Marketing Mix of Zara: Product, Price, Place, Promotion

This article discusses the marketing mix of Zara, including its product offerings, pricing strategies, distribution channels, and promotional activities. It also explores Zara's segmentation, targeting, and positioning strategies, as well as its SWOT analysis and the impact of external factors. The article provides insights into how Zara effectively manages its marketing efforts to achieve its business goals.

Management essentials

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Compare ways in which organisations apply marketing mix to marketing planning process in
order to achieve the business goals..............................................................................................3
Marketing plan for Zara...................................................................................................................7
Executive Summary.....................................................................................................................7
Objective of Zara.........................................................................................................................7
Segmentation, Targeting and Positioning....................................................................................8
PESTLE Analysis........................................................................................................................8
SWOT analysis of Zara...............................................................................................................9
Marketing mix of Zara...............................................................................................................10
Budget........................................................................................................................................10
Monitoring and evaluation.........................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Marketing is the important function of the organisation. If any product and service is
launched by the company then its marketing is very much required. Marketing essential
include sales, advertising and publicity. Marketing create brand value of the company. Zara
is a multinational retail brand. The products of Zara include clothing, shoes, beauty,
accessories etc. company have women, men and children clothing. this study will discuss
roles and responsibilities of the marketing function and how these relate to wider
organisational context. Further comparison between ways in which organisation apply
marketing mix to the marketing planning process to achieve the objective of the business.
This study will also evaluate marketing plan for the organisation.
Compare ways in which organisations apply marketing mix to marketing planning process in
order to achieve the business goals.
Applying marketing mix of Zara and H&M:
7 P’s Zara H&M
Product Zara is a known name in the
fashion industry. Company
have full control over their
products because it do not do
outsource if its goods which
is the advantage for the
company (Ngo, Lohmann and
Hales, 2020). It make
products for men, women and
children. Company have
products which include
clothing, bags, shoes,
accessories, beauty, perfumes
etc. it offers fancy as well as
It is famous and trusteed
fashion brand. It has wide
range of products. Company
offer products like jackets,
jeans, tops, belts, bags,
jewellery, accessories, shoes
etc. company believe in
providing reasonable
products so that large group
of customer can purchase
their products. They offer
designer clothes, basic
clothes, sportswear. It believe
in providing good quality of

casual clothes. Zara ensures
the sustainable development.
They make products
according to the market
trends. It has wide varieties of
products available.
product.
Price Zara provide affordable
goods as compare to their
competitors. They operate
within two stores which are
regular store and premium
store. Regular store have
affordable goods whereas
premium have luxury
products. They provide latest
fashion at the low price
internationally. Low pricing
strategy is followed by the
company. It do not spend
much on advertisement and
believe to offer affordable
product in the market to cover
large customer group. Local
market put the tags on their
products. The market based
pricing strategy is chosen by
the company, which is
customer happily pay. They
fix the price and according to
that do the promotion.
The fix the price according to
the type of products. It has
large price range and that is
products are available for
every customer. By this sales
increase and company is able
to generate more revenue.
Company timely come up
with discounts and coupons
to attract the customers. They
make products for both low
and high earning consumers.
They offer good quality of
products at a reasonable
price. There prices are low as
compare to their competition
because they have less
transportation costs. They
also have wide range of
products then Zara. High
quality and good price attract
the customers which
increases the sales and
eventually revenue of the
company.

Place Zara have stores across
globally. Through online
platforms and through its own
websites also company sells.
This company is a vertical
integrated. Zara take
competitive advantage from
its supply chain. They launch
their new products
differently. Every store sends
their orders to the company’s
headquarters weekly in order
to ensure no shortage at the
store. They make new
products according to the
market demand. Zara keep
the shopping experience of
the customers same
throughout the world and also
give good shopping
experience to them. Their
stores are reachable.
H&M have many stores at the
international level. H&M also
give franchise. Online also its
products are available which
give easy buying and
selecting options to the
customers and customers can
do online payments as well.
They have easy delivery
options also. They make their
products in such countries
where they get labour at low
cost by doing that only they
can reduce the price over
their products. their clothes
are designed from their well-
known designers. Their
supply chain is excellent
(Mayrhofer and Roederer,
2016).
Promotion Zara spends less money on
giving advertisements. Unlike
their competitors company
also interact less with the
media. Their selling style is
unique. They offer wide
variety at affordable price.
For advertisement they use
social media and word of
H&M is across the globe so
they uses various channels for
the promotion. They do tv
advertisements, use print
media, you tube, radio, digital
marketing etc. the tv ads of
h&m are very creative. They
give regular ads so that
consumer do not forget the

mouth publicity rather than to
spend on expensive publicity
tools. Company spend more
to décor their stores
according to the company
that attracts the customers.
Social media is cheap method
of doing the publicity, saves
times and reaches to large
customers.
company. Company also
doing social media marketing
because it is trending
nowadays and many people
using social media so it is the
best method for the
promotion. Company also
offer discounts and put sale.
They do celebrity
endorsement for promoting
the products.
People People are the employees of
the organisations without
them the company can’t even
run (Loo and Leung, 2018).
They do daily to complex
tasks in the organisation. Zara
provide good customer
service. Their employees are
very friendly with the
customers and give complete
knowledge to them about the
products. They trained their
employees so that their skills
can be brushed.
Employees of the h&m are
given proper training. The
working environment of
company is very good and
employees shifted to one
department to the other
department. They motivate
their employees by appraising
their performance h&m
appointed designers from
worldwide so that company
can offer latest designs in the
market. Employees of the
company is from different
backgrounds. Development of
employees is done in the
company.
Physical evidence The physical evidence is the
services and products which
is given to the customers.
The store of h&m is attractive
with the good staff
(Koivulehto, 2017). The

When the customer buys
goods or services they pay for
that for which zara gives
payment receipt to them. The
designs of the product and
store is the physical evidence.
products are arranged in such
a manner which is very
attractive. The interior décor
is also excellent. H&M has
entered into many markets.
They launch their new stores
by the celebrity. It is the PR
activity of the company.
Consumer suggestions are
always welcomed.
Process Customer is god for the
company (Abril, and
Rodriguez-Cánovas, 2016).
Zara believe that their query
should be solved immediately
then only they will give
business to the company.
They also have customer care
number which can solve
customer query. Their
employees give very quick
service.
Customers are given high
importance. Employees are
trained in such a manner that
they can give best services to
the customers and increase
the sales. If any customer
face any problem in the store
then their efficient staff solve
it immediately.
Marketing plan for Zara
Executive Summary
In the marketing plan objective will be specified of Zara which will be based on SMART
objective. The segmentation, targeting and positioning of Zara will also be determined and also
external environment analysis will be done based on certain factors such as political, economical,
social, technological, legal and environmental. Also SWOT analysis will be done and marketing
mix will be determined. The last thing which will be done is monitoring and evaluating Zara.

Objective of Zara
The objective of Zara is specified in terms of SMART objectives. In which SMART is denoted
by specific, measurable, achievable, relevant and time bound.
The objective of Zara is to increase their conversion rate of customer by 15% every year.
Increasing the retention rate of customers by 20% in the current year.
Segmentation, Targeting and Positioning
Segmentation is splitting the marketplace into different groups and segments according to
the characteristics and similarities. Zara has segmented its customers based on demographic
segmentation and Psycho graphic segmentation. Demographic segmentation is dividing g the
broad market based on age, gender, income level etc. Zara has segmented small size customers
and plus size shaped garments. They have segmented their market based on age group and
income level.
Targeting is breaking the large segments of people into smaller ones to concentrate on
specific groups. It is to enhance the marketing strategy and concentrate on that specific customer
segment (Camilleri, 2018). Zara have targeted people in the age group of 18 to 40 and people of
mid-range income level. They have also targeted people who are passionate about the fashion
and trends.
Positioning is the image that the brand has in the minds of customers and it requires
commitment to specific niche and idea or target customer. The positioning of Zara focuses on
democratic fashion. They position themselves as brand of trendy and high fashionable clothes.
The strategy they adopt is low cost and high fashion.
PESTLE Analysis
Pestle analysis is the tool to analyse the external factors for Zara which are as follows:
Political factors – The financial regulation of Spain may impact the functioning of the
the brand like the European Trade Agreements give easiness in importing and exporting between
the member countries. They overcome this political hindrance by limiting their supply chain
operations. In expanding the market also various regulations of different countries impact its
working.

Economic factors – The economic factors that impact Zara are labour cost, inflation, rate
of interest etc. Zara has an impact of fluctuating economy on their revenues. As there are high
unemployment rates in Spain therefore it provides low cost of labour to Zara (Perera, 2017).
Social factors – The society and culture do impact the working of Zara as it has produce
the apparels which are liked by the society and are in trends. Therefore the company do not limit
their scope and caters to different segments of society and also indulges in using eco-friendly
approach in managing their stores.
Technological factor – These factors also impact the functioning of Zara therefore
invests into new technologies to get the cost advantage and also invest in R&D to understand the
taste of their customers. They make use of technology to reach out their customers.
Legal factors – Legal factors do impact the functioning of the company therefore Zara
considers all the laws and ethics in minds while operating the business. They provide fair wages
to their employees and they also enforce copyright law to protect their innovative apparels and
products.
Environmental factors – The environmental factors like pollution and overutilization of
resources do impact Zara therefore the company is focusing to become eco-conscious. The brand
is committed to make a favourable contribution towards climate change, energy saving,
sustaining materials and animal welfare.
SWOT analysis of Zara
Strength of Zara
The company has a strong control over the supply chain and also provides unique designs to its
customers.
Zara has a strong presence globally therefore they increase their chances of survival.
As they have maintained their standards in quality which helps them to create a greater brand
value.
Weakness of Zara
The brand does not cater to a specific genre and serves to different market segment and have
generalize collection (Sarsby, 2016).
The brand spends less on advertising and they may not be able to generate adequate profit as
compared to the competitors.

They also have a lack of safety stock as they keep low inventory at their stores.
Opportunities of Zara
As online platform is a very good opportunity for the brand as this platform eliminate the
geographic boundaries and increase the reach of customers.
Market expansion and growing market potential is an opportunity for the brand to expand in the
areas where they have not.
The company can also use artificial intelligence for tracking customer experience.
Threats of Zara
There are many competitors for Zara which can steal their market.
As expanding to different countries requires the company to follow different laws.
Increasing cost of raw material is also a threat to the company.
Marketing mix of Zara
Product mix – The brand should respond to the market demand in terms of trends and fashion
very quickly. They should not outsource their manufacturing process and take the full control of
their products. Also they should commit to produce products that reduces the production
wastage.
Price mix – As Zara is providing high fashion at lower cost they should focus on advertising and
raw material more to achieve this objective (Perera, 2017). They should adopt premium pricing
strategy by optimizing their training and development cost.
Place mix – The brand should also market their products through online platforms this will help
the company to get a competitive edge.
Promotion mix – The brand should spend some money in promoting their products, different
styles. They follow a zero investment in marketing strategy and heavily depend on word of
mouth publicity.
Budget
The cost required to execute the plan:
Total of the overall budget
Allocating 15-20% of revenue in promotional activity.
Allocating 15-20% on analysing the market and understanding the taste and preference of the
customer which means into R&D.

Allocating 20-25% on innovating and hiring top designers.
Allocating 15-20% on logistics and improving supply chain
and remaining on the others activities.
Monitoring and evaluation
For monitoring and evaluating Zara determined various key performance indicators such as:
Sales per employees – It is calculated by dividing the net revenue with number of employees. It
helps Zara in tracking employees performance and the revenue generated by them. This indicator
helps the company to take decision regarding training, compensation and hiring of employees.
Conversion rate – It is calculated buy dividing the total number of sales by the number of
visitors (McDowell, Wilson. and Kile Jr, 2016). The company tracks the number of visitors
came and made a purchase and became a customer. This indicator helps in keeping the track of
actual sales.
Customer retention rate – The retention rate is also a very important indicator of their
performance as acquiring the customers is important but the main task is to retain them. The cost
to retain the customers comes more than acquiring them.
Inventory turnover – To calculate the inventory turnover cost of goods sold is divided by
average inventory. This is a very strong indicator of measuring the performance of the company
as inventory turnover increases if the sales increases which means there is greater demand of the
products offered by the brand.
CONCLUSION
Through this report it can be concluded that roles of marketing functions are discussed and
also how that relate to wider organisational context. Interrelationship with different
departments. Marketing mix of Zara and H&M are compared by how they achieve the
objective of the business. Evaluating the marketing plan of the organisation in the detail.

REFERENCES
Books and journals
Abril, C. and Rodriguez-Cánovas, B., 2016. Marketing mix effects on private labels brand
equity. European Journal of Management and Business Economics. 25(3). pp.168-175.
Camilleri, M.A., 2018. Market segmentation, targeting and positioning. In Travel marketing,
tourism economics and the airline product (pp. 69-83). Springer, Cham.
Koivulehto, E.I., 2017. Do social media marketing activities enhance customer equity? A case
study of fast-fashion brand Zara.
Loo, P.T. and Leung, R., 2018. A service failure framework of hotels in Taiwan: Adaptation of
7Ps marketing mix elements. Journal of vacation marketing. 24(1). pp.79-100.
Mayrhofer, U. and Roederer, C., 2016. Zara: The international success of fast-moving fashion.
HAL.
McDowell, W.C., Wilson, R.C. and Kile Jr, C.O., 2016. An examination of retail website design
and conversion rate. Journal of Business Research. 69(11). pp.4837-4842.
Ngo, T., Lohmann, G. and Hales, R., 2020. Integrating the third way and third space approaches
in a post-colonial world: marketing strategies for the business sustainability of
community-based tourism enterprises in Vietnam. Current Issues in Tourism. 23(15).
pp.1914-1932.
Perera, R., 2017. Marketing mix theoretical aspects. International journal of research
granthaalayah. 4(6). pp.25-37.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
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