities. In today’s versatile market environment, it is highly important for companies to relate characteristics and attributes of their products to customer requirements more closely. Firms are more concerned with the most commercially attractive segments of market for a given product. This not only increases opportunity but also reduces overall costs incurred by company. This process is called target marketing and it must be carried out systematically to be effective and for this purpose it can be divided into three stages:

Market Segmentation

Targeting

Positioning

These three stages often referred to STP process is key for market operations and success of a company as it determines where and how a product can be marketed so as to create maximum impact and therefore produce maximum sales.

1. Segmentation: International markets are very diverse and often companies find it especially difficult to reach to all the customers. This creates confusion amongst employees and marketers as to who to sell the product. Random outreaches are risky as they cannot assure that the approached group of customers are profitable (as in whether they will buy the product or not).Therefore, the process of market segmentation assist companies in doing the same where the large target market is divided into sub categories by distinct group of age, sex, gender (demographics), customer preferences, etc. Division of customers into these small categories will make it easier for the company to target specific customers. For example a company producing baby products need to select a segmented market categorized by people who are married. If they are able to target the people who are married (who have higher possibility of having a baby), then they have more chances of selling their product to that group rather than to the whole market itself, thus narrowing the scope of the market. Some of these segments are easy to determine relatively with low costs but they are least trusted in terms of determining consumer choice.

2. Targeting: This is the process that is followed by market segmentation. As the name suggests, targeting refers to selecting a particular group after the segmentation of the market has been done. It therefore focuses on the evaluation and selection of one or more previously identified market segments at which to direct marketing resources, developing an appropriate marketing mix for them and develops segment coverage strategy. This selected segment is made focus of comprehensive marketing plan. Kottler (1984) suggested that in order for market segmentation to be effective each of the segments must be distinct, assessable, measurable, and profitable. Once determined which segment attractiveness factors are important, evaluate each of those factor against selected segments using segment attractiveness evaluation matrix.

There are usually four ways of approaching a target market. They are:

Undifferentiated marketing in which the entire market is targeted despite the various division of people from religion, age, sex, culture, etc. i.e. the entire market is targeted.

Differentiated marketing in which the broad market is categorized into smaller group and the groups are targeted separately with offers that would seem suitable and relevant to them.

Niche marketing or concentrated marketing where from the divided groups, only a few groups are selected while the rest are left out. Only the selected groups are focused and targeted on to sell the particular product.

Customised marketing where only a particular group from the segment market is chosen and the product and/or service provided to this group is completely customisable.

Understanding the potential of target market is important for a business as it saves the company’s time, effort and money by focusing only upon the customers who are likely to purchase the product.

3. Positioning

In the phase of product positioning, all the marketing mix are designed and implemented in the segmented market so as to create a definite image of the particular product on the mind-set of the consumers. This particular image is then tried to be developed so as to create a brand value. The brand value then would play the key role in retaining the customers as well as attracting new customers. Through market research, key factors responsible for changing or establishing a good consumer preference is found out in a target segmented market. That very driver of preference is prioritized in the product and played around with so as to attract the target customers. For instance, if the target market is female teens, then clothing industries should focus more on producing stylish products as they are the key factor through which the customers from that segment would be more interested in buying. Brand positioning provides insight into brand performance and gives important inputs for marketing communications used to support a brand. Through communications, especially advertising, information can be conveyed about each attribute and in doing so adjust perceptions customers have of brand.

Primark’s STP strategy

Retail clothing industry is a fast moving and high profile business environment which demands that marketing process of a retail organisation should be managed strategically. Strategy of an organisation is roadmap towards attainment of its long term goals and objectives. Strategic marketing management involves implementing principles of strategic management in the context of marketing function in organisation. At corporate level, marketing inputs (e.g., competitive analysis, market dynamics, and environmental shifts) are essential for formulating a corporate strategic plan. Primark has well organized strategic Target marketing and Product marketing approaches in place.

Segmentation

As Primark is tagged a value clothing retailer, clothing is most important and leading item in its product portfolio. Although all above determined segmentations bases and variables are important but demographic factors is the most straight forward base for segmenting Primark’s consumer market, as they are most meaningful. As Primark focus on cost leadership, naturally the economic sector of the segment market is highly affected and targeted. According to demographic segmentation, the market can be broken down into groups by income. Since Primark products are cheaper, their target market includes people form lower income group to middle income. They may also contain married and older people. These segments of people are more likely to purchase their products. Similarly, segmentation on the basis of psychometric can also be done where Primark needs to differentiate the groups according to customer preferences. Primark has a fashion oriented brand under it, Cedar Wood State, which focuses on producing stylish clothes, but at a reasonable rate. Therefore, the market also needs to be segmented putting fashion taste as a consumer preference.

Targeting

Primark have clear understanding demands of their customers. Primark’s market segment is the fashion conscious people under- 35s with the slogan “Look good pay less”. Primark has chosen ‘Cost Leadership’ strategy, it means that Primark has a cost privilege over competitors.

For Primark, targeting strategy that can be implemented is differentiated marketing strategy because Primark has multiple products at its disposal and consumers can be segmented into multiple segments, hence best approach to be followed is differentiated marketing approach. Different segments identified are based on age, sex, life style, income level and social status and we have multiple products portfolio that can be targeted towards these various segments.

Positioning

Brand positioning provides insight into brand performance and gives important inputs for marketing communications used to support a brand. Through communications, especially advertising, information can be conveyed about each attribute and in doing so adjust perceptions customers have of brand. As Primark need to reposition the perception market has of its brands from range and quality of clothing to be more trendy and stylish. Primark has emphasized more on in-store service and convenience; and as Budget Fashion retailer, they might want to maintain their current positioning of low price, affordable, but also good value for money.

Recommendations:

Market STP is an important issue that Primark needs to address. The London market that Primark is operating currently is demographically vast. This should be fully capitalised by creating segments within the market which will allow the company to target relevant customers to relevant products. If Primark is able to introduce the right product to the right genre of consumers, naturally the product can be successful. This will not only bring profitability to the company but can also lead to creating a brand image. And in a brand conscious market such as London, brand value is of immense importance as it is the key factor that will lead to customer retention and acquisition of new customers and ultimately create competitive advantage.

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