Marketing Essentials: A Comparative Analysis of Zara and H&M

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Marketing Essentials
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Table of Contents
Introduction................................................................................................................................3
LO1 Explain the role of marketing and how it interrelates with other functional unite of an
organisation by:..........................................................................................................................4
LO2 Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives............................................................................................9
LO3 Develop and evaluate a basic marketing plan..................................................................13
Conclusion................................................................................................................................17
Reference List:.........................................................................................................................18
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Introduction
Marketing can be defined as the set of activities, management, and study of processes
involved in business relationships. Through marketing business relationships are created with
the customers and the organisation. Marketing includes the creation, delivery and
communication of offerings that provides value for the business partners, society and
customers. The main aim of marketing is to meet the customer demands and enhance their
satisfaction level. For an affective and successful business operation, marketing is very much
essential for every organisation. In this study, the role of marketing will be discussed with its
relation with other units of the chosen organisation. Several ways regarding the usage of
marketing mix elements will be compared in order to attain the objectives of the organisation.
Ultimately, a marketing plan will be formulated based on the discussions.
The organisation chosen for this study is ZARA, a multinational organisation in the retailer
industry. It is owned by the Inditex group and was found by Rosalia Mera and Amanico
Ortega. It has its headquarters at Spain (Zara.com. 2019).
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LO1 Explain the role of marketing and how it interrelates with other functional unite of
an organisation by:
a) Explain how the key roles and responsibilities of the marketing function relates to the
wider organisational context.
A role that helps in identification of the effective products and services ideal for the market
scenario for an organisation to conduct their business operations successfully is known as the
Marketing Function (Grönroos, 2016). Through marketing function, organisations like
ZARA can promote their existing as well as new collections affectively in the market to
differentiate them from the other available products.
Figure 1: Marketing Functions
(Source: Grönroos, 2016)
The marketing functions involved in an organisation comprises of the several steps. Some of
them are:
 Buying or purchasing
 Selling or trading
 Storing
 Finance
 Grading
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The marketing functions play a very significant role in the complete process of marketing
products and services of an organisation. Its responsibility is to link the final customers with
the manufacturer or producer of the products. The marketing functions can be categorised
into two parts for better understanding its role in context to the organisation. It is categorised
as concentration and dispersion. Both the categories have an inseparable interconnection and
significance on the flourishing of an organisation as well as the stakeholders of the
organisation. The concentration group caters to the buying of the offered products and
services, their trade related factors, storing them, trading the products under various
categories, and deciding the costing. On the other hand, the dispersion includes the proper
distribution of the product to various outlets of the organisation and its online supply.
b) Analyse the roles and responsibilities of marketing in the context of the marketing
environment.
Marketing helps an organisation to promote their business objectives and product range. The
roles played by marketing for an organisation are very vital for the development of their
business operations and business expansion. Their role includes the process of reaching out to
their customers, prospects, investors for creating a positive image in the market. The
responsibilities following the roles of marketing are as follows:
 Identify the target market for the organisation
 Carry out affective market research, understand and evaluate it
 Formulate the strategies for the organisation
 Development of new ideas and products
 Evaluating the opportunities and threats probable towards the organisation
 Organise survey and audit to understand brand experience of the customers
 Creation of opportunities for enhancing competitive advantage
 Planning business expansion programs
 Analysing the strengths and weaknesses of the organisation
The roles and responsibilities of marketing are affected to a certain extent by the internal and
external marketing environment. One of the best tools to analyse the affects of various micro
and macro environmental factors on the marketing of products of an organisation is PESTEL
Analysis (Kauškale and Geipele, 2017). For better understanding, a PESTEL analysis on
marketing is provided below:
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Environmental Factors
Political
Impact on Marketing
This factor identifies the impact of several
governmental policies, laws that prevail in the
market of the respective industry. The
political factors influences the trading,
business expansion, political stability, and
several other elements related to the business
operation.
Economic The business environment is highly affected
by the economic factor as it lays its impact on
the global trade of an organisation like
ZARA, its exchange rate, interest, and
income. They directly impact the buying
power of the customers as a result the
organisation is also affected by it.
Social This factor deals with the socio-cultural
aspects of the marketing environment. These
factors influence the customer demands and
which ultimately affects the organisation
operating their business in the same market
environment. They have change their services
and products according to the customer
demands.
Technological In the present marketing scenario, technology
plays a vital role in gaining competitive
advantage in the industry. ZARA has
incorporated all sorts of latest technologies in
their business operations for developing their
online website and mobile technology for
reaching a large number of customers.
Legal The legal factor of the marketing environment
deals with the legislations and governmental
laws that lays an impact on it. The marketing
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managers have to consider both the national
and international laws for their global
business operation. Several protection laws,
labour laws, regulations, safety and data
protection laws are a part of it.
Environmental The ecological factors have a wide range of
impact on the marketing environment. It
includes several environmental regulations
such as waste management, global warming,
pollution management, recycling of waste
materials and others that should be maintained
by the organisation.
Table 1: PESTEL Analysis on Marketing Environment
(Source: Created by learner)
Figure 2: Factors of PESTEL Analysis
(Source: Moutinho and Phillips, 2018)
c) Analyse the significance of interrelationships between marketing and other functional
units of an organisation.
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Marketing has an inseparable relationship with all the other functional units present within an
organisation. A strategy or process covers all the necessary operations carried out by various
operational units of the organisation is marketing. From a customer’s point of view,
marketing is the complete business process that provides the outcome. Marketing is a
discipline that underpins all the strategic activities related to business operation of an
organisation like ZARA and has significant relation with corporate strategy. Although,
marketing of an organisation is handled by a separate and special department but it should be
recognised and followed by all the other departments of the organisation for affective
business operation. There should be synchronisation in the overall functioning of all the
departments. Proper marketing will invite better customer satisfaction and enhance
profitability of the organisation. While developing a corporate plan, proper synchronisation
should be maintained within all the functional units of ZARA.
d) Critically analyse and evaluate the key elements of the marketing function and how
they interrelate with other functional units of an organisation
In relational with the several other functional department of an organisation, marketing
department has a strong inter-connection. It has association with the production department,
Human Resource Management, finance department and other such departments. ZARA’s
marketing department has a strong interrelation with the finance and production department.
Relation with production or operation management:
The marketing department conducts researches, which provides the key concepts of planning
the plans on production of units based on the customer demands and satisfaction. The
production department manufactures products based on the customer needs figured out in the
research conducted by the marketing department of the organisation. The product-
manufacturing deadline, total volume of orders everything is set by the marketing
department. The design and material of the proposed product is fixed on the customer
requirements.
Relation with the Finance department:
The budget required for carrying out the research works, proper promotion of the upcoming
projects, production cost and distribution cost and several other matters are fixed by the
Finance department. The marketing department has a unique relationship with the finance
department of an organisation (Cacciolatti and Lee, 2016). The market department focuses on
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increasing market share and sales volume while financial department concentrates on
investing in the various processes, cash flows and other matters.
LO2 Compare ways in which organisations use elements of the marketing mix (7Ps) to
achieve overall business objectives
Introduction
The report will deal with the various elements of 7Ps marketing mix to figure out its
influence on achieving profitability and the desired target of the organisation. The various
ways will be compared and for demonstration, several tactics will be evaluated.
1) Compare the ways in which different organisations apply the marketing mix to the
marketing planning process to achieve business objectives.
For comparing the elements of marketing mix, two organisations of the same industry have
been chosen for the study. The two organisations are ZARA and H&M.
7P’s of Marketing Mix ZARA H&M
Product They offer luxurious fashion
products for women, men
and children. A varied range
of products is offered by the
organisation. The products
are manufactured in
accordance with the present
customer demands.
They offer fast fashion
apparels for children, men
and women. The product
quality is very high. They
offer special discounts on
Mondays to attract more
customers.
Price They offer products of high
quality but with low price. In
comparison with the other
rival companies, they try to
keep their price reasonable
but at the same time maintain
the product quality. The price
range varies from country to
country depending on their
Premium pricing is
maintained in all their
products. Like ZARA, they
maintain their standard and
produce high quality
products (Uggla, 2017). The
price range of their product is
approximately $25.
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economy.
Place ZARA has wide expanded
business operation in 88
countries and over 6500
offline outlets. Other than the
offline stores, they sell their
products through online
website. The supply chain of
the organisation provides an
additional competitive
advantage to the company
(Tan, 2019).
The organisation has at
present more than 4000
offline stores all across the
world (H&M. 2019). Apart
from the offline stores , they
maintain pro-active online
website. The distribution
outlets are located globally to
distribute their products at
every corner of the world.
Promotion ZARA does not append mush
money in advertising their
brand. Press-shyness is itself
an identity for the
organisation. The social
media reach of the
organisation is very strong.
Almost 15million followers
are there on Instagram and
more 2.5million followers on
other social sites (Mayrhofer
and Roederer, 2016).
The organisation has chosen
the traditional as well as
latest ways of promotion.
They have designed adds for
telecasting it on televisions,
their own YouTube channels.
They have emphasised on
digital marketing, offered
several discounts and promo
codes (Nguyen, 2018).
People The people recruited for the
organisation especially in the
distribution sectors are local
ones. It helps them cutting
down the cost on labours.
The organisation hires well-
trained and skilled employees
for the organisation. The
prevalent working culture is
latest and the employees are
very much motivated about
their job.
Process The workers recruited for the
organisation are properly
The organisation provides
concentration on the
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trained and their skills are
developed. They emphasise
on maintaining healthy
customer relationships with
the organisation.
management of customer
relationships. The employees
working for the organisation
are well trained and they
emphasise on the fact of
resolving problems faced by
the customers.
Physical evidence An interesting fact about
ZARA is that, they do not
use their logo or symbol on
their products. Other than
that, the employees are well-
behaved and always try to
help out the customers in
making their choices.
The ambience of the outlets
of the organisation is very
pleasant. The employees
working for the organisation
are very decent and humble
in their behaviour. It has a
diversified portfolio and
engages itself in regular
business expansions.
Table 2: Comparison table between ZARA and H&M
(Source: Created by learner)
2) Evaluate different tactics applied by organisations to demonstrate how business
objectives can be achieved.
ZARA uses several tactics in their business operations in relation to the various marketing
mix elements discussed in the marketing mix. In regard of the process involved, ZARA
concentrates on implementing highly engaged workforce by their employees to improve
interactions with their customers. In order to strengthen their marketing strategies, they have
formulated new plans of allowing the customers exchange the old products at the price of
the new ones. In this case, it has toppled out H&M who have kept fixed their marketing
model (Mierzejewska, 2017).
The main motto of the organisation named ZARA is to focus on dragging customers and not
on selling large number of products at any cost. Their new technique of promotion is
Evangelism. They put the customer focus at the centre and rest after that (Forbes.com. 2019).
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Their customer-centric approach is the key tactics of differentiating it from other rival
organisations in the fashion retail industry.
Conclusion
The complete report dealt with the comparison between two renowned and rival companies
named ZARA and H&M regarding the elements of 7P’s marketing mix. After the discussion
in the comparison table, the different tactics utilised by the organisations to differentiate their
marketing strategies from the rival organisations have been discussed and evaluated.
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