Brand Management in Zara (pdf)

BRAND
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain the importance of branding as a marketing tool and why and how it has emerged
in business practice.....................................................................................................................1
P2 Analyse the key components of a successful brand strategy for building and managing
brand equity.................................................................................................................................3
TASK 2............................................................................................................................................5
P3 Analyse different strategies of portfolio management, brand hierarchy and brand equity
management................................................................................................................................5
TASK 3............................................................................................................................................7
P4 Evaluate how brands are managed collaboratively and in partnership both at a domestic and
global level.......................................................................................................................................7
TASK 4 ...........................................................................................................................................8
P5 Evaluate different types of techniques for measuring and managing brand value using
specific organisational examples.................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Brand management is a process of marketing in which companies maintaining good
relationship with customers for increasing the value of their product line and creating a positive
image of its brand at the market place (Brand Management, 2019). The main motive of brand
management is to enhance a level of brand loyalty among existing users. Also it is very
important for every businesses as it helps companies to evaluate an overall performance of its
brand. In this present report, chosen company is Zara which is largest international fashion
industry across the whole world. This is founded by Amancio Ortega and Rosalia Mera in the
year 1975. Along with this report, it covered various topics such as importance of branding as
well as component of successful brand strategy and also it has been analyse the different
strategies of portfolio management, brand hierarchy, and brand equity management. In order to
this, it can be evaluate that how brands are managed collaboratively and in particular at both
domestic and global level. At the end, in this report, different types of techniques for measuring
and managing brand value are going to be covered.
TASK 1
P1 Explain the importance of branding as a marketing tool and why and how it has emerged in
business practice
The term branding refers to process of marketing which involves creation of unique
identity for the product in minds of consumers through advertising media comprising of pursuant
theme (Abratt and Kleyn, 2012). The aim of branding is to set up pivotal and differentiated
presence at the marketplace so that ample number of loyal customers are attracted and retained in
ZARA. Branding acts as very important tool for marketing of products of ZARA and have major
impact on the company. The importance of branding as a marketing tool is defined below:-
 Branding Gets Recognition- Branding is essential for every business organisation
because it helps them to get acknowledgement and becomes better-known to customers.
For ZARA, most important component of branding is its Logo as it powerful,
unforgettable and builds omnipotent impression at the first glimpse. For creating strong
image and brand identity in minds of customers Zara's brand ambassador is chosen as
part of marketing tool. Currently brand ambassador of company is ZARA Phillips.
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 Attracts Investors- A strong brand image in the market helps to increase the value of
business by providing the company more leverage (Annie Jin, 2012). This leads to attract
more opportunities for investment as organisation has established good place at the
marketplace. In context of ZARA, managers focus on fulfilling needs of customers which
develops good image in minds of investors and they invest in the shares of company. So,
it leads to increase of business value for ZARA.
 Increases Employee Productivity and satisfaction-The well- known brand attracts
more qualified and talented employee in the organisation. More and more people wish to
work in ZARA as managers their emphasises on both employee satisfaction and
productivity. Employees of ZARA are highly satisfied because they get their salaries,
rewards and other various incentives on time which leads to decrease in employee
turnover and increase in productivity for company.
 Strengthens Negotiation power with Suppliers- ZARA is largest organisation in
fashion industry so, for suppliers it is the biggest customer. The managers of ZARA has
build up good brand identity in market which leads to strengthen the negotiation power
with the supplier. This power must be used to insist suppliers to deliver quality products
on time and also, managers of ZARA can bargain over prices.
 Increase in Customer Base- A good brand will assist company to win referral
businesses. Once the brand is popularised and trust is developed which helps to attract
more and more customers for company (Balmer, 2012). Managers of ZARA fulfil
requirements of customers without any delay and launches new products according to
trend followed in market which helps to maintain the customer loyalty with brand equity.
 Attracts New Distribution Partners- Zara is very popular brand with huge customer
loyalty. So, this leads to attract more distribution partners for its products at both local
and international level. New distribution partners are attracted for ZARA because of high
return on investment and maximum customer satisfaction.
 Creates Consumer Preference- Customers prefer those brands which possess strong
brand image as they are aware with the brand. The well known brands are seem to be less
risky to prefer to buy products from the ZARA. Customers of ZARA prefer to buy
products from this brand as its products are well-known with quality products.
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The concept of branding has emerged in business organisation from the last two decades
as this leads to develop a good position in the market. If any business organisation planning for
expansion of business than branding will play pivotal role for developing and creating awareness
about the brand in the market. Branding provides certain benefits to business organisation as it
helps to differentiate from the saturated market, increases employee pride, and attracts highly
skilled and talented employees because of strong brand image in the market. This concept has
emerged in business practices which help ZARA to conduct its operations smoothly and
effectively (Braun, Kavaratzis and Zenker, 2013). Thus branding has emerged in business
practices of ZARA because it helps to promote its offerings on a large scale at the international
level. ZARA maintain relationship with their customers by which company can survive for long
period of time at market place. They bring various offers in their product by which they attract
ample number of customers and retain old customers towards their company.
P2 Analyse the key components of a successful brand strategy for building and managing brand
equity
Branding is a tool of marketing which help businesses to make their products or companies
image different or unique from its competitors. Their main motive is to create long lasting image
of any company in customers mind. Along with this, branding is a strategy which is prepared by
an organisation to attract more people which also help customers to easily identify their products.
Also, it encourage or influence people to choose only their products from competitors products.
Along with this, branding is used for attracting new customers and retaining old customers
towards companies and its products in order to achieve organisational goals and objectives
(Bruhn, Schoenmueller and Schäfer, 2012). In context to ZARA, company uses various
marketing strategies which includes, digital marketing, campaign, live chat and many more to
increase its brand image and gain competitive advantage at market place. Every businesses use
successful branding strategies to build and maintain long term relationship between a business
and its customers as well as trust. There are various elements for building a successful brand
strategy which are discussed below:
 Clear Vision: This is a very important component of building successful brand strategy
because it helps company to develop their business at large scale. In context to ZARA,
they wants to make their customers happy and satisfied rather than to focuses on earning
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money. This is because when customers satisfying from company and its product then
organisation can automatically make money by building its positive image in the market.
Along with this, ZARA emphasise employees to communicate with customers and tell
them about their business and purpose of it. It helps an organisation or marketer to build
brand strategy and set their business core value in front of target audience at market
place.
 Consistent Messaging: It refers to provide clear and concise information or message to
people about company and its product for maintain brand image at market. In order to
ZARA, after setting a purpose of their business they craft messages which is clear and
consistent in nature for communicating about its purpose to target audience. It help an
organisation to attract large amount of customers by creating good image of their
company in customers mind (Elliott and et. al., 2015). On the other hand, their main
motive is to make positioning of its brand at market in the form of giving right and
correct message to people. Also to build a brand name which is easy for people to
remember and recognise about company and its product.
 Extending Brand With Effective Communication: Communication is a very important
part of any business as it helps an organisation to influence customers for purchasing it
product. According to manger of ZARA, employees should have communication skills
which aid to enhance its brand image and awareness at market place. Also they make sure
that everyone in organisation are fully aware about their brand and have abilities to easily
convey messages which helps in influencing customer to purchase their product.
BRAND EQUITY: It is used in marketing, where industries describe the value of their brand as
well as owner of a company can generate more revenue to became brand recognition. This is
because customers thinks that product of well known brand is best rather than less known brand
name(Zaglia, 2013). Along with this, the value of brand can be determined by customers
experience and point of view. In context of ZARA, brand equity play a very important role
because they make a positive brand image at market place. Their main motive is to make good
image in customers mind and change their purchase decision which is related to other category
of brand. There are various components of managing brand equity which are discussed below:
 Brand Loyalty: It means to have positive feelings towards a brand which
generate level of dedication to purchase same product repeatedly and in future
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too. In order to ZARA, if company can provide products in high price then
customer will purchase it because customers believe high price of products are
good in quality. Through this ZARA manage their brand equity at market place
which attract more customers and retain loyal customers.
 Brand Awareness: It means to generate awareness at market place which help
customers to know about organisation and product. In context of ZARA, it will
help customers to recall and recognise their brand name for longer period of time
in order to achieve organisational goal and objectives.
TASK 2
P3 Analyse different strategies of portfolio management, brand hierarchy and brand equity
management.
 Portfolio management strategies- This is known as different techniques applied for
efficient management of portfolio as it helps generate highest possible returns at lowest
degree of risk (Wirtz and et. al., 2013). The two techniques of portfolio management
includes active portfolio and passive portfolio strategy which has been defined below :-
Active Portfolio Strategy- This strategy focuses on facts which assist to beat the
market by earning profits. It also emphasises on taking advantage of inefficiencies of market. It
is further classified as Top-down approach for stock selection where managers evaluate whole
market and decides which sector is expected to perform better in present economic cycle. On the
other hand Bottom-up approach is that where managers analyse companies on the base of
strengths rather than considering market conditions and expected trends. Managers of ZARA
uses top-down active portfolio strategy as their decision are based on overall market conditions
and customer needs so, that production can be done accordingly.
Passive Portfolio Strategy- According to this strategy managers rely on the fact
that markets are efficient so, its impossible overcome market returns on regular basis and from
low-cost investments higher returns can be earned and maintained for long-term (Erdoğmuş and
Cicek, 2012). In context of ZARA managers their don't believe in making huge investments as
they consider market efficient. Managers of ZARA make low cost investments and maximise
returns for long term.
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 Brand hierarchy strategies-This refers to strategic and logical structure of all the brands
included in portfolio. This hierarchy is based on the concept that customers associate with
brands at different levels such as endorsed brands, product brands and corporate brands.
These strategies allows mangers of ZARA to create brand portfolio which appeals
different segments and needs. The various hierarchical models for brand are House of
Brands and Brand House.
◦ House of brand comprises of independent set of brands which emphasis on
maximising impact on the segmented market. Along with this, it include numerous of
band where customers have option to choose or select the brand according to their
preferences. (Zenker and Braun, 2017).
◦ Whereas Brand house adopts only master brand for particular time period with the
set of offerings and descriptive sub-brands . In addition to this, company itself is the
brand as well as their services and products are set of the part main brand. (Foster and
McLelland, 2015).
With reference to ZARA, managers develops brand hierarchy by pairing sub brands
ZARA with its master brand Inditex to attract more customers and maximise return on
investment.
 Brand equity management strategies- The term brand equity is part of marketing
which defines value of brand and its importance. It reflects value perceived for name,
symbol, logo and other factors. If organisations have positive brand equity than their will
be more loyal customers and competitors will have knowledge about this factor. Their are
various models for brand equity which helps to build strong brand image propounded by
Kevin Lane Keller (Gummerus, Liljander and Pihlström, 2012). This model explains
about thinking of customers for products and services provided by company. Managers of
ZARA applies this model which consist of four stages which is explained below:-
Brand identity- It refers to information received about products and services for consumers as is
helps them to be well-known with the product. For identification of products ZARA frames logo,
tag-lines, sign, images and physical stores which are related to feelings of customers.
Brand meaning- This stage is concerned with the purpose and reason by which customer
feel proud and satisfied which will influence them to buy products again and again. If ZARA
offers products with good price with best product quality, performance of product is effective
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which are purchased by customers. As ZARA has good image in market because it offers
products with good prices and best quality products which gives customers fantasy over their
products.
Brand resonance- this is totally concerned with customers loyalty because there is cut
throat competition in market with availability of close substitutes of its products offered.
Managers of ZARA production is based on good quality raw material and products are not much
excessively charged which helps to maintain customer satisfaction and their loyalty.
Brand response-If ZARA offers better quality products to its consumers than they will
have positive response with high satisfaction level with the brand. If the products purchased by
customers from ZARA are fulfilling their needs and expectations than they will show positive
response with brand loyalty (Huang and Sarigöllü, 2014).
Brand Extension:- In this extension, company use its brand name for introducing any
new product at market place. This is also called brand stretching. Along with this, company opt
this strategy for increasing demand of product as well as maintaining sustainability (Ferguson,
Lau and Phau, 2016).
Line Extension:- As per this extension, the parent brand aids company to make new
product by which they target new market area so that they can sell their product by using the
name of parent brand. Along with this, line extension means to make some changes on the
product of their brand line, size, flavour and many more (Allman, and et. al., 2016).
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Product Extension:- This extension means to bring some innovation or changes on the
product of parent brand which means to enhance a variety of products (Song and et. al., 2015).
TASK 3
P4 Evaluate how brands are managed collaboratively and in partnership both at a domestic and
global level.
Collaborative and partnership agreements
These two components are part of brand extension which are adopted by company at both
domestic and international level when business operations are carried out in another country. The
collaborative and partnership agreements are used by organisation when its operations are
concerned in another country and don't have proper availability of resources than companies
enter into these kinds of agreements with well reputed and stable companies. For instance, if
ZARA want to established its business in another country, it can do partnership and collaborate
with other companies which are already well established and have good reputation in that
country (Jahn and Kunz, 2012). It is beneficial for ZARA because it will help them to settle and
establish their business operations in less time by making proper allocation of resources provided
by partner or collaborated company. The partnership company already has good reputation in
the market so it is a plus point for ZARA and it will be easy for managers of ZARA to create
awareness among the customers about its products and services with its brand name. For
example, H&M and ZARA are working together to deliver innovative and creative apparels
which help the organisations to attract more loyal customers. This helps in profit maximisation
with increased brand loyalty.
Brand leverage
This refers to strategy to use strong brand image for supporting company's entry in
category of related products by communicating information of products to the consumer. For
instance, the manufacturer of ZARA uses its brand name to launch certain products. While
machines and raw material are in different product categories, there is high degree of correlation
as brand name has strong impact on consumers (Kapferer, 2012). Brand leverage is an essential
form of new product to introduce and inform its customers because it provides a sense of
familiarity by carrying positive brand characteristics and attitudes for the new product category.
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For example, when ZARA launch its new products customer are not doubtful and confused to
purchase it because they are familiar with its product quality and brand name. This is beneficial
for ZARA as cost of introducing brand leveraged product is less than introducing a new product
and no huge investment in advertisement and promotional activities. The organisation can easily
find customers for its new category's products with the help of strategy of brand leveraging.
TASK 4
P5 Evaluate different types of techniques for measuring and managing brand value using specific
organisational examples.
Brand Value
It also known as brand equity in which company maintain their reputation at market place
through which customer are going to familiar with their products and company. If companies
provide various product and service in market and customer are not having them because of
unawareness then the value of their organisation and production are zero. Along with this, brand
value is measured by various manner such as customer retention, brand loyalty, and many more
(Kavaratzis and Hatch, 2013).
Survey
It means companies do survey for identifying customers need and requirement in order to
fulfilling this effectively and efficiently. Along with this, if customers are highly satisfied by
companies product and services then it will increase the brand image and influence customers to
purchase them on repeatedly. For example, ZARA is chosen as a business entity and it is a
largest international fashion industry whose brand image is good in the market place. Along with
this, it has been analysed that ZARA company provides good quality of product which enhance
its brand value. Also customers purchase their product when company offered in high price this
is because customers believe that high price of products having best quality.
Brand Awareness
It is a process through which company can generate awareness about their product and
service at market for providing right and correct information about it. Along with this, companies
using marketing channel to promote their brand and product in front of customers and make
unique or easy brand symbol, image, logo and so on which help customers to recognise
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organisation easily (Keller, 2013). For example, Coca-cola company create awareness by giving
advertising on televisions, social networking sites and so on. So, companies use various tools and
techniques for measuring and managing brand awareness such as search engine quarries,
surveys, social media engagement and many other. All these techniques help companies to
attract customers towards their brand and increase the image of organisation and brand at market
place.
Customer Feedback
This means ZARA take reviews or feedback from their potential customers so that they
analyse the value of product and satisfaction level of customers at competitive market place.
With the help of this,company make some changes on their product in order to attain
organisational goals and objectives (Celuch, Robinson and Walsh, 2015).
Market Value
As per the analysis of market, company st the price of their product. In context of ZARA,
the value of their brand in market sets actual price which is dependent on the buying behaviour
of customers accordingly (Nimtrakoon, 2015).
Brand
It includes unique identity which is totally different from their competitors and will easy
for customers to remind their products such as name, logo, symbol and so on. In context to
ZARA, in every product of this brand use the word ZARA which aids customer to find easily
and creates uniqueness at market (Rosenbaum-Elliott, Percy and Pervan, 2015).
CONCLUSION
As per the above mentioned report, it has been analysed that, brand management help
companies to build strong relation with customers in order to accomplish organisational goal and
objectives. Along with this, there are various importance of branding which enhance their sales
and build image of their brand in market (Kucherov and Zavyalova, 2012). Also various
components which aid to build successful brand strategy and mange brand equity for attracting
new customers and retaining loyal customers towards their company and brand. At the end,
various type of techniques and tools for managing and measuring brand value to generate
positive image for changing purchase decision of customers and encourage them to purchase
those brand of product rather than competitors brand. Branding help marketers or organisation to
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achieve their goal and make happy or satisfied customers by providing good quality of product at
market place. Along with this successful company with good image retain loyal customers for
longer period of time.
Brand equity is determine by the perception of customers as well as brand itself. Along
with this, market of ZARA use comparative methods so that they can compare their products
from others.
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Brand Management. 2019. [Online]. Available Through: <https://marcom.com/blog/what-does-
brand-management-mean/>.
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