Zara: Sales and Marketing Report: Customer Strategy, Semester 2

This report provides a comprehensive analysis of Zara's sales and marketing strategies, evaluating the role of technology in improving relationship marketing and customer expectations. It examines Zara's current segmentation strategy, identifies areas for improvement, and assesses the impact on targeting and positioning. The report also proposes a new target group for Zara, suggesting ways to cater to their specific needs, and offers recommendations for changes to the product or service strategy. The analysis covers relationship marketing, the use of social media, customer data analysis, and the importance of customer feedback. The report explores market segmentation, including demographic, geographic, and psychographic factors. It suggests improvements to Zara's segmentation strategy and how it supports targeting and positioning. The report concludes with recommendations for product and service innovation and the identification of a new customer base for Zara. The report also highlights the importance of customer feedback and its role in refining marketing strategies.

Sales and Marketing
Report
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Table of Contents
Introduction......................................................................................................................................3
Evaluate of the role of current technologies in improving relationship marketing also analyse
how the data obtained about customers contributes to the improvement of customer
expectations............................................................................................................................3
Current segmentation strategy of the organisation. Identify how these strategies can be
improved and what impact this will have on its targeting and positioning strategies............6
Identify a potential new target group for your chosen organisation and make suggestions as to
how you could best cater to their specific needs and requirements. .....................................7
Provide recommendations on changing the current product or service strategy..................10
Conclusion.....................................................................................................................................13
REFERENCES..............................................................................................................................14
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Introduction
Relationship marketing is defined as a well researched area of consumer domain that
involves development of relations between organisational and customers for the objective of
enhancing the trust, value, commitment and loyalty with an aim of improving overall
profitability of the organisations. Customer relations are playing a key role on the failure or
success of a business as strong relationship are strong business success while poor customer
relationship management can lead to driving the customers to switch o other competitors very
easily. Present report is based on analysing the role of present technologies that is social media
and internet in improvement of relationship marketing with selected organisation that is Zara.
There is analysis of the way collected data is contributing towards improving overall customer
expectations and excellence in service by use of such online means (Katsikeas, Leonidou and
Zeriti, 2019). Zara is a Spanish retail brand having specialisation in fast fashion and that are
dealing in products that includes accessories, beauty, perfumes, clothes, footwear options for
their target customer segment. There is evaluation of present segmentation strategy of business
and way such strategies can be improved to analyse its impact on positioning & targeting
strategies. Based on this there is development of ways through which a new customer base can
be approaches. According to which further recommendations are drawn according to such
changing products and services strategies. So that it can be incorporated into a larger marketing
strategy.
Evaluate of the role of current technologies in improving relationship marketing also analyse
how the data obtained about customers contributes to the improvement of customer
expectations
Relationship marketing is defined as the long term strategy that is focussed on building up of
close relationship with the existing customer base. It is one of the most cost effective strategies
that can be adopted by organisations for the purpose of building up a string customer base. Many
businesses are still focused on use of relationship marketing that can lead to placing of customer
first and then developing a suitable strategy (Kingsnorth, 2019). Maintaining and managing of
customer relations can play a very important role in the success or failure of a business strong
relationship can be very effective for the purpose of building up of brand loyalty to have a repeat
business. On other hand poor customer service can lead to dissatisfied customer base.
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Customer relationship marketing is very helpful in building up of customer experience
management strategy to improve the customer interaction. In Zara this strategy is adopted for
building up of high brand loyalty that is core of marketing efforts and activities. It is regarded as
one of best strategies in order to build up relationship with customers by focussing on customer
emotion and opinion related to the product & services offered by them (Shahijan, Rezaei and
Amin, 2018).
Social media marketing: it is regarded as an aspect where there is use of different social media
platform& websites for the purpose of promotion of different product and services of
organisations. E marketing& digital marketing are two different aspects that are related with use
of built in data, enabling organisations to track the progress, engagement of their advertisement
campaigns and success. Organisations are now using this as a medium for the purpose of
promoting their brand by addressing a range of stakeholders that includes present customer base,
future & prospective customers, present & potential employees, general public and bloggers
(Bondarenko, Efremenko and Larionov, 2019).
Zara has a past many success stores where they have been using customer relationship
marketing for the objective of presence of their brand by creation of a differentiation position as
compared to other competitors such as Marks and Spencer or H&M. they have adopted
standardisation as one of the core strategies by focussing on specific needs of their customers.
Role of relationship marketing in improving customer relations:
New technology & relationship marketing: Innovation & technology is evolving very fast there
is concept of developing a search engine optimization that is a key to organisation success with
the evolvement of internet. Video clips, social networks, blogs play a very crucial role in
relationship marketing. Such mediums are leading to organisations being more interactive and
assisting them in making real time relationship with their customers. In context of retail brands
like Zara early adoption of new technology such as digital marketing approach & capabilities can
be observed as a associated capabilities to succeed in the international business environment.
Intergraded customer approach: In the field of Information technology there is a dynamic
environment so there is need to have a key focus on utilisation of customer ideas and
experiences. The sophistication in the service and product can lead to generation of
differentiation basis in order to drive the value of present customer satisfaction. Customer
relation innovation is guide by interactive dialogue in the new age of internet technologies.
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With big brands like Zara the trust is key element for building up of successful and continued
business relations as it becomes easy to dismantle. Customers can also focus on the way they are
treated by a particular brand through such online service management platforms (Gnizy, 2019).
Customer service management: It is a software program that is adopted for tracking and
analyzing the customer feedbacks so that information can be made desire to understand by the
customers. Zara such online availability of information can be very effective in managing the
overall relationship with their customers as such programs are better equipped with timely
addressing of different types of customer issues.
How the data obtained about customers contributes to the improvement of customer
expectations:
The collected information and data is very helpful for business organisation to develop a
customized customer relation strategy such as:
Keeping customers up to date: Company websites and e mails site are allowing business to
keep customers up to date about the latest changes that are being taking place in the organisation.
Business owners are now using it as a tool for the purpose of informing and making the customer
base aware about such new product launches (Adel, Mahrous and Hammad, 2020). Social media
sites are also expanding in Zara this customer data is applied for the objective of interacting with
the customers on regular basis.
Analysing customer response and feedbacks: The prevailing customer data can be very helpful
for organisations to evaluate the feedback related to customer responses. In Zara the reviews on
the online website of the brand are regularly reviews by the customer service departments to
provide a response to the negative and positive feedback provide by their customers. The
collected information is then further used to improve the areas where customers are not satisfied.
References groups are creating like forums for the likeminded people to their experience and
pinion with each other. Many customers are also making their purchasing decision for reading
and approaching of such references groups.
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Current segmentation strategy of the organisation. Identify how these strategies can be improved
and what impact this will have on its targeting and positioning strategies
Market segmentation is a process that is based on a process of diving the heterogeneous
markets relatively more based on development of some homogenous segments that is on some of
the parameters that includes demographic, geographic, behavioural and psychographic (Effendy,
2018). The segmentation strategy of ZARA as a fashion retail brand is based on use of typical
demographics of their customers that includes age, gender and psychographics. They are also
focussing on use of fashion style that is trendy, classic, cotemporary, Latino. Zara has been able
to set their European distribution centre across Netherlands and they are getting many
advantages for their international segment of customers. They are using the Physiographic
segmentation to achieve higher advantages for their international customer base. It involves
dividing the market in different segments based on different personality traits, interest, values,
and lifestyle of customers (Purwantin and Brotojoyo, 2020). Zara has selected a strategy based
on heir lifestyle interests, activities and changing retail fashion.
Improvement of present segmentation strategy of ZARA: the psychographic segmentation is
where the retails market is divided based on beliefs, psychology, attitudes, lifestyle, and
characteristics. It may lead to increasing the marketing ROI of Zara but in on form it can lead to
several difficulties and differences in terms of very fast changing customer opinions.
Supporting targeting strategy: The segmentation strategy of Zara is supporting their targeting
strategy as it is assisting on filling of the wide gaps that is part of the retail market; Zara strategy
is to launch products and services according to the frequently changing demands of their target
segment of customers according to their psychology (Danaei and Moeen, 2017). The main
philosophy behind the targeting the customer segment is to approach those type of customers in
the market who are very much interested in high fashion and the lets fashion trends but may be
not able to afford clothes & accessories from high end boutiques and couture, for this purpose
Zara is willing to make continuous launches and is going up with their stagey to update the retail
outlets in a time duration of every two weeks.
Supporting the positioning strategy: Zara is working towards creation of exclusive product
range so that they are able to make their decisions regarding ay their customer can be satisfied.
They are working towards development of new range throughout the year. Based on their
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segmentation strategy they are taking and managing customer feedbacks as a part of their
creative process.
Zara can work towards using a geographic segmentation as a best approach for achievement of
successful marketing segmentation by evaluating the key geographic regions for their target
segment of market. In this there can be use of any of the factors for the purpose of dividing the
market such as time zone location climate, cultural preferences, population type or language as a
basis of segmenting their market. It has many benefits as it is easy to identify as requires fewer
data points and there is proper quantification of information that is not possible in case of
physiographic segmentation (Solberg, 2017).
There will be higher product relevant for improvement of sales and creation of better relationship
with their customers. Business will be able to sell their products by being more regions specific.
Zara is having 2000 outlets across globe they can focus on use of their outlets by segmenting
people according to their present location. There can be use of cultural aspects in this where
designs can be changed and modified according to the geographical location of that particular
area.
Identify a potential new target group for your chosen organisation and make suggestions as to
how you could best cater to their specific needs and requirements. .
Customer base is defined as group of people and customers that repeatedly purchase
goods and services of business. This is important for organisation to understand the customers
demand and bring the products as well which can help to attain the business goals and objectives.
The customers are defined as business's target market where behaviour of customer in being
understand in well manner by conducting market research and analysing past experience. The
management is playing an important role as they conduct the market research, make sales and
generate the revenues by managing all functions (Dewsnap and et.al., 2020). ZARA is Spanish
apparel retailer organisation that specializes in fast fashion and products involving accessories,
swimwear, beauty products and clothing. This helps to attract the large number of customers by
delivering variety of products and maintaining higher profitability. The selected organisation
wants to expand its customers base by influencing or increasing new target group. The
management of company is having vital role as it brings the changes in their products and
selecting new market that are as explained:
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Planning/ Summary: ZARA is large size fashion based organisation that is providing
range of products and services to their customers. The organisation is mainly focuses on youth
target market where it research and provide the products under the age of 40. As environment is
changing day by day where management has decided to increase their customer base by
preparing market development plan and focusing on over the age of 40 also that influences the
number of people and increase the business productivity. Therefore, management are expanding
their in Asia where population is high and customers are demanding trending fashion products.
Target Group: This means group of individual such as families, organisation and teams
that lives in geographical, demographical and behavioural areas for the purpose of managing
organisational activities and increasing business performance. This is important for all
organisation to analysis who are their customers and how they can be retain for long period.
Segmentation is the classification of market place which are uses to identify, accessible and
making profitable activities. In relation to ZARA, management are focusing on demographic and
geographical segmentation that can help to increase the product range and market area where
organisation increase their sale activities (Hoskins, Verhaal and Griffin, 2020).
 In Demographic, bringing new trend products for more than 40 years people also
as it will influence the kids, adults and old age people to make buying decision by
selecting the products.
 In Geographical area, management is decided to expand their business in new
market which can be opportunity for organization to influence new as well as old
customers. This can help to attain the business goals by generating higher
profitability.
Analysis of competition: Competition is showing as activity which uses by organisation
to know that how many competitors or similar business is exist in current environment. To
analysis the competition porter's 5 force model has been used by ZARA company that can help
to bring the changes smoothly and provide competitive advantages.
 Bargaining power of buyers: The bargaining power of customers in context to
ZARA is low as it sales its products offline and online at retail prices which are
fixed. This can help to increase the customer by offering range of products
between the age of 10 to 60 years old (Rambocas and Pacheco, 2018).
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 Bargaining power of suppliers: There are number of suppliers in market who
sales similar products at different range which can be challenging for them to
increase price as company have option to chose other suppliers. Thus, ZARA is
can regulate its business in challenging market due to low threat.
 Threat of new entrants: There is low threat of new entrance in relation to retail
sector because to enter in new market there is need of high finance and resources
which are difficult to arrange. In context to ZARA, there is low threat of new
entrance which supports to run business continuously.
 Threat of substitutes: It has explained that there is high threat of substitution as
other organisation can provide similar products at lower prices which can reduce
the sales and profitability.
 Threat of competitor: In relation to ZARA main competitor are H&M, Forever
21, GUCCI and others that might be create the competition and affects the
profitability.
Marketing strategies: This means planning which uses by company to promote their
products and services. ZARA is using different marketing strategies such as:
 Internet marketing: The management of ZARA is using internet marketing
which can help to reach the targeted customers by promoting products and
services. This will help to increase the number of customers and sales.
 Relationship building: This is another strategy which uses by selected
organisation to build the good relations with customers by offering range of
products and giving offers on specific festivals. This develop the business growth
and profitability.
 Entering in to new market: By using this strategy, ZARA enter in to new
market where it get old as well as new customers that helps to generate more
revenues (Le Meunier-Fitzhugh and Massey, 2019).
Evaluation and control: All the activities and marketing strategies will be evaluated by
management of ZARA by using the Bench marking tool that uses to formulate effective
strategies by comparing with others and improve the brand image in changing environment by
increasing customer base.
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Suggestions: From the above discussion it has been explained that by using internet
marketing, entering in new market and relationship building strategy ZARA can develop their
business and increase the customer base. This help to complete the organisational as well as
personal goals effectively. Moreover, by using such marketing strategies and focusing on all ages
of people sales would be increase.
Provide recommendations on changing the current product or service strategy
Zara has a belief to be more regular and consistent n different aspects of product development in
the core areas of business. They have grown successfully in developing of new product line by
focussing on development of innovation in their existing products (Hunt, 2018). The emphasis
on product development as a strategy can be judged from the fact that they posses lowest lead
time in the world fashion when it comes to collecting of information related to their products in
the market (Ivanchenko and et. al 2019).
Zara is able to comeoplet the whole process of collecting the information and then further
development of products according to such newly changed requirements.
New product development strategy: there can be a shift in the target segment customers of Zara
by focussing on women and men belonging to age group of 30-50 years. Presently Zara is having
focus on youth and their marketing strategies are also formulated based on the millennial
generation preferences. But there can be enhancement of their present market share by
development of a complete different range of product for this target market of customers.
Use of traditional marketing strategies: It is recommended for Zara to launch their new range of
products by focusing on a dual marketing strategy that is using up of a combination of their
existing digital marketing campaigns along with development of some new marketing strategies
that is based on application of traditional print media sources and hoardings. This dual approach
is going to create a higher awareness about such new launches for different customer segment.
Launching of products: It is suggested there can be modifications in the present product range
of Zara according to the local culture of a particular geographic location (Jaworski, 2018). Such
as in case of Asian countries like India the local culture can be analysed to make some changes
in the products according to their preferences. This customized approach of Zara can assist them
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in surviving in long run as they will be able to provide a huge variety in terms of their product
range.
Marketing mix approach for analysing the tactics formulation of Zara:
There are some of the different approaches that can be used by Zara in order to enhance their
present share in market:
Product: Zara can respond too the rapid changing demands of their customers. The unique
selling proposition of this brand can be further used by changing the stock of new product range
of high age group of people.
Price: The aim of Zara is to keep their prices according to quality of their products that they are
offering. So for the new product launches to be done there can be use of similar strategy that is
price skimming. Zara is a high end brand that has made attempts to satisfy its customers with
their large variety and unique designs (Pegan, Vianelli and Luca, 2020). Similar approach can be
used where the prices have to be set according to the overall value so that customers are able to
compare the utility of product according to its monetary value.
Place: ZARA is using a vertical integrated retail design and then distribution of its product. They
are using up different geographical locations. The launching of new product variants will be both
on their online website and physical locations.bit because of the product range is for old age
group people so there has to be more emphasis on physical locations.
Promotion: It is recommended that the promotional strategy will be a combined strategy of
using the existing digital media channels along with some traditional marketing approaches that
include hoardings, advertisements based on commercials. Magazines in order to approach such
new target market by adoption of a different approach according to their suitability &
preferences.
Above mentioned are some of the marketing mix approaches that can be used as a tactics for the
purpose of new launches that are to be made by Zara in the present scenario. There is need to
consider the existing differentiation strategy of the brand that is based on their manufacturing
process where there is elimination of wasteful products in order to maintain their cost. For this
Zara is having preference to deal with the risk of failure of products and focus on fashionable
offerings.
Further recommendations:
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Zara can take their approach of fast fashion forward by launching new designs for their
products. Zara is focusing on use of anti marketing approach where they are spending only 0.3 %
of the sales on advertising. With the time there has been a requirement to use some aspects of
digital marketing in order to enhance the presence for customers with their changing needs.
Zara can make use of some of the online digital marketing campaigns in order to enhance the
process of customer engagement where there can be use of some sort of questionnaires or
surveys to identify the service improvements that are demanded by their present customer base.
It is one of the techniques that will lead to customers being able to express the modifications that
are required for the purpose of competing with their other competitive brands that include Marks
and Spencer, H&M.
Zara can also open a new range of stores like discounted store for the purpose of offering
products at low rates as compared to the present prices at which they are offering their products.
It can lead to approaching a low income class people of society who will also have option for
branded products but at reasonable prices.
It is one such strategy that has been adopted by many retail stores such as Tesco where there Jack
stores are based on discounted pricing this type of strategy is very helpful for Zara in entering to
developing countries where people generally don't possess enough income to spend on non
essential product range.
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Conclusion
It can be summarised from the above discuss different aspects that friendship marketing is
one of the important aspect that has led to transformation of the way organisations are using the
marketing strategies for the purpose of promoting the brand. There are different types of digital
marketing techniques that are based on use of relationship marketing in the present scenario. For
the purpose of achievement of competitive advantage organisations are focusing on use of
customer relationship management where the existing data of customer is utilised for the purpose
of developing future strategies. All these strategies are very crucial for the purpose of evaluating
the where customer choices and preferences are changing very fast. Based on the way customers
are segmented there is requirement to set a promotional strategy in order to achieve a
differentiation position in the external environment. These strategies play a very crucial role for
the purpose of customer acquisition by application of new and latest technologies in the context
of relationship marketing that also provide Technological Solutions in effective marketing
management process.
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