Download - Grace Rossi Coursework
Digital marketing
Coursework 1
Alistair McColm, Grace Rossi, Jonas Mueller, Holly Jarvie
University of the West of Scotland
Table of Contents
Introduction (1)................................................................................................................. 3
1.1 Report Objective.................................................................................................................. 3
1.2 Company Background.................................................................................................3
Situation: Where Are We Now? (2)..............................................................................5
2.1 Marketplace.................................................................................................................... 5
2.2 Macro Environment Analysis: PESTEL..................................................................5
2.3 Microenvironment Analysis......................................................................................7
2.4 Owned Media Analysis................................................................................................7
2.5 Paid Media Analysis..................................................................................................... 8
2.6 Earned Media................................................................................................................. 8
Objectives – Where Do We Want To Be? (3)..........................................................10
3.1 Objective 1 – Implement customer retention policies..................................10
3.2 Objective 2 – Effectively utilise the digital marketing channels................10
Strategy – How Do We Get There? (4)......................................................................12
4.1 Segmentation............................................................................................................ 12
4.2 Targeting...................................................................................................................... 12
Tactics – How Exactly Do We Get There? (5).....................................................13
5.1 How to achieve objective 1 – Customer Retention.....................................13
5.2 How to achieve objective 2 – Effectively using digital marketing channels...................................................................................................................................... 14
Actions – Who Does What and When? (6)...........................................................15
6.1 Action............................................................................................................................. 15
Control – How Do We Monitor Performance? (7)..............................................15
7.1 What are the key performance measurements?..........................................15
7.2 How is performance recorded?.............................................................................16
Conclusion (8)................................................................................................................. 16
References....................................................................................................................... 17
Appendix 1 – Timeline................................................................................................. 20
Apendix 2 - PESTEL Analysis................................................................................... 21
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Appendix 3 - SWOT Analysis....................................................................................22
Introduction (1)
1.1 Report Objective
The purpose of this report is to provide an insight into the current marketing
strategy of Primark Stores Ltd. By doing so, the report will also provide a clear
interpretation of the marketplace which Primark trades in. Mintel reports and
various methods of primary and secondary research are used to demonstrate
the information.
The current online situation of the organisation will be critically analysed
throughout the report and theoretical frameworks will be applied to illustrate a
further understanding of the organisations strengths and weaknesses. An
appropriate digital marketing strategy will then be suggested for Primark to
ensure sustainable and effective growth within their marketplace.
The strategic direction of the company is considered and an appropriate plan
of action is suggested for the organisation going forward, to benefit their
online marketing success. Research evidence, theories and frameworks, such
as SWOT analysis, are used to support the recommendations throughout the
report. In addition, SOSTAC is the framework used to structure the report.
1.2 Company Background
Originally, registered under the name “Pennys”, Primark launched in June
1969 in Dublin, Ireland. Founded originally by Arthur Ryan, who was backed
by Associated British Foods (ABS) after receiving a £50,000 start up
investment, the store began trading.
The organisation then expanded into the UK in 1973. The trading name
‘Primark’ was born due to competition from an American based company, JC
Penney, who owned the rights to the name. At this point the store grew in
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popularity and has now lead to be one of the worlds leading fasion retailers
owning over two hundred ninety stores over the UK, Ireland, Europe and the
USA (see Appendix 1).
Primark’s expansion heavily relies on their ability to offer ‘cheap and cheerful’
products for a varied and diverse marketplace.
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Situation: Where Are We Now? (2)
2.1 Marketplace
Economy of scale, low manufacturing costs and efficient distribution channels
are used by Primark to hold a competitive edge in an ever changing market
place. The strategy of low margin-high profit, has been used by the
organisation to achieve high financial performance despite poor working
ethics allegations. (Hall, 2008)
Primark has established a loyal customer base in a marketplace that depends
heavily on online sales, despite the company not having a transactional
website.
“Despite its success the last couple of years have seen sales growth slow with
like-for-like sales only growing marginally. Without a website to add sales, all
growth is currently being driven by new stores and expansion into new
markets.” (Mintel, 2015) Primark have ruled out the prospect of a transactional
website, the retailer who is owned by parent company Associated British
Foods, is focusing on the growth of its international retail presence.”
The organisation has created a diverse offering in store, which has lead to a
varied target market. According to Mintel (2013), “Primark has the widest
appeal among a broad range of age groups and this is likely to have attributed
to its continuing success.”
2.2 Macro Environment Analysis: PESTEL
The marketplace can be affected by five main factors, commonly known as
the macro environment, the factors are eceonmic conditions, changes to
international trade legislation, technological developments, innovations, social
change and political interventions, (Chaffey and Ellis-Chadwick, 2012 p.57).
The use of a PESTEL (Political, Economic, Social, Technological,
Environmental and Legal) analysis has been used in this report to analyse the
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factors that have affected Primark’s macro environment and marketplace.
(See Appendix 2)
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2.3 Microenvironment Analysis
This report has provided a critical analysis of the company’s online situation,
according to (Chaffey and Ellis-Chadwick, 2012 p.664) a company’s online
situation means “the different forms of online media controlled by a company
including their website, blogs, email list and social media presences. Also known
as ‘owned media’.
The Microenvironment, also known as the trading environment, looks at how
shareholders such as customers, employees, suppliers and competitors
outline the online marketplace. An effective and sustainable digital marketing
strategy should take the needs of the microenvironment into consideration.
In order to develop a strategy, this report must analyse the current situation
that the organisation is in. The use of a SWOT (Strengths, Weaknesses,
Opportunities and Threats) Analysis will provide a clear understanding of the
areas that the organisation should develop. (See appendix 3)
Today, technology touches virtually every element of marketing, from digitally
enhanced advertisements to packaging, re-search, distribution, pricing and
beyond (Wood, M, 2013.p35). This report has identified the main platforms of
social media and compared their following with other online competitors.
2.4 Owned Media Analysis
Company Instagram Facebook Twitter YouTube Website
Primark 2.8M 4, 409, 778 156,000 17,446 Non-
Transactional
River Island 1.4M 2, 143, 681 379,000 9,333 Transactional
H&M 13.4M 26, 632, 681 7.75M 174,174 Transactional
New Look 1M 3, 207, 497 321,000 10,685 Transactional
The table above was created to provide a comparison of the organisation and
it’s competitors. As seen from the table, with the exception of H&M, Primark is
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exceeding most of its competitors in terms of online following. However, one
must analyse the value of followers. For example, Primark has more
subscriptions on YouTube than New Look, however New Look has more
views-per page. Therefore, these results prove that Primark has a good
following but they do not entice their consumers to visit their pages. Thus, the
organisation is not exploiting their vast amount of followers to market
effectively.
In addition, the organisation has a major weakness of not being able to offer
online shopping to its customers. The three major competitors offer a
transactional websites – by Primark not offering this service, they are missing
out on the massive market that has been presented throughout the report.
2.5 Paid Media Analysis
With the exception of a television add in Christmas 2014, Primark rarely uses
paid media. The advert was described as a ‘fast cut product montage’ (CUK,
2014) showcasing a wide variety of products that the store offers.
Currently, Primark doesn’t value paid media hence its absence from the
marketing strategy. The organisation has used social media platforms to
market their products as opposed to paying for expensive distribution
channels such as television adverts.
2.6 Earned Media
The main attribute of earned media is ‘word-of-mouth’ occurring both online
and offline between consumers and businesses. In relation to Primark, the
organisation have established a well grounded, earned media platform.
However, with Mintel’s predicted 86% growth of the online fashion market
from 2011 to 2016, reaching £9.4 billion (Drapers, 2014), it is apparent that
the provision of a multi- channel shopping experience may be crucial to the
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value retailer’s continued development and success in future.
“Primark will use its own shoppers to help sell the brand to fellow fashion
lovers by posting photographs of themselves wearing their latest purchases
on Primania, the company's new social media site. Less than a year old,
Primania now gets 300,000 visitors a week.” (Butler, 2014)
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Objectives – Where Do We Want To Be? (3)
This section of the report is focussing on creating objectives for the digital
marketing strategy. The objectives will be SMART (specific, measurable,
achievable, realistic and timely) and be related to the Five S’s (Sell, Serve,
Sizzle, Speak and Save).
3.1 Objective 1 – Implement customer retention policies
This objective is specific to the individual customers who already have an
invested interest in the company. Although the organisation has an
established loyalty, this objective is focussing on the retention of them. With
increased competition, the organisation must maintain its competitive edge.
The customer retention figures should be accessible and measurable, these
figures can be analysed weekly, monthly or annually. The use of Customer
Retention Rates (CRR) will allow the organisation to gain valuable information
on how the organisation is progressing.
The objective is achievable and realistic as it offers a simple concept that can
be filtered throughout the organisation, from the top line management through
to subordinates (Total Quality Management).
In order to achieve this within a realistic time period, the retention rates should
be constantly monitored and actions should be put into place when needed.
3.2 Objective 2 – Effectively utilise the digital marketing channels
The objective was created to make use of the current marketing materials that
Primark uses. It is evident that they have a large following, however, the
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channels of distribution should be utilised more effectively in order to market
their products. Offering online shopping, applications, offers, etc. is something
that should help retain and entice new customers.
The marketing team can analyse the followers, social media activity and
website visits and this will provide useful information on how best to reach the
customer.
In order to be realistic, it is very clear that social media platforms are
commonly recognised as an effective business tool. Therefore, the
organisation should take note of this and utilise their current following. In
addition, the timescale can be extended over a slightly longer period of time
as it is something which needs constant maintenance and monitoring.
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Strategy – How Do We Get There? (4)
4.1 Segmentation
According to Chaffey and Ellis-Chadwick (2012 p.668) segmentation is an
identification of different groups within a target market in order to develop
different offerings for each group. The four different types of segmentation are
geographical, demographic, psychographic and behavioral. Focusing on
demographical and behavioral segmentation to develop a strategy for the two
previous objectives.
Primark has already established their individual market segmentations based
on demographics e.g. age, gender and social class. This information should
be put into more use by attempting to retain their customers, by offering
different benefits. According to Mintel (2013), “Primark has the widest appeal
among a broad range of age groups and this is likely to have attributed to its
continuing success.”
Behavioral segmentation will allow the organisation to target groups of people
that actively use, or do not use, digital marketing channels. This can then
relate the level of loyalty to the product.
4.2 Targeting
The importance of targeting is to build or retain the relationship between the
supplier and the consumer. Primark needs to target their loyal customers by
diversify their products cautiously without changing their target audience
completely.
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Tactics – How Exactly Do We Get There? (5)
5.1 How to achieve objective 1 – Customer Retention
o Email Offers: By sending out messages to customers with any offers or
promotions will allow the already loyal custom base to revisit the store
to purchase the products. This measure is cost effective and not limited
to a certain amount of emails sent a day (Resnikoff, 2014).
o Customer Loyalty Cards: The use of these cards will allow the
customer to gain perks by visiting the stores, both online and offline. In
addition, according to (Alenski, 2014) it has proven to boost growth.
o Store Cards: Enticing a customer to spend more and the organisation
will gain interest on their purchase repayment. The loyalty will increase
as they can pay for the goods after the initial purchase, other stores
may not offer the same service.
o Customer Service Training: By training staff on dealing with customer
retention methods. The employees should be focussing their efforts to
providing a high quality service e.g. customer service online/telephone.
“more than half (59%) of the 4,000 consumers surveyed have higher
expectations for customer service today than they did a year ago.”
(Morris, 2016)
o Special offers/Promotions: The use of student discount and
promotional offers can be used to entice and retain customers.
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5.2 How to achieve objective 2 – Effectively using digital marketing channels
o Website: To create a transactional website to allow customers to shop
online. “However, with Mintel’s predicted 86% growth of the online
fashion market from 2011 to 2016, reaching £9.4 billion (Drapers,
2014), it is apparent that the provision of a multi- channel shopping
experience may be crucial to the value retailer’s continued
development and success in future”
o Online Competions: Social Media platforms used to host online
competitions in order to win prizes such as money off vouchers, gift
cards, etc.
o Mobile Application: the development of a mobile application will allow
ease of mobile shopping, therefore increasing the profits and ensuring
sustainable growth. Push notifications allow the customer to be
reminded of the offers and new products.
o Social Media Advertisements: The organisation should exploit their
large amount of followers by bringing fresh and new products across
their social media platforms such as Instagram, Snapchat and
Facebook. These should be linked to the mobile application to, again,
ensure customer ease and satisfaction.
o Live chat/Personal shopper: The use of the live chat allows the
customer to be in constant contact with the organisation. This again
improves customer relations and brand loyalty. According to a poll by
Andersen Consulting, almost 62 percent of Internet consumers said
they would purchase more products online if live customer support
were available.” (Anderson, 2014)
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Actions – Who Does What and When? (6)
6.1 Action
Due to the size of the organisation and the fact it is spread across various
countries, the company could not rely on simple methods of achieving goals
and monitoring progress. Senior management will analyse the performance of
individual stores and implement relevant customer retention policies.
In terms of digital media channels being utilised the organisation may expand
their current marketing department, ensuring they have experience in digital
marketing. Alternatively, they could contract external companies to network
across their digital distribution channels.
Control – How Do We Monitor Performance? (7)
7.1 What are the key performance measurements?
Objective 1: o The distribution of customer loyalty cards
o Analysis of CRR
o Analysis of footfall
o Customer Acquisition Rate analysis
o Customer Attrition Rate analysis
Objective 2: o Number of visits per day
o Increase following social media
o Transactions made on the website
o Amount of downloads of the app
o National Performance Score of the live chat employees
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7.2 How is performance recorded?
In terms of tracking the performance of the KPI’s, the organisation should
consider using tools such as Google Analytics. The marketing and Human
Resource department should ensure they are trained in relevant analysis
programs, to allow for accurate performance records. Customer retention
rates should be monitored regularly and training needs should be identified
and made clear to the appropriate members of the team.
Conclusion (8)
To conclude, Primark have established a good following on social media
channels, however, they are not fully utilising them by not focussing their
posts towards customers. The strong brand image attracts consumers to the
website, however it needs to be more interactive in order to ensure customer
satisfaction. As mentioned in the report, the organisation needs to offer the
online shopping service.
The report identified the need for the organisation to ensure higher customer
loyalty rates. The actions and tactics have been identified throughout the final
sections of the report demonstrating the needs and importance of customer
loyalty.
Furthermore, the organisation will need to heavily expand their current
marketing and human resource departments to ensure they company can
monitor and maintain the procedures put in place. Relevant external
organisations might be used, as discussed in the report, to ensure accurate
analysis.
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References
Anderson (2014) 3 key benefits of live chat for customer service -. Available at: http://www.vivocha.com/2014/01/3-key-benefits-of-live-chat-for-customer-service/ (Accessed: 7 April 2016).
Bryan, D. (2014) How Primark achieved 1.7m Facebook likes in just six months. Available at: https://econsultancy.com/blog/64409-how-primark-achieved-1-7m-facebook-likes-in-just-six-months/ (Accessed: 7 April 2016).
Butler, M. (2015) Showrooming: Are retailers ready to embrace it?. Available at: http://www.theguardian.com/media-network/media-network-blog/2013/may/09/showrooming-retail-solution-e-commerce (Accessed: 7 April 2016).
Butler, S. (2014) Love the dress: Sharing websites are the latest must-have for fashion retailers. Available at: http://www.theguardian.com/fashion/2014/jun/29/primania-fashion-retailers-social-sharing-websites (Accessed: 7 April 2016).
CUK (2014) 2014: Primark has their one-minute Christmas advert out, and it’s the return of the fast-cut product montage. Available at: http://www.christmasuk.org/entry_3893 (Accessed: 7 April 2016).
Chaffey, D. and Ellis-Chadwick, F. (2012) Digital marketing: Strategy, implementation and practice. 5th edn. United Kingdom: Financial Times Prentice Hall.
Drapers (2014) Drapers technology homepage: For fashion technology news and features. Available at: http://www.drapersonline.com/business-operations/digital (Accessed: 7 April 2016).
EA (2016) Comment: Technological advancements in the retail industry. Available at: http://www.retailgazette.co.uk/blog/2014/02/04144-comment-technological-advancements-in-the-retail-industry (Accessed: 7 April 2016).
ETI (2010) Report on Primark Inquiry. Available at: http://www.ethicaltrade.org/news-and-events/news/report-primark-inquiry (Accessed: 7 April 2016).
Flanders, S. (2011) VAT rate rises. Available at: http://www.bbc.co.uk/news/business-12099638 (Accessed: 7 April 2016).
Gorin, D. (2016) Rising cost of raw materials. Available at: https://traccsolution.com/resources/raw-material-costs/ (Accessed: 7 April 2016).
Hall, J. (2008) Available at: http://v]http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/2792753/Primark-faces-customer-exodus-after-BBC-child-labour-allegations.html (Accessed: 23 March 2016).
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Jackson, T. and Shaw, D. (2000) Mastering fashion buying and merchandising management - Tim Jackson - paperback. 3rd edn. Basingstoke, Hampshire: Palgrave Macmillan.
MINTEL (2013) Clothing Retailing - UK. Available at: http://academic.mintel.com/display/683744/?highlight#hit1 (Accessed: 6 April 2016).
MINTEL (2015) Clothing Retailing - UK. Available at: http://academic.mintel.com/display/752281/?highlight#hit1 (Accessed: 6 April 2016).
MINTEL (2015) Mintel identifies four key UK consumer trends for 2015. Available at: http://www.mintel.com/press-centre/social-and-lifestyle/mintel-identifies-four-key-uk-consumer-trends-for-2015 (Accessed: 7 April 2016).
Morris, T. (2016) Buy or bye? Why customer service is increasingly key to retail success. Available at: http://www.business2community.com/customer-experience/buy-bye-customer-service-increasingly-key-retail-success-01496604#iITSPP5jj4YyC6Bw.97 (Accessed: 7 April 2016).
Olenski, S. (2013) How retail brands are using technology to provide added value to consumers. Available at: http://www.forbes.com/sites/steveolenski/2013/11/25/how-retail-brands-are-using-technology-to-provide-added-value-to-consumers/#60c423d49f43 (Accessed: 7 April 2016).
Olenski, S. (2014) 8 reasons why loyalty programs are imperative for marketers. Available at: http://marketingland.com/8-reasons-loyalty-programs-imperative-marketers-109077 (Accessed: 7 April 2016).
Resnikoff, P. (2014) 10 reasons why Email is still your best communication tool.. Available at: https://www.digitalmusicnews.com/2014/05/28/10-reasons-email-still-best-communication-tool/ (Accessed: 7 April 2016).
Roanhorse, E. (2016) ‘Factors influencing trends in retailing’, Small Business Chron, .
Shawcross, J. (2014) The rise and rise of Primark. Available at: http://money.aol.co.uk/2014/03/23/the-rise-and-rise-of-primark/ (Accessed: 23 March 2016).Statista (2016) Retail e-commerce sales worldwide from 2014 to 2019 (in billion U.S. Dollars). Available at: http://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/ (Accessed: 7 April 2016).
Steiner, R. (2016) Primark founder to step down this summer. Available at: http://www.thisismoney.co.uk/money/markets/article-1678245/Primark-founder-to-step-down-this-summer.html (Accessed: 23 March 2016).
Wood, M. (2013) Essential Guide To Marketing Planning. 3rd ed edn. Harlow: Pearson.
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Wood, Z. (2016) Primark’s chief executive Arthur Ryan steps down after 40 years. Available at: http://www.theguardian.com/business/2009/sep/11/primark-founder-arthur-ryan-resigns (Accessed: 23 March 2016).
E.-B. (2013) Is Primark mad to ignore ecommerce?. Available at: https://econsultancy.com/blog/62640-is-primark-mad-to-ignore-ecommerce/ (Accessed: 7 April 2016).
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Appendix 1 – Timeline
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Apendix 2 - PESTEL Analysis
Political and legal regulations
o In terms of Primark dealing with employees, they have to ensure the correct working conditions are in place following government outlines and make any improvements necessary due to being part of the Ethical Trading Initiative (ETI). However, if political parties change Primark will have to adjust their strategy to comply with any new laws or regulations (ETI, 2010).
o In 2011, the rise in VAT impacted Primark’s low price strategy as the percentage rose to 20% making it more difficult for the organisation to keep their prices low (Flanders, 2011)
Economic o The online sales have grown massively in recent years within the retail sector. (Statista, 2016)
o The cost of raw materials and energy supplies has affected the manufacturing and the importing and exporting costs within the retail sector. (Gorin, 2016)
Social o The trend of consumers shopping in-store to have the ‘showroom experience’ and then purchasing online has grown massively in recent years. (Burkwood, 2013)
o Consumer behaviour studies suggest that over a third of the UK population have used click and collect as a method for purchasing in the retail sector. (Mintel, 2015)
Technological o Improved use of digital channels to ensure a better customer experience allows the organisation to benefit from increased customer loyalty (Olenski, 2013)
o The use of mobile netowkring and marketing has allowed organisation to become more personal with their consumers and offer to a far wider audience. (EA, 2016)
Environmental o Retailers are being more concerned about their carbon footprint, which has affected their methods of distribution. (Roanhorse, 2016)
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Appendix 3 - SWOT Analysis
Strengthso On trend, fast fashion at low
priceso Wide and shallow range of
products (Jackson and Shaw, 2009)
o Use of social media (Facebook, Twitter, Snapchat, etc.)
o Corporate Social Responsibility (supporting charities such as Solidaridad, Cotton Connect, new life and ethical trading initiative)
o Prestigious address of flagship store.
o Adaptive to customer needs e.g. health and fitness trends.
o Use of ‘Primania’
Weaknesseso Lack of customer satisfaction
in storeso Poor point of sale designo Poorly organised and non-
customer friendly lay out of stores
o Inconsistent quality of outlets across various locations
o “low prices appears to have negative associations with regards to style and quality.” (Jobber, 2007)
o No online shopping availabilityo Unethical working conditions
(slave labour) allegations.o Certain producst seem poor in
quality
Opportunities
o Demand for online shoppingo In addition, the click and
collect service is becoming more popular.
o Develop an Application for mobile devices
o Better communication with customers such as emails and the use of the app
o Market penetration e.g. plus size market, grey market, imerging markets.
o Increase the offering by providing a food and beverage outlet.
o Offering a store card
Threats
o Similar brands offering equally low prices but increased quality.
o Tainted reputation due to past reports based on unethical workings
o Poor street presence compared to competitors such as New Look
o Brands with higher budgets offer increased customer service e.g. personal shopper
o Celebrity endorsements from more upmarket brands
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