How do the brands that Primark sells benefit the business?

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Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

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Primark focuses on a couple of economic realities that impact the brands they sell and maximizing their profit. These conditions tremendously impact the business. Primark focuses on "fashionable clothes at the low cost end of the market." The emphasis on cost cutting can be seen in how Primark does not spend much in way of an advertising budget, reducing overall costs that can be reflected in company profit. At the same time, Primark is able to develop its own brand. This reduces the need to pay for the right to carry another brand. In eliminating the third party, Primary is able to use its own brand to benefit the overall business. This efficiency helps Primark's business condition because money is saved. Primark's business model is based on buying and selling items in bulk quantity to consumers. The brands that Primark carries are generated in bulk terms, enabling greater savings to help benefit the business: "The company keeps costs down by buying large quantities of items and enjoying the economies of scale resulting from buying in bulk." Primark does not cater to high end and exclusive brands. Rather, in producing its own brand of products and purchasing products that can be sold in bulk quantities, the company has taken direct steps in regards to branding that helps to enhance the overall business profit. This approach resonates with consumers whose pressure point is pricing. Primark understands that its branding will strike a chord with consumers who are cost- conscious. The more exclusive shopper who is willing to spend more on designer products are not in Primark's demographic, reflecting another way in which the brands that Primark sells are directly related to the benefit of its business. As opposed to limiting Primark's profitability, such an approach to brands and business has actually increased profit. In an economic challenging setting, consumers will continue to spend given the savings they experience with Primark's branding approach:

That formula has helped the Dublin-based retailer grow through the downturn, at a time when shoppers are looking for deals such as a spring jacket for $14 or a trendy pair of jeans for just $12. "Everything [at Primark] is dirt cheap," says Jeanette Williams, a shopper at the Oxford Street store. "I usually think I'll spend $20 or $30, but I end up spending $100, like I did today."

This is another way in which the brands that Primark sells help to enhance its business profit.

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