Analyzing Zara's International Marketing: Strategies and Challenges

This report provides an analysis of international marketing, focusing on Zara SA as a case study. It examines the scope and key concepts of international marketing, including the rationale for marketing internationally and various routes to market. The report evaluates key criteria and the selection process for entering international markets, explaining different market entry strategies with their advantages and disadvantages. It also presents an overview of the key arguments in the global versus local debate and discusses the marketing mix in an international context. Furthermore, the report compares international and home orientation, offering recommendations on how to operate effectively in an international setting, and addresses challenges faced by companies like Zara when expanding internationally, such as differing administration policies and tariff barriers. The document is contributed by a student and available on Desklib, a platform offering study tools for students.

International
Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
P1- Analyzing the scope and key concepts of international marketing......................................3
P2 Explaining rationale to market internationally and defining several routes to market the
organization.................................................................................................................................4
M1. Challenges .........................................................................................................................5
P3 .Evaluating key criteria and selection process while entering into international market......6
Steps for selection of foreign market –.......................................................................................6
P4.Explanation of different market entry strategies wit its advantages and disadvantages. .....7
P5.Presenting an overview of the key arguments in the global versus local debate...................8
M4. Marketing mix....................................................................................................................8
P7. Explaining and analyzing the several international marketing approaches.........................9
P8 Comparison on international and home orientation along with the Recommendation on
how to operate in an international.............................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
International marketing may be referred as the applications of the marketing principles
that enables a business firm to trade its business in more than one country. It is the process of
doing the trading of its products and services across the world. Various types of activities are
involved in intentional marketing such as formulating the strategic planning, setting up of
distribution channels in order to provide products and services. Marketing helps in promoting the
products and services within a country or outside the country. In order to face the competition in
the dynamic business environment, companies are focusing on marketing which makes their
product, a brand. The companies focus on analysing the customer needs and which helps them in
targeting the potential customer (Capehart, Kennedy and Turner, 2020). This report is based on
Zara SA, a Spanish retailer of clothing, accessories, perfumes and shoes, headquartered in Spain.
It was founded by Rosalia Mera in 1975. This project report will cover the scope and key
concepts of international marketing along with several routes to market. It also cover the criteria
and selection process and the different strategies to enter in international market with its merits
and demerits. Further, it also involves the arguments in global versus local debate and brief
discussion in marketing mix.
TASK
P1- Analyzing the scope and key concepts of international marketing
The international marketing may be defined as the process of satisfying the needs and
wants of various people who are living across the national borders. It is also known as global
marketing and companies customise their product according to tradition and culture of different
nation. The decision is taken by the company whether it has to go international market and serve
their products or services or not. Technical and social are the two main process that marketing is
concerned with. Various non-human components are involved in this process such as product,
price, place and operating cost (Yilmaz and Flouris, 2017). The social components deals in
human behaviour pattern in terms of their tradition, culture and beliefs. There are various
purchasing pattern of different individual that makes them different in terms of segmentation.
Marketing may be defined as the process of attracting the potential customers and making them
convince to buy products and services of a particular brand. Companies like Zara uses the
technique of marketing mix which helps in defining the potential customers, setting up of

reasonable price along with opting the right channel of promotion and identifying the right place
to display the product. The concept of marketing involves two variable sets such as workforce
needed and other is market (Ramon-Muñoz, 2017). The exchange of trades in domestic country
and international are very differ from each other as there is huge difference is culture, customer
preference and market size. Following are the scope of international marketing.
 Establishing – It refers to the branch units which are setup in foreign countries in order
to render products and serve services to the target customers. In context to Zara it does
its manufacturing by opting direct investment from the investors in order to minimum the
other cost.
 Joint venture and collaboration – In foreign countries, international marketing helps in
setting up of joint ventures and collaborations with abroad companies in order to
manufacture the products and services. In relation top Zara, to lower the transportation
and export cost, it opts the way of collaboration with other manufacturers firm and make
a contract for manufacturing the products.
 Contractual Agreements – The scope of international marketing facilitates and may
grab the opportunity while doing business in international market. In relation to Zara, it
helps in expansion of the market area, creates a positive customer base. This may help in
promoting the growth opportunities while doing contractual agreements with abroad
partners.
 Consultancy Services – This services provides the guidance to the manufacturing
activities by the exporting company. It undertakes various projects and are deal by
experts in order to makes the further process barrier free.
P2 Explaining rationale to market internationally and defining several routes to market the
organization
Every business organisation wants to expand its business operations so that it generates
higher profits. The main aim of any business is to earn profit along with serving the society with
standard products with reasonable price (Westjohn and Magnusson, 2017). For any company, it
is needed to do proper research about the market and the customer needs in order to enter in
international market. Zara is opting a key strategy so that it can enter its operations in abroad. By
identification of business market and customer preferences, it facilitates in making an insight of
the collected data which may be found beneficial to attract the new customers in international

market. The business firms wants to maximise its profitability and to seek the new opportunities
that are available in international market. This also helps in generating higher sales volume. The
company can take the advantage of the unique product or technological advancement that the
competitors don't have. Many market are not competitive in nature that enables a firm in making
more profit. Companies are trying to bring innovation in their products so as to stay competitive
in the dynamic business environment (Schneiberg and Hollingsworth, 2019). Zara is having the
advantage of having a wide customer base that helps in segmenting the customers based on their
preferences. The products can be accepted by the customers that are rendered in abroad and
facilitates in the expansion of business. The economics of scale can also be increased by
internationalisation. Governments also encourages the process of exporting of goods and services
world wide. Following are the routes that an organisation can use to market its products.
 Exhibitions and Trade shows/Fair – Events and trade fairs or exhibitions are the most
powerful method to promote the products and services to the abroad customers. It also
helps in providing the opportunity to the existing as well to potential customers. Larger
network of customers can be created by trade shows (Feranita, 2021). Zara uses this
method in order to attract the potential customers and make them aware about their
product and how they are different from other competitors.
 Selling Online – It is the most easy and convenient method of promoting and selling the
products through internet. It provides a platform that takes the customers and companies
close in order to facilitate trade between them. It helps in time saving for both customer
and company along with flexibility in functioning its operations. In context to Zara, it
provides websites that enables to checkout the trending outfits and can be ordered
directly from the website.
 Pop up Shows – It is defined as the setting up of temporary canopies or shops for a short
period of time in a vacant place. It is needed to opt the correct location so that it can
generate higher traffic of customers. Various social media channels jhelps in creating
customer traffic by posting exclusive commercial.
M1. Challenges
Policies – Various countries have different administration policies which should be taken
care of before establishing business in internal market. These policies should be properly
understood by the management and strategic decisions should be formulate while keeping the

international policies in mind (Olsen and McCormick, 2018). Legal formalities should also
completed by the companies in order to run the business operations smoothly. This is the major
challenge that Zara has faced while setting up its business in internal market.
Tariff barriers – It involves all those taxes and duties which are imposes in the process
of imports. This may lead in lowering the profitability of the company while selling its products
internationally (DaSilva-Glasgow, 2020). It also involves uncertainties for the companies that
results in decline their growth due to change in tariff rates.
P3 .Evaluating key criteria and selection process while entering into international market.
There are various criteria which are setup for the selection of international market. It
involves the environment analysis in order to understand all those forces that may affect the
operations while trading in international market (Kalin, 2018). The company should also do
competitor's analysis which may include the pricing strategy, who are the competitors, their
revenue structure. The management should know all the essential detail regarding the
distribution channel aand supply chain. Sales structure is analysed in order to expand the
operations of Zara. The company should analyse the demand of present needs and potential
needs of different customers. The selection process involves the following steps.
 Identification of foreign market – It is the initial stage of international marketing and
involves the market that is needed to understand where it could sell its products and
services. The entering firm must analyse all those factors that impact positive and
negative effect on its operations. In case of Zara, it primarily identifies the market and the
the segments of customers for which it may be beneficial.
 Selection of International market – There are various opportunities available in the
intentional market that a firm can take advantage of it. A firm choose that potential
market that is less competitive in nature. So it needed to select the international market in
a proper way (Zou and Chen, 2020).
Steps for selection of foreign market –
In the very first step, it is needed to differentiate between the various countries that have basic
opportunities. Macro variable comprises of political, social, technical and economic information.
The second step that Zara is involving is to identify the market size and the product acceptance.
Proxy variables are those which have a common demand as compared to that product. The third
level involves all those expenses which are incur while entering in the international market such

as profitability scale and entry cost. The fourth step is to evaluate the effectiveness of the target
market that are based on tha availability of the firm's resources and key strategies (Chu and
Yoon, 2021).
P4.Explanation of different market entry strategies wit its advantages and disadvantages.
Every business enterprise needs to analyse the success of its competitors in terms of
scalability and profitability. The entry cost depends on the type of entry method twhich tells how
much capital is needed to enter in the international market. Following are the ways by which a
firm can enter in the new international market.
 Licensing - It is a process of giving the rights to the licensee by the licensor of using its
intellectual property like trademark, patent undertaken by a special agreement
(Parameswar, 2021). Zara is engaging this type of entry level by giving its property
rights to its franchisee unit in order to sell its products in intentional market. The
company uses its intangible assets such as trademarks, brand name and its products. The
licensee is liable to pay a fee to the licensor against the rights of using its property. The
cost incur in this entry method in low and yields higher returns. The company can misuse
its resources and the risk of reputation is involved in this method.
 Selling consultancy services – In this type of entry level method, it involves in rendering
the consultancy service in the foreign market. The services can be delivered by the
specific communication channel. The company can grow its operations easily and totally
variable in nature. Research and development involves a huge amount of investment
before entering in international market.
 Joint Venture – It may be defined as the combination of two or more parties who engage
in the same business organisation in order to share equal profit and loss along with its
development (Kim and Kim, 2018). This helps in increasing the economic of scale and
the products can be improved by the technical advancement.
The company should opt the Licensing method for entering in the international market.
As it will help on generating higher revenue across the world. The company should focus on
providing licensing in foreign countries so that it can expand its operations globally.

P5.Presenting an overview of the key arguments in the global versus local debate
In order to attract the potential customer, it is needed to analyse the needs and wants of
the customers in order to make a larger customer base and may cover majority of the target
market. The technological aspect plays an important role in the success of an organisation.
Various companies use digital marketing so that it can attract a larger number of people in a
short period of time with minimal cost. The old traditional method is slowly degrading as the
new technology is emerging. The companies also opting the Search Engine Optimisation in order
to drive their sales to the peak level. The firms are hiring talented individual that helps in
effective working. The companies wants to sell their products and services globally in order to
expand its business. Different countries have different trends, culture and beliefs that becomes
complex for the organisation to work internationally. There are various rules and regulations that
must be considered before entering in foreign countries. Many challenges are faced by
companies such as instability in politics, social issues, change in inflation rate and many more.
M4. Marketing mix
Marketing mix is the framework that is used to promote the product and services in the
market by various tactics and actions (Renzulli and Callahan, 2021) It is important for a firm to
create an awareness of its product in the market. The marketing mix is discussed below for Zara
 Product – It may be defined as the tangible or intangible item that the company is
offering. Zara is engaging in apparels and accessories segment and one of the most
luxurious fashion brand in the world. It offers trending clothes like trousers, jeans, bags,
shoes and other accessories. It is a last stop of clothing under one roof. It regularly
refreshes its stock and have committed to eliminate the production waste. Some items are
made up of organic cotton that makes it unique compared to its competitors.
 Price – It is referred as the amount that is paid by the customers in order to acquire
products or avail services (Gneezy, 2017). Zara is focusing on providing the best outfits
with lower price. Zara is opting the market based pricing strategy which helps in
attracting customers. It also gives some discounts twice a year like 50% off and Buy one
Get one Scheme. The price of clothes vary from country to country. This makes the
customer to buy its products but at a lower price. Customer can easily attracted by these
offers. It is the most important factor in promoting the product as if the product price is
higher, the probability of success is lower or vice versa.

 Place – It is defined as the place where the customer can see and buy the product.
Currently, Zara is operating in more than 90 countries with more than 2200 outlets. It
also provides the facility of online ordering in which a customer can order clothes and
accessories through online shopping platform. It is using an effective method of supply
chain that enables in bringing its products in a short time. The company send its sales
data to the headquarters twice a week. All the departments are working coordinately and
try to make their operations successful.
 Promotion – It is the a way by which a company can promote its products and service to
the market. There are various mediums by which company can promote. One of these
that Zara is using is Digital marketing. It enables in reaching the target customer in a
shorter period of time. It do not promote in flashy commercials and that's the big reason it
do not advertise its products on TV. The cost incurs in making ad campaigns is cheaper
than the old traditional method of promotions. Eye catching campaigns were posted on
social media platforms so that it can attract a large number of people at the same time.
P7. Explaining and analyzing the several international marketing approaches
It refers to the process of converting the consumers into customers of a company's
product by formulating an effective business plan. It contains the message, value and targeting
the customers based on their demographics. Customer value can also created by identifying the
customer needs and preferences. Following are the various market approaches that helps a firm
in gaining competitive advantage.
 Transaction cost approach – It is used to understand the marketing strategies and focus
on various modes of entry in intentional market. The decisions are taken on the behalf of
cost and control resource. The control helps in maintaining the coordination among the
strategies and actions of a business enterprise. It helps in generating higher return with
lowering the risk of dynamic environment.
 Adoption Approach - This approach helps in providing the detailed differentiation of
the products and services that exists. The advantage of economics of scale can be taken
by making their products standardised. It gives the feasibility in the essential of
marketing mix and products.

 Global configuration approach – This approach focuses on the necessity of
coordinating the activities of various levels of organisation that helps Zara in gaining the
competitive advantage by improving its products and services. Value chain activities
involves the design, sourcing and engineering that are used in lowering the cost. It is
needed to have complete coordination whether vertically or horizontally.
P8 Comparison on international and home orientation along with the Recommendation on how
to operate in an international
Management capabilities and international market orientation provides direct influence
on the market within the orientation of the international new venture of an organisation. Within
the internationalisation process, decision related to selection of international market is essential
for every organisation. In order to expand their business in international market, it is important
for the every firm to have strategical, managerial, technical as well as financial resources in
appropriate manner. The international market orientation has been taken in ZARA for
developing and effective behaviour which help company to improve the flow of external as well
as internal information related to international new venture in order to address the changes within
in the international market in better manner. In aspect of ZARA which is a market oriented firm
build the coordinated behaviour in the organisational functions in order to make international
market orientation to focus on present and future needs as well as strong competition within the
international market. To combine the market knowledge in internal process, cross capabilities as
well as market perception are included in market management capabilities. The successful
marketers helps company to increase its competitive position by evaluating its competitors
moves. It ensure high level of consistency in between the marketing activities and branding
which helps company to save their resources and time. As per the above analysis, it is
recommended to the ZARA to set certain parameters and structure within it local market in order
to operate their business in international market in better manner. This makes important for the
company to perform marketing activities like large scale campaigns, strategic budgeting and
planning as well as research strategy in order to get knowledge about the needs and expectations
of the consumers. They also must divides its market in different segments that identifies the
territories in order to achieved possible returns from it. This will help management of ZARA to
effectively understand the needs of customers as well as their different perspectives. The

company also need to develop a global team which help company to get the knowledge about the
local market by making closer relationship with them.
CONCLUSION
From the above mentioned report, it has been concluded that the nature of market is ever-
changing which increase the dynamic customers in the market. The selection of the international
market is an critical activity for the company while making internationalisation. Exporting, joint
venture, licensing, etc. are different types of market entry mode that help companies to make
their international expansion more effective and profitable. The company also need to find the
routes as well as make strategic decisions to enter in another market. Marketing mix is an
important tool that help company to promote their goods and service in order to attract more and
more customers. Intensive market research are required to perform by the company while
entering in another country.

REFERENCES
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