International Marketing Strategies of Zara: A Comprehensive Analysis

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International Marketing

Table of Contents
Introduction................................................................................................................. 3
Discussion...................................................................................................................4
References................................................................................................................14
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Introduction
This report highlights the marketing functions of an organisation in the promotion of
business in an International framework. It focuses on how the international marketing
strategies boost business executive functions and operations of the organisation.
This report analyses the strengths and weaknesses of business and how the
opportunities and threats of an organisation can be utilized for marketing in order to
increase brand awareness in the international market. This study emphasizes on the
world’s leading organisation Zara that specializes on retailing of clothing and
accessories. The organisation of Zara was established in the year 1975 and
expanded all over the world including US, Asia, Africa and Australia.
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Discussion
An introduction to the organization and their current market
Zara is a fashion brand, which consists of joint ventures and franchises that has
undergone a sustained growth and awareness among 15,000 customers all over the
world due to its diversified garment styles that suit the culture of the people all across
the world. Zara looks into satisfaction of customers. Zara in its management
approach towards customers demonstrates the quality, durability and advantages of
wearing the attire. Zara also focuses in predicting the possible designs that would
impress the customers in accordance with cultural needs of various countries in
relation to fashion tastes.
Zara has an overall 77 openings all over the world. It focuses on sustainable
environment practices by producing recyclable containers at the brand stores. It has
a total number of stores of 2,162.
1. Use a range of sources to define international marketing and highlight the
main differences in local marketing.
International marketing uses the approach of promotion and selling of products in
order to create brand awareness all across the world. The main objective of
international marketing is beyond regional and national marketing, which is restricted
to a particular country. This kind of marketing focuses on how international marketing
emphasizes on the generation of profit (Kasemsap, 2016).
Sources of definition
“Marketing theory: a student text”
“Information marketing”
Differences between international and local marketing
The contrasts of internal and local marketing are as follows:
 The domestic marketing strategies operate in the regional and local level.
These marketing deals use strategies with the needs, values and economic
conditions of the regions.
 The pricing strategy of local markets depends on the particular currency
market in the particular country in contrast to the other countries.
 The marketing environment for local business is stable for various regions in
comparison to other countries or regions due to difference in the cultural and
economic conditions.
2. Assess the scope and key concepts of international marketing.
International marketing creates scope for people all across the world to interact with
each other. It helps to form associations and relations among people across cultures
and broadens their horizon. This creates a new outlook among people leading to
more scope for marketing and its growth and expansion. This creates a peaceful co-
existence among people in the international level thereby create peace and harmony
in the world. This creates good international relations among people and
governments thereby fostering economic growth and prosperity. This is because
then various organisations come forward for selling their products and increases
possibility of market expansion. This enables in reducing the unethical approach
towards marketing thereby improving the quality of products. International marketing
also utilizes various approaches of import and export in order to favour profitability of
products. The regional markets gradually become national and then to an
international level. This happens through partnership agreements based on joint
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ventures. The fostering of national businesses paves the way of economic
developments in the international market.
3. Explain the rationale for an organisation to want to market internationally.
An organisation has a large set of aims and objectives for joint ventures in relation to
international marketing. This determines the planning of the operations of the
organisation. The international marketing strategy of the organisation depends on
the target market. Partnerships are considered the market entry strategy of the
organisation. This helps in the promotion of business. After the organisation reach
desirable position, they monitor the performance through various marketing
strategies. The Market research made in the field of planning is done to promote
scope for the growth and development of market and to avoid risk. This ensures the
organisation receive revenue through business. The organisations use knowledge
and expertise to execute the marketing function in order to generate sales. The
reasons are the following:
 The progression in the field of technology enables an organisation to boost
business especially if the technological advancement resources are not
present in other countries. This can promote opportunity for the international
market (Alalwan et al., 2017).
 The process of promoting scope for creativity increases the opportunity of the
organisation and provides scope for expansion. This adds value to the quality
of the products and services thereby leading to revenue inflows. The identical
steps taken by competitors generate the attention of the particular
organisation in changing its marketing strategies.
 International marketing provides the opportunities to the organisations in
promoting exportation and generating incentives from government in the
export of products (Samiee, 2019).
4. Describe the various international marketing entry routes and which one the
company should adopt.
The use of various rules and regulations helps the organisation assesses the
performance of the organisation in relation to business development. This is done by
investigating into the target markets demands and needs and adopting strategies to
determine its ability to meet the specific goals of the organisation. This is done by
evaluating the business performance of the organisation and identifying the prior
strategies in being able to derive the adequate performance. The various functions of
the marketing strategies that enable to enhance the performance of the organisation
are:
 The company should have knowledge about the tastes and preferences of
the customers and the organisations ability to fulfil them. This involves
gathering the informational resources in relation to demographics.
 The organisation should be aware of its internal and external environment. It
should be aware of the strengths and weaknesses of its products in relation
to satisfying the customers. The company should also be aware of the rules
and regulations stated by the management and its ability to use practices of
marketing that do not affect the quality of the environment and use high
technologically advanced resources to follow the same.
 The organisation should balance the skills of the employees in relation to
various customer products and services. The organisation should verify the
strategies adopted to perform the operations of the organisation.
 The organisation should invest on infrastructure in order to determine
environment friendly practices. This not only promotes sustainable growth of
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the environment but also determines high rate of productivity. Thus, by
applying advanced technological factors, the market plan is made and it
supports in the execution of the work plan within the required time through
improving the operations of the organisation (Mata, 2017).
 Zara has chosen a partner to expand its business. It also utilizes the skills of
its artists through balancing the quality. The marketing operations that are
required by Zara in order to increase its sale are identification of the needs
of the target market in relation to their values. The other marketing function
of the organisation is to make collaborations with other organisations in
order to support the deals made in the situational context of business.
 The marketing mix also plays an important part in participating in supporting
the organisation in sustaining in the competitive market (Mayrhofer, and
Roederer, 2016).
5. Evaluate the key criteria and selection process that the company should use
when considering which international market to enter.
Zara is regarded as the most prominent fashion brand in a global level. The
organisation needs to follow the basic rules and principles to enter into the
international market. The stages are labelled as country recognition, screening
preparedly, in-depth screening, ultimate selection and explicit experience.
Country Recognition
This is the beginning of the selection stage. This phase of international marketing
determines the target country for the brand. The selection is based on the
understanding the needs of the target market and classifying the target market in
national premises. This also helps to make the selection due to the export policies of
the country (Mayrhofer, and Roederer, 2016).
Preliminary Screening
The removal of number countries in the first stage of selection the organisation
chooses its national framework for business execution. The various macro-
environmental factors like the political balance play a significant part in the selection
process. This is because these factors influence the economic conditions of the
organisation .The factors are currency standardisation, rate of exchange and
personal consumption patterns of the target country (Wang, 2018).
Key Criteria to enter International Market
There are certain important factors to support the entry into the international market.
If these conditions are fulfilled the market penetration path becomes much easier.
Organisations like Zara should fulfil these conditions in order to penetrate into the
world market. The processes involve minimum investment for capital and derive the
maximum productivity out of the organisation. The various objectives of international
marketing are as follows:
Direct Exporting
It is the most significant and common process by which the product is internationally
marketed through direct exportation to the chosen country. Later the products are
launched in various retail outlets. The distributors and agents are responsible for the
demand and supply retail chain in determining the value of the products in the
selected country (Siqueira et al., 2015).
6. Define and explain what a market entry strategy is, using examples of the
different strategies that are available to an organisation, and include the
advantages and disadvantages of each.
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Different organisations follow different strategies of marketing to invade into the
market world. The marketing organisations follow the four primary marketing
strategies. The strategies are merger acquisition, business partnership, franchises
and joint ventures. The qualities of the strategies are:
Merger and acquisition
Merger refers to joint ventures among organisations that have common values and
understanding of marketing strategy and other views that support business. This
enables the organisation to share a variety of ideas based on their knowledge and
experience. However, the common outlook towards success enables organisations
in reaching their goals in the industry of marketing.
However, there are certain disadvantages of merging which often leads to conflict
due to difference of values of work culture.
The acquisition factor refers to ownership structures of an organisation. A smaller
organisation has more opportunities for growth and expansion. Acquisition often
leads to larger organisations with more responsibilities. However, there are
disadvantages of such organisational structures. This adds workload on the part of
the small companies and if they fail to follow the procedures of large companies then
it affects their performance.
Joint venture
The joint venture is a form of marketing strategy where two separate organisations
form a united authority for particular framework of time in order to reach specific
goals and objectives. Joint ventures sometimes face adaptability problems if there
are differences of opinions. Companies having different managerial structures and
outlooks may lead to inability in achieving their purposes (Mohr and Batsakis, 2018).
Partnership business
Partnerships are based on joint ventures between two people of authority rather than
two companies. An individual company has more than one single owner. A joint
venture is arbitrary rather than a partnership business, which is relatively stable
since the two individuals are willing to share the organisations losses and profits
equitably. This is the advantage of partnership business. However, sometimes this
policy leads to conflict within the organisation if there is misunderstanding and
miscommunication of goals and objectives. This leads to lack of organisations
growth and stabilization. This may occur due to difference in ideology (De Mooij,
2018).
Franchising
Franchising refers to sales of assets for business. This is done for the growth and
expansion of business. In return, the organisation shares a certain portion of profit
with the owner of the asset. The place and location in which the individual owner of
the asset intends to do the business determines the profit level of the organisation.
The individual owner intends to lend one’s assets to do business depending on the
population that would promote the growth of the organisation.
The organisation also intends to focus on the quality of the products in order to
increase its customer base. This also helps in building relationship with
manufacturers and suppliers that boosts franchising (Burt et al., 2017).
The disadvantage of franchising is that it also sometimes leads to threats to the
organisations due to costly products, resistance to changes of policies of
organisations, inability to reach at the market value (Murphy et al., 2016).
7. Conclusions and recommendations on how and why the company should
enter the international market
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The study has given a detailed definition of international marketing. Some
dissimilarity that local marketing share with global marketing has been described.
The chosen company Zara can ensure success while entering a foreign market by
following given steps through a gradual process. The reason behind Zara’s entrance
in the foreign market is analysed. Several criteria as well as screening procedure as
in direct exporting; preliminary screening and country recognition are explained. The
marketing strategies, which can be adopted by the company, are provided. The
company Zara should understand the idea of global marketing, its differences from
local marketing, abide by the suggested steps sequentially and acknowledge the
advantageous factors that they can work with; the company will design proper
strategies and make their marketing systematise with achieving desired success.
The selection processes, as well as criteria, are needed to be taken into
consideration to structure a helpful strategy. The business will get a high rate of
profitability with an increased amount of sales.
8. Explain the difference between global and local marketing, using examples
where appropriate.
The business activities of global marketing are administered in the international
platform. Local marketing refers to the business handled by local salons as well as
restaurants. The strategies, which are designed to administer business operations in
the global market, refer to international marketing strategy. A recognised local
company of Australia has expanded its business in the internal market in a brilliant
manner. The differences that global and local marketing share are the following:
Basis For Comparison Local Marketing International Marketing
Service area The small local area falls
under the service of local
marketers.
International marketers
cover a large area to serve
with their products
Government Interference The government does not
interfere much
The government
interference is
comparatively high
Business Operation A particular nation is
subjected to operational
activities
Several countries are
subjected to this
procedure
Usage of Technology The technological usage
has limitations
Latest technologies are
incorporated within the
handling of business and
within products
Risk Factor A risk factor is less A risk factor is higher
Capital Requirement Less capital are invested A large amount of capital
is invested
Nature of Customers The local customers have
almost similar choices and
preferences (Steenkamp,
2019).
The international
customers show a lot of
diversification in terms of
choices
Research Less research is required Intense research is
needed to understand the
diverse factors governing
international market
elements (De Mooij,
2018).
Table 1: Comparison of local and global marketing
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(Source: Created by the learner)
9. Present an overview of the key arguments in the global v local debate.
The debate between different marketing styles like global and local is a process
emerging long ago. The companies need to design their marketing and business
strategies after evaluating the market wherein they are going to operate. Marketing
strategies should cater to diverse cultural backgrounds and other elements, which
govern consumer behaviour and decision-making. Companies will have to face
various problems and challenges while entering a new market. With rapid
globalisation, many organisations are targeting new markets to expand their venture.
In doing so, various regional diversifications should be considered (Alon et al., 2016).
The pricing and promotional activities will differ along with features of services. The
local marketers work with a limited amount of capital serving the same kind of people
requirements. Whereas, global marketers invest more capital serving different
preferences, which need a lot of innovation, brought into the products to cater to the
needs. As global marketing includes more risk factors, they encounter more
pressure. Proper knowledge in handling business will provide global recognition.
10. How does the product, pricing, promotional and distribution approach
differ when using a variety of international markets.
Various international markets demand a proper understanding of all the elements
constructing the marketing mix. The elements work in collaboration to create the
base of any market. Companies need to analyse each factor and understand their
correlation to implement better marketing strategies that suit the international market
scenario in which the company is planning to enter. Their marketing strategies need
to adopt diverse elements of the foreign market; it should be customised as well as
standardised.
Product: the products of each company depending on various factors like customer
income, their cultural as well as religious background, customer preferences, their
purchasing behaviour and frequency. Therefore, companies need to design their
products regarding the evaluation of each factor. The products may need alterations
and innovations to satisfy customer requirements, which is variable in different
markets. For example, McDonald's has designed their burgers according to the
diverse taste of customers. People travel more these days and met several products
through the internet, which also affects their buying behaviour. The mentioned
company has achieved global recognition. Then they designed a standardised
product. Their products have a quality which every customer aim to have. The brand
strategy of the company should be strong to achieve success and gain more scope
(Gillespie and Riddle, 2015).
Promotion: The promotional strategies of each company should cater to regional
differences. The promotional messages should be acceptable and understandable to
all. It should not harm or offend any citizen. The promotional strategies should have
brand voices included in the message. The message should be in regional language
that everyone can understand. Political aspects will be considered as well to
understand the current market status and thinking of people. The promotional
activities include various things that the company work with. For example, one single
colour can have much significance in different places. The organisations will analyse
media capability to use it for promotions and reach out customers.
Pricing: The pricing strategy of each company can be quite tricky. The company
should set the proper price to every product in such a way that all customers can
afford the products. The products should be transported and delivered properly
which also affect the pricing strategy. The economic conditions of each country also
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influence product pricing. The different currencies of various places also fall under
the category, which pressurises the process. Therefore, marketers should possess
the proper knowledge and situational understanding (Fan et al., 2015).
Distribution: The distribution process of products needs to be done within time. The
distribution is done through wholesalers and retailers. In the case of international
marketing, the number of mediums increases and affects the timely delivery.
A marketing team in every company should be made to analyse these factors. The
help of PESTEL analysis can be done to understand the scenario.
11. Explain and analyse in detail the various international marketing
approaches the company can adopt. Use examples from other organisations
to further enhance your answer
Zara can adopt many marketing approaches in terms of international marketing,
which can help them in gaining profit.
Centralised marketing
This marketing strategy refers to the system in which the company headquarters
take all the responsibilities of marketing and business. The managerial officers plan
and execute business operations. Zara has an effective and efficient team, which will
sufficiently handle all elements like resources and finances of international
marketing. The team of special leaders have proper knowledge of materials and
resource available in the foreign market. They know in which way to use those. The
company can export the products and sell those in subsidiaries. The materials do not
need to be localised for business expanding. The company have gained enough
trust and loyalty from its local customers. The fact will help the company while
entering a foreign market and it will gain recognition immediately. The company
Amazon had the same marketing approach (Jones, 2017).
7P’s Marketing Mix
Subject Description
Pricing Two kinds of pricing strategy are present
in marketing. Zara can follow the system
of adaptive pricing. The officials of
headquarters decide the pricing of each
product according to the chosen
international market. The company try to
maintain set brand value and set the
adjustable prices catering to the market
condition. The strategy is to satisfy the
target customers, and they meet their
requirements (Kanagal, 2015). Much risk
may occur, but success will be gained as
well as H&M did. The pricing strategy
also depends on the location and the
affordability of local people. The
experienced and skilful leaders should
gather relevant data to decide the
pricing.
Promotion Promotional strategy is important to
achieve success in marketing. The
company Zara should use a pull strategy
regarding promotional aspects to attract
more customers from a different market.
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The push strategy regarding marketing
includes media channels, which will vend
the services to customers. The promotion
is also done through several social media
platforms. This process needs a large
amount of endorsement as internationally
celebrities are used for promotion (Noe
et al., 2017).
Place The company Zara needs to analyse
international market places and do
surveys, which will give the company
desired information regarding locations.
The company needs the location related
information to decide the places in which
they want to open their store in a country.
The right market place is essential for
business growth.
Product The products need innovation and
alteration to attract more customers.
Customer satisfaction will also be gained.
The products should carry and reflect
market trends. The clothes will make
people comfortable and gain their loyalty
and trust. The clothes will be innovative
that will create a future fashion statement
(Fan et al., 2015).
Process The business, marketing, promotional,
delivery process should be useful and
helpful for both the company and
customers. The cost transactional
process should run with smoothness and
the product will reach the buyer's fasters.
In the modern era, people do not have
much time as well as patience to deal
with little inconveniences. Therefore, the
process should be neat and incorporative
of modern software. Systems like
DATACAP give EMV solutions (Rowle,
2016).
Physical evidence The clothing companies like Zara should
display their clothes with the help of
trained members who will show the
clothes to the customers in stores and
models in social sites. The brand will
gain more acceptances and company will
achieve success.
People The nature of people should be analysed
and understood through various
information gathered from surveys and
researches. Knowledge is essential to
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gain satisfied customers and to know
what they like to wear. The competitors
are also doing this to achieve success in
all market (Bahadir et al., 2015).
Fig 1: 7P’s of the marketing mix
(Source: Created by the learner)
12. Compare home and international orientation and ways to assess
competitors, outlying the implications of each approach.
Companies need to have proper resources regarding material, financial, human and
knowledge to deal with competitions in the current market. All resources should be
adequate to control external as well as the international market scenario. In the local
market, the competitions may be less in number, but in the international market, the
number is higher. The risks factors are also increased in the international market in
comparison with the local market. The members of management should be skilful in
handling all the marketing operations. They need to have adequate knowledge to
deal with competitions and gain an advantage. The managers and members should
have anticipatory visions of risks and ways of handling those tactfully (Mahmoud et
al., 2016).
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