Primark Indeed Looks Good - Essay Example

Conclusion: Primark Indeed Looks Good The competition is indeed quite stiff in the market place. The retail sector in particular, is witness to a tough competition and amidst a large number of players in the fray. The era of globalisation in general has brought about an intense amount of competitive rivalry and shrinking profit margins. But the fact that besides the likes of Wal-Mart, Tesco etc. more and more numbers of domestic and multinational players are jumping into the retail segments points out towards the promising nature of the retail business. What it perhaps requires is well knit team of managers to look after the company affairs, the marketing efforts and the needs of the workforce. It is quite apparent from the study that Primark has indeed created a niche for itself even in these challenging times. In fact, the strategy of competitors to label Primark as a 'cheap' brand while making efforts to label their own brands as premium ones' has not worked to their advantage. Instead Primark seems to have taken a lead in understanding the requirements of the common consumer and offering them value for money. Primark seems to believe in market penetration strategy, while passing on maximum benefits to the consumer and thus playing the volume game. Primark has opened up stores in UK and Ireland at vantage points, the places most frequented by the common consumer. Thus saving on the marketing communication costs to a great extent. Today marketing communication forms an integral cost component of any business proposition. If a company can save on this expenditure to some extent while making itself visible amongst the existing and prospective customers, then it helps in leveraging the economies of scale. These costs can be passed on to the workforce, which motivates them for pooling their efforts in a better manner, thus coming out with quality products. In fact this chain of events has been quite ably used by Primark to the advantage of its own business prospects as well as to the advantage of its workforce. Motivational theories discussed during the study clearly suggest that if the needs of the fellow human beings are taken care of, they are bound to come out with their optimum performance. Effective management of the workforce lends credence to the notion that a company is being managed professionally. Primark, while charging less from its customers, has maintained good industrial relations. As the returned questionnaire indicates, the workforce is not too unhappy with the HR policies of the company, which appear to be employee friendly. As pointed out in the study, the kind of attention paid to employees' care, by the MNCs is an indication towards the level of competition and the innovative methods devised to sail ahead in these competitive times. The higher levels of turnover of the workforce, in Parimark, could be explained by the fact that in an intensely competitive world the rival companies are always on the lookout for experienced workforce. The workforce, particularly the youth segment, also is on the lookout for making quick bucks, so they don't attach too much importance to the loyalty part and hop on to the company with better payment packages. The higher levels of employee turnover also results in some cost escalation to the company, as it has to incur fresh costs on recruitment and training of the workforce. The newer workforce also requires some time to adjust to the working environment and this could have some effect on the efficiency of the service being provided to the customer. On the other hand, it can also be stated that the young blood brings renewed enthusiasm and more energy to the working environment. As the questionnaire points out the younger lot is there to make some quick money during their free time or vacation period. Therefore it good that Primark does attach too much loyalty strings to the job profile. This, in a way helps in offsetting the disadvantage resulting from the extra efforts being put into recruiting and retaining the work force. It goes to the credit of Primark that it has been able to cater well to the needs of the workforce who have been with the company for quite a while now and growing old and experienced with the company. As the questionnaire results point out, a sizeable number of employees feel that they feel like working for the company as it has been taking good care of all their needs. Maslow's hierarchy of needs explained in the literature review points out towards different types of needs of a person. It talked about social and esteem needs besides the other types of needs. A worker would like to be part of a group which is known for good practices, ethical behaviour and employee friendly attitude. Such an environment at the workplace helps in fulfilling the social and esteem needs of the workforce, which in the long run helps in diversification and enlargement of the business prospects of the company. Effectively dealing with adverse publicity, employee's unrest etc. measures the impacts of such behaviour. It is quite remarkable that even under adverse circumstances, the company is able to maintain the price range of its products. For example, when the South Asian supply chain was affected by the charges of human rights violations, all the European retail companies including Primark were forced to cancel their orders in the region. This resulted in the chain reaction of offsetting all their calculations and budgeted provisions, which ultimately got reflected in the scarcity of products and rise in prices of these products. But it goes to the credit of Primark that it managed to make up for the losses by motivating its workforce to join hands at the hour of crisis and increasing its supplies from other sources in Europe, enough to cause a stampede over 8 jeans and 2 bikinis in its central London store (Freeman, 2007). Discussion In an effort to cut on the costs of production, the company has been utilising the cheaper workforce from some of the Asian countries. It is indeed worth considering as the clothing items are being prepared by the same set of workers in some of the poorest nations, with lower levels of compensation to the workforce, which incidentally happens to be better than the prevailing rates of compensation in those regions. But the question arises as how come Primark is able to put a lower price tag on that product while Tesco and Asda price it higher Primark has been focusing mainly on the youth segment. That seems to have paid off well, so far. The young customer care executive on the shop floor can also prove to be an asset for taking care of the young age customers, because they can give the visitors more authentic information which they could relate to their own experience. If the customer care executive finds the job interesting and feels satisfaction in dealing with young customers; that also becomes a form of motivation for the workforce. The purchasing power of the youth is now on the rise, as more and more youth are becoming earners early in their teens. This gives ample scope to Primark in expanding its market space and popularising the products. But, catering to the youth segment is quite challenging as well, because they are always on the lookout for trendy and innovative. This way the youth market is becoming more demanding, that means more emphasis and effort will be required from Primark to come upto to the expectations of their customers. Primark is not known to have a strong in-house research and development support; it is therefore quite intriguing how the company manages to make its mark with trendy clothes. Is it the other way round Whatever the company comes with, becomes a fashion That off course requires a deeper insight into market sentiments. References: Freeman, Hadley (2007). Primark's 8 jeans and 2 bikinis cause stampede. The Guardian, Friday April 6 2007. Available online at http://www.guardian.co.uk/uk/2007/apr/06/fashion.topstories3 (April 15, 2008) Read More