The Low Retail Price Strategy

Published Date: 23 Mar 2015 Last Modified: 08 May 2017

INTRODUCTION:

Environment of United Kingdom retail Market:

The trading atmosphere in the UK is very challenging, and different corporations are using various methods to stay in business. In order to understand how corporations manage to remain in the competition with low prices Strategy this information will center on a particular area, which has all the time occupied our attention. The low price Strategy is a possible environment. In order to take action to this matter we are going to carry some retailing companies those are well reputable or well known for their deal opportunities in the UK market such as "Poundland" and "Primark" in the last 5 years.

The UK market is very challenging, due to the variety of the residents, and also the significance of the currency which is dissimilar from other countries in Europe. Furthermore the economy of UK develops faster than regular throughout the Europe. (ec.europa.eu/economy)

This is a situation where cost is going up due to the boost of the not only VAT in the kingdom, and where a few companies are leaving the industry due to the no profitability of their business. The UK marketplace keep on to battle against slump, as a result fears over job safety, tax increases and slash in government expenditure are the main issues. The retail surroundings go on to see numerous come to an end, as "Woolworths"; and some companies are ongoing by using unification or an acquisition. On the other hand "Iceland" has purchased about fifty stores with "Bargain Madness", "99p stores", and "Poundland" is also acquiring a number of "Woolworth's stores".

Furthermore, the market is at price wars; this takes place as a result of the slump. Waitrose, Asda and Tesco all expanded and extended their reduction lines in order to challenge the growing share of discounters such as Lidl. (Supermarkets Business Analysis 2011, UK).

If we talk to any regular customer and discus with them about some of excellence, leading big super stores. The probability is far above the ground that one of the initial words they will say will be "costly". Not "outstanding service", "wonderful variety" or level "cooperative employees". On the other hand "costly but attractive", or "You get what you pay for", but in the minds of normal customers, cost is approximately for eternity a mean aspect.

A pricing strategy is a strategy where a business proposes a comparatively low price to rouse stipulate and increase market share and to attract more customers to offer them good prices and quality products. It is individual of 3 broad marketing strategies that could be able to implement by any super store. Therefore these are generally engaged where the manufactured goods have little or no cutthroat benefit or where financial system of level is attainable with advanced manufacture quantity. Also called low price strategy.

In United Kingdom low pricing strategy is used as well and often by several super stores. Therefore it fallout in pricing their goods or services too near to the ground. Many super stores consider that containing the lowest cost in the marketplace will create them unbeaten. It believes that super stores can obtain business from their rivals cleanly by circulating the lowest price.

The Poundland Story:

The Poundland is the Europe's largest only price cut rate seller and won the officially year 2011 Discount Retailer of the Year honour. It has more than 400 outlets across the United Kingdom, also together with Northern Ireland and it trade a broad variety of very quality top product and hold brand goods all for the only price end of £1 only, as long as offering the consumers with remarkable price each day.

This store serve up to Four million regular customers each week, It is an appealing shopping familiarity where customers are certain to purchase more than 3 thousands value goods and up to on thousand Top product, crosswise 17 shopping classes together with groceries and drink, health and beauty, domestic, crop growing, DIY, Animal food, Stationery, books, movies and Toys. Among a expansion policy of at slightest Sixty new outlets each year, Poundland is just the once yet again on way to generate more than Two thousands new employments.

Till 2012 the 22 new outlets are have by now opened as well as Four in the Republic of Ireland. Last April, Poundland accomplish one more landmark by building its 400th outlet in Haringey, in the London city.

Poundland has opened a new 200,000 four-sided figure in the south eastern delivery centre this month Huddleston, Hertfordshire area. The stockroom will sustain Poundland's expansion policy and also will become as a provincial competence to overhaul its outlets all through the England.

The United Kingdom customers hang about underneath heaviness as for consequence of the continuing hard financial circumstances that feat in the United Kingdom and in the rest of the Europe. The goods are of growing value to dare consumers from all socioeconomic crowds. Despite the confront of the financial system and the aggressive atmosphere, Poundland is predictable to carry out strongly in the near-term time.

Jim McCarthy, Poundland's CEO, states: "Poundland carry on to present astonishing value to more than Four million consumers each week. Our well-built trade and volume boost show that consumers distinguish the outstanding worth for cash that our outlets propose."

The Story of the Primark:

The Primark is a clothing dealer; it is widely running in the Ireland, the Portugal, the Netherlands, Belgium, Spain, United Kingdom and Germany. It runs a whole of 1986 outlets with 38 in Ireland, 138 in the United Kingdom, 14 in Spain, 2 in Germany, 1 in Belgium 2 in Portugal and 1 in the Netherlands. On the other hand the corporation major center of operations are situated in Ireland while its operate as Penneys, the string is a contributory of Associated British Foods plc (ABF), and therefore eventually handled by the Weston family from side to side Wittington Investments. The corporation location itself as selling stylish clothing at cutthroat cost.

The Low Price Promise of Primark:

Primark can meet the expense of to put forward our consumers low cost by make use of a number of price saving policy. Primark has no promotion costs. Therefore it as an alternative relying on its customers "doing the discussion" about its products. in addition, Primark purchase and put up for sale in mass size. The Primark have more than 229 outlets in Ireland, and in the United Kingdom, The Netherlands, Spain, , Belgium, Portugal and Germany. The Primarks purchasing power tolerates to purchase in mass size and it bypass the price reserves support to the purchaser. Therefore it remain outlay low where on earth is possible. Through modern supply pact to its outlets to have updated current style, as it appears in the open fashion market.

Meanwhile the Primark has attain this in add up to of traditions together with heartbreaking into urban area, high streets position in larger, in additional prosperous position. It no more aim exclusively the near to the ground income consumer and therefore this is the primary target marketplace is "youthful, style conscious less than 35s" those who wish the stylish clothing at cutthroat cost. It helps these customers and is no more self-conscious to be distinguishing wearing low-cost garments trademarks. Primark is been mark in fashion magazine "Vogue", as well as famous person were also seen wearing its clothing many times.

Major fundamentals of Primark:

Primark has continuous hurried expansion through cautious variety of locality in most important areas in the cities.

Primark has enhanced outlets layouts which are further good-looking and customer forthcoming.

Primark has trade the most up-to-date style goods at cutthroat cost from contractors from across the world.

Primark has an managerial ethnicity that seats a much better importance on good customer services.

Primark has draw soaring excellence workforce with a variety of trading ability and awareness.

Primark has attained financial system of level as quantity of supply raise.

Primark has advertising characteristic celebrities wearing Primark products

Factor that contributed to successful research questions:-

Being in such a competitive market, poundland and Primark are still in good business and it prompts questions that how can a super store manage to get profit and can survive for longer period of time by adopting a low cost strategy. Factors that need to be researched are whether they are managing their business by keeping low profit margins or by keeping the low quality of products or only by focusing on target marketing strategy and cheap labor rates.

Our research will identify and investigate, what is the strategy that works out for them and what is the reason that makes them successful by keeping a low price strategy.

Research Question:

How a super store can earn Profit when it reduces its prices to beat the Rivals?

Why are some Companies trying to include a low retail price strategy?

Why Customers do attracted more towards the Low Price instead of Quality?

Research Objectives:

Conclude how Poundland and Primark can be capable of applying a low price strategy and stay Profitable?

Which strategies or methods the companies must apply, to achieve a low cost strategy?

Research Hypothesis:

The low price Strategy will facilitate a business to catch the attention and keep hold of customers.

Reason for the research:

The Main reason of this research is to find out why Low Price Strategy is Important and how one super store can work on it for a long time and how it can earn profit as compared to its rivals. Moreover, what will be the impact of this strategy in the UK market and what methods and strategies can be used to keep it continue.

Aims:

To reduce the price of the items mostly sell at the stores to increase the sales and to attract more customers, to increase the market share as compared to the rivals. And to keep the good will of the super store.

Objectives:

This is to understand the future responsibility for improvement of productivity level. It has to analyze its sales Strategy and the prices as compared to rivals.

The pricing is an important factor because it's related to the sales of the products and also affects the other marketing mix elements such as products features, channels decisions and promotions etc.

The super store just need to develop a marketing strategy, for that it has to perform marketing analysis, segmentation targets and locations of the stores, defining the products, distributions and promotional tactics. Meanwhile it has to include fixed and variable costs associated with the product. And to focus the likely competitors policies. After collecting the all information the super store needs to selects the pricing methods to develop the pricing structure and define the discounts and offers on the products.

Literature review:

Low price Strategy is a pricing strategy in which a super store suggests a comparatively low price to motivate demand and gain market share. (Business dictionary, 2011),

The link among low price and profitability is not as simple; the analysis of some writings on the subject will be prepared in order to have an understandable idea of the topic; which is determinant for companies to stay challenging, and make bigger or increase their market share.

(Web-Books, 2011)

The Porter's Generic Strategies:

The Porter's Generic Strategies is the best suitable tool to study the role and need of low price strategy for the selected companies, following is the brief review this strategy.

The Cost Leadership:

This strategy works on the super store by engaging market share to tempt to price-sensitive consumers. It can be attain by offering the lowest cost in the key market region, or having the lowest cost to cost ratio. Therefore to be thriving at offering the lowest price as still achieving profit and a soaring return on plan, the super store has to be able to work at a lesser cost than its rivals. (Web-Books, 2011)

The first move is attaining a high asset return. It will involve manufacturing of high quantity of production. These come up to mean the fixed costs are spread over a bigger number of units of the products, ensuing in a lesser unit expenditure. Higher intensity of output both need and result in soaring market share, and generate an entry barrier to possible rivals, who may not capable to get the scale required to go with the firm's low costs and prices. (Web-Books, 2011)

Also it is important to attain low direct and indirect working costs. This is attaining by offering high level of standardized goods, offering necessary basic products and restrictive customization and personalization of service. The Manufacturing expenses are kept lowest by using fewer components or equipments, and also by using standard components or the equipments, and by avoiding the amount of form produced to make sure larger produced run. Expenses are reserved low by paying low salary, locating building in low rent areas, setting up an economical background, etc. (Web-Books, 2011)

The Differentiation Strategy:

The differentiation strategy is appropriate where the target shoppers are not caring about the prices of the products. On the other hand the market is cut-throat and shoppers have very precise needs and choices and which are perhaps under-served, and mean while the store has perfect resources and prospective which let them to fulfil their needs in ways that are tough to copy. (Web-Books, 2011)

The Alternative on the Differentiation Strategy:

The Strategy that extends a large base of resources that gives out the store to survive against the rivals by using a differentiation strategy. A super store with larger resources can manage threat and sustain income more simply than one with less resources. This deep-pocket strategy gives a short-term benefit only. If a super store requires the capability for frequent improvement, it will not carry on its competitive place in sector. (Web-Books, 2011)

The Focus or Strategic Scope:

A focused strategy must target market sector that are not as much of vulnerable to alternative or where a rivalry is weakest to produce above-average return on asset. By assuming a broad spotlight level and the standard is unaffected and the store must set up the requirements for the mass market, and to battle either on low cost or differentiation (feature, product name) depending on its income and skill level. (Web-Books, 2011)

The Low Pricing Strategy:

The Pricing strategy depends on three major faces: cost and profit objectives, customer's requirement and competition. Meanwhile to patch up the price, primary add all the expanses and deduct any other cause of income in this way the least amount of profit will be accessible, On the other hand it will provide least amount of the price. At this time it can be measured as customers and the demand for any product to determine the upper limit selling price. In the last part, once having the price choice, and to use revenue objectives in a sequence about the competition to decide the best price. (Dana Griffin, 1999).

The most frequent pricing strategies are: "Price it Below the Competition." If Primark and Poundland, the two major market companies, It is possible that this thing could happened that when these two companies adopt this policy therefore deliberately and in a marketplace whose formation and consumers make the lowest-price approach feasible These tow companies will have to a based on cutthroat improvement for themselves. And if they don't, then there will be a possibility that there will be a price war that will put down and their rivalry with minor Profits and minor cost earlier than.

The Low Pricing is the most key mechanism of marketing and sales policy, which is a part of a complete business preparation. Conveying manufactured goods cost is a strategic action. The price which these tow companies will allocate will show how customers analyze their manufactured goods and whether they will buy it. Cost also helps distinguish the manufactured goods from the other rivals. Though, the cost that set should be in stroke with the other marketing policy and the manufactured goods characteristic. Meanwhile these two companies introduce a proper marketing arrangement, creating some of the examiner essential for a marketing map earlier to influential the pricing policy it will execute and is significant. The information achieve from the study will assist in turning over suitable cost to the goods or services.

The Pricing Strategy:

The Pricing Strategy is principally based on the Cost, the based on the Demand or the based on the Competition Consequently the cost-based price, the cost are simply planned on producer's costs and the mandatory profit inclusive of bearing in mind the requisite. On the other hand the demand-based pricing, customers study helps to determine the suitable price choice, after that it can be conclude profit and cost. While the competition-based pricing, the prices are stand on the rivals. After all depending on consumer's devotion, or brand differentiation. "(Dana Griffin, 1999)".

The 4 Key Pricing Strategies:

There was a time when most of the companies used to suggest the prices for their every product and wholesaler minimally charged that prices. Any differentiation then was simply on convenience, environment, manufactured goods diversity and value of service of the seller at that time. Here are the 4 main policies:

Hi-Lo Pricing Strategy:

To commence a diverse factor of differentiation, a big figure of seller going ahead dropping the cost of means goods, in command towards grasp the awareness of consumers keen on their stores, therefore they would purchase erstwhile produce as fine as the reduced-prices. Therefore Hi-Lo pricing was happening, and in the mean time it swiftly became the model everywhere. The seller earned little income or even a faced loss but on the other hand; on the price-reduced produce revert to the income in the better sales of other useful lines. The Hi-Lo pricing also found an aspect of fervour into shopping for consumers - and the customers felt good when they had experience the excellent good deal, and this would be able to persuade them to revisit the same store. "Peter Clark (co-author, The Loyalty Guide)"

The Every Day Low Pricing Strategy:

This strategy is used to attract to the even more straightforward customers, and to make easier and helpful shopping for those customers who don't have enough time for shopping. Meanwhile on the other hand other retailer gears this pricing policy so they could incriminate a realistic, but low-as-possible cost for all products they offer inside the store to sell. It is very popular these days. For those customers from whom shopping is an unpleasant task to be handle as easily and swiftly as possible, This strategy is the best solution. There is no need to shop here and there and there is no need to collect the vouchers, also there is any need to waste the time. Meanwhile, this approach shows the face up to the retailer; therefore within the nonexistence of further differentiators of some dependability demonstrates is to the cost charged, not to the selling. So the customers force desert to a rival who start to incriminate somewhat lesser cost.

The Profit Up Front Strategy:

About 3 decades ago, Hi-Lo pricing and EDLP were transformed into a new strategy which was known as Profit-up-front pricing. In this strategy customers were bound to get the unique membership and they were privileged to get special discount on products at extremely at very low price as known as whole sale price. All they had to pay some fixed annual or monthly price. It also depends on super store to super store how much they charge or whether they charge their customers on monthly basis or annual basis. "Peter Clark (co-author, The Loyalty Guide)"

The Access Pricing Strategy:

The main aspect of the Strategy is to offer to differentiate the prices on necessary items among regular and irregular customers in an open and noticeable way. Consequently it is tough for the superstores to propose higher prices to the habitual customers and low prices to the irregular customers within the similar market. But in few developed countries there was a problem that why a poor people should pay more than rich regular customers? Currently this strategy is available in most store and business outlets as a points-based loyalty card one the example is Nectar Card. "Peter Clark (co-author, The Loyalty Guide)"

Generic approach and business Forces:

Industry

Force

Generic Strategies

Cost Leadership

Differentiation

Spotlight

Entry

Barriers

Capability to slash cost within reprisal prevents possible entrants.

Shopper trustworthiness is able to discourage possible entrants.

The focus increase center competencies that can take act as an entrance barrier.

Buyer

Power

Capability to propose minor price to powerful buyers.

Great consumer has fewer influences to agree because of few close substitutes.

The large buyer has less influence to bargain as of little substitutes.

Supplier

Power

Enhanced protect from commanding suppliers.

To able to exceed on providers price increase to the consumers.

The retailer has authority of low quantity, other than a differentiation-focused is well again nurture to avoid on provider price as increases.

Threat of

Substitutes

Be able to use low cost to defend beside alternate.

Customers turn into close to distinguish quality, reducing risk of substitutes.

Meanwhile particular supplies & core competencies support against the alternates.

Rivalry

Improved able to battle on price.

Product authenticity to keep consumers from rivals.

Competitor cannot collect differentiation-focused customer requirements.

(Quick-mba, 2011)

As given above there is a plain clarification that how to stay or attain a low price strategy and being the existing super store and it can use cost leadership strategy to create barriers to entry of new rivals. The key strategy which is motivating for the reason of this report is the price direction. This facilitate business not only to boost their market share, but also to avoid competitors from concern the same strategy, as there is a difficulty from entrant as their price is low. Low price Strategy is based on the ability of the super store to create and bring products of competitive quality at lower cost. This figure expresses as well that to make it in the low cost Strategy, the need to have strong relationships with supplier. According to "Alagse.com" website on "customer focused low cost leadership strategy", one vital point as well to succeed in the low cost Strategy's to construct a strong relationship with supplier; as they have control over their inbound supplies and logistics. Therefore, business can make sure suppliers of the stability of the command; as for the suppliers, it is the promise of supplies on a habitual basis which introduce mainly. (Alagse.com)

Research Methodology:

Definition: Pattron (2009, online) defined research methodology as "a very intellectual human action used in the examination of nature and issue and deals distinctively with the way in which facts is collected, analyzed and interpreted."

The reason to execute the study to find out answers of the questions from side to side the use of logical measures. The key aim of this research is to discover out the accuracy which is unseen and that has to uncover.

Approach to the research scope:-

The span of my inspection is to examine the issue that make the low cost strategy successful in retail business in the United Kingdom Market.

The research objectives and questions are designed in a way so that they first explore how companies in retail industry are making profits by adopting low cost strategy. This research will also examine why customers get attracted by low cost products more and can do negotiation on feature and factors while they make a purchase.

Also in this research, descriptive technique of research has been used and investigation questionnaires was spread among the random people with the help of social networking websites like facebook, and linkedin to get the response that inspect the research questions.

I have carry out a preliminary literature review to investigate what other authors write about my research topic. All findings in this literature review are meant to serve as a bottom for with the consequences of my prime data collection. The comparison between the two will help to either prove or disprove my research hypothesis.

Deductive Research Approach & the Targeted Participants:

The subsequent information will center on 2 companies successful in the United Kingdom retailing market, as they are famous for using a low price Strategy (Primark & Poundland). The use of the survey sample (see appendix) that have been published online among males and females; feedbacks established by discussing with customers around selected retailing business; report from chosen companies; and finally information found in some particular reports and books will help to review the facts and figures composed, this in arrange to have a improved plan of the low price Strategy.

Research Techniques:

This report will be using 2 types of process together and analyze information. However data will be gathered from secondary and primary data or through quantitative and qualitative. Qualitative research methods are a mixture of balanced, explorative and spontaneous.

(Van Maanen, 1983; Strauss and Corbin, 1990). Quantitative research technique is associated with collecting individual data and aggregates are to study organization. Hence they are linked with any measurable thing or figure; providing the examiner with range of numbers, which are available in figures, graphical forms, and tabulations.

Data Collection:

The Data was collected primarily and secondarily. Total number of 10 questionnaire samples was used to obtain primary data from Customers; I had used an online survey. I built and an online survey with the help of free online survey web site and then I share the link online and via email and via social networking website and soon I stated receiving the responses. All the people were targeted who were mostly visiting the Primark and Poundland very often. They have had specified the clearer opinion about their shopping behavior. This survey will help me to find out the root level reality about the low price strategy and how it works and affect the common people. It will also help me to make the decision that is the people are really enjoying the offers of low price strategy or not. And is it beneficial to the selected companies or not. While secondary data taken from books, and helpful websites. This helped me to be familiar with the role of Low Price Strategy in any organization especially in Poundland and Primark.

To start with, a survey plus informal debate with 30 customers was used to have a common view; to determine to what level they are worry with the low price strategy (low cost as well according to the business glossary) used by whichever Poundland or Primark; and on the selling market in common. Secondly, data is provided by the 2 companies through their websites (www.poundland.co.uk, and www.primark.co.uk) Along with the help of book (Michael E, Porter) and information was helpful to have an improved accepting of the low price Strategy

Population Sample:

For the reason of this study convenience sampling will be considered. A sample of 40 Customers approximately was considered from different areas. To rush the collection and response, questionnaire was circulated through social networking websites like facebook and email. A total amount of more than thirty one filled questionnaires were returned and rest was not completely filled.

ANALYSES OF RESULT:

The reason of this research is to find the role of Low Retail Strategy in the market of UK and I have the perfect examples of the two giving stores which help me to study about this strategy. And with the help of this survey it is very easy to understand the that the customers do appreciated the low prices of the products they need and if this strategy is followed by other giants of the market then there will be a big price war. But only those companies will be successful who will not only reduces the prices but will also focus on their quality of products as well as their customer services.

Questionnaire and its outcomes:

Here it will be discussed that how the questionnaire is analyzed. The report used a convenience sampling by distributing a total number of 97 people and the questionnaires was containing 10 questions but only 66 people had return the filled Questionnaire and I consider the 66 filled questionnaires. For this survey I had build a survey on a free online survey website which is www.instant.ly/survey and I had share the link via my email and over the facebook communities.

The following grid shows the entire history of the survey performed by the people who were involved in this survey "Londoners" in the first column stands for the people I hit were random customers lived in the London city and their ages were from 20 to 35. They were contacted through emails and a survey website. The 39 people had opened the link of survey and out of 30 of them had completed it. The second column show they survey link I distributed through web email and got the responses email was sent to 46 and 26 had completed successfully. The last shows the facebook contacts these people helped to performed 10 surveys out of the 12. The total number of 97 people was touched and 66 were the successful responses.

Your Gender is?

The first question of the survey is about the gender, it was essential to ask and to know the trend that how many make and female are more attracted to this strategy. Therefore according to the result 53% males likes the lows price retails and purchasing the item on low price from Primark and Poundland as compare to Females which were just 47%.

Q2: What time did you last shop? (Whichever clothes from Primark or Grocery from Poundland).

Gender proportion categorization according to the super store:

In the next question of the survey it was asked to the people that when they shop last time on the two specified stores. They were gives the few options to choose which were, did they shop this week? Last week or more than a week ago? In the result 30% people said they shop this week, while 18% had shop last week and nearly 52% people had shop more than last week.

Below the graph is a table grid which distinguished the males and females who shop according to the question 2. According to that 30% male and 25% female shop from the two given stores during the current week. This makes the total number of 8 people out of 66. Meanwhile 20% males and 10% females shop on those stores during the "Last week" which gives the total number 4 out of 66 people. Finally 50% males and 55% females shops "more than a week" ago which give the total number 18 people out of 66 who took part in the survey.

Q3: Where do you want to go for shopping? (In sense of retailing store which propose competitive price).

According to this Chart, it is clear that nearly most of the customers hit Primark and Poundland for their shopping on low price. This graph shows 42% people like Primark, they mostly buy garments on really low price and it shows it full fill their needs. On the other hand Asda was the lowest with just 5% people used to shop there for the grocery shopping. While Poundland was the second most likely store with total of 33% attracted by the people.

Q4: Do you think Primark and Poundland are low in Price as compared to other super stores?

The above graph shows the trend of people choice about Poundland and Primark are low price as compared to the other superstores or not. Therefore 71% people say yes to low price while just 29% said no. Hence its proved that majority believes that Primark and Poundland are low price and the low price policy really works.

Q5: How far it is? (The distance from home or work to these two stores)

The above given graph describes the approx. average distance between home & office to the stores like Primark and Poundland. Therefore more than 50% people answered that these store are 5 or more than 5 km from their places. This is the highest average while 20% said that these stores are less than one mile from their places. And 30% are between 1-5km. This clearly states that these stores can be found anywhere in the city and these are not hard to find for the public. And more and more people can get advantage from this low price strategy.

Q6: What is the mainly key factor that made up your selection? (Food shopping/clothes shopping)

The following question is based on the most important question that what key factor makes the mind of the customer to shop at store specially the Primark and Poundland. Therefore 41% of the people hit the "Value for the money" and that was the highest in above all while on the other hand "Brand name" was just 8% which was the lowest of all. The second most important factor to the people was "Cost" which is 39%. This shows that "Value for money" and the "Cost" are the most important factor for the people to shop at the Primark and the Poundland.

Just right below the Graph is table which shows the distinguished result of males and females. Nearly 50% males think the Value for money and 55% for females. While 20% thinks Cost matters as compare to female they are 25%.

Q7: You were happy? (As regards the part (6) that made up your selection for choosing the super store (3).

This graph is based on the question that is the customers are happy about their selection and shopping on low price stores? Therefore nearly 85% people say yes that they were happy about their selection of the stores of their choice. So 56 people selected Yes which makes 85% overall. On the other hand 10 people were said they were not happy which made 15% for No. If I further study the chart below the Graph which explains separately on Gender basis. It's clear that 80% male and 14% female were happy with their selection. While 20% male and 30% female were not happy with this. Overall we can see majority were happy with the low price strategy of Primark and Poundland. That makes them successful in the market.

Q8: Being low in price retailers, Primark for Garments and Poundland for general household stuff are suitable for you? (In sense of affordable prices)

The next Graph describes about the trend that is Priamrk for garments and Poundland for groceries are suitable for the people or not? Therefore in this survey the result shows that 85% people said the prices of Poundland and Primark are suitable for them. While on the other hand 15% said it's not. if we enhanced even more on the gender base 80% male and 65% female said Yes its suitable for them while on the other hand 20% male and 35% female refused to accept that these two stores and suitable for their shopping.

Q9: Each time you visit any of these two specific stores do you find new and interesting things on the shelves?

The above given graph shows the interest of the people that do they find anything interested on the shelves every time they visit Primark and Poundland or not. Therefore 62% people said "Sometimes" they find new products on the shelves of their choice either garments in Primark and the groceries in Poundlad. While 14% said they find every time new products whenever they visit these stores but it's the lowest of all. On the other hand 24% said that they never find anything new or interesting which was slightly more than the 14% of every time. If we study the chart below 50% male and 11 female find new stuff as "Sometimes". While 10% male and 5% female find "Every time" new products. While 40% male and 40% female "Never" find anything of their interest on these two stores.

Q10: Would you recommend any of these stores (Primark/Poundland)?

The last graph shows the result of last question of the survey that will they recommend any of these stores namely Primark and Poundland? Therefore 73% said "yes" that they will recommend these stores. While on the other hand 27% said "No" they will not recommend the store.

If we study bit more deeply on gender basis it is clearer that 60% male and 45% female of the survey choose "yes" that they will recommend. As compare to the 40% make and 55% female said they will not recommend these stores.

Analysis of the Report:

All the above given data and the Graphs describes the real choices of the public. They do really care about the cost and the value for the money. Which is clearly according to the respond specified; the determinant issue that choose consumer when they wish for to buy goods. Here as well it is clear that at present, people are no new fascinated of the quality or the trade name; even if we can to a solid level believe this aspect as linked to cost. Yet the need is obviously considered in expression of the number of goods one can have. The motive may be the scarcity of economic resources; in addition the in general economy is set apart by joblessness, which does not permit many potential in expression of spending or price of livelihood. However, the data composed must be measured as what is the reality at the instant as the collection condition was based on dissimilar places.

According to above given charts (with the help of Questionnaire), there is one more point that is clear; the actuality that the proportion of women in the chosen companies is higher than the one of men. This will be considerate as well to appreciate the shopping behavior of customers, as after gathering information, it is helpful to know which femininity group is in fact apprehension by the price strategy. The result shows that female gender is in fact concern by the Strategy as there are the one who are shopping mainly.

Hence, the economic state might then become an issue determinant to make a choice, while deciding to create a purchase. As a effect, customers rather to use their cash in stores where the worth for the money and the cost are very good; as we can observe on the survey provided the majority of the people question were spot companies such as Primark, Poundland as their preferred super store, according to the minor price of supplies offered by those companies. So, this give details why some companies while using a low price strategy are able to keep their productivity, for the easy fact that they contain a vast number of customers; who in return can purchase supplies at a lesser price, with a huge value for their cash.

Customer satisfaction upon the low price strategy:

This diagram shows the percentage of fulfillment of customers upon the low cost Strategy. This diagram tells us that even if some customers are not pleased, or cannot say something about this Strategy; the majority have spoken their liking. This could be clarifying as that most customers feel very happy with the reality that they can pay for buying some goods at a low price. For the displeased or uncertain side, the basis is that some customers due to their place do not see any dissimilarity as their ability is wealthy, or they mostly protest about the feature of products which are vacant.

As to a examine I have made in inquiring people, having response from some customers, discussing with them; (see questionnaire in appendix) roughly all customers, are very pleased of the price they pay for various products in the companies specify above e.g. in Poundland, either male and female are in fact happy of the good deal over there. They are certain to have all they want to the only and cutthroat price of £1 and that is a thing of inspiration for customers at this stage were money is appropriate rare. Furthermore, a study conducted in 2007, 99% of the respondents said they would suggest the chain. (Marketing week 2008) also the outcome of our exploration is unfolding the similar thing as additional and more customers are pleased to pay for in the chain.

Yet, here the customers are not worried of the excellence of the products they are being presented, but all is about the development of consumer service, the safety in the stores, and the variety of the products; to which the chain is take action by adding new things in array to complete the requirements of customers. (Poundland 2010),

Meanwhile; the consequences of the survey explain that in Primark, customers although they are happy as they can have some high-quality products which are actually costly in other stores for a high-quality price, the quality is not as soaring as it ought to be. The variety of the store is radiant according to some as well, and yet again other is famous that it is just outstanding. This shows that: customers first are looking to build some good deal, and if the worth is not as good as in various other stores, the main things the requirement that is to be fulfilled. According to the outcome of my study the overall quantity of fulfillment is up than the standard; and we have set up that not only people with fewer budgets are leaving in these stores, but a few which may be well thought-out as well-off.

One more spot which is significant to speak here is that the majority of Primark customers are female; that is not to say men are not buying there, but according to the answers established as well, men choose to let women make a decision on the shopping, and yet when shopping with the women; they allow the choice to be prepared by the women. This is capable of established as well in other selling stores.

The Poundland and the Primark examination:

The environment and level of contest in the trade works on five forces: the risk of new competitor, bargaining influence of consumers, bargaining influence of provider, risk of substitute goods or services, and rivalry between existing rival. (Porter 1979).

The story of the Poundland:

The Poundland is committed to work hard to bring down the prices of the everyday use. Recently it has earned the 80% more profit as compared to the previous year.

According to the official website of the Poundland, every so often the most of the products are sold so quickly that the staffs have to refill the shelves very often during the trading hours. Just because everything on the shelves are just £1 only.

Beating the brightest trading opportunities, Poundland has built the history of great unbeatable performance, and is now it is growing to a large scale of mature business countrywide.

On the other hand, Poundland's management is dedicated to ensure that the excellence of management skills to run the business effectively and to always beat the needs of a rapidly growing business across the country. To overcome the future needs, it has devoted significantly in the field of supply control, distribution, economic and employees managing structure.

The Sales strategy of the Poundland:

The Poundland could be the only store which doesn't have to decide the prices of the products on the shelves because every product in the store is of one pound only. While other stores have to adjust the products on the shelves and to decide the prices of the products from time to time. And this is the biggest advantage for the Poundland.

The Financial performance of the Poundland:

Poundland's Performance from the year 2003 to March, 2011...

According to the CEO of Poundland Jim McCarthy, it is presently an issue of timing and good business practice. He believed "Poundland is famous for making quick decisions, and the super store has a reputation for paying quickly." This might be one of the motive they are able to influence product giant such as Colgate, Heinz, Kellogg's… all of which goods are on their shelves to trade them their goods at a extreme lower price than the other seller.

There are numerous method accessible in order to remain a low price strategy, which is move on customers in term of buying goods at a lower price. Between them, there is the across-the-board; which means buying any business supplies in mass quantities. One more is to try to generate corporation with wholesale storehouse. A super store must also come across for more or latest suppliers for its dealing, in order to remain a firm benefit. As an end result that will offer the option to discuss a lower price for any business tools or goods. So it could provide any corporation an enhanced position in the rivalry to get the finest good deal, as there are many suppliers. Primark for example that is a big seller in the division is using the low price Strategy; and this is feasible because of Primark is buying products directly from their suppliers (Primark 2011); this present the benefit of getting goods at a lower cost, which allocate the super store as well to trade products at a lower price.

Furthermore, they have lots of contractor in the top 250 who have work with the business for more than five years, and more than a few for more than ten years. This thing again explains the stability in the connection with the contractor and the well-built dealings they have with them.

The corporation only trade in the most fashionable sizes, which avert from waste and guarantee the business with stability as they have recognize which are the regular or usual sizes appeal in the marketplace. The super store has determined to generate an easy or not complex design, which is not tricky to make in order to decrease their fixed cost in the production of their material.

One significant cause as well, is that the super store buys high volume of goods; because of the cost-cutting measure of weighing machine the more they buy, the cheaper it become. The price benefit is accepted therefore on the consumer. (Primark 2011)

One more selling business in the United Kingdom atmosphere is Poundland; which propose goods for the single price of £1 only. The super store is using the similar method and furthermore the price here is very cutthroat, more again than the earlier example. Poundland as well has lots of suppliers, and the super store description for nearly 30% of their capability, which provide them a stability of supply. Furthermore, the super store can make sure the suppliers of a swift delivery of stocks, as they have many stores and they are fine known. (Poundland 2010),

The super store is promise their price to stay steady, as it is what customers are looking first as pay for. The super store has seen well-built growth, accredited to the increase of the domestic requirements, with an increasing amount of people visiting its stores for deal.

They are lots of others selling companies which are doing low price strategies, such as ASDA, Sainsbury's, Lidl… each of them are diverse in their style; I have determined to center on these 2 as there are actually delegate of the low trade price Strategy in the UK. Yet, these whole companies perfect is to offer customers good worth for their money and good bargains as well.

As regards to this, it is clear that even if the price is low, the worth of the goods they are offering is incredible in term of price, and in result they have more and more customers, which has an essential possessions on their effectiveness and credit. As a result, these selling companies are in stable growth and the outcome of this is to present goods at a low retail cost to a incessantly increasing quantity of customers, due to the economic disaster and the joblessness aspect, that praise to be very cautious about the everyday expenditure.

The Porter's 5 Forces of study of Poundland and the Primark:

Michael Porter pioneers the Five Forces of Analysis that is considered as the evaluation formation of any business. The 5 forces are that known as: competitive rivalry, threats of substitutes, threats of new entry, Power of buyers, and power of supplier.

1. The Competitive Rivalry:

The retail market is indeed competitive in the United Kingdom and the companies, both are existing and new, are trying hard to join that make a more strengthen rivalry than ever before. Therefore most of the companies need to do some work out on bit more risky marketplace policy. For example, as of March 2009, Tesco is the most important seller in UK with market share of 30.4% whereas The Poundland and The Primark's share is 16.4%, trail with Sainsbury's by 14.9% plus The Morrison is by 12.1%. Amongst its strongest contenders is Tesco, which is considered as the leading superstore of the UK.

The Threats of New Entrants:

The entry of the new super store has to face many obstacles and the first one is that it needs a lot of investment for its dense feature within the UK, along with introducing the new brand name expansion which may take years to for the growth. The retail business has an advantage in the UK that, there is little capacity for new companies. On the other hand the local information is not enough in the retail industry, and that adds one more complication on the side of the overseas or multinational companies. Consequently there is no threat of fresh competitors in the United Kingdom marketplace. But a key acquirement by overseas/multinational super store can be a Threat.

The Threats of Substitutes:

A number of substitutes are the big options for customers, mainly from retailers having diverse layout: food-supermarkets, local grocery stores, subdivision stores, specialty stores, etc. Meanwhile attractive second alternate is the direct sales channel. For example the super store like Dell who sells straight to the customer may be a rising rival for cut rate seller.

The Power of Buyer:

The influence of the customer inside the industry is high mostly when there is presence of entrant that brings the same products (could be low price). The supplier Power e.g. the seller like Poundland and Primark are capable to deal products at a very low price as they buy the products and very low price from their key suppliers. Therefore, suppliers are in the hub of the war of the seller. The suppliers mostly set up relations with different companies with the same products at the same time. The problem occurs at the time when superstore does not put up for sale their products. Therefore customers will move their loyalties to the other stores.

CONCLUSION:

This report has produce reliable information from facts composed, in order to contain an improved thoughtful on the low retail price plan. As the description was to appreciate the link between low retail price and profitability; they want of a low retail price Strategy, and finally how to grow or attain a low retail price strategy. From the data offered, it is now obvious that the low retail price Strategy is mostly to have a viable benefit on the market; plus this avoid any super store from heavy rivalry, due to the cost they use to sell their products.

Furthermore, to be bright to move or stay in this Strategy, there are some requirements that a super store must think. Amongst them, a tough network of suppliers, as the suppliers want to have a promise of the swift selling of the stock they offer; this is to be definite that no matter what the cost you are selling the goods, the volume of the goods highly praised will come as an advantage to the supplier. This could then explain the bond between the low retail cost and productivity. Furthermore, a low trade price Strategy allows the business to gain or boost its market share, as the amount of customers relying on this strategy is very tall. On the other hand, a low retail price itself does not settle on customers buying behavior, as they also explore other things, such as worth for money, excellence as well as the price worth. To some level even, they are fascinated by the product offered in term of determinant aspect of purchase.

Recommendations:

After conducting the above given survey and after the brief discussions with the customers of the Primark and Poundland I believe that people care about their money more and they mostly tend to spend the money more wisely. They believe that they should get the maximum out of their spending. And the Poundland and Primark being the low in price help them to spend less and fulfil the needs. I have few recommendations for the Primark and Poundland, that they should keep focusing on the best quality of products and staying the low price at the same time. And also good customer service also matters a lot. If customers are happy with their shopping experience at store and experience good behaviour from the staff and greetings while shopping and paying on the check outs, I think it always creates a good effect on anybody. And this will make them to visit again and again. I have my own example that whenever I shop on some ordinary store I always find the tired and sad faced staff on the check outs without greeting the customers. And whenever I visit any super store like Sainsburys, Poundland or Primark I feel like the staffs on the checkouts knows me personally and they make me feel special. So therefore Poundland and Primark shell work hard on the improvement of the customer services to make feel the customers special. So they could come back again for the shopping.

There is also a best strategy to adopt on these two given stores about the customer services is to increase customer-friendly course of action, coach your workers to provide outstanding customer service, and become skilled at how to personalize customers shop's experience. On the other hand Poundland and Primark shell also conduct the mystery customer services at the store on weekly basis and trained the staff with the latest customers' services skills. There should be customer services refresher courses and time to time the management should refresh the staffs working skills. It is really important that staff should be friendly and smiling all the time to make the feel the customers pleasant. Customer service is regarding giving the customers warm welcoming, helpful impact before the shopping and after the shopping.

There is just some of the concern the Poundland & Primark has to think about and fit in their strategy, for the long and short term:

Identify the customers and the rivals

Recognize the drivers of sales and margins

Get hold of the trade fundamentals right

Produce multi-channel offerings

Know your customers needs

Treat your employees friendly so they could be friendly with the customers

Listen the complaints of the customers and deal them properly

Ask the customers for the recommendations

Greet the customers when they walk in

Offer the alternatives to the customer if they can't found their required product.

(http://www.kpmg.com/)

The above given diagram shows the perfect structure of the strategy that any superstore should follow. For Primark and Poundland it is really essential to follow all these steps to i