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Business analysis of zara
Zara - A Marketing Case Study
Zara - A Marketing Case Study
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Zara retail’s stores normally placed in the center area or the best location on streets to attract their targets customers. Their target customer is obviously high fashion interested and shop frequently. For example, Zara in Thailand is located in the middle of town and in the center of the mall, which is easy to get by the sky train, bus or car. Everyday Zara has many shoppers coming to the store looking for the new product and some of the people, who is passing because Zara’s store has located in front of the escalator. Especially on the weekends there are crowded and hard to get into the store. The store has decorated with clean and wide atmosphere so it gives customer a good experience when shopping at Zara. Moreover, Zara’s stores design are always have a big window displays and attractive layout to advertise the products to customers because Zara does not spend much on advertisement. Furthermore, the stores are combined with the big entrance that customers are easy to access to the shop. Zara’s stores also decorated with yellow light that effect to the customers shopping time because yellow light provide comfortable feeling and make customers stay longer. In addition, store’s materials are decorated with the classy and glossy tones that refer to the Zara’s position of classy and fashionable brand. In term of weakness, even though he area, which Zara is located is the best area, there are a lot of competition.
Promotion
As Zara does not spend much on advertising, so they are better than the competitors with high profit margins and low cost of goods sold. However, Zara try to promoted and advertised their products in the different way. For instance, Zara always decorated nice and luxury window displays that make a promotion more attractive to customers and rent or buy good locations store, which customers are easy to find, and also seen Zara’s promotion on the window displays. Moreover, in sale season, Zara used only one poster posted on the window displays and communicated though online social network. Zara’s sale promotion is the same as the competitors. Although, Zara hold a low inventory that make their sale does not important. Even though, Zara does not spend much on advertising but they are using online social media to communicate with their customers. For example, Zara’s Facebook fan page has more than 19 million people like them. So, Zara can keep in touch with their targets customer by posted pictures, video, look book, Zara’s new collections, sales information, new events, etc.
Most retailers know that the appearance of their stores plays a big part in determining consumer behavior. As such, they seek to use it to their advantage. Sport Chek sells various types of sports merchandise mainly to middle and upper class citizens of Canada. The company has many stores and online portals. The design of the stores communicates to customers that goods in the store are of high quality. Therefore, customers come with the expectation to pay a premium. The main elements that the store uses to influence consumer behavior include the choice of construction materials, careful choice of colors and shapes, and creative use of lighting. These elements have an impact on the affective, cognitive, and behavioral responses of potential customers. The channel strategy used by the company is effective because of Sport Chek’s strong brand name. The company can benefit more from a better channel strategy for its online shopping portal that can help it to take advantage of the global high-end sports market.
However, Zara are usually compared to premium brands for instance Armani, Hugo Boss and others because of this Zara have some stores which are premium and others which are affordable. Zara mostly have a premium pricing strategy the pricing is made by optimising development and training costs (Hitesh Bhasin, Marketing mix of Zara) looking at pricing as portion strategy Zara are looking into high quality and high price. Zara pricing approach in my opinion is value-based for example a detail in a product and the quality of the product will mean the cost will be higher for instance a well designed detailed leather jacket will cost more compared to a basic design leather jacket because the difference of producing the detailed jacket which takes time to designing and material being used compared to the basic quick to make
The company’s strategy is customer focus strategy; Nordstrom has followed its faithful philosophy as offering its customers the best possible quality and value service. Being successful in the industry, the company has become a leading in fashion retail industry. When people tend to pay attention on the fashion, so that they are willing to spend more on the premium or exclusive products. Therefore, the company can provide items, which meet customers’ need will be the most successful in the industry. In addition, understanding the important of providing the best customer service, Nordstrom always be professional in their design of the store and employees attitudes such as, all of their stores are design to set the color and lighting, which can create the relax feeling for shoppers. Moreover, Nordstrom employees are well trained to
1) With which of the international competitors listed in the case is it most interesting to compare Inditex’s financial results? Why? What do comparisons indicate about Inditex’s relative operating economics? Its relative capital efficiency? Note that while the electronic version of Exhibit 6 automates some of the comparisons, you will probably want to dig further into them?
· Use of social media for promotion- word of mouth and social media help to get the message across and promote the product efficiently
The business model of the company could be categorized into formal and informal. As the name implies, the formal aspect of the Zappos was concerned with all the traditional aspects just like that of other companies. The formal aspects of Zappos had included Human resources, policies, procedures, operations, measurement of performances and compensation to employees on the basis of their performances. The informal aspect of the company dealt with the behavior of employees in an organization which was highlighted by Zappos in their corporate philosophy. According to their philosophy to get happy customers it was important to have happy employees and for happy employees an inspired culture was essential.
Problem Statement: In 2003, Zara's CIO must decide whether to upgrade the retailer's IT infrastructure and capabilities. At the time of the case, the company relies on an out-of-date operating system for its store terminals and has no full-time network in place across stores. Despite these limitations, however, Zara's parent company, Inditex, has built an extraordinarily well-performing value chain that is by far the most responsive in the industry. Therefore the major problem to the company is to decide whether it has to upgrade the present system and by doing so, risking the reliability they have with the current system or to continue with the present DOS based system which will not be compatible for future changes or improvements.
In the case, Marks & Spencer and Zara, it discusses two business process designs that each company took. You first had Marks & Spencer, who had a more traditional approach. Their chain started of with the buying team, design, developers, merchandisers, technologist, suppliers, logistics, and lastly the store. Zara, however, comes up with a new innovative design. With this new design in effect the delivery of new collections only has a lead-time of 5 days. They were able to cut down this time due to the fact that products where mainly produced on Galicia.
Problem Recognition is the first step in the consumer decision making purchase. When customer passes through this step, it moves to the second step which is known as information search. Zara focuses on this step. When customers starts collecting information to know about a particular brand or various alternatives available in the market. As per the customers of Zara, various factors can influence their decision to choose Zara. Some of the factors that can influence the decision of its customers are products, brand image and brand identity, coming up with new products every two to three weeks and ambience of Zara stores and outlets. The decision factors differs from a person to person are unique for every person. Zara has to focus on factors like brand image, brand identity, products, ambience of its stores, so that it can influence the consumer’s decision and attract more customers to choose Zara. (Vaxjo, K. 2011)
The fundamental business strategy of Zara is very simple which is linking customer demand to manufacturing, and liking manufacturing to distribution. Zara has been running their business in fashion industry which is susceptible to seasons and quick changing customer tastes. Zara has been approached to and considered their business as a perishable commodity business just like a fresh baked cake or bread to be consumed quickly.
For the past several decades, globalization has been a hot topic and it also anticipates every aspect of the world to connect each other. Likewise, globalization also allows consumers to have more access to catch up with updated fashion. The advantages of globalization bring a new philosophy called fast fashion, which holds quick response time and enhanced design in fashion apparel industry. In this paper, I will deliver By exploring all the aspects of each system, I will conclude the reason why fast fashion becomes the mainstream of the fashion apparel industry, and use one particular brand, Zara, as an example to discover the impact on consumer behavior in detail. Finally I will make some comments on the future of fast fashion and what luxury brands will react to this circumstance……..
In order for a retail company, like Zara to produce good sales results it is dependent on the level of stock on hand. If Zara has too much inventory in a given store it can slow the stores cash flow as well as reduce profit due to markdowns. Therefore, excellent inventory control is of high importance to Zara in order to realize sales targets. Studying the open-to-buy has allowed me to realize it’s tremendous importance as well as usefulness for a buyer. As one of the two major tools of merchandise planning, the open-to-buy plan is used by many retailers today as an inventory management tool, in order to determine the quantity of inventory that needs to be bought. This is generally done on a monthly basis in order to reach revenue projections.
This paper describes the various aspects of the Zappos case. The objective is to evaluate the depth analysis of the Zappos strategy. It enables to determine the Zappos strategy, business model & marketing strategy, and smartness of the Zappos acquisition.
This is one of the many reasons why, the firm has invested in conventional marketing techniques such as print media where we can see newspapers talking about the company, broadcast TV with their captivating commercials and radio, They use telephone which is a device that almost everyone has and is carried almost everywhere, so, to make sure that customers keep their brands in mind, they will send SMS coupons to their registered customers and also use mobile banners to advertize new collections and sale promotions. They also like to organize fashion shows and special events to boost the visibility of their brand. Hennes and Mauritz AB prints magazines, catalogues and brochures that will be distributed to customers mostly for free to show upcoming collections, season-in collections, products prices, sale promotions but also will invest to get featured in famous high-end magazines such as Vogue, Harper’s Bazaar, Elle or Marie-Claire. Their collaborations with super stars and respected fashion designers like Karl Lagerfeld of the iconic high-end fashion brand Chanel, Lanvin, Versace, Isabel Marant, Gucci and many and other activities such as their sustainability(their H&M Conscious Campaign which supports the use of organic inputs and encourages recycling of old H&M products) ,
According to Shimp (2007), there are five important factors which determine the purpose of advertisement in terms of marketers’ communication with consumers. He listed these five factors as follows: “(1) informing, (2) influencing, (3) reminding and increasing salience, (4) adding value, and (5) assisting other company efforts.” (p.246). To clarify that, the first most important aspect is informing people which means company needs to enhance the awareness of the consumer about their products by mentioning its advantages and features. Advertising also affect the products in two ways. Firstly, by basic demand, which build consumer desires for old products of the company and secondly, refers to a new brand of the company. In addition, effective advertising can retain consumer’s mind fresh about the image of a brand which develops the trace of the memory where consumers have to choose between two or more products. Moreover, it may change the product quality, create new, well-designed and elegant product and change consumers view towards the product. Lastly, by effective advertising program, company may save money and time as s...