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Unit 2 Marketing Essentials Primark Assignment Help
Diploma in Business
Unit Number and Title
Unit 2 Marketing Essentials
The unit 2 marketing essentials Primark assignment help comprises of four tasks. Task 1 deals with the study of an organization named ‘Primark’. It consists with the purposes of the organization, organization and objectives of different stakeholders, responsibilities and strategies of the organization. Task 2 of the assignment comprises the economic systems of three countries (Cuba, United Kingdom and China), effect of fiscal and monetary policy on farming and housing in UK, competition policies and effect of such policies on the organization. Task 3 deals with different business market structures (perfect competition, monopoly, oligopoly and duopoly), demand and supply shaping the responses of the organization, business and cultural environment affecting the organization. Task 4 gives details bout BREXIT, importance of international trade, effect of global factors, effect of policies of the European Union on the UK business organization.
1.1 Primark and purpose of the organization in respect of public sector, charity and cooperative
Primark is an organization in the clothing sector. It sells products at discounted prices (pile it high and sell it cheap) and gets the support of certain celebrities. It has given stiff competition to many high known brands such as Marks & Spencer and many supermarkets (offering low price clothing) as well. In UK in the year 2006 it had the maximum sale amounting to around 18 billion. It aims to overtake Marks & Spencer and become the leader of women wear in UK. It has been constantly increasing its outlets. (Parvez, 2010)
Purpose of the organization
The public sector:The main purpose of the organization is to provide quality products at low prices to the public. Low cost does not imply poor quality. A test for checking the quality of a product is performed and is sold at a fair price. Number of choices is provided to the public to choose from and number of outlets is there.
Cooperative:Developing good, healthy and friendly relationship not only with the customers but also with the staff members and develop a image of friendly company in the minds of everyone. The treatment with every customer is same whether with less money or lot of money.
Charity:The organization does not stay behind when it comes to charity. It not only provides free clothes on various occasions to its employees, the organization also gives its clothes as charity to poor and needy and especially in winters. (Blurtit, 2016)
1.2 Describe the extent to which Primark meets the objectives of its different stakeholders
Stakeholders are the persons, individuals, group pf persons or even an organization that have a say in the company and form a interest in the decisions and actions of the company. For Primark different stakeholders are-
- Trade unions and civil societies:The organization works with number of trade unions and societies worldwide and has a common aim of guarding the rights of the employees and workers. From 2006 Primark is a member of Ethical Trading Initiative (ETI). In order to improve labour worldwide UN’s international labour organization started Better work partnership in the year 2010 and primark has been a partner of it and follows international standards towards the workers.
- Workers and communities: The main suppliers for the organization have been China and India. To ensure every worker has minimum wage primark engaged in China. Minimum wages are such wages to ensure that basic necessities are met and some part is saved as well. In India, it has engaged with certain NGO’s to provide education and betterment to the workers.
- Customers are very important for every business. Without customers a business cannot progress and therefore it is necessary for a business firm to take care of its customers. Primark’s main aim is to provide good quality products to its customers at low prices. It does not spend huge funds on marketing and advertisement or promotion and it beliefs that its customers will do the talking for them. It not only gives value for the money to its customers but also takes care about the concerns of its customers. (Business case studies, 2015)
1.3 Explain the responsibilities of Primark as an organization and the strategies employed to meet them
Primark aims for the betterment of its employees, communities and its suppliers and engaging them in the work operations of the organization. It lays the responsibility of providing unbiased and equal opportunities to all. It enhances the proper treatment of the suppliers. The society and the environment concerns and responsibilities are properly looked upon by Primark.
The organization is a member of Ethical Trading Initiative (ERI) and it clearly specifies that the company is following ethical conduct.
The organization lays support to certain charitable organizations, societal projects and helps certain families and individuals in UK. The organization contributes generously towards the betterment of the people and providing health and education facilities.
Waste is produced in packaging department and through packaging waste regulations, it aims to reduce such wastage and take care of the environment. The producer is required to pay a certain amount of cost for the recovery and recycling of the wastage produced in packaging as a part of regulation.
Another responsibility that the organization looks into is the usage of plastic bags. It is constantly replacing the plastic bags with the paper bags and tries to be environment friendly. The organization makes sure that it has appropriate efforts and strategies to fulfill the responsibilities of the company. (Primark, 2016)
2.1 Explain the type of economic systems operated in the following countries and reasons why they follow these systems
a. Cuba-The economy of Cuba is planned.Many and most industries are owned and controlled by government. The government of the nation directly and indirectly controls the economic activity. The growth rate in Cuba has decreased recently. There have been certain reforms on the control by the government but the government still controls most of the industries. People in Cuba generally tend to work for themselves only and as far as import and export are concerned, the nation makes import of goods and exports the services. (DeSilver, 2015)
b. United Kingdom-The economy of United Kingdom is one of the most globalized economies. It has the 6th largest economy worldwide in terms of GDP and 8th largest in terms of PPP. The rate of unemployment is UK is high at 8.02% although the number of workers amount to around 32 million. The government spends less on public. Agriculture is important sector in UK as it makes 60%of food in UK but only contributes to 0.7% in GDP. (EW World Economy Team, 2013)
c. China-The economic system followed in China is the socialist market economy. It is a mixture of socialism and capitalism. The leaders of the company aim at the creation of a communist economic society, the growth of China mostly happened after it did some capitalist practices. The GDP of China has been constantly increasing at the rate of 10% per year which is better than many developed countries and it is the leader in the sector of manufacturing.
Unlike many neighboring countries most of the business practices are controlled by the government and the private organizations are also closely watched upon by the government. (Reference, 2016)
2.2 Impact of fiscal and monetary policies on the business
a. Farming-In case of farming sector, the growth totally depends upon the development in economy and low poverty. After green revolution the use of farming products such as fertilizers have increased significantly. Agriculture and farming is greatly monitored by fiscal and monetary policies. Increase in interest rates has also affected the farming. Proper production of food products is necessary to meet the requirements. Being totally controlled by the private sector, the public sector also has a major role to play in providing various products necessary and developing various programs. (Awan, 2012)
b. Housing-A change in single policy may result in several conflicts. The rate of interests on loans greatly effects the housing business as most of the private builders or constructors do the working by taking loans. High rates may reduce the potential of the builders and vice- versa. By the supply of money forces the authority can keep a check on the interest rates. Various other examples of monetary and fiscal policies affecting the business of housing can be discount rates, interbank borrowing rates, etc. The president and the authorities tend to alter and have a effect on the rates of interests. Another factor that affects the housing business is the unemployment rate and the price inflation and price deflation. (Naylor, 2012)
2.3 Identify at least five competition policy and other regulatory mechanisms in the UK and evaluate their impact on the activities of the organization
The core objective of competition policy is to increase competition, make the operations in the market better and improve the efficiency of the market. The policies are as follows:
De-regulation:It is a policy to decrease the monopoly in the market. It makes an attempt to prevent the company to merge (preventing monopoly). In the case of postal services, there are laws in order to increase the competition. Also promote or rather force the sales of assets.
Privatization:It means to transfer the ownership especially the stock market of Royal mail and semi privatization of network rail.
Tough laws on anti competitive behavior:Strict laws and punishments on the cases on insider trading fixation of prices.
Decrease in import formalities:Decrease in the prices of the import tariffs can result in low cost imported products. Altering the quantity of imports can also have the same effect on the prices.
Promoting innovation and safeguarding the interest of the customers:The policy promotes the scope of innovation and protects the right of customers. (Riley, 2015)
3.1 Explain how pricing and output decisions of businesses is determined in the following market structures
Perfect competition-There exists no power. There are large number of buyers and sellers in the market in perfect competition. There is free entry and exist of the firm. The firm enters the market considering the following pricing and output decisions:
- What quantity is to be produced?
- What will be the profit on the production?
- Is it beneficial to continue even after the losses?
The assumption is necessary, in short run the organization should aim for profit maximization.
Perfectly elastic demand curve i.e. the customers are ready to purchase the product at whatever price the company is willing to sell.
There should be comparison between the total revenue and total cost to increase the profits or reduce the losses.
In case of long run, the prices will become stable and company will continue to earn profits for long time. It is very difficult to acquire profits over the long run. There should be efficiency in cost.
Monopoly-In case of monopoly, there is market power as there is one seller and one product and restricted entry and exit of the firm. The sole power to set the prices lies with the company and it maximizes the profits. The maximization of profit is limited by the elasticity and the demand curve. The firm should not become rude and annoy its customers and the ability to earn profits will never diminish. Changing business environment can bring about a change in the monopolistic power of the company. (Hunjoo, 2014)
Oligopoly-In case of oligopoly market, there is product differentiation and there are few sellers and entry and exit is restricted. The prices keeps on changing. In a market where there are number of sellers, the sellers have some control over the prices as all sellers charge same price for the product and it depends upon the customer from which seller to buy. There may be different ways in which sellers advertise and market their product for the attraction by the customers. The decision on producing the product is taken considering the demand for that product. (Nitisha, 2016)
Duopoly-It is a form of oligopoly where there are only two sellers in the market. With the help of these four models, the pricing and output decisions under duopoly can be determined:
Classical model of Cournot and Edge Worth:It is based on the assumption that output and price of one seller change and that of other seller does not change.
Hotellings Spatial Equilibrium Model:The product of both the sellers is differentiated on the grounds of location of the sellers.
Stackelberg’s model:The assumption is that the one seller is leader and the other seller follows the leader.
Modern Game Theory Model:Whenever there is a change in price, quality, quantity of a product by one company, the other reacts to it (reaction function). They formulate strategies accordingly. The model is a approach in which two sellers compete for profits that depends on the strategies formulated by them. (Economics, 2010)
3.2 Illustrate the way in which market forces (demand and supply) shape organizational responses
The operations in an organization are greatly effected by any change in quantity demanded in the market. A change in quantity demand and supply is a change brought other than the factor of prevailing price. The surplus lying with the supplier can be used by the producer. The surplus of consumer can be used for discrimination. When the quantity demanded for a product is equal to the quantity supplied, it is called market equilibrium. Market disequilibrium is when demand and supply are not equal (excess- quantity supplied > quantity demanded, shortage- quantity supplied<quantity demanded). Shortage and excess situations can be determined from the market. (Primark, 2016)
3.3 Judge how the business and cultural environments shape the behavior of a selected organization
The management should take care of the ‘clothing members’ and also the behavior of its employees which is caused by social communication. Whenever the authority or the managers are to make the decisions, it is the cultural environment that they have to consider. The culture of Primark is to provide quality products at low prices, the values and regulations are guarded by their employees. The culture of the organization affects the operations within. It guards its employees and consumers interest. There has to efficiency in the work within the organization and the business and cultural environment should be such so as to establish friendly relations and effective team work. The cultural and business environment determines the outcome of the business. (Primark, 2016)
4.1 Discuss the significance of international trade to UK business organization
International trade in the UK business environment involves exchange of money through international borders. It involves the use of the resources by importing and exporting them through international borders. Not all the products we use in day to day life are available in our own country. Lot of the products have to import from other countries. International business is an essential requirement for any country to sustain.
The importance of the international trade in UK business environment can be explained best by taking the concept of comparative advantage. The two country will have trading relations among each other when both of them are at profit. UK want to leave EU as it is a hindrance in its trading relations with the most potential market of India and China. UK took a exit from EU as it was no longer beneficial for it. (Dudovskiy, 2013)
4.2 Impact of global factor on UK business organization
There are many global factors that affect the business organization that are present in the market of UK. Some of the important factors according to the PESTEL analysis are listed as below:
- Social factors
The values of the family affect the social buildup of the country. The immigration of the outsiders and change in the family pattern also affect the social structure of the country.
- Legal factors
These are business related rules and regulation of the country. There are many international laws that are applicable in many countries. Safety issues and laws related to data protection are also included.
- Technological factors
Technology changes at a very rapid rate. Regular innovation comes in the market so in the laws of the government. There are many cyber laws that are applicable in the businesses in the country.
- Political factors
The level of political stability and the political condition of the country determine these factors. The freedom given to the media in the country the terrorism in the country also stop the foreign investors from investing their money.
- Environmental Factors
The climatic condition and the pollution level also determine the entry of new players in the country. There are many laws applicable on the companies related to the environment harmed by them.
- Economic Factors
The economic condition of the country also determines the trade of the country with other nations. Due to BREXIT the economic condition of the country are affected. (Dudovskiy (I), 2013)
4.3 Evaluate the impact of policies of the European Union on UK business organization
The two major policies of the European Union are mentioned below:
- Policy related to employment
The major hike in the employment of the country can be increased by the effort of the government. The recent government of UK are trying to increase their trading relations with the upcoming potential markets such as India and China. This is the major reason of BREXIT in the country.
- Policy related to inflation
It is the duty of the government to keep a check on the sudden hike in prices of the commodities in the country. The rate of inflation is set by the highest bank of England. Increase in interest rate is a limiting factor for the growth of the banks in the country. The rise in interest rate will make it difficult for the company to borrow money. (Business Case Study, 2016)
This present assignment focuses on the marketing strategy. The company considered in this assignment is Primark. The interests of various stakeholders are different. The employees are the major asset of the company. The economic policies of different countries are different. International business is essential for functioning of a country. Fiscal and monetary policies determine the rules and regulations of the business. Pricing decisions taken by the company perfect competition, Monopoly or Oligopoly. Various political, economic, social and legal factors are essential effect the international trade of various countries. Brexit is an important factor in the business history of UK. International trust between two nations is possible only when both are benefitted.
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