An International Marketing Strategy for Primark’s Entry Into Cyprus

Introduction

The global fashion industry is highly competitive and is characterized by constantly changing consumer preferences, trends, and demands. The industry has recently experienced massive capitalization growth, with top brands such as Gucci, Prada, Louis Vuitton, Zara, and Burberry setting the pace. Primark is a leading Irish brand specializing in affordable clothing and apparel. Market dynamics in the fashion industry are shaped by changes in consumer income, demographic shifts, and technological advances, which constantly influence demand, supply, and pricing. For instance, the industry suffered massive disruptions by the COVID-19 pandemic, which created economic uncertainties and a significant decline in consumers’ disposable income. The pandemic also exposed underlying issues such as poor working conditions and unsustainable production practices, leading to a renewed focus on ethical and sustainable fashion.

Additionally, global economic fluctuations, such as the exchange rates and economic policies, continue to impact the fashion industry, leading to increased competition and strategic adaptations. Primark has overcome these challenges by emphasizing sustainability and digitalization to drive global expansion. Primark could venture into the Cyprus fashion market in post-pandemic recovery through a joint venture with local brands, as discussed in this essay.

Overview of Primark Company

Primark is a leading clothing retailer with over 70 000 employees in 14 countries (Limited, 2022). Arthur Ryan founded the company in 1969 to fill the market gap for trendy clothing products at affordable prices. The global expansion strategy of Primark is founded on the low-cost business model, which is efficiently adaptable to changing consumer trends and preferences. Primark’s retail stores are designed as simple and functional, focusing on low prices and resonating with millennial consumers looking for trendy and affordable fashion items (Agnihotri and Bhattacharya, 2020). The company recently continued to expand its global footprint, focusing on expanding into new markets in Europe and North America.

Moreover, Primark has strategically positioned itself as a leading fast-fashion retailer with a reputation for providing low-cost, high-quality products as the main source of competitive advantage. Among the key factors contributing to Primark’s global positioning is agile supply chain management, which fosters adaptability to changing consumer preferences through a range of affordable products. Moreover, focusing on sustainability and ethical practices has positioned Primark as an influential player in the global fashion industry (Agnihotri and Bhattacharya, 2020). However, the company has faced challenges maintaining its competitive edge due to growing competition and changing consumer preferences. To address these challenges, the company has focused on expanding its online presence, especially in regions with little or no physical presence. Nevertheless, expanding its physical retail networks remains a critical driver of sales growth for Primark.

PESTEL Analysis of Primark in Cyprus

The analysis of Political, Economic, Social, Technological, Environmental, and Legal (PESTEL) aspects of the macroeconomic environment provides a robust framework to guide Primark’s risk assessment and market entry decisions into Cyprus. The framework fosters a systematic assessment of the market conditions based on the potential risks and opportunities that should be considered for competitive positioning and strategic planning, as illustrated in Figure 1.0.

International marketing strategy

As a consultant for Primark Company, one of the main challenges expected is how to structure the company to manage the diverse and complex activities in the allocated country Cyprus so that the company achieves its goals and satisfies the stakeholders’ expectations. As a consultant, I am considering how to respond to different challenges and other issues by developing a clear and robust strategy and market planning process. Primark has succeeded by following a strategy that involves growing into foreign markets with great growth prospects. It will be vital to the company’s future growth if this is prioritized above domestic expansion (Krizanova et al., 2019). In this international marketing strategy, the company will ensure it tailors the products to meet the expectations of the local culture, and the focus will be on 16-30 because this forms a great population base in the allocated country for expansion. The objectives of expansion into the country are, therefore, the following:

1. To grow the annual revenue by at least 15% by tapping the Cyprus market in the next 5 years.
2. To outdo the main competitors by offering high-quality, affordable products at a lower price in 5 years.
3. To be helpful and friendly to the Cyprus market to generate anticipated sales in the next 5 years.

Planning Process

In this process, the evaluation of the current and future markets of the company is very important through assessing both current and potential capabilities, where the focus is on the factors which might be out of control and hinder the achievement of the set objectives. Currently, the Primark Company operates in 14 countries which it has been doing well, and I would like to expand internationally to Cyprus (Agnihotri and Bhattacharya, 2020). The company can reach the market by physically having stores in Cyprus to meet the identified market. Primark is rapidly expanding into other markets outside clothing. The company’s flagship location in Birmingham is quickly becoming a must-see landmark. Currently, it is a feat for a retailer to entice customers away from their computers and into a physical location. Primark has established a strong market presence thanks to smart branding and advertising. This aids Primark in accomplishing its aims and purposes, and having a similar store in Cyprus will do well for the company.

Situational analysis

Most of the success of a business relies on its adopted marketing strategies and, in this case, international marketing strategies. Its main purpose is to spearhead the overall and foresee consumer requirements fulfilled in the current fast-paced fashionable world. The company introduced the motto ‘look good, pay less’ in 2010, which has led to growth and adaptation to clothing, thus the introduction of new products which attract new target markets and meet long-term goals (Limited, 2022).

Primark, in contrast to other retail behemoths, spends relatively little on advertising, preferring to let its customers’ “large bags” boast “great discounts to carry on the message.” Sales growth has not been affected by their decision to remain as physical stores rather than having an online transactional website, but it is reasonable to wonder if sales could increase even more dramatically (perhaps exponentially) with a second website, given that “technology has played a strategic role in gaining competitive advantage in the market” and thus it is easier for the company to enter the country. They have an exceptional grasp and insight into their target customers in each business location without spending a fortune on marketing. Primark has preserved its significant market share and position as the leading retailer by studying the environment, market movements, strategy, competitive advantage, and economy.

There will be less money available for corporate growth or digital development, which would be to Primark’s advantage if not for the expenditures involved with political and legal concerns like ensuring working conditions are satisfied, and rules are obeyed regarding minimum wage payments being made. Since manufacturers are shared with other retailers, Primark will have a chance to bargain with its suppliers, which might result in reduced prices and expenses thanks to a joint force and retail network. There is the potential for this to backfire for several reasons, including rising prices due to improved circumstances and potential increases in supply-side prices (Hall, 2014). The recent events in Cyprus will affect the country’s business climate, commerce, and currency exchange rates. This will significantly affect the cost, pricing, and profitability of items sold at Primark. If they operate in such a setting, it is unclear if they would raise the pricing of their clothing and other items to compensate for the loss incurred by dealing with many legal systems. However, the economic analyses also show that these exchange rate changes will ultimately result in reduced interest rates and increased discretionary income levels. However, this may not benefit Primark since buyers may shop at one of their competitors instead.

Source: (Hollensen, 2018).

Target market and segmentation-Cyprus

Market segmentation for consumer fashion products in Cyprus is demographically segmented based on age, gender, income, and ethnicity, whereby every person has unique clothing needs, tastes, and shopping behaviours (Gundala, 2019). The consumers are further segmented based on income levels, significantly influencing specific preferences and cultural influences on fashion choices. The market is further segmented based on the neighbourhoods, whether urban or rural. Urban consumers in Cyprus have more exposure to fashion trends and higher disposable income than rural consumers, who prioritize comfort and are sensitive to prices (Gundala, 2019). The Cyprus market has a special customer demographic composed of mostly foreigners with a high disposable income and diverse preferences that Primark can satisfy. Other factors influencing market segmentation in Cyprus include consumer lifestyles and behaviours such as brand loyalty, shopping frequency, and occasion-based purchasing. Therefore, Primark must develop strategic initiatives to ensure that the product offerings and marketing strategies are tailored to cater to the diverse needs and preferences of consumers in Cyprus.

Source:https://www.pro-tools-expert.com/home-page/2012/9/15/understanding-product-life-cycles-and-what-they-mean-to-you.html

Primark is known for its cost-effective pricing strategies, regardless of a customer’s income. Customers would be less likely to deliberate over their purchases because of the price, as was previously indicated in this research; they may be seen as instant, guilt-free impulsive buys in the newly identified market.

Ages 16 to 24 comprise the millennial generation. Although Primark does not allow for online purchases, they have modern clothing lines and home goods; thus, they appeal to the tech-savvy generation that has grown up with the internet, which, when applied in the newly identified market, will strive in the country Cyprus. Primania, a sub-brand of Primark, has helped the company gain a large social media following by allowing customers to “submit” photos of themselves wearing outfits put together from items purchased at Primark, which is the image that will be used to sell the products in the identified country.

Competitive Positioning and Advantage

When competition is fierce, and the desire to make sales is vital for profit, setting oneself apart by providing diversity and knowing what the firm stands for can help one stand out. The combination of concept and allure establishes an expectation in the minds of consumers of what they may anticipate finding in a given store (Lo and Campos, 2018). Primark will use this to find out what its consumers already know and what they wish to share with the brand.

Primark can maintain its position as a market leader with a sizable market share due to its cheap manufacturing costs, strong volumes, and established relationships with its suppliers. Their foresight and willingness to adapt by expanding into new categories like fitness and cosmetics are boons to their position. Still, the rise of competitors, which offers identical products at lower prices, poses the greatest danger, which will exactly be duplicated in the allocated and desired country of expansion.

The marketing mix

McCarthy’s marketing mix is a tried-and-true method of analysis that considers the four primary facets of any advertising effort (Arif and Balo, 2017). To verify that Primark is meeting its customers’ demands, it is vital to analyze each of the four Ps.

Price

This is a crucial selling point for the company since they are the cost leader and one of the cheapest major merchants. Visually, when one visits the Primark website, one may peruse some of the available things, with the pricing being a prominent aspect of every item featured. After considering several factors, the supermarket’s strategy is successful, and implementing it in Cyprus would be a fantastic idea and concept for producing profits (Arif and Balo, 2017). Primark can leverage this marketing mix component to appeal the price-sensitive consumers through cost-reduction measures such as supply chain automation and sustainable sourcing. Additionally, the company can develop its minimalist design to maintain sustainably low pricing models, as discussed by Sawaftah, Calıcıoglu, and Awadallah (2020). Furthermore, Primark can capitalize on the thriving tourism industry by offering seasonal deals and discounts to appeal to locals and foreigners looking for affordable clothing products. However, the company must ensure that the focus on low prices should not interfere with quality to minimize the potential impacts on brand reputation.

Place- Cyprus (Limassol, Protaras, pernera and nacosia)

Primark can achieve a further competitive edge by strategically locating retail stores in high-traffic areas such as shopping malls, tourist hotspots, and urban centers to increase visibility and drive sales through increased awareness. The company can also tap into the growing online market presence to drive sales through an enriched shopping experience through strategies like offering home deliveries and partnerships with local brands. Furthermore, optimizing the supply chains is crucial for ensuring that the retail outlets are fully stocked to build the perception of reliability among the customers and cater to the changing consumer preferences.

Promotion

Spending money on advertising might seem like a good idea at first, but customers may want more than just recommendations from their friends in the long run. However, Primark will benefit from its massive online following, and through its website, customers can talk about their favourite Primark products and services with one another. Primark agrees that social media plays a crucial role and recognizes the importance of this online interaction. Primark’s website is mostly used for advertising and heavily promotes the company’s principles. Leading bloggers have noted that flagship stores are of much higher quality and standard than smaller stores across the country (Gazzola et al., 2020). This will open some possibilities for growth. Still, the management also needs to consider whether Primark, a store known for its low prices, is expected to have such “in-store visually stimulating quality,” which the company plans to implement in the new markets it has identified (Gazzola et al., 2020).

Product

While women’s apparel receives the most attention from Primark regarding floor space, specific clothing lines, and window advertisements, the shop caters to a wide variety of customers by stocking a wide variety of items that appeal to different personalities within the same consumer sector. They provide a variety of brand assets across all departments, as well as a new “exclusive” line, the sales of which skyrocketed due to the increased perceived worth of these items in the minds of their target demographic. Primark will use this method in the allotted nation of Cyprus since it helps the company differentiate from its rivals.

Conclusion

In conclusion, the report sought to establish the best international marketing strategy for Primark Company which operates in 14 countries but has yet to venture into the lucrative Cyprus market. The report found that entering the market through physical presence and having stores in the country is a good strategy for the company. This was due to analyzing the PESTEL of Cyprus, which found that they were crucial for business operations ranging from political stability to legal factors and employment laws. Therefore, diversifying into the country is a nice idea.

References

Agnihotri, A. and Bhattacharya, S., 2020. Primark Stores Limited: Low-cost Strategy and Sustainability Initiatives. Ivey Publishing.

Arif, Md. and Balo, B.K. (2017). Application of 4Ps Model of McCarthy in the Marketing of the Eco-Friendly and Hygienic Brand-Bashundhara Tissue:Empirical Evidence from Bangladesh. ANVESHAK-International Journal of Management, [online] 6(2), p.68. doi:https://doi.org/10.15410/aijm/2017/v6i2/149983.

Bao, Z., Lu, W., Chi, B., Chin, C. S., & Hao, J. 2019. Construction waste cross-jurisdictional trade under PESTEL context. In Sustainable Buildings and Structures: Building a Sustainable Tomorrow: Proceedings of the 2nd International Conference in Sustainable Buildings and Structures (ICSBS 2019), October 25-27, 2019, Suzhou, China (p. 283). CRC Press.

Bertola, P. and Teunissen, J., 2018. Fashion 4.0. Innovating fashion industry through digital transformation. Research Journal of Textile and Apparel.

Gazzola, P., Pavione, E., Pezzetti, R. and Grechi, D., 2020. Trends in the fashion industry. The perception of sustainability and circular economy: A gender/generation quantitative approach. Sustainability, 12(7), p.2809.

Ghauri, P.N. & Cateora, P., (2022). International Marketing, (5th Edition), London:

Gundala, R. (2019). Retail Store Image: A Study of the Cyprus Clothing Industry. [online] Econometrics: Applied Econometric Modeling in Microeconomics eJournal. Available at: https://www.semanticscholar.org/paper/Retail-Store-Image%3A-A-Study-of-the-Cyprus-Clothing-Gundala/eb5129f48a4fbadf0d8ee8c705137be5bf14872d [Accessed 10 Apr. 2023].

Hollensen, S. 2018. Marketing management. Pearson UK.

Krizanova, A., Lăzăroiu, G., Gajanova, L., Kliestikova, J., Nadanyiova, M. and Moravcikova, D., 2019. The effectiveness of marketing communication and the importance of its evaluation in an online environment. Sustainability, 11(24), p.7016.

Limited, P., 2022, About Us, Primark. Available at: https://www.primark.com/en-gb/about-us (Accessed: November 14, 2022).

Lo, F.Y. and Campos, N., 2018. Blending Internet-of-Things (IoT) solutions into relationship marketing strategies. Technological Forecasting and Social Change, 137, pp.10-18. McGraw-Hill.

Sawaftah, D., Calıcıoglu, C. and Awadallah, R., 2020. The relationship between viral marketing and consumer purchase intention, the moderator role of brand image and age: Evidence from smartphone users in North Cyprus. Management Science Letters, 10(6), pp.1307-1320.

Soltani, M. (2016). Determinants of Foreign Direct Investment in Cyprus. Journal of Advanced Research in Law and Economics, 7. doi:https://doi.org/10.14505/jarle.v7.2(16).18.

World Economy (2023). Cyprus GDP – Gross Domestic Product. [online] countryeconomy.com. Available at: https://countryeconomy.com/gdp/cyprus [Accessed 12 Jun. 2020].