Strategic Marketing Management

CONTENT PAGE

Section                                                                                                                         Page No.

                                                            Group Task

Task 3:

Introduction                                                                                                                             3                                                                     

 3.1: Use appropriate marketing technique to ascertain growth opportunities in the market                 4        

                                                                                                                                   

3.2: Identify as to how the organization plans its marketing strategy option in a market                      6

3.3: Discuss appropriate strategic marketing objectives for the market chosen by the organization     7

                

Task 4:

4.1: How the organization responded to the changes to the external environment on a given marketing strategy                                                                                                                                                                                                                                                                                                9

4.2: An internal analysis of Silver spoon                                                                                             10

4.3: Propose strategic marketing response to key emerging themes in a marketing strategy for the organization                                                                                                                                    12                                                                                                                                           

Conclusion                                                                                                                                13                                                                                         

Bibliography                                                                                                                             14                                                                                                                    

Introduction

More people are becoming health conscious therefore customers are now reducing their sugar intake, Silver spoon has listen to the customer’s needs by producing more healthy products with less calories.

Silver spoon is a part of the associated British Foods (ABF); ABF is a diversified international food, ingredients and retail group with an annual sales volume of £11 billion with customers in 46 countries across the globe. ABF currently has 102,000 employees across 46 countries (ABF, 2012), with 13,000 of these employees working directly with the Silver Spoon brand.

ABF corporate objective is to achieve strong market leadership position, “ethically” by listening to the customer’s needs and wants, bring them products at an affordable cost.

Since the launching of the Silver Spoon brand in 1972 the brand has seen continuous success and has become the UK favourite choice. The silver spoon brand loyalty has grown throughout Europe, Africa and Asia, the company is known for having fewer calories in their products.

The silver Spoon products is in almost everything from the drinks we buy to the cake we eat, there are a lot of companies operating through the silver spoon brands these include, Allison, Askeys, Billinton’s, and crusha.

This report will discuss the way Silver Spoon has responded to the changes in the market environment and their link with Associate British Foods (ABF). 

3.1 Use appropriate marketing technique to ascertain growth opportunities in the market

Silver spoon is a leader supplier of sugar and sweetener in UK market. Demand and consumption of sugar is falling in UK  ,consumption of sugar in 1995 was 2.396 million ton but in 2000 I  went down to  2.337 million ton,(  ED&F Man June 2001 ).Lower consumption is causing UK Sugar sales  in long term decline falling by 3% a year for last one decade. Because of crisis in sugar market Silver spoon company came under investor pressure to divest their sugar division and concentrate on food ingredients that forced   Silver spoon to  make a significant addition to its product portfolio and it  launched  a multiple products in each of the following categories : sugars and syrup for cooking , low calorie sugars and sweeteners , ice cream cornets and topping sauces ,milkshakes ,flour and cake craft products for baking and decorating as a result it benefited from the strong  sales of  Silver spoon sugar and Allison flour ranges. Silver spoon products are available in different packaging size to meet business and individual customer needs in a segment .Silver spoon has created its packaging from 500 g through to 25 kg for white sugar.

Marketing objectives of Silver spoon is of course to obtain growth, increase sales and maintain market share. To accelerate growth it has to adopt marketing strategy and that is a cost leadership through investing in factories in china and Africa that allows getting sugar in low cost. Similarly another strategy is competitive advantage through introduction of superior technology and bulk buying capacity of firm that is benefiting ABF to increase profit.

Because of health concern people were more interested to use organic and low calorie sugar, to target these market audience Silver spoon went organic and did first brand acquisition with Sucron, a low calorie sweetener .In 2001 it also acquired Crusha leading UK milkshake mix brand.

 According to Tony Lucas marketing director of Silver spoon, “there was scope for the new product to increase the UK sweetener market by 18% over the 2 years adding 10 million to sale”. More than a quarter of all British household currently buy artificial sweeteners. This figure gave Silver spoon an opportunity to grow with innovation.  As a part of marketing techniques Silver spoon launched the first calorie free natural sugar substitute sweetener product in the UK, called Truvia .Competitors such as Splenda and Canderal which use synthetic sugar substitutes but making Truvia natural sweetener, Silver spoon has differentiated from these sweetener competitors in a bid to take a major share of the 50 million pound UK sweetener market.

It has targeted its products for different market segments first is foodservice industry that includes hotels, restaurant, bakery and product are designed to meet the needs of food service industry like sugars and syrup ,flour cake craft decorating sauces etc. And next is individual customer segment, for them the size of packaging, price and products range are vary because the needs are different in this segment. Positioning and promotion can be done through making accessible all the products in market, promotions like advertisement and reaching to customer directly via website. These are all activities stimulating growth of Silver spoon.

3.2: Identify as to how the organization plans it’s marketing strategy option in a market

In order to be an efficient and effective business, Silver Spoon seeks out target customer market of different groups. If we are talking about target they are making products for meeting the needs of the customers. Silver spoon has a highly motivated marketing team to fulfil the requirements of the company.

Porter argues that competitive strategy means “taking offensive and defensive actions to create a defendable position in an industry, to cope with competitive forces and thereby yield a superior return for the firm”. (tutor2u.net)

Following are some of their options for market plan:-

Cost Leadership Strategy

Silver spoon is low cost producer industry which makes quality products on a reasonable price so that it could be possible for the people of different classes to buy and enjoy the products. In this way they can maintain customers and beat the rivals. Silver spoon can beat cost leadership just because of some of these qualities: (silverspoonpeople.co.uk, 2012)

They have very good distribution channels

They have expert manufacturing department to fulfil the requirements of orders and they use latest technology to reduce the costs and to enhance the productivity. (quickmba.com, 2010)

Differentiation strategy

A differentiation plays a great role in the success of silver spoon just because they have a strong creative product team they can make innovative products for these day’s customers. To help to achieve a healthier lifestyle Silver spoon have a number of lower calorie products like Half Spoon which has all the taste and texture like sugar with half the calories . Including this Silver spoon have a strong sales team with the ability to successfully communicate the strength of the new product and they also have good reputation for innovation and quality. Silver spoon is good in performance they always use innovation in packing, speed in distribution, greater flexibility and delivery all over in EU, quality of the materials. These are the reasons behind the success of silver spoon because customers find it better and different than that of rivals. (tutor2u.net)

3.3: Discuss the appropriate strategic marketing objectives for the market chosen by the organization

Product Life Cycle Management is a strategic business approach that applies a consistent set of business solutions in support of the collaborative creation, management, dissemination, and use of product definition information across the extended enterprise, and spanning from product concept to end of life-integrating people, processes, business systems, and information. PLM forms the product information backbone for a company and its extended enterprise. (PLCM)

Silver Spoon also proud to be the first sugar manufacturer in the world to certify the carbon footprint of its sugar according to the new PAS 2050 British standard, the world’s first standard for assessing the lifecycle greenhouse gas (GHG) emissions of products and services. (Silver Spoon)

Silver Spoon is preparing to launch Truvia, the first “calorie-free” natural sugar substitute sweetener product in the UK, in a bid to take a major share of the £50m UK sweetener market. Truvia, which replicates the graininess and sweetness of sugar, but with zero calories, is derived from the South American plant stevia that was authorised for use in the UK and Europe last year. (Marketing Week)

Silver spoon has introduced the new design for its bags of Granulated, Caster and Icing Sugars. Tony Lucas, Silver Spoon Marketing Director said: ‘Our new packing shows Silver Spoon sugar’s support of Britain’s sugar beet growers’. (Britsh Sugar)

Silver Spoon is the number one supplier to the UK retail sugar and sweetener market and is a major sugar supplier to the foodservice market. They are proud of the fact that our core sugar range comes from British farms and that from field to spoon; our sugar travels fewer miles than any other to reach consumers. They make their products with concern not just for the quality of the sugar but also our impact on the environment. The below key strategies for the successes of Silver Spoon:-

·         Silver Spoon has a range of sugars to suit all of your baking needs.

·         To help achieve a healthier lifestyle, we have a number of lower calorie sugar and sweeteners including Half Spoon which has all the taste and texture of regular sugar with half the calories.

·         To reduce our impact on the environment we are working closely with the Carbon Trust and WRAP to further improve our production processes. (Silver Spoon)

Silver Spoon has a special affinity with the Foodservice market. They are understand  how important it is for chefs and catering managers to get the right type of sugar in the right packaging at the right price. That is why we have a dedicated Foodservice team, who are constantly looking for ways to improve our product offering. New product development especially for Foodservice users is very close to our hearts. They have developed a diverse range of sugars in Foodservice-specific packaging to suit your individual business needs. (Silver Spoon)

4.1: How the organization responded to the changes to the external environment on a given marketing strategy

For every business external environment have strong impacts on making its decision for strategic planning, as businesses are operated in space. This external environment consists of many important factors which collectively influence the business performance.  These factors include socio cultural, technological, demographic, natural environmental, legal and political factors (K. M. Bartol, 1998).

Silver spoon management has successfully analyses its external environment conditions and created profit driven strategies. Looking at social cultural factor, people have become more concern about eating healthy food and diet conscious. Silver spoon has offered various diet plans on its website, BMI check, and healthy sweet recipes.  According to silver spoon, “Sugar is a natural source of carbohydrate and therefore can contribute to a healthy lifestyle. If you are watching those extra calories Silver Spoon has developed a range of Light and Lower Calorie sweetening products to help you”. (Siler Spoon Sugar Company, 2012)

As HSE (health & safety executive) recommend that no more than 15 Kg should be carried by the workers, silver spoon responds to this recommended safety measure very positively and for care of its people and designed carry bags of 10Kg & 5Kg.

Focusing on environmental conditions like other companies silver spoon always support the positive changes in the environment and make its policies and strategies environmentally safe. It has highest standards for environmental protection and sustainability in both crop production and processing. It also cares for waste reduction and recycling.

 According to silver spoon website, “As the UK’s number 1 sugar brand we are committed to reducing our environmental impact. In January 2008 together with British Sugar we became a pilot partner with the Carbon Trust. We believe carbon-foot printing needs to be implemented with a standard methodology across the manufacturing industry if results are to be meaningful to customers and consumers.” (Silver Spoon Sugar Company, 2012)

From demographical point of view, silver spoon has a wide range of products for different customers, people with different tastes and nutrition requirement can buy a product according to their own needs. It has offered Silver spoon Stay soft range, caster sugar range, light & low range and others.

In similar ways Silver Spoon Company is fruitfully facing changes and pressure coming from all of external environment, few I have discussed above. As part of ABF group it comprises lot to group profit by successfully running the business.

4.2: An internal analysis of Silver spoon

An internal analysis can be defined as strengths and weaknesses of an organisation. These factors illustrate advantages and disadvantages of an organisation to meeting the requirement of focused market. Strengths means core competencies that promote benefits or a strength is a factor controlled by or available to a organization that gives it an advantage relative to its competitors in meeting the needs of the customers and target market. Weakness is limitations or deficiencies in an organization’s structure or resources related to its competitive forces that create disadvantages to meeting customer requirements. (internal analysis)

Silver spoon sugar’s current strengths and weakness in marketing strategy

Strengths

·         Silver spoon sugar is the number one supplier to the UK retail sugar and sweetener market and the foodservice market. (Silver Spoon)

·         Silver spoon sugar is a product of British sugar that is the sole producer of UK home-grown sugar beet. It purchases the entire crop from around 9000 growers all of whom are under contract to the company. (Silver Spoon, 2012)

·         It is a part of ABF (Associated British food).

·         It provides wide range of sweetening choices like sugars for drinks and sprinkling, sugar and syrups for cooking, sweeteners, cake craft etc.

·         Silver Spoon offers an excellent range of lower calorie sugars and sweeteners like trivia the new natural calorie-free recipe.

·         From January 2008, Silver spoon sugar also works with carbon trust that means it is committed to reduce carbon emission of environment purposes. (silver spoon, 2012)

Weaknesses

·         Climate change is affecting the production of sugar cane and sugar beet that includes the impact of global warming, UK carbon emission that are still rising. (ABF, annual report and accounts 2006, 2006)

·         Silver Spoon because of EU sugar regime change, granulated sugar came under retail pricing pressure and sustained some volume reduction impacting profit by £8m. (ABF, annual report and accounts 2006, 2006)

·         The profit of silver Sugar reflected the impact of the crop shortfall resulting from the frost damage sustained during the severe weather in winter. To meet all customer requirements, despite the very tight market, using a combination of destocking, supplies from third parties at high cost is also reflecting the performance of silver spoon sugar. (ABF, associated british foods plc, 2011 

4.3: Propose strategic marketing response to key emerging themes in a marketing strategy for the organization

1936 was a very important year for the British consumer, that’s the year things got a little sweeter with the launch of “The British Sugar Corporation”. The silver spoon retail brand for granulated cubed, caster and icing sugar was launch in 1972. As the years goes by, British sugar has continue to keep Briton sweet with the introduction of their new range of dessert in 1989.

Silver Spoon has seen continuous growth over the years; they were able to achieve this by adapting to the change in the external environment, listening to the customer’s needs and promoting their products through TV adverts and other advertising podium, hence, satisfying the customer’s needs.

British sugar was taken over by Associated British Foods (ABF) in 1991; the takeover has helped the market position of the silver spoon brand. Silver spoon has strategically positioned it selves under the ABF brand and image, who has influence the company corporate objectives, with the help of the 7ps and porters five force, silver spoon were able to capitalized on their internal strengths by exceeding the customers’ expectations, while achieving their objective without compromising the quality of their service and products.

According to ABF (n.d.) The Ingredients business is a key growth area for ABF in the UK and North America. The group applies technical skills in producing functional ingredients from natural products; ABF is a major manufacturer of both branded and private label grocery products. Some of the best known household brands include Twinings, Ovaltine, Mazola, Ryvita, Silver Spoon, Tip Top and Kingsmill

Silver spoon company portfolio comprised some of the UK leading brands including Allison, Askeys, Billinton’s, crusha and silver spoon.

The Silver Spoon Company is part of Associated British Foods plc, a diversified international food, ingredients and retail group with sales volume of £11.1 billion across 46 countries worldwide.  Silver spoon continuous success is due to its market position, they have introduce due new technologies, new products  and re-launch with new packaging while promoting their products and catering for the customer’s needs and maintain their low price. 

Conclusion

Today’s global market has seen immense competition from companies on a global scale, companies are fully aware of competition and technological advancement. With the help of ABF, Silver Spoon has strategically positioned themselves as the UK market leader for sugar sweetener and low calorie products.

Abiding by ABF corporate objectives, Silver Spoon has strategically utilized these as their internal strengths. As the UK leading supplier of sugar sweetener, Silver Spoon was able to corner the market through companies like Crusha, Allison, Billinton and Askey, these companies are offering their products under the Silver Spoon umbrella.

Silver Spoon success is due to strategically positioning themselves as the market leader for sugar sweetener and their ability to convert more customers into consumers by offering them on unbeatable price for their products without compromising the quality of the products.

 Bibliography

ABF. (2012). Retrieved 08 28, 2012, from ABF global coverage: http://www.abf.co.uk/abf-companies-globally.aspx

ABF. (2006). annual report and accounts 2006. Retrieved 8 15, 2012, from abf: www.abf.co.uk/uploads/2e7badfbd01.pdf

ABF. (2011, november 8). associated british foods plc. Retrieved august 15, 2012, from abf: www.abf.co.uk/uploads/annualresultsannouncementfinal2011.pdf

Britsh Sugar. (n.d.). Retrieved 08 15, 2012, from http://www.britishsugar.co.uk/Media/2012/new_silverspoon_packaging.aspx

internal analysis. (n.d.). Retrieved from my strategic plan: http://mystrategicplan.com/resources/internal-analysis/

K. M. Bartol, D. C. (1998). Management (3rd ed.). Von Hoffman Press.

Marketing Week. (n.d.). Retrieved 08 14, 2012, from http://www.marketingweek.co.uk/silver-spoon-to-launch-calorie-free-truvia-sweetener-brand/3033035.article

PLCM. (n.d.). Retrieved 08 14, 2012, from http://www.product-lifecycle-management.info/

quickmba.com. (2010). strategic management. Retrieved september 5, 2012, from http://www.quickmba.com/strategy/generic.shtml

Siler Spoon Sugar Company. (2012). Good Health: silver spoon suger company. Retrieved August 15, 2012, from http://www.silverspoon.co.uk/home/good-health

Silver Spoon. (n.d.). Retrieved 08 16, 2012, from http://www.silverspoonpeople.co.uk/page/our_brands

Silver Spoon. (n.d.). Retrieved 08 17, 2012, from http://foodservice.silverspoon.co.uk/home/about/history

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Silver Spoon. (2012, 08 09). GMO Statement. Retrieved from silver spoon: http://www.silverspoon.co.uk/home/about-us/gmo-statement

silver spoon. (2012, 08 09). silver spoon's carbon footprint. Retrieved from silver spoon: http://www.silverspoon.co.uk/home/about-us/carbon-footprint

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Strategic Marketing Management

CONTENT PAGE

Section                                                                                                                         Page No.

Task 1:

Introduction                                                                                                                            

      1: The general principle of strategic marketing management                                                          3                                                                                                                                                                                                         

1.1: Discuss the role of strategic marketing                                                                                    4                                                                                                                                                                                                    

1.2: Explain the process involved in strategic marketing                                                    5                                                  

                                   

1.3: Evaluate the links between strategic marketing and corporate strategy                                    7

                 

Task 2:

2: Tools used to develop strategic marketing strategy                                                                    10

2.1: Assess the value of models used in strategic planning                                                            13

2.2: Discuss the links between strategic position and marketing tactics                              15

2.3: Analyse the merits of relationship marketing in a given market strategy                                 17

3: Conclusion:                                                                                                                   18

4: References:                                                                                                                    19

Introduction

This report is a study of principles of   Strategic marketing management by considering Primark. Primark Ltd is a subsidiary of Associated British Foods Plc (ABF) It operates stores in the UK, and other European countries. According to Primark Handbook, (2006/2007), Primark is a fashion retail store that was established in Dublin in 1969. Primark is a part of the Associated British Food group (ABF) whose mission is to develop sustainable agricultural practices. Primark has 237 branches across Europe with 156 outlets in the UK.

The company was established in Dublin in 1969, where it trades under the Penney’s brand. Over the years Primark continues to expend and now employs over 27,000 this figure is expected to increase to 30,000 by 2015.

Primark is the UK leading retailer in fashion with over 20 million people visiting their store each week. The company is well known to provide low cost clothing and accessories for women, men and kids.

Strategic marketing

Strategic marketing management is the process of formulation, estimation and implementation of marketing strategy by an organization. Indeed a marketing strategy aimed at differentiating the business in a positive way with respect to its competition through satisfying customer needs.

According to Tony proctor (Strategic Marketing, 2000) a strategy is a plan that integrates an organization’s major goals, policies, decisions and sequences of action into a cohesive whole. It can apply at all levels in an organization and pertain to any of the functional areas of management. Thus there may be production, financial, marketing, personnel and corporate strategies.

Strategic management is about realizing marketing from the strategic perspective of creating customers. The basic principles of Primark include respecting human rights and setting a guideline for appropriate conditions of employment  in its suppliers, employees and vice versa. The basic principle of strategic marketing is to strategically satisfy the needs and demands of existing and potential customers.

The strategic marketing management involves understanding and applying marketing from the perspective through creating customers. In performing this process a number of steps are taken iteratively (Kerin et al, 2007) 

Section 1.1:  The role of strategic marketing in Primark

Marketing has been playing an important role in most organisations over the years. Strategic marketing focuses on how to reach out to customers and how to gain a competitive advantage over the competition. The goal set by the marketing department should, by design, be in line with the company mission and vision; the marketing department of a business needs to work closely with operations, research and development, finance and human resources, Marketing is perhaps the most important activity in a business because it has a direct effect on sales, profitability and sustainability.

Strategic marketing is a process by which organizations obtain what the customers need and want by indentifying, value, communicating and providing it to them. The most important concepts of marketing are customers, needs wants and values. Marketing is strategically concerned with the direction and scope of the long-term activities carried out by the organisation to reach its goals. The organization applies its resources within a changing environment to satisfy customers needs while meeting stakeholder expectations.

The marketing strategy of Primark is to appeal to image conscious people between ages 16-35 who would like to keep up to date with fashion by giving them the chance to buy high fashion at a reduced price. Like most other business Primark’s main objective is to convert customers to consumers. They were able to achieve this by offering their customers cheap products without compromising the quality of their products. In order to achieve this the 7Ps must be taken into consideration, the marketing mix, Products, Price, Promotion, Place, Process, Physical and People. 

Section 1.2: The process involved in strategic marketing

The graph listed above shows 10 steps a company can take to achieve their company objectives. At this time we will only talk about 2 of the 10 steps. The 2 steps to be talked about are the Company Mission, and the marketing objectives & Strategies, relating this to Primark.

Mission

The mission statement of Primark is to provide luxurious clothes to every citizen of the country at a affordable price. The mission statement is the overall goal of the company that direct the company decisions, employees and other associates need some smaller goals which can be worked on for a short time span.

Marketing Objectives and Strategies

 According (Macmillan & Tampoe, 2000), Strategic implementation requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that the formulated strategies can be executed effectively.

Strategic implementation includes developing a strategy-supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems and linking employee compensation to organizational performance.
Historically, the principal benefit of strategic management is to help organization formulate better strategies through the use of a more systematic, logical and rational approach to strategic choice.

According to Macmillan & Tampoe ( 2000), One of the potential benefits of strategic management is it make sure that the organization only follows one direction or path towards the achievement of its business mission, objectives and success. (Marketing - Thinking Made Easy)
The marketing objectives of Primark can be summarized into the following.

Ø  Primark target specific kinds of audience and potential buyers for their clothing material. They devise marketing strategies which are applicable and directed to specific audience only; aiming right at the correct direction.

Ø  The output of the productivity should be measurable in terms of quantity and quality. The amount is important because it will measure the profit the company has made and the other intangible benefits and will determine how much the company has boosted after applying such techniques.

Ø  All of their strategic marketing process are realistic; hence, can be applied in reality and implemented before it is too late. As the competitors of Primark are in constant hurry to gain an advantage over the company, Primark has to execute the devise strategies on time in order to maintain their success in the market.

Ø  The data used in the analysis of deciding strategic marketing planning processes should be accurate and authentic. Any mistake could result into a heavy loss for Primark. Not only would it result in monetary loss, but also the goodwill of the clothing garment retailer would highly be affected.

Section 1.3: Evaluate the links between strategic marketing and corporate strategy at Primark and its link with ABF.

A company is diversified when it is in two or more lines of business. Strategy-making in a diversified company is a bigger picture exercise than crafting a strategy for a single line-of-business. A diversified company needs a multi-industry, multi-business strategy. A strategic action plan must be developed for several different businesses competing in diverse industry environments. (Strategies for Managing a Group.

ABF, PESTLE Analyses, contributes to the Primark co-operative strategy.  Setting corporate strategy objectives means setting those measures of actions and methods which will help the company to achieve its overall mission in a certain timeframe. Corporate strategies are the most basic planning tools underlying all planning and strategic activities (Hamel & Prahalad, 1994). Through sharing its value ABF and Primark establishes strong relationships with its stakeholders that have led them to have an encouraging feedback on the latest annual report about the audit conducted on ethical trade (Hamel & Prahalad, 1994)

The corporate mission of Primark is as follows:

Ø  sourcing products efficiently

Ø  making clothes with simpler designs

Ø   using local fabrics and trims

Ø  focusing on the most popular sizes

Ø  buying in volume

Ø  Not spending heavily on advertising. (Introduction - Providing consumers with ethically sourced)

In order to facilitate such corporate strategy with strategic marketing plans, Primark has devised such marketing schemes that are:

1.      Low in budget and effective

As it doesn’t want to spend high amount of money for advertising its products, minimal money will be spend in this department.

2.       Merchandising

Properly combining colours, styles and visually displaying new season products to catch passers - by attention.

3.       Bulk purchasing

Buying product in large quantity will be cost effective as the cost of producing one garment will be low. Also, the supplier will be happy to work with Primark in future and maintain a strong relationship bond of work with them.

Need of the customer

Primark uses CRM (Customer Relationship Management), a software that enables them to detect high demand products in order to produce large quantities of them to satisfy the high demand while generating Hugh income for the company.

SWOT Analysis

The Success of SWOT analysis is mainly based on how the firm fits its strategy with respect to its environment. The SWOT analysis of Primark attempts to interpret the information they have with respects to its environment that affects the ability of the business to meet its strategic goals (Leigh, N.D). The external analysis of Primark includes the opportunities and threats encountered by the organization and the internal analysis covers strength, weakness

Strengths

v  It has an organized business structure providing its customers with what they want and when they want. By volume Primark is now the second largest clothing retailer. 

v  Primark offers high street quality clothes for cheap prices. The fashion scheme of Primark is solely based on the people between 16- 35 years.

v  Primark has a very strong work force behind them.  Who are well trained to have good knowledge of the products and to offer high customer service.  Primark has over 27,000 employees working for them on daily base, with each individual strategically positioned for optimum performance.

v  Primark has 237 branches across Europe with 156 outlets in the UK; The Company is part of the ETI (Ethical Trading Initiative) which focuses on worker’s rights.

v  Use cheap and skilled labour for the supplying of product.

Opportunities

v  Primark is expanding rapidly with the opening of 47 new stores in the UK and other part of Europe.  Primark will see the door of the 48 store opened in Tottenham court road in September 2012. They also has an opportunity to share their high quality products and services overseas.

v  The opening of the 7 new stores in Spain to battle along its competitors like Zara and other retail out in Spain, Primark is now providing high quality clothes to fashion conscious people.

v  Day by day the demand for latest design with low price are increasing ,this demand opened a Huge marketing opportunities around the globe for Primark.

Weakness

v  One of the main thing for which Primark is criticized of is using child labour

v  Primark has being very successful in capturing the low income earners due to low pricing but they do not have enough checkout point and fitting rooms, hence, customers  end up walking away due to the long queues at these places.

v  Primark do not have security tags on their products, this failure has seen an increase in customer theft, though the CCTV operators security officers try their utmost best to reduce it to the minimal.

Threats

v  Primark’s major threats come from its competitors which are big names in the market with lot of resources like Zara, forever 21, Top shop Next and H&M.  Will it match the needs of the customer in terms of fashion and uniqueness?

v  Complex and volatile business environment customer’s needs and wants are changing and the competition is likely to increase.

v  Increasing labour and raw materials cost can see an increase in Primark pricing structure. 

2: The various tools used to develop a strategic marketing strategy

The graphs below shows the various tools use by companies to develop good marketing strategies. Every company operates differently and would have to adopt the tool that best suit their company marketing strategies.

Primark more favors the PESTLE (Political, Economical, Social-Cultural, Technological, Legal and Environmental and the SWOT Analyses (Strengths, Weakness, Opportunity and Threats.

The identification of these tools has helped Primark to adopted to the changing environment and the continuous changes in human needs and behavior.

According to (Hawes & Crittenden, 1984), states that as a brand, loyalty bond get stronger and they

Are able to expand more and create more demand of their products in the market.

Primark strategy is to keep their customers by keeping their prices low. They were able to achieve by out sourcing 90% of their products to developing countries like Bangladesh, India, China, Turkey and some part of Europe. The major role of strategic marketing starts from planning, analyse, interpreting, implementing and evaluating. 

PESTLE

Ø  Political, Economical, Social-Cultural, Technological, Legal and Environmental

7Ps Marketing mix

Ø  Product , Price, Place, Promotion, People, Process, Physical evidence

SWOT

Ø  Strength, Weakness, opportunity, Threats

ENTREPRENEUR JUNIOR (2011)

Porter 5 forces theory

Ø  Supplier Power, Buyer Power, Competitive Rivalry, Threat of Substitution, Threat of New Entry

According to (freelancerconsulting.com, 2012)

Section 2.1: Access the value of models used in strategic marketing planning, Identify the models used by Primark towards its marketing strategy.

Strategic plan for strategic model provides a long- term plan for success and the framework for clear communication of what is important and what is not. It is a key leadership instrument providing direction for implementation of operational and tactical planning to decide what the company should do.

Developing competency models is crucial to accelerate the growing need of an efficient and effective process of an organization. Strategic success model is a software aided process developed by Haves and Associates to describe the competencies that are very important for success in a given market. Out dated model needs to be replaced or revised and even a new model can be redeveloped using the strategic model building process if it produces unsatisfactory results.

According to (Phillip Kotler, 2007), Model building started with a card-sort process that is facilitated with competency cards and sorting pads for participants.

There are various models that companies can use. Every organisation will use the model that best suit their service in regards to Primark I will discuss Porter 5 forces theory.

Supplier Power

Primark has out sourced 90% of the manufacturing to developing countries like Bangladesh, India, china, Turkey and some part of Europe. Primark does not rely on only one big supplier rather Primark has multiple suppliers across various countries. This is a strategic move by Primark, this strategy reduce the bargaining power of the suppliers therefore the bargaining power of the suppliers are very low.

Buyer Power

In today’s competitive market with raising prices and the rapid downsizing of companies, consumers are forced to cut back on their expenditure. Customers are now looking for cheap products, Primark is able to price their items lower than the competition, hence, more and more customers are now coming to Primark to get value for their money. The buying power of the customers is very high, there are a lot of competitors in the market none of which can compete with Primark when it comes to pricing.

Competitive Rivalry

Competitive rivalry is very high, Primark has to stay focus and ensure their pricing is in line with the customer’s needs. There are a number of similar size players in the market like Topshop, Zara, Forever 21 and H & M. These players are offering similar type products like Primark, each of them are aiming to be the market leader.

Threat of Substitution

Threat of substitutes is very high because there are lots of companies in the market offering similar products at competitive prices, H & M for example. Customers can switch from one product to the other as in today fashion conscious world customers are becoming more and more choosey.

Threat of New Entry

The threat of new entry is very low for Primark because of high setup cost involved. Primark dominate the UK and Europe market by offering very low cost, anyone who is thinking about entering into the market has to think about Primark and the existing competition of Primark. 

Section 2.2: Discuss the links between strategic position and marketing tactic with to Primark

According to (Wisegeek, 2012) Market positioning is the manipulation of a brand or family of brands to create a positive perception in the eyes of the public. If a product is well positioned, it will have strong sales, and it may become the go-to brand for people who need that particular product. Poor positioning, on the other hand, can lead to bad sales and a dubious reputation. A number of things are involved in market positioning, with entire firms specializing in this activity and working with clients to position their products effectively. When a product is released, the company needs to think beyond what the product is for when it comes to positioning. It also should think about the kind of people that would wants to buy the product.

The act of designing the company’s offering an image so that they occupy a meaningful and distinct competitive position in the target customer’s minds (Phillip Kotler 1997).

Primark Targets

Primark marketing targets are women, men and kids with 50% of their products targeted at women wear. They mostly target low income earners, fashion conscious people and also customers from outside of the UK.

Demographic Targets

60% of Primark sales revenue comes from outside the UK. Most of Primark customers are from Europe and the Arab Nation, with a marginal amount coming from the B.R.I.C Nations.

Primark has positioned itself very well in the mind of the customers and the consumers; over the years Primark has been converting more and more consumers into customers. Consumers across the globe knows that they can always find a good bargain at Primark, Primark slogan is “Look Good, Spend Less” and they have managed to live by their slogan this is what their customers are expecting from them.

In order for any business to survive they first need to understand their competitors and the market they are competing in. A number of tools can be used to access the market and understanding the competition better the company has to use the tool that best fit them. 

Tools

ü  SWOT,

ü  PESTLE,

ü  STEEP,

ü  7PS,

ü   PORTER 5 FORCES

ü   PEST

The above mentioned tools are vital and will help Primark maintain a very strong position in the near and for future. A successful retailer like Primark must use effective marketing strategies to deliver what the customers want; the strategic positioning enables Primark to analyze all the factors of the market and continue to be the market leader for cheap products.

Primark has a lot of big competition competing with them; these big players would like to gain better market position. Primark is trying to control the market by flooding it with cheap products; their competitors are unable to keep up with Primark pricing method. These big players are Forever21, Next, M & S, Top shop, New Look, Zara, H & M and many more. What does this mean for Primark? This means Primark can’t afford to fall behind. The Primark team has to be on top of the new market trend and stay focus on the strategies they have set. 

Section 2.3: Analyze the merits of relation marketing in a given strategic marketing strategy. Reflect the role of RM at Primark.

Relationship Marketing

According to Zeithaml and Bitner (2000) Relationship marketing is a philosophy of doing business, it's a strategic device that focuses on keeping and improving current customers whole acquiring new customers. According to Coviello's (1997) states, Relationship Management is an ‘integrative activity involving functions across the organization, with emphasis on facilitating, building and maintaining relationships over the time.

Relationship marketing is a new phenomenon which is a step ahead of traditional marketing. The emphasis here lies on ‘Relationship' between a customer and a product, a customer and an organization (b2c), an organization with other organization (b2b). The overall purpose of Relationship Marketing is to facilitate and maintain customer relationships, which leads to changed focal points and modification of marketing management process. RM tends to provide a superior relationship between a customer and an organization which in return gives an organization competitive advantage.

Primark is a billon pound retail industry and is a part of an even bigger organization “Associated British Food (ABF) there are a lot of companies listed under the ABF group of companies and Primark is the most successful company listed with ABF. Primark  success start from  picking the right manufacturer for the raw material, processing the raw material into finish  products packaging and distributing it to the Primark's stores. Primark has to have a good relationship with their suppliers to ensure consistent quality, service, deliveries on time, and other inward and outward logistics. 

Conclusion

One of the basic principles of Primark is to ensure that it provides its customers with values for money and maintaining the ethical manufacturing standard. In doing so some extra cost are involved but Primark believes that this will enable their business to operate in a sustainable and well managed way.  Sustainability is one of the features of Primark all due to the strategic marketing method that’s has been implemented dissolved in its business practices. By establishing the strong relationships with stakeholders consumers believe that their valued appropriately. 

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