Plan de marketing - Primark

MARKETING PLAN

Carlos Montero
cmontero@gmail.com
Iñigo de Luis
ideluis@gmail.com

Content

• Situation analysis
• Environment
• Competition
• Market
• Situation diagnosis
• Objectives definition
• Strategies
• Action plan

The two main figures are improving slowly their level, so the
aggregate demand willl increase the level of the economy.
Situation analysis: economical environment

Consumers Confidence Indicator Family expenditure level
• It has two components: today situation • Decrease of the home expenditure
and expectatives. reduction from -5% to -3,5%.
• Its level is the same that before the • Salary, as families main support, slows
crisis crunch. down its decrease from -3,9% to -
• Consumers think that the worst phase 2,7%.
of the crisis is over.
• Best levels are in the 16-24 & 25-44
years old band. Premises price
• It has decreased in the main cities up
to 20%.

26/2/10 Marketing Plan 3

Technology has two different influences in this sector:
information distribution, and e-commerce.
Situation analysis: technological environment

Technology improves distribution of information
• Internet and specifically social networks used as resources to support
purchasing decisions (friend’s recommendations)
• Internet is used by customers as a tool to compare prices, designs,
products between different brands.
• Internet as a tool for brand communication towards potential
customers and repeating customers.
• Online publicity investments have been rising.

32% of Spaniards search information online whenever they want to
purchase clothing, and 28% ocasionally.
Source: TNS, feb-2010 http://www.tns-global.es/docs_prensa/nota_prensa_254.html “Internet influence on
purchase decisions”


Technology has two different influences in this sector:
information distribution, and e-commerce.
e-
Situation analysis: technological environment

Competitors’ e-commerce technology
e-
• Most of them sell online (Bershka, Carrefour, H&M, Kiabi, Zara
Home).
• Success in Spain of online “private shopping clubs” such as BuyVIP,
Privalia or Vipventa: online outlets where the customer finds
temporary offers of discounted brand products. Based on mouth-to-
ear and virality between users (rewards for bringing new users).

Private shopping clubs in Spain (2007) http://www.consumer.es/web/es/tecnologia/internet/2007/09/05/166466.php
VentePrivee growing in Spain http://www.fashionunited.es/News/Leads/Vente-Privee.com_duplica_su_facturaci%F3n_en_Espa%F1a_201002154953


Future purchasers are focusing their decisions not only in
the price but in their own fashion trend.
Situation analysis: social environment

• Discount and value retailers have transformed the clothing industry in recent
years, reinventing the consumer perception of a bargain.
– “”Fast retailers” as Zara, GAP o H&M, have democratized fashion and luxury.
– Clothes life cycle is shorter so the supply change management importance
increases.
– Focus is in profitability too, not only in fashion. High volumes. Less margin.
• Fashion trends are not only in the hand of the main firms.
– Consumers are looking for emotional and social relations when choosing their
clothes at a reasonable good price.
– Market reaction capacity is important. First wins.
• Purchasing decision has changed of hands.
– Youngest people choose their clothes without their parents approval.
• Number of people who try to create their own style is increasing.
– Not only one firm. They look everywhere.
• Being the first is important among the social environment of the consumers.


Several big competitors with brand image associated to
low prices.
Situation analysis: competition environment

• There is a certain degree of concentration in the market, but there is
no single major competitor that can exert a monopolistic influence
over the rest.
• Primark’s competitors can influence the environment through
standard market tools (prices, promotions, opening new stores)
• Some competitors, however, due to their presence in the Spanish
market for a long time, have a big brand recognition and association
with “low price” which gives them an advantage attracting customers
price”,
in the short term.
• Mouth-to-ear takes time to create a similar level of brand recognition
in the minds of Spanish customers.


Customers purchasing behaviour is moving to trendy
clothes at low prices.
Situation analysis: customers environment

• Customers are looking not only for the best price but for trendy clothes.
• They don’t really prize so much the quality because the number of
clothes per person is bigger, so the use decrease. Higher rotation of
dressing.
• Youngsters directly purchase in the shop. They don’t need their parents.
• Shopping experience importance is higher. There are several Facebook
groups that promote it.
• New technologies, such as social networks (including mobile versions),
are influencing the way people make their purchasing decisions.
• EgoBlogs (for example, http://chicisimo.com) are increasing its number of
visitors as a prescription way, higher than official catalogues in most of
cases.


Technology trends: increased importance of the internet as
information, promotion and competition.
Situation analysis: technological trends

Technology changes to be expected in the next two years:
• Increasing use of the internet by the target customers,
through computers or mobile phones. That involves both
information search and communication with friends.
• Internet evolution and use will continue to increase
importance of online advertisement; expenses in the
internet will increase versus other media
• Increased online presence for Primark’s competitors: Zara
will sell online from fall/winter 2010.


Future expenditure will continue its decrease as consequence
of the new business models and the huge competence,
Situation analysis: economical trends

• Clothing expenditure among the
families represents 4,4% of the total
home consumption. It has been
decreasing since 1985 when it was
the 6,3%.
• From 2001 to 2008 the annual
increase has been around 0,9%,
much less than the average home
expenditure (2,5%).
• In the future it will represent 4,% of
the total expenditure according to
Nielsen.
• The business is increasing in
volume (number of garments) but
not so much in sales because of
the global decrease of the prices.


Demography trends: target market loses population, and they
spend less in clothing.
Situation analysis: demographic trends

Demography changes to be expected in the next two years:
• Population increase will slow over the the next two years, mainly by
the slowing in inmigration (450,000 instead of the 700,000-900,000
during the years 2004-2008) However, this variable (immigration in
the next few years) is considered as hard to predict, and volatile.
• Specifically, for the target markets of 18-35 and 14-24, population will
decrease significantly in the short term, as the “baby boom” (currently
in the 28-35 range) “exits” the target market, and the “baby bust”
(currently in the 9-14) enters it.
Source: INE data and short-term estimates http://www.ine.es/prensa/np576.pdf
• Nielsen global study on consumers indicates that, on the
second half of 2009, 67% of spanish consumers say that they
spend less in clothing than before; if the economy continues to
be down, they consider cheaper clothing as a useful way to
save money.
Source: Nielsen via DistribuciónActualidad


H&M is a dynamic firm with fashionable designs mainly for
women, at a low price.
Competition: H&M

•Offers "fashion and quality at the best price", remarking the concept “new”
everywhere.
Brand •Frequent collaborations with top designers (Karl Lagerfeld, Jimmy Choo) or celebrities
(Madonna, Kylie Minogue)
•COS – high end clothing
Product •Variety of products including shoes, apparel, accessories, and cosmetics
Categories •Home textile products – not present in Spain

Target •Mainly women

Online •http://www.hm.com/es/ collections, style guides, interactive
•2009 – 2% market share in Spain (Source: TNS WorldPanel Fashion)
•114 stores in Spain
Facts and •During 2009 sales fell 2% YoY, to 615 million euros;during 2009 Q4 sales fell 6% YoY.
Both numbers are in local currency, EUR. Numbers in SEK show a rise in sales, due to currency exchange
figures variations.
•Profit rises in swedish currency; no data for Spain.
Source: H&M Report.


Bershka designs for young trend followers and
associates the brand with modern art and music.
Competition: Bershka

•Strongly associated to music (remarkably loud and “catchy” music in the stores, music
Brand playlists and recommendations at their website, music icons in the clothing designs)
and art trends (store decoration)
•Bershka - modern
Product •BSK - young
Categories •Men, Accessories

Target •Young, trend-followers

Online •http://Bershka.com/ collections (possible online store before 2011)

•266 stores in Spain
Facts and •Global Sales go up in 2009 by 14,7% to EUR 511 million.
•Global Profits down in 2009 by 5,3% to EUR 56,91 million.
figures Source: http://lowcostattitudespain.wordpress.com/2009/09/23/bershka-se-beneficia-de-la-moda-low-cost-y-
supera-en-rentabilidad-a-zara/


Zara is strong in logistics and design; currently shifting
more towards the Lefties stores
Competition: Zara & Lefties

•Fashion at affordable prices(Lefties: Zara design at very low prices)
Brand •Designers quickly copy trends that have become famous.

•Man, woman, kids
Product •Zara Home
Categories •Zara Home Kids
•Lefties is a Zara sub-brand

Target •Fashion-seekers

Online •http://www.zara.com/ collections (possible online store before 2011)

•In Spain: 332 Zara and Lefties stores, 172 Zara Kids stores and 120 Zara Home
stores
•Zara stores are being transformed into Lefties stores
Facts and Source: http://www.modaes.es/empresa/231109/inditex-echa-el-freno-y-comienza-el-repliegue-de-z
figures •5,4% marketshare
•Provisional: feb-oct 2009 data shows rise in sales YoY. Complete 2009 data to be
available in march.
Source: http://www.cotizalia.com/noticias/inditex-cumple-previsiones-ventas-alcanzan-millones-20091210.html


Kiabi focuses its positioning in the whole family experience of
shopping around their exclusive commercial surfaces.
Competition: Kiabi

•“Being the favourite brand of all the families, making it possible to dress up with no
limits and enjoying the process”
Brand •Values: efficiency (Price, big offer, quality, up-to-date clothes) and experience
(Welcoming, team, shop environment, presentation).

Product •Women (mom, large size, lingerie), men (large size), children (1 to 5, 3 to 10, 8 to 16)
Categories and baby. Biggest success: baby, large size for women and pregnant women

Target •The whole family.

Online •http://www.kiabi.es/Online shop available (objective of 5% of sales for 2012).

•57 stores in Spain (12 more along 2010)
•121 millions of sales in 2008. (30% increase from 2007).
Facts and •Less than 1% of share of market.
figures •Franchising available (objective is 15 tp 30 for 2012 out of France)
•Main presence in outskirt commercial areas.


C&A is a multibrand experienced company, with a dressing
solution for everyone’s desires for all the moments.
Competition: C&A

•“Fashion for young and old, fashion that fits every occasion and suits every style”
Brand •Values: bid offer, price, high level of service, post-purchasing service.
•Women (Yessica for casual, Yessica Pure for fashion clothes & Your 6th Sense for
classic style), men (Angelo Litrico for urban style, Westbury for a classic style), unisex
Product (Canda for comfortable daily clothes), youngsters (Clockhouse), children (Palomino from
Categories 2 to 6 and Here&There from 7 to 14) and baby (Baby Club). Specific brands for jean
clothing (Jinglers), sport style (Rodeo) and environmentally friendly (Bio Cotton)

Target •Individuals from both sexes and specific needs

Online •http://www.c-and-a.com/Collectionsand store locator.

•145 stores in Spain: 89 + 25 Kid’s Store (17 more for 2012)
•440 millions of sales in 2008. (6,5% increase from 2007).
Facts and •1,4% of share of market.
figures •25 years of experience in the Spanish market.
•Presence in both commercial and city centre areas with specific categories


Decathlon is an sport material retailer with their own dressing
brands for practising sports and feeling comfortable before
and after it.
Competition: Decathlon

Brand •“Dress casual and comfortable not only the weekends”

Product
•Sport and complements. Different brands as Quechua, Kalenji, Domyos and Triboard
Categories

Target •Mainly people who practice any kind of sport, but also for casual wearing.

Online •http://es.decathlon.com Online shopavailable.

•979 millions in sales in Spain during 2008 (not only the dressing business).
•2nd brand in number of customers (5,48 millions)
•3rd brand in share of market (1,8%)
•Decathlon has 66 shopping centres in Spain
Facts and •18 years of experience in the Spanish Market.
figures •On line shop available
•Presence in commercial areas with huge centres and in urban areas with the new
Decatexperience (where 80% of the supply is clothiing)
•Koodzais the new business model for “low cost”.
•The owner group is Oxylane.


Carrefour integrates their clothing offer in the
hypermarket, with occasional designer collaborations
Competence: Carrefour

•Value at low price, easy access.
Brand •Collaborations with BCBG or Don Algodón (now owned by BCBG) during the last five
years.

Product •Variety of products
Categories •Leaders in the underwear and socks markets.

Target •Women, 28-35

Facts and •Over 160 stores in Spain
figures •No separateddata for clothing


Market Data by store type: Multibrand clothing stores have
lost marketshare to cheaper alternatives
Situation analysis: market

Over the past few years:
• Multibrand clothing stores, and lately, department stores, have lost
market share
• The increase in marketshare is for outlets, and secondarily,
supermarkets and single brand chains.
Source: Acotex

Multimarca - multibrand clothing stores – independent
stores retailing from different providers
Grandes Almacenes – Department Stores as El Corte
Inglés
Cadenas Especializadas – Single brand chains as
Primark
Hiper/Supermercados – hiper/supermarkets as
Carrefour
Outlets – stores offering discounted goods as Lefties


Market Data by store type: Single brand stores are the main
alternative for clothing purchase in Spain

Now:
• Primark store type, single 2009 2Q Sales % Volume %
brand stores, channel a
Multibrand clothing store 32,9 21,4
third of all the clothing
sales in Spain. Single brand store 33,8 33,9
• Secondarily, multibrand Markets 5,5 16,4
clothing stores keep
selling expensive items of Department Store 15 6,3
clothing, and Supermarket 5,5 14
markets/supermarkets,
cheap items of clothing Other 7,3 8
Source: TNS Worlwide


Market Data by brand:

Now:
• Zara, C&A, H&M, Primark, 2009 2Q Sales % Volume %
Cortefiel are the main
players. Zara 5,4 5

• Of them, Primark, C&A and C&A 2,1 2,8
H&M are a different
H&M 1,9 2,4
segment, with lower price
per unit (high volume % Primark < 1,9 2,9
related to sales %)
Sourcee: TNS Worlwide Cortefiel 2,5 < 2,4


Competition is increasing within the Spanish market. In
consequence, price levels are lower because of the huge
offer.
Situation analysis: market conclusions

• Most of the sales come from the women market.
• Shops location is important. Shopping malls and city centre are the
favourite locations.
• Market prices are decreasing very fast, especially the last year with
the economical crisis. Not only in sales season. So, cost reduction is
a key factor for the companies.
• Multibrand stores and department stores are loosing ground against
the single brand stores and the supermarkets.
• New competitors are looking to the Spanish market for their
expansion plans: Gap (USA), Esprit (HK) & Fast Retailing with its
brand Uniqlo (JP).


The target customer is a generation of young adults looking
for individualization but connected with their peers in and out
of their country.
Target customer analysis

(18-
Some relevant characteristics of the target customer (18-34 spaniards)
• They choose and buy their own clothing, both the individual items and the
general style. Specially the young ones and the women.
• Well communicated through mobile phones, social media, group activities
(parties, concerts...) Less use of TV or radio than prior generations. Also a
high percentage of them shares comments, blogs or photos online.
• They realize there is an economic crisis, but they expect it to end soon and
go back to higher income levels.
• Stays close to the family (relatively few study or work away from their
hometown, and generally stay in their parents house until well in their 20’s)
• Culturally different from older spaniards – more following of world brands,
less of traditionally spanish cultural items.
• Interested in world events, but low skills in foreign languages.
• Interested in health, fashion, cinema and music.


Primark is the most trendy dressing solution at the best prices
for its target group and makes it possible to be part of its
community.
Brand positioning

price variety trendy community


Brand positioning is evenly distributed when analyzed
from the prices vs design point of view.
Brand Positioning
Prices
Zara Brands in this market
Cortefiel
are distributed evenly,
balancing prices and
design to focus in
different niches.
H&M
C&A Primark space is not
Bershka
Decathlon overcrowded but
Design there are competitors
in the surrounding
markets
Carrefour
Lefties
Primark
Size: Brand awareness Colour: Target market
Kiabi regarding clothing market Family - Young m/w - Young woman


Promotion through several channels is mandatory to increase
the brand awareness and build barriers for future competitors.
Situation diagnosis: SWOT

Positive Facts Negative Facts •Primark business
model is a success
(strengths) but brand
awareness is still a big
•Price challenge. Specially,
Internal

•Design •Shops location because of the
•Variety •Not in the “Top of Mind”
•Quality •Market fragmentation
incoming competitors
•CSR image such as GAP and Fast
Retailing.
Strengths Weakness •Market fragmentation
will increase cost
Opportunities Threats reduction requirements
to be competitive.
•Primark locations
External

•Premises price decrease •Target volatility
•Fashion trend increase •Target population decrease don’t make possible to
•Clonehunting •Incoming competitors reach the key target
•Web 2.0 •Economic future
group.


The main objective is increase the brand awareness within the
customer target in order to achieve a sustainable position of
the Primark’s business model in Spain
Objectives definition

MAIN OBJECTIVE SECONDARY OBJECTIVE RESULTS •In the short term the
objective is to increase
business chifres through
Increase the word
Build a community brand awareness
of mouth
increase and in order to
maintain a profitable
Increase customers Decrease
business model.
loyalty customers volatility Sustainable
•Taking advantage of
business
model economies of scale,
Primark can use its
Brand awareness benefits to build up new
Build up incoming Positioning barriers to incoming
barriers reinforcement competitors through
Key reference of promotion investment and
the Spanish market
setting stores in the city
Promotion investment / City centre premises
centre.
•Last step is to create a
Increase business community around the
sales Maintain a brand through web 2.0 to
Economy of scale profitable
business increase customers loyalty
Increase market and creating a fan
model
share
phenomenum to create a
sustainable business
model


New social, economic & technological situation are keys to
increase Primark’s brand awareness in its new positioning.
Strategy: starting point

• Consumer confidence index and home expenditure recovery.
• Increase the use of the Internet as an advertising tool and a
comparison tool by the customers.
• On line selling is not an option as it would require a different business
model and customers engagement with the brand will be more
difficult.
• Spain is not a monopolistic market although the competitor’s brand
awareness is higher than Primark’s.
• Reduction of the target minimum age to 14 years old.
• Single brand stores are increasing their market share, as Primark.
• Primark growth rate has been very important since its arrival to
Spain.


Primark’s requirements within the Spanish market are
specific and requires an specific strategy
Strategy: brand requirements

We are looking for Primark’s knowledge
1 increase within the consumers to…

be relevant and build up a BRAND in Spain.
2

To gain clients To create a
community


Primark offers fashion solutions for the most trendy
people at the best price.
Strategy: insight

Individual level Economic level Fashion level
Consumer

The consumer is Seasons are shorter Looking fashionable
looking for her and clothes rotation among their friends is
personal style but higher. Price is more important. Creating an
influenced by brands. important now. own style.
Primark

Primark has to be a Looking around the
fashion SOLUTION Recognized leadership in community to know what
company for its low price market is fashionable.
customers Coolhunting.

Primark helps you to be in vogue and share it with your friends.

Primark’s landing in the Spanish market was product
oriented and now it’s necessary to build up the brand.
Strategy: strategic approach

Brand relaunch

1st 2nd
stage stage

Increase Primark’s awareness within Enhance communication with the
the target, creating new fashion followers and Primark fans
expectations and attractiveness to increase their loyalty and build up
a community around the brand

Increase brand knowledge & relevance Increase brand esteem &differentiation
differentiation


Content

• Situation analysis
• Environment
• Competition
• Market
• Situation diagnosis
• Objectives definition
• Strategies
• Action plan
• Control plan

Use of different media and different formats for both
objectives: promotions and brand building
Action Plan: creative development

• General press for specific
• Focus in local radio promotions and/or
stations for specific opening of new stores.
promotions and/or opening
of new stores. • Specilist press for
creating brand
• Not a good way for brand awareness.
building.
• Wedge radio.

Radio Press

Online Outdoors
• Buy attention: display • Outdoors canvas,
Advertising and video muppy, vinyls, etc.
marketing. • Street marketing to
• Beg attention: Search create a close
Marketing, connection with
• Earn attention: Social customers.
Media & e-mailing


Each media type offers different benefits for the
campaign
Action plan: benefits by media

Radio Good for local promotions. Economical.

Outdoors Notoriety and coverage. High impact if creativities are good.

Local press offers good impact for store-specific promotions. Specialized press
store-
Press improves brand image and has prescriptive qualities.

Segment targeting, interactivity, virality, monitoring results.
Internet •Search Marketing.:Very targeted, relatively cheap and scalable.
•Display advertising: similar to print media advertising; online versions of
specialized or local press.
•E-mailing: direct and easy to monitor.
•Social Media: tracking conversations and integration with the online actions
already described.


long-
Customer loyalty and strong long-term positioning is a
target achievable by online community building
Online action plan: key factors

• Increasing customer loyalty and achieving a stronger long-term
positioning will be achieved through online community-building. That is,
promoting a space where clients can share ideas, preferences and
opinions about Primark items or clothing in general.
• That space will allow Primark to appear as a brand that listens to
customers, an “ally” for them, and a provider for their needs.
• Using online marketing for these objectives is both effective
(customers already consider internet a good way to communicate
about possible purchases) and efficient (marketing actions can be
delivered relatively cheaply)


First, Primark customers will be reached in social
networks, where they spend time.
Online action plan: Primark presence

• Primark customers are active in social networks.
• There are already some communities that can be helped (Facebook
and its fan pages)
• There are other places where Primark will create it’s own following
(channels in Twitter; events in Tuenti)
• Primark communication activities will be focused on community
building and sending customers to additional information at the main
Primark website.

Action Customer benefits Brandbenefits
Create/Improve Primark Customers get information about Increase brand awareness
presencein Social Networks events, products and stores within through word-of-mouth and link
(Facebook, Tuenti, Twitter…) their usual websites, among their to Primark community website.
friends


The community website will provide customers with
information aligned with Primark brand values
Online action plan: Primark’s Community

• The Primark community website will provide clients with useful information
(elaborated in-house, or links to customers’ websites, egoblogs or fan
blogs) Diverse information will reinforce the brand values of Primark:
– Industry news (gives Primark credibility as a main player in the market)
– Trends and Fashion comments (brand image as designer’s clothing)
– Clothing tips (helping customers with day-to-day clothing needs)
– Social Responsibility (Underline Primark’s effort to be socially responsible)
– Other customer’s profiles (reinforce or reward the social status of Primark’s fans)
• Customers engaged in the community are receptive to targeted
promotions, etc.

Action Customer benefits Brandbenefits
Create a Primark Community Customers can access a community Improve customer loyalty
Website with shared interests, communicating
with many Primark customers
Provide news and information Customers get centralized in-depth Improve brand awareness and
through Primark Community information about fashion, Primark brand image (Primark helps
website news, other customers’ ideas. solve your needs)


cross-
Online and Offline actions can cross-over to increase
brand presence and effectivity
Online action plan: Crossmedia

• The Primark community website and
social networks (Facebook, Tuenti,
Online etc.) will send customer’s attention to
presence offline promotion efforts: opening of
new stores, seasonal clothing
promotions, etc.

• Store opening materials, print ads, Offline
brochures will tell customers about promotional
the online channels of Primark, to
increase the community there. materials


Sources

Statistics, Data and Studies
• Indicador de confianza del consumidor – Instituto de
CréditoOficialhttp://www.ico.es/web/contenidos/616/index.html
• INE economic data and short-term estimates http://www.ine.es/prensa/np576.pdf
• “Internet influence on purchase decisions” http://www.tns-
global.es/docs_prensa/nota_prensa_254.html - TNS Group
• ComercioTextil en Cifras 2008 - Acotex
• Worlwide Panel Fashion – TNS Group
News items such as as:
• Private shopping clubs in Spain (2007)
http://www.consumer.es/web/es/tecnologia/internet/2007/09/05/166466.php
• VentePrivee growing in Spain http://www.fashionunited.es/News/Leads/Vente-
Privee.com_duplica_su_facturaci%F3n_en_Espa%F1a_201002154953
• http://www.distribucionactualidad.com/noticia/6255/Especiales-DA/textil-confeccion-imperio-
cadenas.html
• http://lowcostattitudespain.wordpress.com/2009/09/23/bershka-se-beneficia-de-la-moda-low-cost-
y-supera-en-rentabilidad-a-zara/
• http://www.modaes.es/empresa/231109/inditex-echa-el-freno-y-comienza-el-repliegue-de-z
• http://www.cotizalia.com/noticias/inditex-cumple-previsiones-ventas-alcanzan-millones-20091210.html
Corporate data from each competitor


Plan de marketing - Primark

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