Comparing Zara and H&M Retail Strategies

This assignment requires a comparative analysis of the retail strategies employed by Zara and H&M. Students must examine key aspects such as growth patterns, market share, and the effectiveness of each brand's marketing plan. The analysis should highlight the similarities and differences between the two companies and identify which retailer holds a stronger position in the market. A range of sources, including academic journals, books, and online resources, can be utilized to support the analysis.

Marketing Essentials

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
P3 Comparison between 7Ps of marketing mix of ZARA and H&M clothing stores................1
TASK 3............................................................................................................................................5
P4 Evaluation of marketing plan for an organization.................................................................5
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Marketing is an essential activity that every organization possess for higher productivity
that brings larger revenue into organization. There are various tools and techniques that help in
adequate completion of tasks and actions (Albert, 2014). These tools and techniques are
marketing mix and marketing plan. Marketing plan includes strategy of new product
development and market analysis with help of various tools that are SWOT analysis, PESTLE
analysis etc. marketing mix comprises all factors that are necessary to accomplish business
activities for e.g. product, price, place and promotion. It also includes 3 other points that are
people, process and physical evidence. This works as procedure that starts with offering and ends
up with placement of goods and services in consumer's mind.
TASK 2
P3 Comparison between 7Ps of marketing mix of ZARA and H&M clothing stores
Marketing Mix is a tool that helps in efficient persuasion of marketing activities that will
generate more profitability as well as increases market share of organization. It is mainly have
four attributes that are Product, Place, Price and Promotion. After some it was felt that these
points are not enough to manage marketing actions and later on three more factors were added
and these factors are People, Processes and Physical evidence. These are seven essentials of
monitoring marketing activities and covers all area of marketing. There are various differences in
marketing mix tool of ZARA and H&M which stated below:
Basis Definition ZARA H&M
Product It is an item that is
created or prepared to
meet wants and desires
of target customers.
This can be tangible or
intangible (Babin and
Zikmund, 2015).
Intangible products are
It is a well known
name in fashion
industry. It has
complete control on its
products as it does not
outsource its goods.
That is a major
strength of company.
It is a most trusted
fashion wear company.
It has wide product
portfolio. It deals in
several products that
are fashion weras like
jersy, jackets, jumpers
etc. and accessories
1

formed as services that
is used by its
consumers directly.
It quickly responds on
changing needs of
fashion of customers
and also cope up with
variabilities like
cultural needs, designs
etc. It has wide range
of products that varies
country to country.
like bags, jewellery,
shoes etc. company
focuses on affordable
prices that will enable
them to release their
new products in
regular gap of time.
Price It carries an amount
that a customer can
pay to enjoy product
(Dibb and Simkin,
2013). It is a very
important component
of associations'
offerings that
determines success or
failure of goods and
services.
ZARA provides prices
that is affordable to
cream customers that
can compare ZARA
with H&M and other
companies. This
enterprise has two
kind of stores one is
premium and other
one is regular.
Premium stores keep
luxury products and
regular have
reasonable price
stores. Prizing policy
of association is
premium pricing. That
is made by optimizing
T&D cost.
Its pricing policy
depends upon ranges
of products that is why
it has wider price
range which is set to
suit every kind of
consumers. This will
lead more sales that
brings larger revenue
into corporation. It
also comprises various
schemes and discounts
on new stock. It makes
organization's articles
more economic which
is affordable for cream
and non-cream
customers (Crain and
et. al., 2014). This
kind of pricing
maintains zeal of
customers in
2

corporation's offerings.
Promotion It is a tool or making
perception that means
how is product to be
perceived in customers
eyes. It includes
several points that are
sales organization,
Public relations,
advertising and sales
promotion.
This business entity
uses a unique
marketing strategy for
its promotion that is
“Zero investment in
marketing”. It means it
investing money in
opening new stores
rather than spending
money in marketing
activities. This entity
found various
differences that is
important for
customers and used
this distinctions to
stand themselves apart
from competitors. This
activity is a
combination of
exclusivity, experience
and differentiation.
This association relies
basically on word of
mouth type of
advertising. Promotion
is done for target age
group i.e. 18-40 years.
Because this age group
is more fashion
This company focuses
on proper promotion
of products. Main
attribute of promotion
strategy is quality with
reasonable price.
Management
personnels of
organization
efficiently utilize
electronic and digital
media like television
and internet
respectively
(Mohammed and et.
al., 2017).
Endorsement of goods
by celebrities like
Robert Cavalli and
Jimmy Choo brought
up this firm as brand.
It also spend its
resources in
sponsorship as they
sponsored shows on
MTV. They have been
put various resources
like finds, time and
raw material etc. in
making adequate
3

conscious. Market
segment includes
women 65%, men
25% and children 15
% approximately.
marketing strategy.
Place It means placement of
products or services in
target market that
assures returns over
the cost. It mainly
consider potential
buyers who have
buying decision
making power.
Thing that make
ZARA stand out from
other brands is its
vertical integration. It
means they operates
all activities from
production to post sale
services. It includes
design, manufactures
and distributes
products itself. That
explains they do not
use any outside
support. This
placement strategy
worked for enterprise
as they established
itself one of largest
fashion store across
the globe (Malhotra,
Birks and Wills,
2013).
Their placement is
strategy is very strong
as they established
their footprints in
markets of various
countries and make
itself 2nd largest store
in fashion industry.
H&M stores are very
convenient because
they have various kind
of products in its
portfolio. Association
also put its fund in
store opening
decisions that are
reasonably priced.
These stores increases
profitability of
business. To place
products in target
market they opened
three thousand and
five hundred stores
approximately.
4

People It is necessary to
identify whether there
are sufficient people in
target market that is
important to meet
demands and generates
profitability.
ZARA increased its
focus on employees
that it established its
employee management
culture and customer
services. Because
workers are people
who directly seal with
pointed customers.
This association pays
more attention on its
customers and this
firm makes strategy
while focusing on
customer base. For
example reasonable
pricing strategy etc.
Processes Systems and
machinery that posses
production function.
This organization is
vertically integrated
and posses all
manufacturing units
that are necessary for
production.
Corporation does not
focus on systems and
possesses as it is
horizontally integrated
that means it depends
on outside units for
support of many
functions like logistics
in sales and
distribution etc.
Physical evidence It means how can a
customer identifies
enterprise in
marketplace.
Main evidence of this
fashion house are
products, stores and its
employees.
This store's physical
evidences are store
location, products etc.
Above comparison deals with distinctions between marketing strategies of two
companies that are ZARA and H&M. This study provides information about where one retail
store looses and at which point other one is standing strongly. According to above analysis it is
clear that marketing strategy is very different from each other and gave different and separate
places to both of them (Oriyano, 2017).
5

TASK 3
P4 Evaluation of marketing plan for an organization
For every single firm marketing plan is necessary to reach to their desired goals. A
company always try to become a leading brand in marketplace and improve its products or
services standardisation and by that it can make profit. For all of these things they have to make
plans and execute them properly to attain targets in an efficient manner.
ZARA also uses different marketing plans by which organization can stay in the market
and give good competition to its rivals. Also organizations should modify or develop plans for
growing as market keeps on changing in various dynamic ways.
Overview of the Organisation: ZARA is a Spanish brand which deals in clothing sector in all
over the world. It was formally created by Amancio Ortega and Rosalia Mera in 1975. This
organization is currently trying to expand its business with huge success all over the globe from
which it was internationally introduced in market for the first time in 1989, when a showroom
was opened in Portugal. ZARA makes almost 450 million products in a year which consumer of
it uses them likewise. This firm deals in all kind of clothing of men, women and child.
Mission of the company: ZARA's main aim is to give satisfactory to its consumer by giving
quality products and services. They also keep on increasing the standardisation of goods by
analysing, researching and implementing plans with innovative ideas which can improve the
experience of end users.
Vision of the company: ZARA's leaders and managers has cleared their vision in front of its
employees. They believes in giving or providing quality products to consumers and also aims to
make long term relationship with them and this part ultimately increases profitability of the
organisation.
To give hard competition to rivals in the international market they give proper training to
its employees so that they can work efficiently which improves productivity of company and this
helps in enhancing consumers satisfactory level by providing them good quality products right
on time (Panigrahi, 2017).
Goals and objectives of company: ZARA focuses on giving latest fashion to its consumers and
aiming or focusing to become leading organisation in online market. They manufacture high
quality products that anyone can afford. Every company wants to become a leading one in all
over the world and ZARA also focuses on same.
6

Managers and leaders set goals and plans for it and to achieve it they start training employees so
that every individual can be beneficial for company. ZARA don't believe in advertising as this
could costs them high they focus on giving proper information to the consumers at the stores
only.
ZARA's SWOT analysis:
Strength-
 ZARA is famous in its customer for its
uniqueness as they don't copy of any
other organisation's products.
 To keep the profit rate high this
company sells it products in their stores
only.
 Highly fashionable quality products
very low price. For betterment or for modifications if
needed company' managers/leaders
takes feedbacks from its customer at
the time of purchasing.
Weaknesses-
 ZARA's leaders don't believe in
advertising of its products which can
affect the profitability.
 Organisation tries to make its products
different from any other but most of the
time the products are same as of H&M.
 Firm do not uses new technologies as
online markets are taking place of
normal markets where consumers can
buy products from their home but
ZARA don't sell its products online
which reduces the expected percentage
of profit.
Opportunities-
 Online marketing of goods can be a
successful plan for ZARA as it will
definitely increase income. Continues enlargement of business in
all over the world this could increase
the sale of its business (Peteraf, Gamble
and Thompson, 2014).
Threats:
 New brands or companies which are
coming into the market on daily basis
can give a hard competition to ZARA.
 Recession could be a reason for loss of
the company.
 Natural disasters are major threat which
every organisation can face any
moment at any time.
7

External analysis: This is one of the significant stage of the company where a company
required to evaluate its external environment by using Prestel analysis which is mentioned
below:
Political factor This Is related with the government stability in a particular country and
its having a large influence on business and its growth. In the context of
UK, which is politically stable country as compare to other European
nations. It will provide a consistent growth to the company in the longer
run.
Economic Factor This is another element which includes GDP growth rate, inflation,
interest rate and other factors. For example, UK income level is quite
good and growing. It will help to increase demand in product and
services specially in clothing sectors.
Social factor UK society is quite modern and multicultural society which helps to
sustain in demand of fashionable clotting in longer run.
Technological factor Technology also plays main role in improving efficiency level of a firm.
Legal factor Along with this ZARA also keeps an eye on reducing the usage of
limited resources so that they can keep environment healthy and with
this company also follows every single law which are made by Govt.
8
Illustration 1: SWOT Analysis
(Source: SWOT Analysis, 2012)

which keeps the transparency in between employer, employee and
customer.
Environmental factor Today customer is more aware towards the climate issues. Therefore,
this is responsibilities of Zara is to offers its product which having less
harm to the environment and it will increase the satisfaction level of
their customers in the longer run.
Marketing Mix of ZARA: Product: ZARA manufacture its product as per requirement of their customer. Every year
ZARA produces thousands of new products.
 Price: Prices of every single product of ZARA is reasonable so that any individual of any
class can afford it.
 Place: ZARA has its stores in most of the countries, most of them are in UK and
continuously expanding the business. Promotions: ZARA has started doing promotions through online which is helpful in
reducing the cost of budget and maximises the profit. People: Member of the company can be known as an asset as every individual is
important to increase organisational productivity and profitability (Marketing mix of
ZARA, 2017). Processes: Feedback's can be said as a part of analysing where a company needs
improvement from its customers and employees. Positioning: ZARA should always try to improve its positioning by analysing the mind
set of end users.
Different strategies which ZARA uses in market:
Segmentation: Every company has its own style of segmenting where ZARA targets its
consumers on basis of every individual style senses. Company makes different type of goods
according to need of end users.
Target: ZARA targets most of the marketplaces where consumers makes transactions at a
high level. End users gets attracted by this brand because of its reasonable prices where products
are highly fashionable.
9

Positioning: At a lower price high quality products which are trendy ZARA produces for
its consumers according to current fashion. And to create a great brand image in the market
ZARA opens it stores at high profiled places which can be stated as a marketing strategy
(Trinkley and et. al., 2013).
Marketing strategies: It is a process where companies plans to reach to persons and change them
into customer which then becomes a part of profit maximisation. Here companies needs to do
research the market, find where rivals are standing, what new technologies are going to come in
upcoming future all these things helps in ZARA doing business for a long time.
Marketing budget: This is a main part of a market plan where companies pulls cost of
advertising or promotions of their goods and services. A marketing budget should not cost a
company really very high as it can reduce the profitability.
Implementation: After setting each and everything managers implements all the activities of
marketing plan that has been stated above to attain set targets in an efficient time frame.
Evaluation and monitoring: This part comes after implementation where manager and leaders
analyses and try to increase performances or improves the outputs of a marketing plan (Williams,
2017).
CONCLUSION
This analysis can be concluded as it comprises many attributes that are marketing plan.
History of two companies, as well as comparison of both organizations. Study is based on
various marketing strategy and plan along with marketing mix of both associations. Marketing
plan included swot analysis and other sort of market analysis and marketing mix described
status, market share, reason for growth and position in marketplace. It also explained where these
two business entities are same and where they differentiates from each other. Complete analysis
is based on study of growth, position in market, which retail store acquired greater place and
who's marketing plan is better.
10

REFERENCES
Books and Journals
Albert, A. B., 2014. Communicating library value: The missing piece of the assessment puzzle.
The Journal of Academic Librarianship. 40(6). pp.634-637.
Babin, B. J. and Zikmund, W. G., 2015. Essentials of marketing research. Nelson Education.
Crain, M. A. and et. al., 2014. Valuation Fundamentals. Essentials oF Forensic Accounting.
pp.449-482.
Dibb, S. and Simkin, L., 2013. Marketing essentials. Cengage Learning.
Malhotra, N. K., Birks, D. F. and Wills, P., 2013. Essentials of marketing research. Pearson.
Mohammed, E. Y. and et. al., 2017. Fiscal reforms for sustainable marine fisheries governance:
institutional frameworks and design essentials. Chapters. pp.320-338.
Oriyano, S. P., 2017. Dealing with Mobile Device Security. Penetration Testing Essentials.
pp.243-260.
Panigrahi, R., 2017. Exploring New Dimensions of Retailing Consumer Essentials. Journal of
Marketing Vistas. 7(1). pp.36-56.
Peteraf, M., Gamble, J. and Thompson Jr, A., 2014. Essentials of strategic management: The
quest for competitive advantage. McGraw-Hill Education.
Pop, A. and Dredetianu, M., 2014. Essentials Of Advertising Communication. Academica
Science Journal, Economica Series. 1(4). pp.17-23.
Trinkley, K. E. and et. al., 2013. QT interval prolongation and the risk of torsades de pointes:
essentials for clinicians. Current medical research and opinion. 29(12). pp.1719-1726.
Williams, J. B., 2017. Essentials or Toys: Home Computers. In The Electronics Revolution. pp.
153-161. Springer International Publishing.
Online
SWOT Analysis. 2012. [Online]. Available through: <http://nexightgroup.com/using-swot-
analysis-to-plan-an-uncertain-future-and-increase-organizational-effectiveness/>.
Marketing mix of ZARA. 2017. [Online]. Available through:
<https://www.marketing91.com/marketing-mix-ZARA/>.
11