The primary motive of this task is to outline and explain the significant of marketing strategies that help in expanding and flourishing the business activities widely. Here is the discussion about Primark business operation and further, the report outlines that how the company enters in Romania to attain the long term mission and vision. The company offers various types of footwear, accessories and clothing to the customers across the globe. Girl’s accessories product has been taken in the task. No company can expand and explore the business globally without analyzing and identifying the external environment of the country. The paper discusses that how Primark evaluates and identifies the macro environment of Romania. Apart from this, various entry modes also are used by the firm to enter in Romanian market. At the end, porter generic strategy has been discussed in the task briefly to capture entire key target audience in the competitive market. More detail of the task has been discussed below.
Primark is an Irish accessories and clothing retailer. Its headquarter is situated in Dublin and it is a subsidiary of AB foods. The company offers a wide range of products, stocking from kids and baby, home ware, mens, beauty products, frills and confectionery. The company opened its store in Dublin in 1969 under the name Penneys. It has around 350 stores in 11 countries across America and Europe (Primark, 2018). The company carries concessions in Manchester, Birmingham and Selfridges. The main mission of the company is to provide good and unique quality of products to the customers at suitable prices with sustainability in the workplace. Girl accessories are significant products that help in increasing and enhancing the sales volume of the firm. This product helps in attracting maximum number of girls in the Romanian market. By expanding and exploring the business in Romania, Primark wants to generate maximum profits and make a dynamic goodwill in the global market.
Macro environmental may affect each and every business globally. If the company wants to reduce the negative factors then the firm must need to understand and evaluate the macro environment (Tho, 2018). The macro environment also affects the entire economy of the business globally. Pestle analysis is done by the company to measure and identify the external factors to eliminate and reduce the threats and issues of the market. As the same way, if Primark wants to introduce girl’s accessories in Romania then it needs to focus on the external factors. The pestle analysis for Primark has been discussed below.
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External factors |
Opportunities |
Threats |
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Political factor |
Various political factors may influence the success and growth of the company in Romania while conducting business activities and operations in such country. The scope of the European legislation is to protect investors, safeguard marketing integrity by setting harmonized needs and requirements governing the actions and activities of authorized intermediaries and to encourage effective, fair transparent and incorporated financial markets. The Romanian government launched the stages of the liberalization procedure and attributes of the market open to rivalries. Therefore, stable political conditions can directly affect the growth and success of the firm positively (Adriana and Monica, 2018). |
In today’s era, the Romanian political situation is not stable and it is tense and unbalanced. It may influence the profitability and business functions of Primark adversely. |
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Economic factor |
The economic factors such as interest rate, exchange rate, employment rate and inflation rate could also affect the target and efficiency of the company. Romania’s economic freedom score is around 69.4, thus making its economy the 37th freest in the 2018 index (Heritage, 2018). Apart from this, it is stated that external economic of the country has been stable after 2015. It is noted that Romania is showing a strong and effective economic growth in the marketplace. One of the effective strengths of Romania is cheap workforce and production factors that can remarkably contribute to stimulating business ventures. Further, primary opportunity is the association to the European economic area that permits for the free flow of goods, people, capital and services. Wage growth of the country is also stable and effective (Gantman, 2012). |
Delay in additional structural reforms put direct impact on the target and growth rate of Primark. On the other hand, corruption is widespread at all levels of government authorities and undermines the rule of law. In addition, few diversified offers will also affect the efficiency and effectiveness of Primark in Romania. One of the significant and effective demerits in this domain is the lack of a transparent business environment and mixed legislations that have impacted on the growth of the company. |
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Social factor |
The social factors such as customs, values, beliefs, income level and buying behavior of the consumers that can affect the sales volume and operating income of the people (Businessculture, 2018). It is stated that social elements are also very significant and effective because they can be found in the macro environment (official’s investors, suppliers and business partners) and the internal environment of the firm (employees). |
The social atomization is the biggest and effective threat for the Romania that can be eliminated by setting the social integration programs and sessions. Along with this, the company would fail to control information and facts that may directly or indirectly hamper its image in the global market (Müller, Leitão, and Sikor, 2013). Changes in behavior and attitudes of the key target audience will also affect the sustainability and progress of Primark in the global market (King, 2013). |
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Technological factors |
It is noted that Romania is fastest information technology markets in Eastern Europe. The nation has made effective and unique progress in the information and communication technology (ICT) subsectors including mobile telephony, basic telephony and the internet. Hence, Primark can take ample of opportunities while introducing girls accessories in the country. |
Technology is a dynamic factor that can be changed frequently. Change in technology and resources might affect the revenue and growth of Primark adversely. |
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Legal factor |
It is stated that the constitutional court of Romania acts as an sovereign constitutional jurisdiction and it is not part of ordinary court system. The military court system is formulated intro three tribunals such as the military court of appeal and the territorial tribunal (Wang, and Sun, 2010). |
It is analyzed that Primark is coming from other country thus, the rules and regulations of Romania would be different from the home country. It will also affect the production and performance of Primark in the country. Before initiating the business in Romania, the company should analyze and identify the rules, regulations and policies of the country so that future risks and challenges can be predicted. |
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Environmental factor |
Environment is a significant part of each and every country therefore it can also influence the operating income of the organization adversely and positively as well. The weather, climate changes and globalization would affect the effectiveness of the firm (Kemeny, 2010). |
Primark is an Irish clothing retailer therefore environment of Romania is different from Ireland. It could affect the long term objectives and goals of the company adversely. It is stated that the company should focus on the environment when introducing new product such as girls accessories in Romania. It will help the company to gain competitive benefits in the international market and along with this, it will also help to accomplish the desired mission and vision in the competitive market (Harding and Fokkens, 2013). |
There are ample of entry modes that can be used by Primark to enter in the Romania. The choice of how to penetrate a overseas market can put remarkable impact on the outcomes (Kumar, and Annushkina, 2010). The market entry modes for entering in the new country have been discussed below.
Foreign direct investment: It is one of the significant entry modes that can be used by the company when entering in the new market. Investment is used by the company in this entry mode to attain various rivalries benefits. Venture might be direct or indirect through monetary and other institutions. Foreign direct investment may influence the investment outline of the economy and further it helps to augment and enhance the overall growth and expansion. The investment can be done by buying shares of a property, assets and company. By using foreign direct investment, modification and correction can be done at anytime. Along with this, it is an easy and unique mode of entry (Morschett, Schramm-Klein and Zentes,2015). Direct ownership is also included in the foreign direct investment. It also includes transfer of resources such as technology, resources, and personnel. It is noted that direct investment can be done through the acquisition of an existing and effective entity or setting of a new and innovative endeavor. It is stated that direct investment may offer a high and huge degree of control in the operations and the capability to better know and understand the competitive atmosphere and consumers across the globe. It also needs unique resources and effective and dynamic degree of commitment (Bbamantra, 2018).
Merger and acquisitions: Merger and acquisition play a vital role in expanding and exploring the business globally. A merger is a mixture of two or more different entities into one, and the assets and liabilities of two different entities are combined into one. All the benefits, economies of scale, diversification and synergy are taken by only one entity. In this entry mode, control and evaluation is done by single entity. It does not lead to termination of the firm whose shares are acquired. In this way, merger and acquisition provide ample of benefits to the customers across the globe (Raff, Ryan and Stähler, 2012).
Strategic alliance: It is an voluntary and effective formal agreement between two corporations to pool and use their capital to attain a common set of purpose and goals while remaining sovereign entities. It is generally used to expand and explore the production capacity and maximize the profitability and market share for a new product in the competitive market (Bbamantra, 2018).
Licensing: This method can also be used by the company while entering in the new market globally. Licensing is a method or tool in which a company gives permission to an individual to utilize its legally protected technology or product and to conduct business activities and operations in a specific manner for an fixed period of time and within a given specific region. It is stated that licensing is an effective and unique technique to enter overseas market as less control and collaboration is involved. Optimum utilization of resources can be done within the help of licensing. The financial risk is transferred to the licensee through the licensing method. There is less investment in the licensing method and further it does not require large labor force (Quickmba, 2018).
Exporting: One of the important entry modes that can be used by the company is exporting. Exporting may be defined as a process of selling goods and services that are produced in one nation to other nation. It can be direct or indirect that can affect the growth and targets of the company. The distribution of surplus can be done with the help of exporting and it is not much expensive and risky. In this way, it helps in providing various benefits to the firm when initiating the business actions and functions (Quickmba, 2018).
After the various studies, it is analyzed that Primark can use strategic alliance method to enter in the foreign market. Furthermore, this method also helps in gaining competitive benefits in the international market. This method helps in providing ample of opportunities for growth and expansion. Apart from this, it also helps in developing innovative technologies and using brand image in the global market. Primark can promote girls accessories in Romania with the help of strategic alliance method. Further, the organization can increase and enhance brand awareness in the foreign market. This method also helps to capture entire target audience in the international market. In this way, this method deems to be a great option for Primark to promote its new product in Romania.
Market segmentation is a process of dividing the entire market into various segments or areas after considering the needs, wants and expectations of the customers. The company needs to determine and identify the most suitable basis for segmentation after focusing on the demographic, geographic, behavioral and psychographic areas. The market segmentation will allow mangers or leaders to see a clear and effective diversity within their market and uncover opportunities that may exist in the global market. Primark is a clothing retailer thus clothing is most significant and effective item in its product portfolio follower by girls accessories and footwear (Park and Sullivan, 2009). Its market segments are analyzed and identified on the basis of girls accessories in Romania. In demographic factor, the company analyzes and evaluates the age, sex, race, religion and caste of the customers to sell the girls accessories at suitable prices to stand out against the rivalries internationally. Apart from this, demographic elements are measured and identified according to their percentage relative attractiveness for targeting them depending on their sales volume and market share for Primark. In behavior segmentation, the company is categorizing market into the various groups based on the attitudes, aspects and knowledge of the consumers because the company is rendering cheap quality products to attract maximum number of customers globally (Weinstein and Cahill, 2014). In psychographic segmentation, Primark divides its market into the different groups on the basis of social class, personality traits and lifestyle (Dibb, 2010).
Nest stage is known as targeting that help in attracting and retaining large number of customers in a large extent. Aside this, effective and unique targeting strategy is used or initiated by the company while flourishing the business activities and functions in Romania. There are approx four different targeting approaches or tools that can be considered to develop and enhance marketing mix to attain the desired marketing objectives. The marketing mix such as price, place, product and promotion would be done by the company to meet the long term needs and requirements of the clients in the competitive market. It is stated that differentiated marketing strategy can be used by the firm because organization produces various products therefore consumers can be segmented into various segments in the rivalries market (Weinstein, 2013).
The company is targeting those customers who prefer buying accessories, footwear and clothing products at a suitable price so generally its target customers include the age group between 18-30 years. These are considered the primary target audience of the company who help in maximizing the outcomes and profitability globally. The target audience also helps the firm to strive and cope up with rivalries in the market (Weinstein, 2013).
It is stated that generic strategy is developed by Michael porter to gain and sustain competitive benefits in the international market. The generic strategies help the organization to stay in the competitive market (Stonehouse et al, 2009). There are four generic strategies that have been detailed below.
Cost leadership strategy: One of the significant issues of the firm is the high prices of the girls accessories and other goods. Sometimes, the products are not suitable and reasonable by the middle and lower class people because of this issue. Due to this issue, the company can also keep an eye on the upper class people. It may affect the returns and revenue of the organization adversely. To handle and eliminate this issue, Primark uses cost leadership strategy to beat the competitors widely. By using this approach, the corporation will be able to offer the girls accessories at the suitable prices by minimizing the logistics and products costs of the products. This strategy will also help the corporation to find the appropriate and unique suppliers with premium quality but at a suitable price. By using this strategy, Primark has been able to provide excellent quality of products at effective and appropriate prices (Parnell, 2010).
Differentiation strategy: This strategy helps the firm to distinguish its products from the competitors to attract the clients with the superiority of the products and services rendered by the firm (Stonehouse et al, 2009). The organization needs to focus on the segregation strategy where they can distinguish their fashion and clothing products and services from the rivalries to attain rivalries benefits (Magretta, 2011).
Cost focus and differentiation leadership strategy can also be used by the firm to run the business in Romania. With differentiation leadership and cost focus strategy, the business targets is much larger and objectives to attain competitive benefits through differentiation across the whole an industry. This strategy uses selecting one or more criteria used by the employees in a market. By using this strategy, the organization has been able to produce unique and innovative products in the competitive market. It is noted that differentiation strategy is also connected with changing a premium and excellent price for the products. Moreover, it also reflects the sustainability and growth rate of the firm.
It is recommended that Primark should focus on the differentiation strategy to accomplish the goals and objectives and to overcome the competitors internationally. With the help of this strategy, the organization has been able to use innovative and advanced technology and resources to differentiate its products from the other players in the market. Developing some exclusive and effective design of the girls accessories might be the cause of the accessibility of some effective and fashionable products which will distinguish the products of the firm from others Mckeown, 2013). This distinctiveness and effectiveness may attract many new and innovative customers towards the products and services rendered by Primark. In this way, differentiation is one of the considerable strategies that can be implemented by the company in the workplace (Mckeown, 2013).
Conclusion
From the above mentioned study, it is concluded that marketing strategy of Primark and expansion of the firm in the Romania have been evaluated and explained in the task. The firm is focusing and identifying only quality of the products to make a good and dynamic image in the minds of the customers. The above mentioned analysis indicates that how the firm is using effective and dynamic marketing strategies such as Pestle analysis, porter generic strategy and foreign entry modes in order to attain maximum level of outputs and effectiveness. The recommendation given in the task would be helpful and supportive for attaining the sustainable competitive benefits in the future business. It is also recommended that Primark should focus on the corporate level strategies to build and develop a financial position in the global market. The organization should also focus on the promotional and advertisement strategy to make distinguish its clothing products and accessories from the rivalries. In this way, Primark has been able to capture entire market globally. The company should also concentrate and identifies the marketing mix strategies to evaluate the price and product.
References
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