Detailed Marketing Report: Zara's Strategies and Processes

This report provides a comprehensive analysis of Zara's marketing strategies. It begins with an introduction to Zara and its business, followed by an examination of the marketing process, including mission and objectives, and a detailed situational analysis using PESTLE, SWOT, and Porter's Five Forces models. The report then explores Zara's marketing strategies, focusing on segmentation, targeting, and positioning (STP). A thorough discussion of the marketing mix (product, price, place, promotion, process, and people) is included, highlighting Zara's unique approach. The report concludes by discussing the role of marketing in creating customer value and stakeholder engagement. The report also emphasizes Zara's commitment to customer satisfaction and sustainable development.

Marketing

Table of Contents
TASK 1............................................................................................................................................1
1.1 INTRODUCTION.................................................................................................................1
1.2 Marketing Process ................................................................................................................1
1.2.1 Analysis of mission and objectives ...................................................................................1
1.2.2 Situational Analysis...........................................................................................................2
1.2.3 Marketing strategy:............................................................................................................4
1.2.4 Marketing Mix Decision ...................................................................................................6
1.2.5 Impact Analysis .................................................................................................................7
1.3 Role of marketing in creating value for customer................................................................8
1.4 Stakeholder engagement and their impact on marketing activities ......................................9
CONCLUSION................................................................................................................................9
REFRENCES ................................................................................................................................10

TASK 1
1.1 INTRODUCTION
Marketing means to communicate about product and services to customers. This helps to
increase sales and profits of organisation and it helps to increase goodwill in industry. There are
different means through which managers can market their products (Al-Ekam and et. al., 2012).
This is the way through which customer satisfaction can be checked and actions are taken in
order to improve it. This report is based ZARA which is a fashion retailer in Galicia. This
organisation was established in 1975. it has headquarter in Arteixo Spain. In this report there is
discussion about market process, aim and objectives, situational analysis, marketing strategy,
marketing mix and lastly role of marketing.
1.2 Marketing Process
Marketing is one of the important department which helps in improving sales and profits
of organisation. There are many changes which has to be taken according to market trends.
Marketing can be done in effective way by proper planning. There are possibilities that
organisation has to alter their business plans and policies according to market trends. ZARA is
one of the best brand in clothes and they have niche market as targeted consumers. Marketing
process followed by managers of ZARA are as under-
 Mission and Objectives
 Situational Analysis for Identifying Opportunities
 Marketing Strategies for Value Proposition
 Marketing Mix Decisions for Developing Tactical Plans
 Implementing and Controlling Those Plans For Getting The Desired Outcomes.
1.2.1 Analysis of mission and objectives
ZARA has good brand image in clothing industry. This is the brand which was
established in 1975 and it served all over the world in different parts of country. It has 2200
stores across globe. Improving quality of customer satisfaction, attractive clothing are priorities
of ZARA.
MISSION
Mission statement of ZARA is to satisfy produce what customer demands and it must be
delivered with rapid speed. Their aim is to satisfy customer by proper use of resources. ZARA
also emphasise on sustainable development of society.
1

OBJECTIVES
Objective of ZARA is to expand its business through diversification in Asia,
Switzerland, Italy and other continents (Brooks and Simkin, 2012). To continue its store growth
in the nations where companies already having its existence so as to consolidate its position and
enhance its market share.
1.2.2 Situational Analysis
Business has impact because of macro and micro factors of environment. As there are
many changes taking place in business environment, so to be competent in market it is essential
to make alterations according to market trends.
(Source: PESTEL Analysis, 2017)
2
Illustration 1: PESTEL Analysis

PESTLE ANALYSIS
Factors ZARA
Political In business, there is involvement of government bodies which
affects business operations of ZARA in positive as well as
negative way. ZARA operates in different parts of country and
there are different rules and regulations. Manages of ZARA
has to frame policies according to government norms.
Economic Economic factor affects business adversely. It is essential to
select sources which are readily available. Fluctuations in
interest rate, different prices in different countries, etc. are
considered in this.
Social Social factor means demand of customers according to culture,.
Background, society, etc. are considered before delivering
goods. Discounts offers are provided according to culture,
festive season of people.
Technological As ZARA has its own manufacturing unit, so technology is
used accordingly. There are many stores of ZARA so they
must be centralised at head office. This helps to keep eyes on
sales. ZARA mobile app is also result technological up-
gradation.
Legal There are any laws which has to followed by managers of
ZARA in order to run business in specified and efficient
manner. In case of alteration in such laws manager has working
style also gets changed.
Environmental In clothing sector, environmental factor plays vital role. It is
essential to manufacture goods which are relevant according to
market. ZARA managers must focus on use of renewable
resources.
SWOT ANALYSIS
3

4

(Source: SWOT Analysis, 2018)
Strength
 ZARA has good supply chain
management which helps to deliver
goods in time. They have presence in
88 countries.
 ZARA has its own manufacturing unit,
they do not outsource their services in
order to satisfy customers demand. So
they have best quality products. Production management of ZARA is
also good, so activities are performed in
specified manner. This helps to reduce
production cost and time.
Weakness
 ZARA has self controlled distribution
system which is the biggest problem for
them.
 ZARA does not spend much on
promotional events. This affects their
sales and brand is not so famous among
people.
Opportunities
 ZARA has global presence but they
Threats
 Cut throat competition is one of the
5
Illustration 2: SWOT Analysis

have less stores in countries like India,
Europe and other developing states.
 ZARA must frame policies in order to
expand business through online
sources. They must give more focus on
improving distribution channel which
helps to satisfy customer demand on
time.
threat which affects sales and profits of
organisation.
 There are many international designers
such as Coco Chanel, Pierre Cardin
which affects sales and this is also
threat.
PORTER'S FIVE FORCES
Porter Five Force Model is techniques used by managers to know competency in
industry. Five force model of ZARA is discussed as under-
Threat of New Entrants
In clothing sector, there is much competition as new brands are entering very frequently.
ZARA has competition with local as well as global brands such as Marks and Spencer, H&M,
etc. so there is pressure of new entrances (Chamorro-Mera, Miranda and Rubio, 2014).
Bargaining Power of Consumers
In clothing sector, bargaining power of consumer are moderate. ZARA has niche market,
so they have limited consumers. As there is much competition in clothing sector, so there are
possibilities that consumer many switch to other brand, this affects sales and profits of
organisation.
Bargaining Power of Suppliers
ZARA has good name in fashion and clothing industry. There is requirement of raw
material in order to manufacture finished goods. Suppliers of ZARA has moderately high power
so they have to make strategies which make raw material at time.
Threat of Substitutes
ZARA is a brand which has product of high price. But customers have believe in brand
because of quality. As there are many options in clothing sector, so there are bright possibilities
at customer may switch to other brand. So threat of substitute is more.
Industrial Rivalry:
6

There are many competitors of ZARA so there is requirement of alteration in policies
according to market trends and customer demand. This helps ZARA to expand its business and
brand image can be improved.
1.2.3 Marketing strategy:
Segmentation: Segmentation means to divide whole population into different parts
according to different basis such as nature, age, sex, social factor, etc. This approach helps
ZARA to satisfy customer need in more effective manner (Hugos, 2011). Demographic segmentation: In this, customers are categorised on the basis of age,
gender, income, religion etc. According to age there is difference in clothing sense of
customers. E.g. there is difference in dress of children and young men or women. Behavioural segmentation: According to change in behaviour there is difference in
demand of clothes by consumers. According to change in fashion, there is alteration in
taste of customers. Psycho-graphic segmentation: Psycho-graphic segmentation talks about lifestyle of
customers. There is difference in demand of customers according to events. ZARA is
famous for its differential dresses range.
 Geographic segmentation: In geographical segmentation, there is change in demand of
customers on the basis of their area where they live. As per change in country, there is
change in dress material. For instance in countries like Russia where thee is extreme cold
ZARA uses polar freeze Polyester, nylon, etc. that keeps the skin warm in contrast to
other hot countries.
Targeting:
In targeting, target market of company is defined. Zara deals in clothing sector having
high range of clothes. Out of total clothing sector, they mainly focuses on 58% women, 22%
men and lastly 20% children. So their main target customers are women.
Positioning:
This is the last step in STP strategy which talks about position its product in industry
(Desai, 2013). ZARA is the brand which has imager of good quality products and recent fashion
clothes. It can be further understood under the following:
7

 Product differentiation: ZARA is the name which clicks in mind because of latest and
trendy clothes. This organisation has product which are classy and fashionable, this
makes ZARA a premium brand. Channel differentiation: Channel differentiation is the way through which products are
delivered to customers. ZARA has outlets all around globe. They have existence on
online sources too.
 Image differentiation: ZARA is a brand which people recognise as expensive and classy
clothes. This is recognised by people by its logo. This provides ease in brand
enhancement in industry (Hauer, 2011).
1.2.4 Marketing Mix Decision
Product:
ZARA is known ''COCA-COLA'' of fashion. They deals in clothes, perfumes, handbag,
shoes. They have clothes for men, women, children. They make alterations in their products
according to change in taste of consumers. They do not out sources manufacturing of clothes, so
they have best quality products. Latest design goods are available at ZARA stores within 2
weeks. This brand does not keep old or dead stock at outlets.
Price:
ZARA follows premium pricing strategy. In UK ZARA is reasonable as compared to
other high and lavish brands such as Hugo Boss. ZARA main target is creamy crowd out of total
population, so they set high their prices at some places. ZARA sets their price according to
customers who want latest fashionable clothes at affordable prices. This helps to increase
customer base of ZARA (Marketing mix of Zara, 2018.).
Place:
ZARA operates in different parts of country. They have 7000 stores in different 30
countries at world wide level. ZARA outlets helps consumers in purchasing and providing
feedback about product. They have existence through online sources too. ZARA is famous in
vertically integrated retailer. There is same entire of ZARA store at different places. This means
people gets same fee if they visit store at London, New York, Paris, etc.
Promotion:
8

Promotion is one of the best way to advertise brand and products which are different
from other competitors and this results in increment of sales and profits. ZARA has policy of
Zero investment in market. ZARA does not have much marketing policies to promote their new
arrivals. They believe to work according to exclusivity, experience, differentiation and
affordability. They invest money in advertising new store opening. They use publicity strategy as
word of mouth. This is cheap and most effective method of promotion.
Process:
ZARA has its own manufacturing and distribution unit. So accordingly they have proper
chain of manufacturing till distribution at outlet. Afterwards also ZARA take feedback from their
customers. They use proper methods through which fast and effective communication is possible
which helps in smooth running of business operations.
People:
As ZARA is a worldwide brand having 7000 stores, there are around 171839 employees
working. They recruit numerous person for their new outlet and other business units. They
provide training to new personnel so they are able to competent with organisational environment.
There are various events which helps to attain sales targets for personnel.
Physical Evidence:
Physical evidence in case of ZARA are quality products, trademark, bill, paper bags.
These are proof of relation between person and ZARA. ZARA has same ambiance at their
different outlets with music, colour and building layout that matches its product. Apart from this
physical evidence of ZARA includes interior, packaging, internet and brochures.
1.2.5 Impact Analysis
It identifies the impact of various above mentioned analysis: PESTLE Analysis: This analysis helps to know about external factors which affects
business operations. These includes political, environmental, social, technological, legal,
economical. This helps in growth and development of ZARA. SWOT Analysis: SWOT analysis is the technique which is used by managers of ZARA
to know internal factors which affects business operations. This includes strength,
weakness, opportunities, threats (Al-Ekam and et. al., 2012). Porters Five Force Model: This model helps ZARA to analyse competency and growth
prospects in industry. This provides knowledge about existence strategy in industry.
9

 Market segmentation: Market segment is one of the important technique which helps
organisation to divide whole customers population on different basis. This helps ZARA
to satisfy customer demand in proper way.
 Marketing Mix Decision: ZARA use marketing mix to influence customers to buy
product. Managers focus on price, place, promotion, process, physical evidence, people.
This provides knowledge about strategies framed by organisation for overall development
of ZARA (Jain, Ahuja and Medury, 2013).
1.3 Role of marketing in creating value for customer
Marketing is a process which helps in interaction with customers and provide them
knowledge about product and services. This helps to promote brand in market and alterations are
done in product in accordance to consumer demand. Mentioned below are certain areas wherein
marketing is effective in creating value for its customers: Product: Marketing is one of the important component which helps organisation to
produce according to customer demand. Marketing helps managers in research about
demand of customers. Managers of ZARA are able to improve quality of their product.
As ZARA enters in children's clothing so with the help of marketing, they can easily
create awarenesses among consumers. Price: Price is one of the essential factor which has to be considered in marketing. This
helps to create base for enhancing customer base. Marketing department of ZARA has to
analyse market and then set price. This helps to provide clothes at reasonable price and
hence customers gets feel of value for money. As there are many brands in clothing
sector such as Marks and Spencer, Mango, etc., ZARA is able to compete with them. Place: ZARA has global; presence. This helps to reach customers frequently. To make
good customer base managers of ZARA has to analyse ways through which they can
reach more and more customers, they must give emphasise on online presence in industry
(Brooks and Simkin, 2012). Promotion: Promotion is one of the important component which helps organisation to
increase sales. There are different promotional events such as Sale, discounts offers,
festive season coupons, etc. This helps to create awareness about brand and product.
ZARA does not give much emphasise of promotion of their products which affects sales
and profits.
10