Zara's Marketing Strategies: Achieving Business Objectives

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MARKETING MIX OF ZARA
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MARKETING MIX OF ZARA
Table of Contents
Introduction......................................................................................................................................3
Lo1: Explain the role of marketing and how it interrelates with the other functional units of an
organisation (P1 & P2)....................................................................................................................3
LO2: Comparing ways in which organisations’ use elements of the marketing mix (7Ps) to
achieve overall business objectives (P3).........................................................................................7
LO3: Developing and evaluating a basic marketing plan. (P4).....................................................10
Mission and vision.....................................................................................................................10
Objectives..................................................................................................................................11
Situation analysis.......................................................................................................................11
Marketing strategy.....................................................................................................................12
Market segmentation and targeting...........................................................................................13
Marketing mix...........................................................................................................................14
Allocation of resources..............................................................................................................15
Action plan.................................................................................................................................15
Evaluating and monitoring the marketing plan.........................................................................16
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
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Introduction
It can be observed that marketing is an essential tool in the modern business organisation that
helps in understanding the marketplace in a better way (Rundh, 2016). Through this, it has
helped the business to realize the importance of customer-business relationship through an
innovative approach. Based on this, this research shall focus on the marketing essentials of the
modern business world. The case of Zara shall be considered and lastly and marketing plan shall
be developed.
Lo1: Explain the role of marketing and how it interrelates with the other functional units
of an organisation (P1 & P2)
The marketing function is defined as the roles of the business organisations, which help in
identifying the source for promoting the products within the marketplace. The functions are very
much common in nature, which involves research, product plan, development process,
promotion, sales, and various other things (Fuentes-Blasco et al., 2017). These functions tend to
carry many responsibilities that is very much responsible for the growth of the company.
Therefore, the marketing function has a different role to play which helps in promoting the
growth of the organisation. Thus, the marketing functions have a crucial role to play, and a close
link exists between the marketing function and other functions of the organisation.
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Image 1: Marketing function
(Source: Mishra and Modi, 2016)
The interrelationship between the marketing function and other organisational functions is a part
of the business organisation and other departments are very much related to each other. The
marketing functions help in backing the other operational departments of the organisation so that
they perform in an effective manner. Thus, if any company wants to build a marketing plan, then
they require support from the finance department, HRM department, sales department, and
production department (Kozlenkova et al., 2015). For instance, if Zara wants to give discounts on
their products through a scheme of buy 1 get 1 free, then they need to consult with the finance
department and production department on an initial basis. However, the marketing functions of
any department are separate entities in any business, but they are all linked with the other
departments to increase the profitability of the company in an effective manner. Thus, the main
functions of the marketing department are to increase the sales, which will help in increasing the
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profitability of the company, and so all the departments need to work together. For instance, the
finance department is responsible for providing the much-needed budget so that the marketing
plan can be implemented easily. Production department communicates with the logistics
department to fulfill the demand and supply of products and services (Sajid, 2016). Human
resources help to recruit employees who have higher talents. Thus, all the functional units of the
company correlate with each other for implementing the marketing plan effectively.
Roles and responsibilities
The major role that the marketing plays in the context of the marketing environment is being
discussed below:
Market strategies: The first role is to formulate the development of marketing strategy and
planning for the business. For this, managers need to recognize the need of the consumers and
fulfill their requirements accordingly. Through this, the strategies help in bringing out the
objectives and opportunities from the market.
Marketing Information System (MIS): This system helps in bringing out the information
regarding various factors such as planning, product, and other things (Mishra and Modi, 2016).
For instance, MIS can be used for depicting the information about the logistics in real time.
Monitoring marketing environment: Marketing process play a crucial part to identify new
developments in the marketing environment for increasing awareness among the customers.
Market research: It is one of the major roles in the marketing process, which helps to
understand the need of the customers so that products can be modified in accordance with that.
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Segmentation: The modern market is very much volatile, which requires accurate segmentation
for promoting goods and services in an effective manner.
Brand equity: It can be observed that customers incline towards brands that have a higher value
in the market. Increasing the brand equity will help in increasing the sales of the company.
Key elements of the marketing function
The key elements are analyzed below:
Research: Market research is very much crucial, as doing business would be very much
difficult. It helps in gaining valuable information regarding all the marketing factors (Slater,
2015).
Strategy: After collecting information, the strategy is built which is mainly based on the
strengths and weaknesses. Further, it provides the much-needed guidance to overcome the
competition level.
Planning: Planning is done after research and strategy are made where the financial planning
and forecasting is done. Planning department uses a specific timeline for converting the goals
into success.
Tactics: Tactics are the small short-term plans for attracting customers. It tends to include offers
which help in promotional boost.
The interrelation can be explained with an example between the finance department and the
marketing (Jin, Jung and Jeong, 2018). The economic resources that the company needs will be
provided by the finance department. It cannot work without proper economic allocation from the
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finance department. Therefore, like the finance department, other departments are also closely
related to marketing so that accurate marketing plan can be made effectively.
LO2: Comparing ways in which organisations’ use elements of the marketing mix (7Ps) to
achieve overall business objectives (P3)
In order to achieve the marketing objectives of the organisation, the marketing mix helps and
thus it has been included in the marketing planning of the organisation. A number of methods
can be used in order to understand the products and the attributes of the organisation, however
the marketing mix has been considered as the best and effective. In case of the mentioned
organisation, Zara, the marketing mix would help to analyze the products to a deep extent and
the way the organisation would be able to achieve their business objectives.
Figure 2: Marketing mix
Source: (Liu et al. 2017)
Products: The production process of the organisation is completely owned by them. From the
manufacturing to offering the final products to their consumers, the organisation does not any
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outsourcing for any stages. The unique selling proposition of the organisation is their style and
design of the dresses. It has been seen that the organisation is developing their dresses in a way
that they are becoming the latest trend of fashion industry. Those new styles are available on
their store and websites for about two to four weeks. Products that do not sell in the stores are
pulled back after that period by the management, as the policy of the organisation is not to repeat
with the same styles (Liu et al. 2017). In a year, around 10,000 designs have been sold by the
organisation over their stores around the world. As the organisation believes in sustainable
development, they concentrated on the minimum reduction of waste from their manufacturing
process. On the other hand, they also provide paper bags to their consumers instead of plastic
bags. Ecological fabrics such as organic cotton have been used by the organisation for their
production process.
Price: In comparisons with other international fashion brands, the mentioned organisation, Zara,
provide their products in lower prices. It is one of the reasons behind the popularity of the brand
in the whole fashion world. The organisation does not spend a huge amount on the promotion of
their products in the different medium. Rather, they invest in the betterment of their products and
the raw materials. The low cost structure has been followed by the organisation in the various
aspects of their business, apart from the product development (Datt et al. 2017). Also, they has
been following the market based pricing strategy, where the prices of the products are defined
according to the affordability of the target market and the currency of the country has also been
taken into consideration . The production budget for the product lines has been defined according
to the target price offered to the consumers. It helps to earn profits for the organisation.
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As the part of their promotional purpose, the organisation offers various schemes for their
consumers. Low-level discounts are also offered to the consumers twice in a year, where the
consumers have been offered discounts up to 50% over the base price of the products.
Promotion: Although, the organisation does not believe in the exaggeration of the promotional
efforts of their products, it is seen that they also promote their products in social media such as
Facebook and Instagram. The followers in the social media can have the information about the
latest trend of fashion and the new collection of products from the company. Unlike their
competitors, Zara does not spend their revenue on flashy advertisement campaigns. Rather, they
believe in investing their revenue in opening new stores in the newer locations in all over the
world (Massingham and Pomering, 2017). According to their spokesperson, they would spend
their money on expensive real estate in the prime location of the metro cities and the décor of the
stores as well, as it is their style of attracting the news consumers.
Place: Zara have more than 8000 stores in the 55 developed and developing countries of the
world. The expansion process of the organisation is still going on. Among the stores of the
organisations, almost 90% of the stores of the organisation are solely owned by the organisation,
however, among the others, joint ventures and franchises can be found. The supply chain of the
organisation is their source of profits and competitive advantage as the whole process of the
supply chain has been owned by the organisation itself (Festa, et al. 2016). Apart from that, it is
also seen that the organisation collaborate with their in-house designers for the development of
the products and styles. Most of the stores of the organisation are located at the prime locations
and they are designed by the personal designing team of Zara.
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People: The personal designer team has been appointed by the organisation, in order to the
design their products according to the latest styles and fashion trends. It is also seen that for the
effective training of the staffs, the organisation have invested a huge amount of money. Apart
from that, as the customer satisfaction is the most important factor for the business of the
organisation, the employees are needed to provide the right training to satisfy the needs and
demands of the consumers and provide them a good shopping experience (Wu and Li, 2018).
This would also help in consumer retention process for them.
Process: The manufacturing process of the organisation has been developed and owned by the
company entirely. From selecting the raw materials, designing of the products and offer them to
the consumers – all of these stages has been developed by the organisation itself. In addition to
the above-mentioned factors, Zara have a hardworking customer care service help their
consumers with the right fitting, size and colors according to the occasion (Abril and Rodriguez-
Cánovas, 2016).
Physical evidence: Apart from the online stores, the organisation has their physical stores in
most of the developed and developing countries. All of the stores have been located at the prime
position of the metro city areas. The stores has been designed and decorated by the top interior
designers along with the personal designing team of the organisation.
LO3: Developing and evaluating a basic marketing plan (P4)
Mission and vision
Mission statement: The mission of the organisation is to be the first and foremost name in the
fashion retail industry.
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Vision of Zara: The vision of the organisation is to provide apparel according to the latest trend
and style for the women of all ages. The vision of the organisation also contains providing
unique style of dressing and style to their consumers.
Objectives
The objectives of the organisation are consisted of the following factors:
 To increase the customer satisfaction
 To mitigate the demand of the consumers
 To introduce new designs every week
 To open more branches of the organisation and cover 85% of world by the end of 2020
Situation analysis
Situation analysis is done with the help SWOT analysis:
Strengths Weaknesses
- the designs are very much unique in
nature
- have a strong presence over various
places across the globe
- the brand value is high
- the supply chain is very much efficient
and filled with trendy products
- operating cost is very much low which
helps them to earn greater profits
- the higher presence of stores in the
- have a generalized collection which
reduces the uniqueness of their
products
- they don't advertise much which
restricts them from earning more
revenue
- the inventory keep at low safety level
which means that sometimes the
product does not reach its potential
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