Primark: Marketing Strategy - Essay Example

Total Integration (Primark: Marketing Strategy) Marketing is d to be a set of human activities directed at facilitating and consummating exchanges (Kotler, 1974). The consumption behaviour as well as the facilitation processes have undergone considerable changes since this definition came into existence. While on the one hand the competition ensured that consumer gets the worth of his spending, the companies have also come out with innovative ideas for reaching out to the consumer. Peircy (2002) terms the emerging scenario as complex, confusing, paradoxical and rapidly changing market scene. Technology played a big role in setting the pace for these changes. As we approach the era of globalisation and liberalisation, and the channels of communication become diverse and more consumer friendly, reaching out to the customer is not considered the task of marketing department in isolation. Now the customer can be reached through the online route, different types of web-services etc. besides the traditional methods like media advertising, sponsorships, word of mouth publicity etc. Now an increasing emphasis is being laid on creating goodwill amongst the existing as well as prospective customers. Such efforts require that an integrated approach is adopted towards the ultimate objective. Total integration strategy is a broader term which involves an integrated approach in dealing with human resources, manufacturing, marketing, R&D and other supporting wings of the business entity. Environmental concerns and philanthropic efforts have also become integral parts of the creating goodwill and adding more market space. In addition to adding more features, value addition becomes the key component of product differentiation. Market led forces necessitate that the company should come out with a product which appeals to the customer's requirements. Piercy (2002) points out that total integration calls for change in thinking of the company from the traditional functions like marketing, sales, production etc. to the need for seeking active cooperation and coordination from all the stakeholders in the business. Such an approach in fact divides the marketing function also in four different segments namely; Integrated or Full service Marketing Departments: Such marketing departments are the one's which have become a norm now a days. Value addition and customer care happen to be the topmost priority in these types of marketing wings. Lack of adequate time, a fast life, range of available other brands in the market and evolving needs of the customer necessitate such an approach on the part of the manufacturer and the service provider. The emphasis in such an approach is not on operational effectiveness, but on value addition and other effective strategies instead. Porter (1996) points out that, for a company to outperform its rivals it has to establish a difference and subsequently to preserve it. This can be done in a effective manner by delivering a greater value to the customer, creating comparable value at lower cost or to do both. The full service marketing departments are not only meant for soliciting sales orders, but they also have the added responsibility of reaching out to the customer, by integrating marketing campaigns or otherwise. In view of added responsibilities to such department Piercy (2002) states that such departments can wield 'clout' in the company affairs. In fact while product differentiation is key to an integrated approach, the evolving nature of core competencies has also become the hallmark of globalisation and competitive era. Nicholas (1996) also points out towards the changing nature of core competencies when he points out that Core competences can indeed deliver sustainable competitive advantage, but with competitor making inroads into the turf and affecting the needs of the customer, a phase invariably arrives when companies are supposed to unlearn these competencies and a company which can move easily through such a transition process find the sustainable business goal rather easily. Primark has been able to take a leadership role in UK retail market, by aggressively pursuing a total integration policy with a full service integrated marketing department in place for reaching out to the customers and taking their feedback while going in for the upgrades or newer designs. Being a subsidiary of Associated British Foods helps Primark in gaining an insight into huge pool of talent to take control of the activities in Primark. But the question worth exploring is, why Primark continues to relish the tag of being labelled as a 'cheap' brand In today's context when companies are always on the lookout to strengthen their brand identities, Primark has been busy exploiting the economies of scale while coming out with reasonably priced products. Strategy/ Services Marketing Departments: The realisation that marketing as such is different from sales was the major force behind the creation of a separate department called 'marketing', with the stated objective of reaching out the people, making them understand the feature of the product and win them over to go for the product or service. The task was assumed to have been established after the successful closure of the deal. According to Piercy (2002) such departments could be differentiated by the lower degree of integration while devoting their majority of time and resources towards product policy. Though such departments did not have the full fledged powers of an integrated unit, their closeness with strategic and planning issues gave them enough of clout as well. Selling Orientated Marketing Departments: Such departments basically represent the legacy with huge infrastructure and sales responsibilities. Even in strategic planning process their role was limited to that of a department entrusted with the custody of valuable goods and items. Once the company receives some orders, these orders are handed over to the sales department for further processing and delivery of the goods. Such departments are not supposed to make extra efforts in satisfying the customer needs, customer loyalty etc. as they don't have much say in planning, production, marketing communication etc. Limited or Staff Role Marketing Departments: Such marketing departments are meant to some associate departments of the main business. Without much say in planning and execution process, such departments were mainly entrusted with the task of sales promotion and marketing research (Piercy, 2002). Their nature of responsibilities does not allow them to wield much power in the hierarchy of the company. In fact such an arrangement mainly stems from the older days when production and HR were considered to be the key departments with marketing not having any demarcated responsibilities; instead people from other departments were entrusted with added responsibilities. Primark, the retailing company with a modern outlook and having a reputation to be trendy in it range of products, has been paying much attention to the concept of an integrated approach in marketing with a variety of measures like providing quality at reasonable rates, competing with other brands on the basis of cost advantage, and establishing itself as a budget retailer. Primark has been able to hold the cost advantage even during adverse circumstances by sprucing up its supply chain. The company manages its supply chain as a part of integrated management practice by not depending exclusively on one particular supplier or region for the supplies. For example even during the time when EU put in place legal hurdles to placate the domestic industries in view of excessive cheaper Chinese imports, many retailers were left high and dry once the legislation was in place as they could not take their supplies from China in larger quantities, but Primark was able to manage its cost advantage by routing the supplies from its other suppliers in Philippines and Turkey (Fox, 2005). We must not forget the controversy surrounding the supplies from Bangladesh which tarnished the image of the company (Meacher, 2007). In fact, Asda and Tesco were also at the receiving end of this controversy. Question naturally arises as to how come Primark is able to put a lower price tag on its clothing, when all three of them are picking up their supplies from the same area and paying similar low remunerations to the workers in those regions That perhaps give an indication of how the concept of total integration can bring about the difference with an effective leadership and strategic management. In addition total integration approach also allows the company to come out with the latest fashion wear before the other competitors. Susan (2005) argues that, "Their time-to-market has been very fast, both in terms of copying designs rapidly after they come out & in terms of getting the new stock into their stores while items are still 'hot'." The approach of differentiating between marketing and marketing department, holds that 'marketing' as such comprises of well organised efforts, activities and expenditures for acquiring and retaining the customer with retention of company's profitability. The marketing department on the other hand is a unit of organisation coordinating different tasks like involved in the process of marketing. Integrating marketing communication plays a key role in preparing the company for competitive environment, and reaching out to the customer. The integrated marketing communication works to the advantage of the company if it tries to establish a relationship with the existing as well as prospective customer. This is also called as relationship marketing by the marketing gurus keeping a close eye on the 21st century market dynamics. Schultz et al. (1992) state that relationship marketing works well if it is supported by managing relationship-oriented integrated marketing communications. Integrated Marketing Communication has been defined by Smith et al. (1999) as; Management and control of all market communications. Ensuring that the brand positioning, personality and messages are delivered synergistically across every element of communication and are delivered from a single consistent strategy. This also calls for maintaining the ethical standards of business. Primark on its part has implemented an extensive audit programme to assess the risk of its supply bases and the company also submits an annual report to the ETI1. The strategic analysis, choice, implementation and control of all elements of marketing communications which efficiently (best use of resources), economically (minimum costs) and effectively (maximum results) influence transactions between an organization and its existing and potential customers, consumers and clients. There are a number of ways though which a company can establish a dependable relationship with the customers. It could be by taking regular feedbacks from the customers, by giving away loyalty bargains or being seen near the customer in different forms. IT has presented a paradigm shift in this relationship management. Primark, for example chose to part of a successful Facebook group started by a happy girl customer on the social networking internet site. Primark went on to announce that they would not be creating their own official group as they don't think it would be as popular as the existing user-generated one2. While on the one hand such a gesture appreciated the efforts of a loyal customer, it also resulted in saving lots of resources for the company. Schultz et al. (1992) while underlining the need for integrated marketing communication, talks about a new trend towards integrating different element like advertising, direct marketing, sales promotion and public relation. While establishing the dependence of integrated marketing communication on establishing a relationship with the customer Schultz et al. (1992) state that, "As we are committed to two-way communication, we intend to get some response from those persons to whom the integrated marketing communications program has been directed. . . .We adapt the customer's or prospect's communication wants or needs and begin the cycle all over again. This is truly relationship marketing at its best". Managing the supply chain is one more crucial aspect in the process of total integration. In fact for a company like Primark whose mainstay is 'cost advantage' effectively managing the supply chain also results in maintaining the leadership position. Procurement from more than one sources helps in equally spreading the strength of the company. Primark takes its supply from many different sources. With e-procurement coming on the scene, the procurement process becomes much simpler and cost effective. some of the salient features of such an approach include; i. Time taken in performing the procuring tasks. This includes saving in overall time as well as time taken in different processes involved. ii. Saving in manpower. Orders placed through the net results in saving good number of man-hours. iii. Reduction in inventory management costs. iv. Overall benefit to the brand equity of the company. The company will be known as a progressive and evolutionary company. Value addition forms the core of total integration approach, as it results in competitive advantage, retention of customer and relevance with the time. The term "value" can be defined in different ways according to the adopted perspective of the analysis: it is possible to determine a "customer value", a "firm value", a "stakeholder value" (Mele and Colurci, 2006). Besides the customer, there are a number of stakeholders to the business. Suppliers, shareholders, opinion builders, government organisations, environmentalists, legal set up etc. are some of the key stakeholders for any business. Management therefore involves a coordinated approach taking care of all the factors affecting the business operations. Functioning of an organisation is mainly affected by two types of factors; Internal: These are the factors like the strengths of the organisation, in terms of its finances, human resources, management, strategies etc. These factors can be controlled well by the organisation. Mullins (2005) contends that organisations comprise 'people, objectives, structures' and 'management'. External: These are the factors which on which an organisation may not be able to exert much of its control. These include, the legal and political scene prevailing within the state/ country of its operations, number and types of competitors, suppliers in the market, terms and conditions from financial institutions, alternative products available in the market, newer technological innovations etc. Worthington (2006) places greater importance on political developments occurring at different levels - local, national and international. For the companies to identify and strengthen their sustainable competitive advantage, the total integrity approach requires them to make the best possible use of the value proposition, go for quality and keep an eye for the evolving needs of the existing as well as future customers. For a company like Primark which takes pride in catering to the Gen-Next, the future readiness becomes all the more necessary. Conclusion In the competitive era Total Integration appears to be one of the key strategies in defining a successful implementation process for a company. It calls for strategic amalgamation of the strategies being adopted by the company, the processes involved and the transformation process. In the total integration process, Primark has made it a point that while customers continue to get value and quality at affordable prices, the supplier chain is not adversely affected and remains robust and healthy for continued support to the company. In order to set and achieve the strategic vision a company will have to have a visionary leadership at hand who could devise strategies for taking care of the people, time and finances and come out with an executable plan of action which could take the prospects of the company at the desired destination point. References: 1. Fox, Imogen (2005). Shortcuts: A la mode-The last bras in Britain. The Guardian, Thursday August 18 2005. Available online at http://www.guardian.co.uk/theguardian/2005/aug/18/features11.g21 (April 9, 2008) 2. Kotler, Phillip (1974). Marketing Management: Analysis, Planning and Control. Prentice Hall, NY. 3. Meacher, Michael (2007). Extend Freedom of Information to top 1,000 companies. Available online at http://www.michaelmeacher.info/weblog/2007/07/ (April 12, 2008) 4. Mele, Cristina and Colurci, Maria (2006), 'The evolving path of TQM: towards business excellence and stakeholder value', International Journal of Quality & Reliability Management Volume 23 Number 5 5. Mullins, L. (2005) Management and organisational behaviour 7th edition. Harlow, Pearson Education 6. Nicholas J. O'Shaughnessy (1996).Michael Porter's Competitive Advantage revisited. Management Decision, 34/6. MCB University Press. 12-20 7. Piercy, Nigel (2002). Market-led Strategic Change: A Guide to Transforming the Process of Going to Market. Available online at http://books.google.co.in/booksid=OqN1Cq-5aZgC&dq=%22market+led%22+strategic+change+a+guide+to+transforming+the+process+of+going+to&pg=PP1&ots=L-rOKaf6Ol&sig=usLPm7rNWX0cWSfCrHeWkVEnpeo&hl=en&prev=http://www.google.co.in/searchhl=en&q=Market-led+Strategic+Change:+A+Guide+to+Transforming+the+Process+of+Going+to+...&sa=X&oi=print&ct=title&cad=one-book-with-thumbnail#PPA67,M1 (April 9, 2008) 8. Piercy, Nigel F. (2002a). 'Market-Led Strategic Change: New Marketing for New Realities'. The Marketing Review, 2002, 2. Westburn Publishers Ltd. Available online at http://www.westburnpublishers.com/media/190619/m7e_chapters21_to_25.pdf (April 10, 2008) 9. Schultz, D.E., Tannenbaum, S.I. and Lauterborn, R.F. (1992), Integrated Marketing Communications, NTC Publishing, Lincolnwood, IL. 10. Susan Segal-Horn (2005). Shedding the frills; making a success. Available online at http://www.open2.net/blogs/money/index.php/money/2005/12/01/primark (April 9, 2008) 11. Worthington, I. and Cumberpatch, Z. (2006) 'Business organisations: the internal environment' in Worthington, I. and Britton, C. The Business Environment 5th edition. Harlow, Pearson Education. Read More