The Main Reason for the Success of Primark Company - Essay Example

? PRIMARK AND THE 5 GAPS MODEL AFFILIATION: Table of Contents Table of Contents 2 Introduction 3 Competitors of Primark 4 Service Quality 4 Reasons for Primark’s Success 5 The 5 Gaps model 6 Conclusion 15 References 16 Introduction Primark is a fashion retail store in clothing. It has around 200 operating in different countries such as Germany, Ireland, Netherlands, Spain, Portugal and the United Kingdom. The main headquarters of Primark is in Ireland. The Primark chain is a subsidiary of the Associated British Foods plc (ABF). The controlling owners of Primark are the Weston family that does it through their Wittington Investments (About us- Primark, 2010). Primark is famous because they sell their items of clothing at budget end prices of the market. This is the main reason of success of Primark as they supply their sources cheaply. The clothing they have is of simple fabrics and designs. Sizes of the clothes are of the standards sizes and they make it in bulks with different types of varieties (About us- Primark, 2010). These are some of the brands of Primark (About us- Primark, 2010): Atmosphere — Women wear/footwear Active - menswear Backswing - Women and men’s sportswear Butler & Webb — formal menswear Cedar wood State — casual menswear Denim Co. — women wear, casual men's and children’s wear Early Days — baby wear (newborn-23mnths) Essentials - basic cheaper items Girl 2 Girl — young girls wear (2yrs-7yrs) Limited Edition — women wear Competitors of Primark The main competitors of Primark are all the fashion retail stores such as Marks and Spencer, John and Lewis, Zara’s and other such brand retail stores. The difference between Primark and its competitors are that Primark has adopted a low cost strategy in fashion retailing and its competitors are high priced. John & Lewis and Marks & Spencer are struggling to stay in the tough market competition while Primark is in a stable position because of it low cost strategy applied on its products. Service Quality The phenomenon of service quality has been of quite interest to researchers (Wisniewski and Donnelly, 1996) as it is one of the main elements for the success of any service oriented or product orients organisation. The type of services provided by the organisation is at times very difficult to measure as service is an intangible thing (Wisniewski, 2001). There have been many definitions discussed on the term service quality and the most common ones are the service quality is the meeting of the expectation of the needs of the customers (Lewis and Mitchell, 1990). It should be strongly adhered by all organisations that they should constantly work upon improving their service quality so that they can attain a large customer base. The type of services provided by the organisation has to be valued against the perceived service by the customer. In other words it is the difference between the expectations of a customer of the service and the perceived service (Asubonteng et al., 1996). All service organisations need to match up to the expectation level of the customers so that they have a good perception level of the organisation. If the customers have expected vey high and the performance is not up to the level, then dissatisfaction is observed from the customer (Parasuraman et al., 1985). Organisations need to constantly work upon improving their standards of service delivery so that they can attain a high level of customer satisfaction from their valuable customers (Dotchin and Oakland, 1994). Reasons for Primark’s Success In the midst of high competition in the fashion retail market, Primark has successfully managed to overcome their tough competitors such as Marks & Spencer, John & Lewis and other such fashion retail stores. The reasons for Primark’s success are as follows: Primark implemented the low cost strategy in their organisation and this strategy worked perfectly for them. In the time periods of high inflation, everyone has to work upon their budgets; they cannot afford to spend on high priced items unnecessarily. Primark developed fashion related products and attracted a wide number of customers towards themselves. Customers of Primark tend to come in to buy the cheap products and with that they are willing to buy one or two high priced items (Lewis and Mitchell, 1990).This again allows Primark to increase their level of success and their level of profitability. In high clothing seasons, the discounts in the Primark stores tend to make all types of customers to visit their stores. The competitors are not able to provide such low pricing in fashion retail clothing as much as Primark is able to do so. Intensive advertising of stores with attractive features also attracts many customers and this is a strong reason for the success of Primark. The 5 Gaps model The 5 Gaps model has been developed for the concept of service quality (Parasuraman et al., 1985). The 5 Gaps model portrays the gaps available in the organisation related to their services so that they can work on its improvement. The gaps are as follows: This gap occurs because of having lack of marketing research done for the organisation, the upward level communication has been too inadequate and also the reason can be having many layers of management. Also, in this gap a larger focus is given towards the transactions rather than the relationships with the customers. This may result in inadequate service recovery. Service recovery being delayed may also tend to affect the brand image. Primark has implemented their low cost strategy on almost all of their products. There are many products that are used occasionally by customers ad for those products the customer may be willing to pay a high price. For such products, allotting low prices may not attract the customers to buy the product. Only focusing on selling their products and not providing adequate service level can increase in improper services being provided to customers. Therefore Primark needs to conduct a proper market research for the products that the consumers are willing to pay high prices and also for those products that consumers want low prices (McDonald and Dunbar, 2004). Teenage fashion has a tendency to keep changing rapidly and also they want more varieties. Products that attract teenagers should be kept at low prices all round the year. Also all the needs and requirements of the customers need to be analysed as well once they visit the fashion retail stores so that customer services department can deal with all the customers accordingly. Source: http://www.hitechstrategies.com/106146/Outsourced-Marketing-Services This gap occurs because of the compromise done in the quality of the service, unfeasible plans implemented by the management, the tasks do not meet up to the required standard level and the organisation does not have any goal setting process taking place in their organisation. They don’t know where they are heading towards and what do they want to achieve. The design of the store is not designed in a suitable manner and therefore there is always a chaos present in the customers. Also in many of the products, they don’t have the source of where the garment has been produced from (Sheth et al., 1999). This is a big gap as customers may not know the quality type and range of the product. It is also an alarming situation when it has been stated that Primark is one of the least ethical retail store that is operating in Britain. The solution for filling in this Gap is that Primark should make sure that they insert proper country tags that portrays to the customers of which country the product has been made from. Also the sales staff at Primark should know all details of the products that are present in the store so that they can respond to the queries of all customers. Quality is expected to be maintained by customers even in cheap clothing retail stores because nonetheless customers are spending their money for the products. Ethics in Business It is important that while a business is under process it should maintain all its ethical principles and perform the operations related to the business and related to the customers effectively. Being rated as one the least ethical shops in Britain may in the long run cause problems for the retail store as customers may start losing their trust. Therefore it is important that the products used in the store should be having proper tags and place of origin so that quality can be notified to the customers through the tags. In the development of quality level of services, it is important to analyze and measure the level of services (Edvardsen et al. 1994). Primark may at some stage be compromising with the quality of service levels with other fashion retail stores such as Marks and Spencer and John & Lewis, this may not affect Primark in the short run but in the long run customers may not be willing to compromise on quality all the time. Source:http://www.mmr-international.com/qualitative-market-research/mr_strategy/customer_focus This gap is present in the organisation because there is an ambiguity present in the role levels, conflicts of interest may be present, misfit of the employees for the job roles are present in this gap, technology is not implemented as required, control systems are not supervised adequately, there is lack of teamwork witnessed as well. A high level of responsibility is on the shoulders of the sales staff to make sure that they facilitate their valuable customers and answer all their doubts and queries in a confident manner so that reliability can be attained from the customers. At peak seasons there is a lot of mismanagement of customers taking place in the Primark stores. Customers have to wait in long queues; employees are not trained well to deal with customers in a fast manner. Also it has been observed that in busy seasons, the employees are not helpful in assisting the employees. Customers want to know about the different sizes and varieties available but due to the presence of large number of customers, the sales employees are not able to entertain the employees well (Stone et al., 2004). The head of customer services department need to ensure that they conduct proper training and development programs for their employees so that the employees can gain the expertise of how to deal with their valuable customers in times of peak season. Also the number of check in counters need to be increased as it is becoming a usual routine of many customers visiting the store at a time and many counters can decrease the waiting times of customers in long ques. Customer Relationship & Service Aspect The main aim of the retail stores is towards satisfying their customers as their customers are important elements of the value chain. Retail stores such as Primark in this case tend to have their customers revisiting their stores by the interaction their employees have with the customers. The management has to highly focus on this aspect that customers receive quality services when they enter the Primark store for shopping. The high quality services provided to customers tend to create value for customers and this way the performance level of the retail store increases. According to Rust and Zahorik (1993), customer cycles are affected by their components and this affect the recognition of the brand and also the retention level of the customer. For customers to revisit the Primark store again and again, it is important that they receive value services from the sales staff at Primark. The marketing process of the organisation along with the brand building process is impacted according to the customer cycle components. The aim of the customer services department is to retain their valuable customers so that they revisit the retail stores and make the organisation profitable and successful (Zahorik, 1993). Source: http://www.publicinvolvement.org.uk/2006-11-Nov/Whatareuserstellingyou.php This gap occurs due to the lack of communication at the horizontal level and a high level of over promising being done to the customers. The customer expectations are managed ineffectively in this gap. There is a drawback observed in the marketing plans on the internal level of the organisation. In the advertising mediums, the way the advertisements are catered towards the consumers tend to portray a high level of unattainable aspects by the organisation, and this too much over promising in advertisements tends to risk the brand image of the organisation as they are not able to fulfill whatever they portrayed in their ads (Christensen et al., 2005). Primark is not a member of Ethical Trading Initiative and therefore they cannot convince their customers about the quality of their products just by saying they have their own ethical standards of auditing their suppliers. The customers may be promised about quality and low costs but no official proof can create doubt in the minds of the customers. The range of selection of products can be just limited to a number of product types. Primark should be a member of Ethical Trading Initiative. Primark is in a retail store business and they cannot compromise on the satisfaction level of their customers, as this would cause them to take the path of failure. Customers may not react positively to any compromising situation of quality. Also in the advertisements there should be no overpromising done on the type of products that Primark sells. The fashion retail stores need to strongly realize that there are different types of customers and they give different values to the various types of products and services. In the aspect of garment retailing, customers may be specific and choosy about the color, contrast, sizes and other such elements of clothing. Customers needs need to be catered to according their desires so that the buy the products. The fashion retail stores should opt for brand-centered strategy along with the orientation of the customer so that the retail store can achieve their desired result. Primark needs to exercise positive customer and effective communication skills in their stores so that they can get the right message across the customers and also increase their customer retention base. Also, positive customer service requires that public customer interaction should be communicated well and all the needs of the customer should be addressed. This gap occurs because of the influence and pressure from the customers and the shortfalls faced by the provider of the service. The expectations of the customers have a high influence from their personal needs, for the advertising done through word of mouth, and also through the previous experiences of the customers with the provider of the service. Primark advertises that they sell all types of brands and sizes in clothing but they tend to run out of sizes soon. There is a gap of availability of all sizes of the clothing garments. The most common sizes seem to be over soon. Customers want to have value for whatever they pay some of the products are of extremely low quality and have to be disposed after using it once or twice. It should be made sure that the running sizes of clothing garments should be available in abundance so that customers may be satisfied with the size availability of their garments. Primark should make sure that they work upon getting reasonable quality clothes so that low quality does not decrease the perceived value of the customer that they have from Primark. Customer Satisfaction The customer services department needs to constantly focus on working towards the satisfaction level of the customers once they customers are in the retail store. All friendly and cooperative assistance should be given to the customers so that they feel valued in Primark. It has been stated by Hoyer et al (2005), that the corporate strategy have customer satisfaction as an extremely important element to be considered. A higher level of customer satisfaction will lead to the performance of the company to be improved. This has been usually concluded by many of the executives and they have started to implemented training programs in their organisation so that an improved level of customer satisfaction can be observed. Also by implementing customer satisfaction programs, it becomes easy for the organisation to monitor their customer’s level of satisfaction with the services they are providing (Bowman et al., 2001). Conclusion The 5 gaps model tend to highlight the gaps present in the services of any organisation and through the proper identification of gaps in services the required solutions are deduced so that improvements can be made in the service gaps identified through the model. Primark is a retail store that needs to work on improving their retail services for their customers so that their customers become satisfied with the retail services and revisit the stores on a continuous mode so that the retail store becomes highly successful and profitable. Primark is usually observed to be implementing the low cost strategy on their products and therefore they are able to attract many customers towards their fashion retail store. In conclusion, it is highly important for organisations to adhere to the service levels and the quality of services so that they can gain high benefits in both the qualitative and quantitative ways. Satisfied customers tend to be the path towards a profitable organisation in the industry. Service organisations need to constantly monitor and evaluate their services so that they can make improvements in their services accordingly. Primark needs to focus on the service quality management in their retail store so that they can have a positive impact on the customers in all elements. Focusing on all aspects of service quality and understanding the weaknesses of the organisation by the 5 gap model can allow a proper strategy to be devised by the head of the customer sales department for improving the services of their organisation, Primark. References About us- Primark, 2010.Available at: http://www.primark.co.uk/aboutus. Accessed on: 13th Jan 2011. 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