Principles of Marketing: Zara Food Services Brand Extension Report

This report examines Zara's strategic brand extension into the food services industry. It begins with an introduction outlining the report's scope and objectives, followed by a company background that highlights Zara's existing brand value and market presence. The report then analyzes market size, sales trends, and the rationale behind the proposed brand extension, Zara Food Services. It employs the Ansoff Matrix to detail market penetration and product development strategies. A key focus is the identification of the target market, which includes health-conscious consumers across various age groups and income levels. The report also delves into key market trends, using PESTLE analysis to assess political, economic, and social factors influencing the new product line. A comparative analysis with competitors like Marks and Spencer is included to highlight Zara's competitive advantages. The conclusion summarizes the findings, emphasizing strategies that align with the target segments and market demands. References to academic sources support the analysis and recommendations.

BRAND EXTENSION

TABLE OF CONTENT
• Introduction
• Company background
• Market share, market size and trends in sales
• Existing brand value
• Explanation of the new product
• Proposed target market for the new brand extension
• Key trends
• Comparative analysis
• Conclusion
• REFERENCES

INTRODUCTION
• This report is in the context of Zara, which is expanding its product line in food services.
• This report covers market size, existing brand value, explanation of the new products line, key trends
and comparative analysis of the competitors.

COMPANY BACKGROUND
• Zara is a multinational organisation that is famously known for delivering fashionable apparels,
footwear, swimwear, beauty, accessories and perfumes.
• In the context of Zara, which is multinational retailer, headquartered in based out of Spain, UK, found
by Amancio Ortega and Rosalia Mera.
• In order to expand the market offerings, Zara wants to open the new product line as Zara Food
Services.

MARKET SHARE, MARKET SIZE AND
TRENDS IN SALES
• Zara has achieved 83. 1% of FY2018/19 UK sales.
• The sales from the year 2018-19 of Zara was accounted £772. 5 and the revenue generated as £22.3
million.

EXISTING BRAND VALUE
• Zara uses different advertising campaign including outdoor and digital media advertising, Zara mainly
focuses on digital media advertising which involves social media marketing, search engine
optimization and email marketing.
• Zara also have online site, wherein customers can order their desired product vie online site and the
company deliver the ordered product at the doorsteps.

EXPLANATION OF THE NEW PRODUCT
Ansoff Grid
• Market penetration: Zara focuses on continuous improvement of the product quality and accomplish
the target segment demand.
• Product development: Zara develops product that accomplish high end fashion and social and cultural
value of the targeted segments.

PROPOSED TARGET MARKET FOR THE NEW
BRAND EXTENSION
• The target segments of the Zara include to covers customers who are highly specific and conscious
about healthy lifestyles, the new food service of product development includes the customers from all
age groups, earning mid earning income customers.

KEY TRENDS
• Pestle analysis
• Political factors: Zara complies with all the legal norms in order to develop corporate image of the brand in
the marketplace.
• Economic factors: With stable economic conditions in UK, Zara can achieve high revenue over new
product.
• Social factors: With rising healthy lifestyles and high living standards, Zara has adopted different social
values in order to develop new product development of vegan and organic ingredients in the food services.

COMPARATIVE ANALYSIS
Products Zara Marks and Spencer
Food services In order to attain the competitive
advantage, Zara adopts
innovates products which fulfils
the social value and quality
lifestyle of the targeted
customers.
Marks and Spencer is
multinational organisation
delivers different ranges of
products including food
services.

BRAND EXTENSION

CONCLUSION
• Thus, this report reflected the new product development strategies that business should adopt that best
suits the targeted segments and market demand.