Market Planning Essay Example for Free

Market Planning EssayAnalysis1. IntroductionIn 2001, Doole and Lowe defined the internationalist commercialiseing. In a simple class, international grocery install involves the firm in devising one or more grocery storeing mix decisions across national boundaries. And in a complex class, it involves the firm in assureing manufacturing facilities overseas and coordinating marketing st measuregies across the globe (Doole Lowe, 2001). And Chong and Kasturiratne say that, the world of marketing is a dynamic and very elicit one where decision making is at the heart of the marketing process. smart markets are opening and old markets are evolving, bringing with them naked competitors but in manage manner alliances (Chong Kasturiratn, 2009).2.1 Primark BackgroundPrimark is an interesting, horrific and growing phoner that gives customers with downcast-cost contrive vesture. It has a supply chain, which is very effective. The production link in china, India, Turkey, Bangladesh and other countries, with retail outlets in Ireland, the UK and other parts of Europe (Businesscasestudies, 2011). Primark is a global habiliment retailer found in June 1969, and in Mary Street, Dublin, the first Penneys livestock opened. The evolution zip is strong, from 1969 to 2012, in that location are 38 stores in Ireland, 35 stores in Spain, 161 stores in UK, 4 stores in Netherlands, 6 stores in Portugal, 9 stores in Germany, 1 store in Belgium and 2stores in Austria. In total, there are 256 stores all over the world (Primark, 2012).The slogan of Primark is appearance, quality and affordable scathes all rolled into one at Primark. And the key principle of Primark is to provide the consumers with starting time-coat fashion items. The target consumer is the people who has fashion thinking and want to save money. By using the way of sourcing productions efficiently, making apparel with easy design, using local raw material, paying attention to the mass size and speeding less on advertisement, the operating of Primark is efficient.1.2 Chinese fast fashionAccording to Barnes and Lea-Greenwood, fast fashion is a kind of marketing strategy. When the demand of consumers touches a top value, to satisfy this peak, the purpose of fast fashion is to reduce complex processes in the buying cycle and save times for delivering unexampled fashion productions into stores (Barnes Lea-Greenwood, 2006). In recent times, fast fashion developed very fast, it become an appear market for the whole world, In china, Fast Fashion cross outs are now learning that the speed of bringing a new style to market is supplementary to the speed of reaching the market at all (Poleg, 2012).2. Analysis2.1 PEST analysisIf an organization want to enter a new market, before the base of the process, PEST analysis is very important. The PEST analysis is an efficient tool to understand the market. The genes include political, economical, social-cultural, and technolog ical. Political The political factor has a big trance on the business. In the course of instruction of 2012, the political environment is stable, though it is the time that chinas leader will change from Jintao Hu to Jinping Xi. As one of Chinas fundamental political system, the multi-party cooperation system identifies the status and functions of the CPC and the eight other political parties in the political life of the state, and the relations between the parties (U.S. give in Department, 2012). And the Chinese government consists of a system of multi-party cooperation and political consultation under the leadership of the CPC. The system ensures that the CPC is the further party in provide in the Peoples Republic of China (Fogel, 2010). So even though the leader changed, the policy will change limited in the future.And at the uniform year, the Chinese government has put in the lead the 12th five year plan. In the twelfth chapter, there is a plan to improve the level of o pening up, in order to make a win-win situation. That policy may be unassailable for Primarks meekness to great(p) of Red Chinas market. Economic In recent years, as the result of successful economic reform and nimble marketing strategy, Beijings rag trade is becoming prosperous. GDP is becoming graduate(prenominal)er and higher, so the consumer awareness of people who maintenance in Beijing is stronger than the past time. Rag trade in the Beijing is a big market ranked thirty-sixth (Wang Zhao, 2012). With the reform and open and the developing of economics, china is the biggest change state assiduity and brand development all over the world. Beijing is a city of big consumption for clothing, there is more than 60 percent overseas clothing investment in Beijing. According to the Beijing statistical bureaus data, in the year of 2011, the disposable income of each Beijing resident is increased 13.2 percent, consumer spending of each is increased 10.3 percent.And for the cloth ing spending is increased 8.5 percent, which occupy the whole spending 10.3 percent. Last year, the spending on clothing is 46.92 billion. And it occupies 22.6 percent for the last year in the obtain mall (Beijing business information consultation center, 2012). And for the economic growing, it is do a high speed of Chinas developing in the past 10 years. GDP is 47156.4 billion, it increased 9.2 percent, and the expert forecast the date will be increased more than 12%. Chinas clothing market is very huge, in the year of 2011, the sales volume of transnational clothing corporation is 5700 million, and the sales volume of obtain center is 2340 million (We the financial channel, 2012). Economic globalization has become the trend of world economic development. In the year of 2012, there are 1419 new foreign investments carry been approved in Beijing. The growth year-on-year is 3.73%.The total investment of new established enterprise is 4.109 billion dollars, and the growth year-on-y ear is 92.05% (China industry research, 2012). Social Beijing is the capital of China, so Beijing is the center of political, last, science and technology, and diplomacy activity. The culture of clothing has a long history in here, there is strength in the culture deposits and arts and humanities. At the self said(prenominal)(prenominal) time, Beijing is the center of national minority, it apprise sufficiently shows the glamour of brand. Beijing is the economical center of northern part of China, there is a vast potential for future development. Nowadays, the developing speed of Beijings economic is very fast, followed, the values and taste are changed, too. The demand of new clothing, new brand, and new style is the key point. on that point is a big latent purchasing power on the people who come from other places. later reform and open up, people travel to Beijing, people work in Beijing, people settle in Beijing.International stars, HK, Macao and Taiwan compatriots, artists, and famous people, they all like to go to Beijing. All of these make a good foundation for the clothing development. As the capital of China, Beijing is the center of international communication. There are a large number of embassies, trade delegations, and foreign institutions. A lot of meetings in Beijing, China International Clothing and Accessories Fair are now the largest fashion modal(a) in China and it stands for the authority level in China.The clothing market in Beijing contains top grade brand shopping mall, brand shop, boutique, undivided shop, and supermarket, all of these make a system that good for new brand located. Technological In Beijing, people can easy to get information and there is strength for the textile industryupdate the technology and imported technology is convenience. So Beijings rag trade can follow the international fashion. The development of high technology makes Beijings market climb a high level. And there are some top-ranking clothing universiti es in Beijing, such as Beijing Institute of Fashion, Tsinghua University and China Academy of Art, and so on. There are 10 universities focus on clothing, they make high level talents for design, prudence and sales, which improve the Beijings rag trade.2.2 Michael Porter Five Forces AnalysisSuppliers bargaining power A producing industry requires raw materials-labor, components, and other supplies. This requirement leads to emptor-provider family relationship between the industry and the firms that provide it the raw materials used to create products. Suppliers, if powerful, can exert an define on the producing industry (Quick MBA, 2010). As we mentioned in the Primark background, the first supplier is China, the credible forward integration threat by suppliers, suppliers concentrated, significant cost to switch suppliers and customers powerful make the suppliers are powerful. Primark sell in bulk, and put one across a mandatory requirement. Primarks Supplier Code of Conduct i s a mandatory requirement within which its suppliers work. It incorporates the United Nations Charter, Chapter IX, article 55 and is subject to strict and ongoing audits conducted by third parties (Primark, 2012).Primark takes this Code of Conduct very seriously and its management board reviews it regularly. But there is exiting a problem, which is the increasing cost of raw material. Because of the decreasing cotton plant cultivation makes the cotton price increased in China. So Primark should pay attention to the relationship with suppliers caused by price increasing. vendee bargaining power Buyer concentration versus firm concentration refers to the extent of concentration in the buyers industry compared to the extent of concentration in business. The more concentrated the buyers industry relative to business the greater the bargaining power of buyers (Lima, 2006). By the late 90s, Chinese rag trade stepped into the buyers market. There is no definite brand and aligning, the i ncreasing of productive power is faster than the increasing of order quantity.The competitors always win by low-cost. And for the targeting sort out of Primark is preteen people, there are a few buyers with significant market share and they possess a credible backward integration threat, so the bargaining power of consumers is high. Potential new entrants The rag trade has low barriers to entry, and in theory, any form should be able to enter and exit a market, and if free entry and exit exists, consortly profits always should be nominal (Quick MBA, 2010). So, although the rag trade is easy to enter, there is exiting so many competitors. If Primark want to get the profits, it should have its own characteristics and build its own brand wee. Like Lima said Brand identity is the extent to which buyers take the brand name into account when making purchase decisions (Lima, 2006).Threat of Substitutes In Porters model, threat of substitutes is caused by the products in other industri es. The price change of the substitutes can affect the products demand. But clothing is essential for people, it is difficult to find a substitute for clothing. But the consumers in current time, the function of clothing is not only unbroken warm, but also to follow fashion. So some consumer changes their attention to cosmetic and jewelry. Therefore, the threat of substitutes is high The rivalry among competing sellers Primarks main competitors are HM, ZARA, GAP, UNIQLO and other fast fashion brand. From a macroscopic analysis, there is no different between the competitors. But from the microcosmic, the price strategy of low-cost is an advantage point. So the threat of competitors is high and fierce. When Primark reflection to the competitors, it should improve the product differentiation, creatively use a distribution channel and improve the relationship with suppliers.2.3 SWOT analysisA scan of the interior(a) and external environment is an important part of the strategic plann ing process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the form can be classified as opportunities (O) or threats (T). Such an analysis is referred to as a SWOT analysis (Quick MBA, 2010). Strengths Primark has confirmed the market of goal and brand name. It comes from Europe and it is easy to develop in Beijing. And the style of clothing is prevailing with low price. It is easy to find factory to produce productions. The brand is fits for the youth to follow fashion and fits for their purchasing power.And it has a good industry chain. Weakness Primark does not familiar with the market in Beijing, and Chinese consumer does not realize the brand. Other fast fashion settle in Beijing early, and they occupy the market. Opportunities There will be plenty of space for new brand to grow. There is a high purchasing power in Beijings market. The education of Beijing is high and people can accept new things . Threats The culture, policy and human are totally different from Europe, these make difficult to entry. And some competitors have settled in Beijing a few years age, how to line consumers and how to build brand name is the first problem.-Strategy Development2 STP AnalysisIn the marketing theory, segmentation, targeting and positioning are the factors of caller-up marketing strategies. When Primark enters Beijings market, it will face to thousands of consumers. The consumer psychology, consumption habit and income level are different. By analysis the strategies factors, we can know which way fits for the Primark in Beijing.3.1 sectionGeographical factorsIn Beijings market, we divide the geographical factors into two parts, one is city consumer, and some other is rural consumer. For the city consumer, they need the clothing style full of modern and the productions can follow the fashion trend. For the rural consumer, they focus on the practicability of the productions, and pay l ess attention to the appearance.Demographic factorsA).Gender The demand for clothing is different between men and women, women have a high demand for the appearance of the clothing, and men pay attention to the style and practicability. B).Age Different age cleave in the different level. The young people and students in school are the main consumer group. ground on some researches, the people whose age between 18 and 35 is a big consumer group, they hold the 50% of the clothing market, and there are only 19% held by the age of 40. The young people is the tether group for the fast fashion, different consumer group has its different consumption level. At present, the consumer of high-end expensive and of high quality is 0.6% for the Beijings market. And eye class is 70-75% (EFU, 2012). mental factorsIn Beijings market, we divide the psychological factors into five parts. Price For this group, the first esteem is price. The income drives the purchasing power. Quality The consumers pay attention to the quality of the clothing, hats, home or bags. Service This group pays attention to the pre-sale services and after-sale services. They need high service system. Fashion The consumers love to follow the fashion trend and the renewal and second-stringer is fast. Luxurious They pursue the highest price, and they need satisfaction from shopping.Behavior factorsFor the confirmedly brand buyer, they only buy one brand, never considering to buy other brand, the purchasing pattern is A.A.A.A.A.A. For the middle brand buyer, they will buy the production from several brands, the purchasing pattern is A.A.B.B.A.A. For the evoke brand buyer, they change their mind from one brand to another, it means they have no loyalty for one brand, the purchasing pattern is A.A.A.B.B.B. For the no loyal brand buyer, they do not have the favorite brand and do not care the brand, the purchasing pattern is A.C.E.B.D.B.3.2 TargetingAfter analysis the Segmentation, The target group of Prim ark is the young people who have higher education in Beijing, because the characteristic of this group is the convergence of purchasing. They may be come from different city, have different personality, but they are in the golden age, they listen to the resembling music, watch the same movie. Especially the developed internet, they can get the information and then synchronization with the world. So it makes Primark to choose the undifferentiated marketing. Primark enters Beijings market, it can use the same production, the same price and the same selling way, but it should make a new business strategy to Beijings consumer.3.3 PositioningWhen Primark enters Beijing, the first consideration of position is competitors. The tentative competitors in Beijing are HM, ZARA, GAP and UNIQLO.Product- positioning map 1In fact, the productions of Primark have a competitive advantage on the price, but it will lose in the popularity of brand. Therefore we should pay attention to build the brand n ame. Then the Primark can attract more potential consumers (middle shift brand buyer). High popularity with low priceProduct- positioning map 2For the entering of Beijing, one thing is difficult to change, that is equipment. The quality level is similar, and then Primark must(prenominal) put itself into a high service. As known, the shop of fast fashion is self-service just like supermarket. So Primark should improve service and then establish a good presence in Beijings market. Primarks clothing is full of British style, the selling point is designed in British, and then the brand value in Beijing could be higher than the value in UK. And based on the price in the UK, Primarks strategic positioning is middle class in Beijing. The middle class can help Primark to establish brand image and keep it have a long future.3 intromission modes analysisWhen a company entry a new market, there are two major modes they are integrity mode and non-equity mode. The equity mode comprises joint venture and wholly owned subsidiaries, and non-equity mode comprises export and licensing. And the main purpose of each company is to establish itself in the aim market (Zekiri, 2012). According to Charles, no matter which entry mode the company chooses, it has implications for how frequently resources the company must commit to its foreign operations, the put on the line that the company must take, and the form of control that the company can exercise over the operations on the new market (Charles, et al., 2011). The following tables will analysis the four entry way, and the factors that influence the entry mode, then we will know which way should chosen by Primark.ExportingLicensingJoint VenturesDirect InvestmentFactors that influence the entry modeBased on above analysis, we can see the country risk is low in Beijings market, and the polity and economy are stable tardily in China, for these factories, exporting and Joint Ventures do not fit for Primarks entry. Furthermore, P rimark in the UKs market, brand name has been built. It owns a lot of consumers not only in UK, but also in Europe. So the international last is experienced. Finally, for the reason of big firm resources, experience abroad, low local market risk and a little intensity of the ambition, it seems the most adapted for Primark entering in Beijing is direct investment. The direct investment, it may bring pressure to the investment and the company may take more risk. But the cost of the clothing is low, and the labor cost in China is lower than UK. The productions of Primark follow the fashion trends, which need the company uses the short time to produce, transport, and product release in the first time. Building the factory in Beijing can satisfy the need of market. At the same time, Primark can catch the Beijings fashion trend, which makes the production diversification.IMPLEMENTATION5. 7P marketing mixBooms and Bitner suggested that adding three factories in the marketing theory of 4P s in the year of 1981 (MATT, 2012), the three factories are People, Process and Physical Evidence. In this section, we will use the marketing theory of 7Ps to analysis the implementation of Primark.5.1 ProductThe marketing theory of 4Ps is direct by the product, and Primark do well in product, there are two aspects to show the Primarks product organise. A) From Primarks website (2012) we know, there are three clothing style in Primark, they are menswear, womenswear and childrenswear. The womenswear include four branches, the first is atmosphere, which is high fashion clothing for women, with a focus on key fashion trends, classical casuals, accessories and footwear the second is DENIM, which contain all the fashion style of pants the third one is secret possessions, which is a branch to Primarks underwear for women, from underclothing multipacks, to individual items and nightwear and the fourth one is backswing, which is a sports branch with the emphasis on technical functionali ty.According to the Primarks website (2012), the style for men is enough to manly consumer. Primark has the clothing style for all occasions, consumer can buy eachthing from the formal one to the casual one. All of these make the Primarks product structure complete, give a lot of choice for different consumer, and let each consumer have a good shopping experience. B) The quantity of each clothing is every huge, as Primark said we buy and sell in bulk Primark has over 230 stores in Ireland, the United Kingdom, The Netherlands, Spain, Germany, Portugal and Belgium. The huge quantity satisfies the demand from the new market.5.2 PriceThe strategy Primark used is low cost strategy. The target group is young people with higher education, their age between from 18 to 35. They have the purchasing power for the fashion trend, but they do not have the power to purchase the luxury. So the price can satisfy the demand of this group. When Primark entry Beijing market, it will use the same pri ce strategy. As Zollinger said prices that al unsex exist in the subjective memory of consumers (Zollinger, 2011). When a consumer choose a goods, if the performance, appearance and value are similar, one factor should considered by the consumer is the price. For long term thinking, the price is interrelated with sales. The low price could be got a higher level of the sales in the new market and if the sales have risen, it can drive the financial income increase the competition will face the austere market the low price discourages the potential competition and finally market does not allow a high price in the same level (Danciu, 2001).5.3 Promotion and PlaceWhen a company entries a new market, an important point is promotion. There are 5 aspects of promotion. They are advertising, personal selling, sales promotion, public relations and direct marketing. But in fact, according to Primarks website (2012), it said that Primark has no advertising costs, instead relying on their custome rs advertising on mouth (word of mouth) about their products. But the competitors like HM, GAP and UNIQLO pay much attention to the advertising and designing. There are three main ways of Primarks communications. The first is mentioned in the website word of mouth. The second is the product structure of Primark, which is the fashion design, diverse style with low price to attract the consumer. The third is the geographical position. Primark always set the shop in the city center or the bustling shopping mall.Although the rental cost is much higher than other competitors, Primark always give consumer a good shopping experience. However the shopping experience is different from Europe to China. Advertisements surround Chinese everywhere they go. Based on my personal experience, a good advertisement will attract me to try new product. According to Carl Hose, the purpose of advertisement is to sell the product.It is a communication of one-way form from company to consumer, and it will g ive consumers the important information to make a buying decision and attracting new consumers. It tells consumers about the products and how to get it. The purpose of advertising is to sell products and to build brand name (Carl Hose, Demand Media, 2011). Consequently, when Primark entry Beijings market, it need advertising to build the brand name at first time, and then it can use the promotion used in Europe. At the same time, Primark should keep the low price strategy and set the shop in the city center.5.4 PeopleWhen Primark entry to Beijings market, if it wants to move forward, the management should knows what has to be achieved, departments should know their role and stuff should know their goals. And they all should know what the consumers need. For Primark, it should hire the people who study abroad. Because they are familiar the behavior and thinking mode of Chinese cultural tradition, they can easily communicate and assemble with the stuff, and make the management more e ffective. At the same time, the hired people got the occidental educations, they understand the western way of dealing problems and behaviors, and they can understand and implement foreign bosss management concept. So, these people have important function to deal the culture conflict, promotion to cooperate effectively (Sun, 2010).5.5 Process and Physical EvidenceThe service is an essential point for the Primark entry the new market. It can build the brand name, at the same time, it can keep the consumers. Like James A Karl said that service good in an operation will greatly help in attracting new customers and the amazing consumer service can keep the consumer coming back. This is indeed a fact because people like to do business with the people who they trust and had a good experience (Karl, 2007).Conclusion and Critical Reflection6. Conclusion and critical reflectionAfter the Pestle and Porter five forces analysis in the first section, Primark seems to ready to entry Beijings mar ket. But no one can predict the future and the condition of Beijings market is changing every time. For entry, the strong new market can help Primark to develop itself, at the same time, the new market may be weaken the brand name of Primark. Though the situation is good for Primarks entry, it is an armchair strategist. There are so many problems we cannot consider, such as financial crisis, the changing of price and the changing of tack rate. Primarks strategy positioning is middle class in Beijing, and the target group is the people who have higher education, using the direct investment with low cost strategy. But the strategy cannot force the competitors, the success of Primark in Europe is decided by the strategy used in the UKs market, and Primark has experience to face the competitors, but Chinese condition is different from Europe.Another problem is the cognize of price in China, Chinese always think the high price is equalise to high quality, and low price is equal to low quality. So the effectiveness of low price strategy is worrying. And there are two problems we should consider, one is money, another is store. Because the direct investment, it will cost a large number of money. And the store should build in bustling street, but the Beijings bustling shopping mall seems in a situation of saturated. When Primark set in Beijings market, the 7P analysis is a basic for implementation. But the development of Primark should change the supposition with the changing of each factor from 7P. 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