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The new trends of the fashion age have already been abundant in all aspects of businesses. It is being assumed that there has been a huge amount of data regarding fashion and clothing in the last 30 years than in the past generations. This is caused by the dynamism in the fashion industry but most of the credit has to be given to the modernization in fashion and clothing over recent years.
The use of market entry strategies has many benefits for an organization. Market entry strategy is the concept that includes most types of strategies used to establish, communicate and utilize marketing in its various structures. Since clothing and fashion has been included in the itinerary of every individual's working place, Zara clothing lines have been selected to enter into international markets. The primary goal of this essay is to establish a marketing entry strategy for the Zara clothing line. The report will include the analysis of the environmental factors that may affect the product entry. Herein, the chosen countries are India, Russia and Mexico. These countries have been chosen because it is believed that the three countries are open in adopting creative fashion and clothing trends. The discussion will also include the assessment of the marketing mix strategy. Further, the environment will also be analyzed using PEST Analysis, which stands for political or legal, economical, socio-cultural and technological aspects.
Â Â Â Â Â Â Â Â Â Â Â The main goal of this report is to analyze the environment where the Zara clothing line will be marketed. The product is chosen to be marketed in three countries (India, Russia and Mexico). Analysis shows that the main problem of the product is to in terms of making the target market know the existence of the product in the country and the competition of the current clothing lines available in the market.
Â Â Â Â Â Â Â Â Â Â Â In order to solve such complexities, the solution is to implement strategic marketing approach in terms of advertisement and promotion to make the target market become aware of the existence of the product in the marketplace. In addition, strategic market planning can also be attributed as a better solution to ensure that the product will be introduced effectively. The only problem that is unsolved is to find a company that will commit to the distribution of the product. With this, it is suggested that the organization must be able to use a more effective market planning and strategy which will enhance the market value of the product.
Screen 1: Political and Legal Factors
Â Â Â Â Â Â Â Â Â Â Â First and foremost the political situation gives emphasis to the role of the government and its impacts in a company or firm. It also involves the extent to
which the government participates in the political situation (2000). The political condition in India, Russia and Mexico can be considered as an open market.Â In this manner, the governments of these three international markets are willing to accept new investors or company that will operate within their region. In addition, the government of India, Russia and Mexico also provides their own version of corporate policies which should be followed by different organization. In this manner, the pressure is on the Zara product in terms of ensuring that they always have legal actions in their business operations.
Screen 2: Technological and Economic Factors
The Indian, Russian and Mexican markets are the targets of Zara Company. In this manner, it is essential that the economy of these countries must be analyzed. Russia has the reputation to have one of the most stable economies among these three countries. In 2005, it has been established that Russia also had the 4th largest when talking about exchange rates. In recent years, Russia has been able to recover from crisis because of the growing internal consumer demand. Hence, the country has been noted to be the 9th largest economy throughout the world. On the other hand, India has been ranked as the 12th in the world in terms of GDP and has the fourth per capita income in Asia ( 1981).Â Hence it can be said that there is a bigger opportunity for Zara company to become successful in operating in India. The continuously growing market economy of the country has been a good indicator that Zara company will be known in the marketplace.
When speaking of technological issues, the three countries have been able to utilize advanced technology. This includes their acceptance of information technology especially for business operations and or organizational needs. This aspect will give Zara clothing lines an opportunity to grow in the market and make use of state of the art technological facilities to enhance the quality of the service given by both public and private corporations.
Screen 3: Societal and Cultural Factors
Â Â Â Â Â Â Â Â Â Â Â Social and cultural aspects are also essential and have to be given tremendous consideration when one wishes to participate into a foreign market. Also, culture is considered an integral aspect in the analysis of an industry, because for any company or firm to function efficiently it must for some extent possess an acceptable set of perspectives and beliefs on the role of culture in giving influence to the progress or downfall of any organization. Culture environment is one of the critical perspectives that greatly affect the company.Â Â (2004) states that there exists four aspects that separate cultures at a national level (power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance), which encourage the analysis that individuals enter into companies with their own national culture.Â
Â Â Â Â Â Â Â Â Â Â Â It can be said that when talking about social context India is able to give more priority to social security. In addition, India is also in the process of thinking about participating in trades and agreements to various companies which can possibly give them high quality products or services. Like India, Russia has also a strong culture and society. Russians' social context is considered to be impulsive when it comes to consuming products or services. In addition, the society is open to investors who will provide technologically advances products and services. In Mexico, it can be noted that the social and cultural condition are diverse. This can be a big factor for the Zara clothing lines to become marketable in the country.
OVERVIEW OF ZARA COMPANY
Zara is one of Spain's primary fashion and clothing line companies with regards to profit and sales volume. The company has also one of the most extensive presences among all international fashion and clothing companies. This is done through the use of a marketing strategy of global networking of distributors.
Zara Company utilizes the prestigious name of both the company and its excellent clothing labels, and this strategy has enabled the company to fulfill an integrated marketing approach which gives emphasis to the company name. There are also a wide range of Integrated Marketing Communication (IMC) strategies available that Zara Company could utilize of in order to manage their promotional endeavors. These strategies involve a variety of advertising, branding and personal selling strategies. When utilized appropriately, these IMC strategies can help Zara Company to disseminate in an efficient manner the critical information that they want to tell to their esteemed customers.
However, several issues have to be understood and evaluated by Zara Company about IMC tools. Since their income is slightly bigger than most of their competitors, the duration for implementation of their selected IMC tools would take a much longer time than expected, aside from being costly. But since the objective of Zara Company is towards obtaining a long-term market leadership and stability in the fashion industry, then the pursuit of these promotional strategies will be crucial for the company in the future.
Background of India
Â Â Â Â Â Â Â Â In India, it can be mentioned that the nation has a stable political situation.Â Also, the economic status of the nation can also be classified as stable since it enables foreign investments to participate in the market.Â India is known to possess one of the most stable economic situations in their region. In 2005, it has earned the distinction as the 4th largest when talking about exchange rates in Asia. In this case, Zara Company's entry to India is feasible and that with the use of proper market entry strategies the company may guarantee growth and prosperity in this country. When talking about technological aspects, India has shown its capability to accept modern technologies to guarantee growth and progress within its territories.
Â Â Â Â Â Â Â Â When speaking about demography, India contains a population of almost more than 100 million people. This implies that India will have tremendous opportunities to maintain multiple target markets that will maintain its products. It is said that the dies of majority of Indians, excluding bigger cities, mostly depends on what is manufactured in that particular region. With regards to food expenditures, spending is not distributed fairly over the entire population. Like for example, over 50% of the food supply is being utilized by 30% of Indians who reside in the urban areas.Â The target market for urban consumers spends at least twice as much food products as compared to those residing in the rural areas.
Â Â Â Â Â Â Â Â As the incomes become larger in India, the consumers gain the power to demand for more quality and fashionable clothing. Therefore, it can be concluded that with the quality and fashionable clothing lines offered by Zara Company, there is a guarantee that it will be loved by the Indian consumers.
Â Â Â Â Â Â Â Â Â Â Â Â Social and cultural aspects are also essential and have to be given tremendous consideration when one wishes to participate into a foreign market. Also, culture is considered an integral aspect in the analysis of an industry, because for any company or firm to function efficiently it must for some extent possess an acceptable set of perspectives and beliefs on the role of culture in giving influence to the progress or downfall of any organization. Culture environment is one of the critical perspectives that greatly affect the company.Â (2004) states that there exists four aspects that separate cultures at a national level (power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance), which encourage the analysis that individuals enter into companies with their own national culture.Â
Â Â Â Â Â Â Â Â It can be concluded that with regards to social context India will be able to give more special attention to social security. Aside from this, India is also planning to participate in new trades and partnerships to various companies which can offer them better quality products or services.
Launching Zara Clothing in India
A. Market Entry Plan
Â Â Â Â Â Â Â Â Â Â Â In order to participate in the Indian market, Zara Company must be able to select the type of market entry to be utilized. In this scenario, one of the strategies that Zara Company will use is by pursuing a joint venture with highly recognized clothing line distributors in India. It can be mentioned that the joint venture option occur by pursuing a venture with other larger and competitive organizations. An international joint venture is a solitary enterprise or multi-organizational agreement, established as an alliance between two or more primary entities functioning over various nation territories in planning and managing the venture.
B. Marketing Strategy
In order to successfully attain these goals, Zara Company needs to pursue a strategy of selling a variety of its local clothing lines and international clothing lines, but maintaining Zara as the primary brand in India. Zara Company must also target larger positions including either the first or second positions in the Indian market of clothing lines. Any of these positions would be sufficient enough for Zara Company to establish an excellent level with regards to manufacturing, marketing and distribution. Aside from this, these positions can establish a platform from which Zara Company can sell their clothing lines and other special fashion products. Zara Company's branches in the Europe are excellent examples of huge market leadership positions. And with a concerted effort on the structures of the costs, the above mentioned goals should be attained without a doubt.
C. Promotion / Communication
To promote the organization and its clothing lines, Zara Company will utilize video advertisements, print ads and the idea of e-marketing. These promotion and marketing strategies will be able to fulfill the varying needs of consumers from India and beyond; especially those priority Indian markets or the consumers in the urban India areas. For this promotion campaign, the perfect information that Zara Company may utilize will be "Providing quality and fashionable clothing lines that fulfills your needs'.
Zara Company has been able to establish its reputation as one of Spain's primary clothing line companies for several years now. It is able to rise up to the challenges in most of its markets directly(1999). This is made possible through the efficient promotional and positional strategies established in order to maintain not only large profits, but also on establishing the foundations of Zara Company's clothes and fashion trends.
The promotional campaigns and strategies of Zara Company in India must prioritize the significant growth of its clothing lines and improving the company's financial situation. These strategies will also be able to help Zara Company maintain critical mergers and partnerships among companies. And more importantly, these campaigns can lead to the eventual unleashing of the potentials of the company's workforce, thereby establishing a quality performance- based culture.
The promotional strategies of Zara Company in India can be easily implemented by the local employees themselves. This strategy will definitely enable the organization to vastly improve without the burden of implementing costly technologies. These initiatives can also lead in improved financial profit for the organization and will enable the foundation of distribution networks for Zara clothing lines in India.
D. Target Market
Zara Company has maintained a reputation for targeting the teenagers, those in their twenties and even the individuals considered young at heart. This is a customer sector that other clothing companies have previously ignored in place of the adult consumers. Zara Company also has the unique strategy of portraying the generations in their campaigns. These campaigns in India will tell that Zara Company is not a mere simple clothing line for the next generation; its users are also a generation ahead of their competitors. Zara Company can establish an image for itself in India as the clothing line for the present generation. It has discovered that the purchasing power of the youth and the marketing power of celebrities were similar (1998). They have garnered significant profit gains out of this strategy, and there is no reason why this won't also work in India.
E. Pricing Strategy
Zara Company must use as a foundation of its pricing strategies various critical trends that constantly dominate the global marketplace of clothing lines in India. One unique trend is called "premium-tization". This trend triggers the polarization of various markets. This circumstance would then force the consumers to demand and pay much larger prices for perceived quality. However, putting significant deductions in prices is also simultaneously happening, therefore putting pressure to the middle range. More often than not, supermarkets enter the process of internationalization which leads to a tighter squeeze for shelf space (1994). This will eventually leave Zara Company as a winner. It is for this reason why Zara Company must prioritize the Indian "premise sector" so much because this would enable their consumers to try their clothing lines at lower risk and costs.
With regards to market segments, premium and specialty clothing lines of Zara Company have an unequal share of volume growth at an evaluated 4-5% annually, as against the 2-3% entire growth rate. These rates are a result of both the emergence of GDP values among recently established markets and consumer demands for greater value propositions, which is undoubtedly headed by international clothing lines. Therefore, Zara Company has to elevate its portfolio and function in India to outperform the home market. Zara Company practically functions on a slightly fragmented market, with the top four clothing companies accounting for 22% of global volume five years ago and only about 28% today.
There is obviously an immediate priority to merge both the inside-out and outside-in capabilities of Zara Company. While Zara Company's market entry strategy in India includes prioritizing on its major potentials with market position in consideration of the resource base, the company will be put into a losing position should it choose not to pay attention to both the macro as well as the Indian clothing market environment. Therefore, Zara Company has to be knowledgeable of the current management changes, as well as changes in political, economic, legal and even demographic situations in order to enhance the outside-in capabilities, such as market evaluation, customer linking, channel bonding and technology monitoring.
The advantages enjoyed by Zara Company may come in the form of increased profit gains. Having an idea on what the Indian market wants and the latest fashion trends could help Zara Company fully utilize its research and development potentials to release clothing lines which are not only cost-effective but also high in quality. The strategic option can even be utilized as a marketing strategy where the goal is on staying close to the company's customers and acting on their feedbacks. On the other side of the page, there will be great utilization of resources that has to be expected, and the associated risks involved with Zara Company.