Electronic Assignment Cover sheet

Student Name - YATHARTHA BHARTIYA

Student No. - 10623303

Course Title: MBA

Lecturer Name: Shakeel Siddiqui

Module/Subject Title: B9MG008 Strategic Marketing Analysis (B9MG008_2223_TMD1S)

Assignment Title: CA3 – Marketing Analysis of Zara

No of Words: 3624
TABLE OF CONTENT

Introduction: ...............................................................................................................3
KeyAttributes: ............................................................................................................3
P’s of Marketing
Mix:...............................................................................................................................4
Product: .......................................................................................................................4
Price:.............................................................................................................................4
Place:.............................................................................................................................5
Promotion: ..................................................................................................................5
People: .........................................................................................................................6
Positional: ....................................................................................................................6
Process:................................................................................................................... .....7
Performance: .................................................................................................................
......................7
C’s of marketing
strategy:.........................................................................................................................8
Communication: ............................................................................................................
...........8
Convenience: ..................................................................................................................
...........9
Postioning
map: ........................................................................................................................10
Market
Segmentation:.................................................................................................................
............11
Conclusion:.....................................................................................................................
...........11
References: .....................................................................................................................
...........12
INTRODUCTION:
In my last CA, I discussed the introduction of the brand Zara, the eight principles that
make up its marketing strategy, and the company's customer profile, which identified
the key traits of its target market. To better understand the brand's performance in the
market, I looked more thoroughly at the customer journey map, brand
communication, and brand strategy for Zara. We will look at the Ps that contributed to
the brand's performance in this CA3 to understand better what kept Zara competitive
in Ireland compared to its rivals. Additionally, I will discuss how these Ps relate to the
Cs in the marketing mix and how they relate to the positioning strategy.

KEY ATTRIBUTES:

We'll look closely at Zara's essential components concerning the 8Ps of marketing.
We will consider the consumer's perspective at this stage and the consumer's
journey as the business changes the Ps into Cs, and we prioritize the customer's
requirements over those of the marketer.

• Product
• Price
• Place
• Promotion
• People
• Positional
• Process
• Perfomance
• Cost
• Consumer
• Communication
• Convenience

P’s OF MARKETING MIX

Zara Product Strategy
The product strategy and mix in Zara marketing strategy can be explained as follows:

i. Zara is one of the leading luxury fashion labels in the world.

ii. Zara’s offers products for men, women and children. It offers jeans, trousers, tops,
skirts, knitwear, T-shirts, shoes, bags and accessories.

iii. It is a one stop solution for everyone whether you want to buy formals or casuals.
One can choose from different styles Zara has to offer. It launches at least 10,000
new designs in a year.

iv. Zara products are a hit with the high-end fashionistas as well as with the masses.
The taste of the target market influences the availability of the product line.

v. Zara also teams up with local talent (3rd party) to provide the best fashion trends.
The brand focuses on contemporary designs & ensures it keeps refreshing its stock
for its customers.

vi. Zara believes in sustainable development and is committed to reduce the

production of waste. It recycles its hangers and security tags.

vii. Zara gives out their products in paper or biodegradable plastic bags. Zara uses
ecological fabrics like organic cotton in the production of some of their items. These
products have a unique and distinct label which can be identified easily.

Zara Price/Pricing Strategy

i. Zara’s products are high on fashion and low on prices - Zara’s prices are country
specific.

ii. Zara provides the latest fashion at much lower prices as compared to other
competing international brands. Zara follows a low pricing strategy. It can afford to
do that as it doesn’t spend enormous amount of money on advertisements and raw
material. It has an overall low cost structure compared to its competitors.

iii. The brand positions itself as a high-quality clothes manufacturer at a competitive

price. The tagging on their products are done local, Zara sets market-based pricing
strategy which sets the target price consumer is willing to pay.

iv. The budget for production according to the target price. This in turn fixes the profit
margin they earn on every item. This gives an insight on the marketing mix pricing
strategy of Zara.

v. The brand uses various schemes as a way of sales promotion. Zara has a low level of
discounting around the year and discount sales of 50% or more twice in a year, for
which the consumers eagerly wait.
Zara Place & Distribution Strategy
The product strategy and mix in Zara marketing strategy can be explained as follows:

i. Zara has good reach with 9 stores and an online store for wider reach. With the
growth of ecommerce, the brand is also available on several multi-retail online
shopping platforms. All these cover the marketing mix place & distribution strategy
of the brand.

ii. It is a vertically integrated company. Zara’s supply chain is what provides them a
competitive advantage. It uses its unique business model to bring new products and
fashion to the market in the shortest time possible.

iii. Store managers send orders to the headquarters twice a week based on the sales
data of the store and the shoppers’ preferences. The commercial team compiles the
order then sends it to the manufacturing hub.

iv. The commercial team also coordinates with the in-house designers to find out new
trends and develop new products. New products are produced in relatively small
batches which helps them give exclusivity.

v. Most of the Zara stores are owned by the company and are not a franchise. This
helps in keeping the shopping experience at Zara intact and constant.

vi. The stores are in posh locations and are spacious and modern in look with walled
mirrors and excellent lighting.

Zara Promotion & Advertising Strategy

The promotional and advertising strategy in the Zara marketing strategy is as follows

i. Zara barely spends any money on advertising. It is famous for being press shy. Even
its owner never gives any press interviews. Unlike its competitors, it doesn’t engage
in any flashy campaigns. This is the reason why Zara’s advertisements are not visible
on television. However, its outdoor advertising is eye-catching and focuses on the
fashion trends which the youth prefer.

ii. Zara’s unique selling proposition is its short processing time, a large variety of styles
and affordable pricing. It relies on word-of-mouth promotion and social media
rather than expensive marketing tools.

iii. Zara’s social media reach is quite exceptional. It has 30 million followers on
Facebook and 45 million followers on Instagram. It is interesting to note that Zara
doesn’t put its logo on their products.

iv. Zara prefers spending their percentage of revenue in opening new stores. The brand
spends money on expensive real estate for its stores and on its décor. Zara believes
that its show windows are sufficient for advertisements, and they do not need
anything else to sell their products.

Zara’s People Strategy

 To build and retain all of Zara's audience, here are the few ideas they created and followed:
i. TRUST and support their own people, customers, buyers, and suppliers.
ii. Known to serve the community’s higher PURPOSES.
iii. Understanding who their audience is.
iv. What Zara’s audience needs and wants from their business, and how they would
want to support their higher-level aspirations.
In terms of this marketing strategy, “people” here include everyone their business touches.
This translates to the BIO approach including buyers, income makers, and others.
Zara’s Commitment to people: Zara ensures that its employees have a shared vision of value
built on sustainability through professional development, equality and diversity, and
volunteering. It also ensures that its suppliers have fundamental rights at work by initiating
continuous improvement programs for them. The Zara brand was born with a keen eye on its
customer – its ability to understand, predict, and deliver on its customers’ preferences for
trendy fashion at affordable prices. One of the secrets behind Zara’s global success is the
culture and the respect for the fact that no one is a better, authentic trendsetter than the
customer himself or herself – and this philosophy needs to be continually reflected in all its
business strategies going forward.

Zara’s Positioning Strategy

All other aspects of the marketing mix and competitive environment will play a direct role
in POSITIONING.
With Zara’s modern approach towards fashion, Zara highly targets young customers as its
main customer group, especially the millennials. Understanding that they want trendy but
affordable fashion items, Zara sharply provides the latest styles at low prices. But the
quality is not compromised, the fabric used is still of sufficiently good quality but meant to be
used for just one season.
Compared to average retailers, Zara provides a significantly larger assortment of styles and
designs with over 450 million products per year. The items have their own fashion seasons
that come and go even faster than the rest of the fashion world. Women typically love the
idea of being more than half of Zara's target market, mainly because they prefer to change
their styles occasionally more. The highly responsive supply chain of Zara ships new products
to stores twice a week, giving buyers constant new options.
By understanding the target customers and providing a new way for fashion, Zara has
successfully positioned itself as a stylish, affordable, and quick-changing fashion brand for
the younger generation.

Zara’s Process Strategy

Zara uses the JIT (just in time) production process unit, Zara has also been heavily influenced
by using JIT generation strategies. Zara completes incredibly quick trades by making every
item in small quantities. The new designs can land in stores within 15-days, meaning that
Zara can react to its customer request by creating greater quantities of its famous items and
ignoring less prominent items. Zara completes incredibly quick business by delivering small
quantities of each item. Zara gets an amazingly fast turnover by producing every product in
small quantities. Zara has opened its first technology-driven method which is the Store and
Collect Store in London and plans new stores to open in major cities, with mirrors that
embed technology to help customers make the right and desirable choices.
 Spring, inspired by Zara’s innovation, will likewise include a simple instalment framework
that works via Bluetooth and store partners will pass along cell phones to help customers in
any capacity. Customers will have the option to examine something to get more data about
it, not to understand the various decisions to plan and consolidate with different pieces of
clothing.

Zara’s Performance Strategy

Every store reflects the company’s approach towards the integration of fashion into the daily
clothes of every customer. Moreover, Inditex demonstrated the importance of fashion and
proved its desire to obtain a leading position in the market thanks to its active expansion. In
particular, Zara became one of the most successful projects, which helped Inditex to
generate millions of euros.
Below are Zara’s 7 ways of staying top in the market:
i. Manufacturing designs close to home
ii. Having an integrated digital and offline business model.
iii. Investing little in advertising
iv. Manufacturing in small batches
v. Staying on top of key trends
vi. Making fashion affordable
vii. Focusing on novelty

Thus, Zara by using the 8Ps of the Marketing Mix maximized the impact of every element of
its marketing strategy.
It helped Zara’s audience, specifically prospects and buyers, to find a solution that provides
value to them.

C’s OF MARKETING STRATEGY

Zara’s Brand Communication Strategy:

Zara has largely shied away from sponsorships and advertising throughout its existence, choosing
instead to use some of its revenues to fund the building of additional locations. Compared to rivals,
which spend an average of 3.5% on advertising, it consumes just 0.3% of sales. The company's
creator, Amancio, has never addressed the media or advertised Zara. Customers respect and desire
the brand, driven by the brand experience rather than advantages at the product level. This is a
hallmark of a highly successful brand. Everyone knows that Zara hurries products to market and
"mimics the trends" of the major companies. And it's all because of his production for "Just in
Time."One of the keys is that the money that might be used for media buying and advertising is used
to create compelling marketing strategies. Logistics and marketing strategies are the foundation of
Zara's competitive edge.

The sales and design teams are focused on the client's needs and dedicated to using sustainable
methods and materials in Zara's goods. Through their ongoing interactions with retail and online
teams through the Product Management Department, Zara designers can gain knowledge about
client preferences. Additionally, their active promotion of environmentally friendly materials and
manufacturing techniques aids in raising quality standards and lowering our activity's social and
environmental effects.

The Company can continuously send products from the logistics centres of each retail concept
throughout each season to both physical and online stores thanks to the logistics and distribution
system. This method is built mainly on centralized distribution hubs for each idea, where items are
transported to physical and online stores worldwide and stockpiles are kept.The Company's
employees enable the model's long-term development: a diverse human team of 177 nationalities
(171 nationalities in 2020), distinguished by its creative talent, passion for fashion, teamwork, an
enterprising spirit, constant innovation, and responsible effort. The Group's mission is to provide
fashion products that meet the most stringent sustainability, health, and safety standards, all while
promoting human rights.

Zara Ireland assures very high client traffic for their stores by choosing to be in the most prominent
places in a city. Its window displays, which highlight the collection's most exceptional items, are also a
potent communication tool devised by a professional team. A lot of work and effort is put into making
the window displays beautiful and eye-catching. The window displays are continuously altered
according to Zara's rapid fashion philosophy.
This strategy extends to how the personnel is dressed. While working in the stores, all Zara workers
are required to wear Zara apparel. However, these "uniforms" vary between Zara stores to represent
socioeconomic differences in the areas in which they are located. Again, Zara's emphasis on the mass
market is made quite clear—yet another example of how the corporation pays special attention to its
clients.

Innovation, a crucial component of change, is ingrained in the DNA of Inditex. They strive for constant
development to satisfy clients in every facet of their interaction with Zara. Due to the convergence of
technology and their open innovation approach, which encourages the recruitment of talent and the
attraction of customers, Zara can guarantee success at every level of the shopping experience.
Zara’s Brand Convenience Strategy:
Zara makes significant investments in the location and aesthetics of its 2,250 stores worldwide while
spending little on advertising and promotion. In addition, Zara provides customers with the brand
experience and goods they want when and when they want them. Furthermore, customers may
access inventory that is not available in their locations thanks to technology and mobile connectivity.
There are 39 online markets at the moment.

Zara's store placement strategy involves placing them in high-street shopping districts in significant
metropolitan regions. As a result, the shops are close to high-end apparel brand retailers. By
eliminating failing locations and entering new areas, Zara has the guts to bolster its portfolio
continuously and maintain the reputation of its flagship locations with regular customers.Data will
always influence decisions made by large corporations. It is a planning tool and an insider's
perspective on customers and industry trends. With the help of its highly developed analytics
infrastructure, Zara can determine what is popular and trending on social media. This is utilized to
enhance the company's services and product offerings, among other things. It is a two-way
conversation that enables ongoing development.

To provide clients with the most significant experience, Zara attempts to engage with them whenever
feasible. As a result, the brand knows and comprehends the customer's thoughts, making this a
valuable technique for business decision-making.
POSITIONING MAP BASED ON
PROMOTION AND PRODUCTIVITY

The distinctive aspect of Zara's promotion marketing approach is that the firm doesn't invest in
advertising. While most other fashion companies spend a lot of money promoting their namesake and
goods, Zara doesn't even create commercials. Instead, Zara uses original yet incredibly effective
strategies to market on social media. Zara posts on its registered social media handles, like its
Facebook wall, to announce future events. Zara has 30 million followers on social media who view,
read, and share the content.Additionally, Zara has a sizable following on Instagram. Instead of costly
marketing advertisements, Zara has opted to use social media and word-of-mouth marketing. Zara
opens up specific retail sites to promote its products. In addition, the business uses its inviting
storefronts to promote its brand among locals in that area. Zara has genuinely contributed to the
Promotion mix by using a global approach.
As a result, breakthrough goods, pricing, marketing, and distribution techniques have all been part of
Zara's marketing mix. The marketing mix has helped the fashion brand take a strategic position in the
industry and create a competitive advantage. This ensures that the company stays on pace to reach
its objectives.
Since it quickly and inexpensively delivers the newest trends to its retail outlets, Zara is renowned as
an "instant fashion" brand in the world of fashion. This is the cause of the brand's rapid growth and
positive reputation. The brand's products seem similar to popular things on the market, although they
vary depending on the market. Zara researches to comprehend the culture and tastes of the
community before posting anything. Although Zara didn't label it at the time as fast fashion, this was
its approach when it first joined the international fashion scene. From the start, the creator of the
business sought to handle clothing sales differently.Simply said, Zara’s products feature cutting-edge
fashions, popular designs, reasonable costs, and regionally appropriate tastes which is always its
secret to success when it comes to this “P”.
MARKET SEGMENTATION

Market segmentation is dividing a market into well-defined slices and thus the market consists of
a group of customers who share a similar set of needs and wants. (Kotler & Keller, 2016). After
segmentation, the company needs to target, identifying which segments focus their efforts on,
hence Zara had to zero into the market between the ages 20 -35.

STP- Market segmentation, Targeting and position. (Kotler & Keller, 2016:267) are interlinked to
approach a market.

Psychographic segmentation is the science of applying psychology and demographics to enhance

understanding of consumers which is understanding personality traits, values, or lifestyle.
Consumers within the same demographic strata can exhibit very distinctive psychographic profiles
hence Zara two profiles of consumers from two extreme ends. The Strategic Business Insight’s
(SBI) VALS™ framework comes handy when analysing this segmentation (Kotler & Keller, 2016

Behavioural Segmentation: In this segment, consumers are divided into groups based on their
attitude toward knowledge of, response to, or use of a product (Philip & Keller, 2012).

Demographic segmentation is segregating the market based on the following characteristics:

gender, age, income, location among others. Age and gender are the main variables utilized by
Zara to segment its market.

CONCLUSION

The Zara brand was created with a keen focus on customer experience - which leads
to its ability to provide trendy fashion quickly at affordable prices. In addition to a
super-effective supply chain, Zara also involves customers in the design process and
provides a unique competitive advantage. Fashion trends come and fade quickly, but
Zara is always able to quickly jump on the wave and bring exactly what buyers
desperately need to buy.
Despite being a fast-fashion company, Zara has a competitive advantage over its
competitors due to the success of its business model. One of the key reasons for
Zara's high success rate is its unusual and remarkable business style. Thus, we would
like to conclude on how we obtained an in-depth understanding of Zara and its
marketing techniques, which allowed the company to reach its long-term success.

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