Introduction

Penneys is an Irish clothing retailer which operates in Ireland however internationally as in the United Kingdom, Belgium, France, Germany, Spain, Netherlands and Portugal  it comes under the name of Primark. The retailer was founded and headquartered in Dublin, Ireland. Primark's parent company is Associated British Foods (ABF). The first store was opened in 1969  in Dublin on Mary Street and was called Penneys.This name could not travel to Britain because the American retailer JC Penney had the right to use the name in the region, where Penneys was entering the international market in England back in 1973. Primark was the name born from that and since then all stores outside Ireland have adopted to this brandname. The retailer employs over 57,000 people and operates in over 287 stores around the world. Penneys has built up its worldwide success by offering customers up-to-the minute fashions at value-for-money prices. The company says it focuses on a target audience of people under 35, aiming to offer “amazing fashion, amazing prices”.Wishing to further expand the business around the world we will look at further expansion into Eastern Europe with two countries for consideration Poland and Ukraine.                                                                                                                                                                                                           UkraineUkraine is one of the biggest countries in Eastern Europe with the population of 42.910 million people as of February 1, 2015, the population of Ukraine is decreasing due to the prolonged crisis which began in November 2013 when former President Yanukovych suspended preparations for the implementation of an association agreement with European Union. It resulted in protests by Yanukovych's opponents in Kiev, the conflict developed further and resulted  in a war between the East and the West of the country. The unstable political situation is the main reason for not considering Ukraine as a potential market.

PolandPoland lies central to Eastern Europe. Poland is recognised as having a business friendly culture, experiencing positive investment growth and also the only country within the EU not to be affected by the recession. Poland is enjoying a falling unemployment rate at 10.4% down from 12% in 6 months,  rising GDP currently at $11.6 per capita and a rising growth in economy. For all these reasons Poland is a very good place to expand into.

Market Entry StrategyAs a first step to enter the Polish market we suggest to adopt “bricks and clicks” strategy, which means launching online in the country`s own language. Many businesses like Debenhams, Marks & Spencers, Mothercare used this strategy to enter foreign markets. It will give the company a better understanding of the market and the appetite for the store. The second step will be direct exporting. The direct exporting involves higher risks but brings greater potential returns. The company will set up a sales branch which will handle sales, distributions, promotions and customers service centre. To implement this the company should hire Polish bilingual professionals, who will be able to conduct the business in  English and in Polish simultaneously.

SWOT Analysis

StrengthsPennies have many strength factors; one is its distinctive product and its remarkable upbringing; its numerous strategic moves; and the Pennies indisputable inclusion and diversity.  But the strongest factor for Pennies, probably its strongest link is the loyalty of their customers because of its unique services. Its strategic elements are its keys to achieving their goals.  WeaknessesWhile the company as its set of strengths, Pennies has its weaknesses. For instance, its tough competitor, like TK Maxx & Dunnes with other local clothing companies, has produced the same line of product.  Pennies had  nasty reaction towards product similarity as it can affect their company’s sales growth and profitability.   OpportunitiesIn order to attain the goal of the company, there are several opportunities available for the company’s further growth and progress.  An additional content area is an opportunity for Pennies to increase its market coverage. Rather than trying to imitate its competitors, Pennies concentrate on polishing and promoting its own unique clothing product.  The company cater it’s product to those with blue-collar users like the manufacturers, construction workers, taxi drivers. Although, Pennies is an established market within the business arena, the company has been utilized a strategic marketing move, including a strategic planning in order to make the market be know in the marketing environment.  Aside from creating innovative clothing lines, the company has also made it possible to be connected to their target market thru the use of technological advancement like the e-marketing.  ThreatsThe primary threat of the company lies on its increasing competitors. Pennies encounter various competitors offering similar products or services or that which is founded on similar objectives. The strengths and weaknesses of these competitors should be identified and analyzed so that Pennies can always counteract their moves.

PEST Analysis for Primark in Poland

Political

Poland has pursued a policy of economic liberalisation since 1990 and Poland’s economy was the only one in the EU to avoid a recession through the 2008-09 economic downturn. Although EU membership and access to EU structural funds have provided a major boost to the economy since 2004, GDP per capita remains significantly below the EU average and unemployment continues to exceed the EU average. While the Polish economy has performed well over the past five years, growth slowed in 2012 and 2013, in part due to the ongoing economic difficulties in the euro zone. Short-term, the key policy challenge will be to consolidate debt and spending without stifling economic growth.

Economical

According to UNCTAD’s World Investment Report 2012, Poland is the 14th most attractive investment location in the world for 2012-2014. Poland attracted some €4.716 billion of Foreign Direct Investment (FDI) in 2012, compared to €14.256 billion in 2011. The EU was the source of 87% of FDI.

Poland was ranked 43rd in The WEF Global Competitiveness report for 2104-15. The report highlighted improvements in institutions, infrastructure, education and its ‘increased flexibility in labour market efficiency’.

Poland has enjoyed uninterrupted growth since 1992. GDP per capita went up from 49% of the EU25 average in 2004 to 66% of the EU28 average in 2009. In 2008 GDP grew by 5% and, despite the global economic, Poland was the only EU country to record positive growth in 2009. Recently growth in 2013 reached 3.8% y-o-y and was forecast at 3.2% for 2014 by the European Commission. Currently, the economy is expanding at the fastest rate in two years. Companies are increasing investments, consumers are buying durable goods and exports are accelerating. Longer term, Poland has catch up growth potential remaining to developed economies. According to PwC, the economy is forecast to grow around 3% per annum until 2030 and 2.5% per annum until 2050.

Social & Cultural Poland is a country located at Eastern Europe it has an area of 312.680 km2and population of 38 451 989 people.                18 543 978  Current male population (48.2%)                19 907 011 Current female population (51.8%)

Population dynamics in 2015

According to estimations daily change rates of Poland population in 2015 will be the following:

1 055 live births average per day (43.95 in a hour) 1 072 deaths average per day (44.65 in a hour) -50 emigrants average per day (-2.06 in a hour)

Poland population density is 123.0 people per square kilometer as of July 2015.

Poland age structure

14.7 71.6 13.7

- percentage of population under 15 years old

- percentage of population between 15 and 64 years old

- percentage of population above 64 years old1

In Poland the average household net-adjusted disposable income per capita is lower than the OECD average of USD 25 908 a year.

In terms of employment, around 60% of people aged 15 to 64 in Poland have a paid job, less than the OECD employment average of 65%.

In Poland, 90% of adults aged 25-64 have completed upper secondary education, higher than the OECD average of 75%, and among the highest rates in the OECD.

Religion plays an important role in Polish society. Religious holidays are considered national holidays, when most businesses are closed (Christmas, Easter..).

Marketing Mix

"Marketing mix - The set of controllable tactical marketing tools - product, price, place, promotion - that the firm blends to produce the response it wants in the target market.” (Kotler, Principles of Marketing, Fifth Edition, p. 49.)

Some other authors include 7P's as the complete version of marketing mix. The remaining three are as follows: people, processes, physical evidence.

Product means the totality of “goods and services” that the company offers the target market. (Kotler, Principles of Marketing, Fifth Edition, p. 49.)

Primark`s product is fashionable clothing and footwear for men, women and children, fashion accessories, skin care products, homeware, lingerie, hosiery and most recently beauty treatments. Primark`s core product is affordable fashion clothes. Penneys has built up its success by offering customers up-to-the-minute fashions at value for money prices. The company says it focuses on a target audience of people under 35, providing fashion basics at value for money prices. Product quality is one of the major positioning tools of marketers. Quality has a direct impact on product performance and can be defined as “ freedom from defects”. The quality of Primark`s products is very good as compare to their prices especially if we look on the Primark`s competitors in the high street market. Primark`s delivery of a new design inspired by catwalk and red carpet to the shop floor takes only six weeks. All of the company's merchandise made specifically for the company Primark has its own brands like Atmosphere, Denim Co., Limited Edition, Authentic Apparel, Secret Possessions, No secret, Primark Essentials, Love to lounge,  Ocean Club, Cedar wood state, Butler & Webb, Backwing, Cedar wood state Active, Denim Co., Early Days, Young Dimensions. Primark`s packaging is fairly simple. It is “environmentally friendly”. Its famous brown shopping bags are 100% recycled. Primark`s core objective is to provide the best service to their customers. Each and every Primark store has a customer service department where trained customer service representative helps customers with their concerns and problems. At Primark the product that has been purchased by customers can be exchanged or refunded within 21 days  of the day of purchase. “Price is the amount of money charged for a product or service or the sum of the values that consumers exchange for the benefits of having or using the product or service.” ( (Kotler, Principles of Marketing, Fifth Edition, p. 639.)

Value for money prices is the most important element of marketing strategy of Primark, its slogan is “look good & pay less”.  For example its ladie`s top is 5 euro, girl`s dress is 12 euro, gents` jeans are 16 euro, ladie`s shoes are 18 euro. You can buy a whole  new look for as little as 35-50 euro. Apart from that Primark runs its seasonal sales keeping its promise of offering high fashion at value for money prices. To achieve this goal Primark is sourcing its supply cheaply, they buy directly from factories without involving any agents, making clothes with simple designs and fabrics, only making them in popular sizes, buying stock in huge bulk, targeting under 35 audience.

Primark does not run huge promotional campaigns, its affordable prices make it very popular without expensive advertising. Primarks lets its customers” do the talking”. It does not use TV or radio advertisement. It relies on “word of mouth” strategy. However it does not mean that Primark does not pay attention to promotion of its products. Considering Kotler's definition of promotion mix “Marketing communications mix - the specific mix of advertising, sales promotion, public relations, personal selling and direct marketing tools that the company uses to persuasively communicate customer value and build customer relations.” (Kotler, Principles of Marketing, Fifth Edition, p.691) we can see that Primark is actively using many marketing tools to build a good relationship with its customers. Primark has a very well trained staff for personal

interaction. It uses social network, it pays a massive attention to its social media strategy.  We can find Primark on twitter, Facebook, Pinterest, google+, on its own website it runs the Primania hashtag, where fashionistas can upload their own looks, share them, discuss them, express their opinions. It has the biggest followings of any high street stores, it is very popular amongst fashion bloggers like Becky Johnson of Pink Elephant Blog, Michelle Ross of Needsnotwants.

At the beginning choosing the place for trading Primark targeted areas of low income and opened its stores on outskirts of towns, it kept the costs down and made it closer to its target audience, but considering that company's strategy is changing and it moves on mid market, we recommend that renting a warehouse near Łódź proves a reasonable solution for the company. The region is characterized not only convenient, central location, but also an extremely well-developed road infrastructure; A1 and A2 motorways, as well as S8 express road provide fast connections to Warsaw, Upper Silesia and Poznań.

For the first Primark shop in Poland the best place to go will be Krakow, this is one of the most popular and busy cities in Poland.

Conclusion

Regarding Business Environment in Poland there are following arguments why Primark can be successful. First of all  it is a low risk market with same EU market regulatory framework as Ireland. Secondly Poland has resilient economy which has seen growth throughout the global economic crisis with catch-up growth potential remaining. Furthermore, it is the largest consumer market in newly joined EU countries, springboard for regional expansion. Moreover, Poland is the largest beneficiary of EU funds (over EUR 105.8 bn. in 2014-2020) and politically stable, pro-business government. Polish people like to dress up trendy, the price range of Primark is very affordable for the majority of the population. People know about the store from the “word of mouth”  and want to have it in their own country. According to the Polish Forum website the Primark stock is so popular with Polish people that they go to UK and Ireland to acquire Primark`s apparel.

Sources:

http:/www.primark.com/en-ie/our-ethics/environment/stores-and-operationshttp://businessetc.thejournal.ie/penneys-business-1957209-Mar2015/ https://docs.google.com/document/d/15lC0mxmABl_AugyAuK_05ep0vAHmkiIzm9BZ2MSSG_g/edit / http://stat.gov.pl/statystyka-regionalna/rankingi-statystyczne/miasta-najwieksze-pod-wzgledem-liczby-ludnosci/www.oecdbetterlifeindex.orgwww.euromonitor.comwww.worldbank.orgwww.biznesforum.pl