Marketing Strategy Analysis Of Zara Marketing Essay
When mentioned about fashion¯, most people would think about Chanel, Dior, Gucci or Armani. These types of brands are the representatives of high-fashion and luxury. Moreover, the dozens or even hundreds of years history also make them more blend in a noble feeling, and the high class marketing strategy make normal consumers keep their step back.
Recently, a Spanish clothing and accessories retailer“ Zara is on a unique way of explaining fashion and become more and more competitive around the world. Zara was established by Amancio Ortega and RosalĆa Mera in 1975. The strategy of the first Zara shop in Spain was low-priced product but look like the high fashion style. Fortunately, this strategy worked very well and Amancio Ortega and RosalĆa Mera began to expand their business first through the Spain, Porto and Portugal in 1980s and then Mexico, Greece and so on in 1990s. So far, Zara store has be located more than 73 countries become the top.3 clothing retailer in the world. ( History of Zara, 2008)
With nearly 40 years development, now Zara stores are selling women`s clothing, men`s clothing and shoes which have been subdivided into lady sector, young girl sector, gentlemen sector, leisure sector and Zara Kids. (MarketLine, 2008)
The way which Zara used to improve their competitiveness is speed. They believe the quicker reaction to the changes of market is the only way to get more share on the fashion industry. In 1980s, Ortega created the term instant fashion¯, he improved the manufacturing line to reduce the lead time and make sure new trends could be produced within 2 weeks. Additionally, the individual designer working style has been substituted by a group of designers in ZARA.
In order to figure out why Zara could become such a competitive global fashion brand in short period of time, this paper will analyze the marketing strategy of Zara from the consumer profile, price, place, promotion and product. (Tiplady, 2006)
Marketing strategy analysis
Consumer profile board
With observing and selecting the most popular product in every season, Zara would adjust the style or rematch the collection to attract their target customers. The target customers of Zara are the people from 22 to 35 years old with most sensitivity to vogue and strongest ability of consumption. In order to provide the high quality but low price fashion collection to the customers, it is important for Zara to understand what the customers` need is. Thus, each Zara`s retail shop would like to take the advices about color, style and even price from their consumers and all these information will get to the head office every day. Based on each individual advice, the relevant department will do adjustment and reflect these changes on the new product with two weeks. With this efficient marketing strategy and reasonable brand operation mode, the sales of Zara is growing 30% every year and annul selling amount has been already over $200,000,000. (Capell, 2008)
2.2 Product analysis
For the traditional clothing brand, it generally takes about 2 to 4 month for product designing, fabrics purchasing, producing and processing and logistics transportation. The high-fashion collections such as Chanel or LV would take even longer time. With using the global information sharing system and purchasing-transportation system, Zara could make sure their product will be renewed in every two weeks and all the retailer shop could get the stock on shelves at the same time. This advantage of Zara meets the needs of their target consumers, every time when the consumer step into the Zara they could get the similar product which they have just seen on the fashion magazines. ( Zara history and background, 2009)
Additionally, due to the instant fashion manufacturing line, Zara only produced limited amount for each collection, the consumer have no need to worry about wearing same dress with someone else on the street. Also, it leads to customer produce immediate consumption and avoid the shopping regrets. On the other hand, the storage for each store will always keep low, so there is no need to set up a ware house which keeps the cost to the minimum level. (MarketLine, 2008)
Actually, Zara has got a group of buyers; they are quite sensitive to the changes of fashion in each season. These buyers would help Zara to select the most fashionable product all around the world. Moreover, the high-fashion selections traditionally announce their fashion information six month before going to the market, Zara always could take advantage of this time gap and produce the most fashionable clothing to satisfy their customers. With absorbing the best elements in these selections, the professional designers could make a brand new collection which has the perfect combination of fashion elements in the minimum time period. (Capell, 2008)
Compared to the top grade high-fashion brand, the product quality of ZARA is not the best. In order to let the product get into the market as soon as possible and avoid producing the high grade fabric product in the manufacture line to control the cost, the non-winter fashion women`s clothing is given a priority. Also, the size range is quite wide--from extra small to extra large. (Capell, 2008)
2.3 Placing strategy analysis
ZARA has approximately 500 shops all around world; however, it is rather to call each one of them a small shopping mall rather than a shop, because almost each one of them is more than 10,000 square meters. Ten thousands of different styles` clothing could provide the customer one-stop¯ shopping environment. In order to make easier and comfortable for customers, ZARA has quite concise exhibition for each section of the product. Usually, each exhibition would be on the model with a theme. (MarketLine, 2008)
2.4 Pricing strategy analysis
The low price is the most competitiveness part for ZARA to attract its target customers. Traditionally, besides the high cost of design and manufacturing, most high-fashion retailers believe the most valuable part is their brand value. Thus, as long as the products are advertised themselves with fashion, the product price must be very high. Contrary to this view, ZARA consider more about the need of target consumers and high cost of storage. The ZARA`S target consumers are mainly young and mature women, most of them just seek for fashion style and reasonable price. ZARA get rid of everything which is not relevant to fashion in order to control the cost. With minimizing the manufacturing cost, ZARA set low prices for individual product. Normally, for the low price product, as long as the customers like it, most of them will buy it without any hesitate. For customers, their needs are satisfied; for the retailer, even though individual product`s price is not high, the average selling amount is quite high. Additionally, with low storage level, ZARA has saved the cost of renting a warehouse and got good cash flow. (Capell, 2008)
2.5 Promotion strategy analysis
The most unique market strategy of ZARA is zero adverting. Compared to doing the promotion on TV or magazine, ZARA prefer to do the expansion of business. Although not doing the usual promotion, ZARA do have the most restrict requirement on building the global brand image. They believe the strong company culture is the best way to communicate with the consumer. The good impression of company culture would encourage the customers to visit again. ZARA have very high requirement for service, exhibition and team management. (MarketLine, 2008)
On the other hand, the effective communication with customers also makes ZARA always satisfy customers` needs within a short time period. ZARA`s target is to let the customers impressed by their quickest reaction to the present fashion style. Actually, this is the best promotion. (Lynn, Bennett, & Joines, 2009)
With doing the ZARA`s marketing strategy analysis through the customer profile, placing, product, pricing and promotion, the key of the success for ZARA is the they understand the need of the customers. From designing to manufacturing, ZARA always put the customers` need as the priority. They select the strong purchasing power group as the target customer. With using the effective information sharing system, the whole ZARA manufacturing line could react to the changes in fashion market within the shortest time. Additionally, the ZARA collection looks like high fashion but low price, they only produce limited amount to make the customers feel unique and become extremely loyal to ZARA.
Moreover, the two unique marketing strategy of ZARA-- instant fashion¯ and no advertisement¯ are also attractive to their consumers. The instant fashion emphasizes speed. In other words, the customers always could find new product in ZARA which may attract them to shopping in ZARA at least every two weeks. The no advertisement strategy make ZARA pay more attention on building the good impression for customers and improve their service quality at the same time.
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