Analysis of Zara UK's Marketing Strategies: MKTG202, Module 3

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Marketing Essentials
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Table of Contents
Introduction...................................................................................................................... 3
LO1.................................................................................................................................. 4
LO2.................................................................................................................................. 7
LO3................................................................................................................................ 10
Conclusion..................................................................................................................... 16
Reference list................................................................................................................. 17
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Introduction
Marketing is an action of promoting the business by doing proper research and surveys
(Baker, 2016). In this study, ZARA, UK is chosen for analyzing marketing plan. ZARA,
UK should use a marketing strategy to interact with their customers, which will help to
increase the sale and maintain a healthy public relation. However, a proper marketing
plan helps in getting new product ideas and saves cost as well. In this study, there are
three modules. The first module includes the analysis of marketing functions. In the
second module and the third module, the comparison between different organizations is
discussed and a marketing plan is prepared for ZARA, UK.
ZARA, UK is a fashion retailer brand, which was established in 1975 in a central street
in Galicia by Amancio Ortega and Rosalia Mera. Headquarter of ZARA, UK is located at
Artexio in Spain (Zara.com. 2019). It is one of those main brands owned by the world’s
largest retailer group called Inditex. ZARA, UK has expanded their business and it has
7,475 stores worldwide by 2019. ZARA, UK manages around 20 different clothing
collections and manages 450 million products per year. ZARA, UK has achieved the title
‘world’s most valuable brand’ recently.
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LO1
Explain the role of marketing and how it interrelates with other functional units of
an organization
P1 Explain the key roles and responsibilities of the marketing function.
Market Research
Market research is used to analyze the process that includes a collection of information
about the consumer segment, competitor brands and business environment and
condition of that particular industry. Market research includes test marketing, which is a
process where either the consumers are chosen to try the product or the product’s
benefits are shown to them that helps in soliciting the customer's mind (Burns et al.,
2014). Another important role of research is to monitor the competitive market. ZARA,
UK can study other competitor’s business by visiting their website or retail stores that
will help the organization to have control over the competitive market. The organization
should perform research to improve the quality of a product by proper testing that helps
the company to take any further step and share a healthy bonding with the consumer.
However, the governmental and political issues or the inflation rate changes can affect
the business so the brand needs to predict the changes. Research helps to gather the
data about the political stability and economy of the nation so that ZARA, UK can
prepare themselves according to that. Identifying trouble helps in getting new
opportunities and helps the business to grow.
Budget
ZARA, UK conducts research on the marketing budget to analyze the macro aspects of
the business in terms of money. From setting a plan to production, pricing, everything
needs the financial projection. A strategic budget helps to track the investment and
measure the profit. ZARA, UK should start investing more in marketing. Budgeting
influences the pricing strategy of ZARA, UK so the market plan should be properly
based on the accurate data records covering all the expenditures (Piercy, 2014).
Monitoring customer feedback
monitoring customer feedback is used to analyze the customer involvement into the
business. The feedback works as an insight into the product’s performance. ZARA, UK
should gather feedback from customers and show value to their opinions that will help
the brand to achieve reputation and maintain brand equity (Ordenes et al., 2014).
ZARA, UK should listen to consumer's voice to understand the demand of them.
Monitoring customer feedbacks also helps to improve the qualities of the product.
Monitoring their feedback will help to satisfy the customer. If ZARA, UK wants to
increase their sales they need to make sure that the customers are happy with their
product and service by listening to them. They can visit the online reviews of customers
or can conduct a survey. Customer satisfaction is a crucial factor, which is directly
related to increased market share, more revenues, and lower costs. ZARA, UK can
gather customer to create the best customer experience. Nowadays UK people are
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being fancy about products. They want to buy the product with some boldness to
expand their boundaries. If the organization provides them with the best consumer
experience the particular organization will earn loyal customers quickly.
Promotion
Promotion should be used to create awareness among customers about ZARA, UK or a
particular product. Promotions and Advertisement ZARA, the UK to establish their brand
as a useful brand in the market. The marketing mix strategy includes promotion, which
is enlightened by using several communication tools to add value to ZARA, UK.
Promotion of ZARA, UK will also help to increase revenue by attracting consumers
(Andrews and Shimp, 2017). However, ZARA, UK can use promotion as a strategy to
gain customer loyalty by reminding them about their products. Customers will be apt to
visit ZARA, UK store frequently for shopping and may dodge other brands.
P2 Explain how the roles and responsibilities of marketing relate to the wider
organizational context
Finance
The finance department of ZARA, UK controls the financial condition depending upon
the financial records, which are compiled regularly. The marketing department of ZARA,
UK manages and develops the growth of a company. Finance and marketing
department both should work together to monitor business trends and sales promotion
as well. Management looks for a relationship between sales and finance, which is called
ratio (Wood, 2016). Ratio analysis measures the gross expenses of ZARA, the UK with
gross sales. If the finance and management of ZARA, UK work together, they will be
able to find out the ratios of marketing and advertisement expenses. The most important
reason for working closely is to prepare the budget that will help in further expenditure
also. Finance department’s role is to measure the compliances of the marketing
department to plan future budget limits. ZARA, UK must be able to acquire profit by
good marketing and sales but also have to be capable of lowering the expenditures of
advertising and marketing.
Human resource
Human resource recruits employers to add value to their brand, ZARA, UK. Human
resource and marketing should work together as ZARA, the UK needs to have highly
skilled and talented stuff to invent new product ideas and to produce in bulk (Paillé et
al., 2014). Both of the departments complement each other as it is said that employers
are the first consumers of the company if they are satisfied with the product they will be
the agent of ZARA, UK. Products and services cannot be the only thing to promote a
business as people want to work with a company, which has a brand value. ZARA, UK
has to show the brand’s personality to people if they want to attract and retain people. If
ZARA, UK wants to recruit top candidates, they should align their HR strategy to a
marketing plan that is the key to achieve a reputation.
Production
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The marketing department of ZARA, UK tries to sell as much as possible and without an
increased production rate that is impossible. There is a chance of arising conflicts
between the two departments as the marketing wants the production department to
manufacture more and the production department wants to slow down because they
want to make a higher quality product so there is no recall of that product (Hill, 2017).
Marketing staffs generally research the changing tastes and demand of people so they
can make decisions about product innovation and the production team can work
according to that. ZARA, UK’s management authority need to understand the issue and
should try to resolve it.
IT
The marketing department of ZARA, UK is responsible for customer experience and
brand value so they need to be well integrated. The interaction between marketing and
IT department will help in adopting new technologies and monitoring online sales. IT
department plays a very important part in marketing. IT department performs several
duties which include the development of the website, monitoring e-commerce, database
development, automation of marketing and data analysis. The marketing department of
ZARA, UK should use e-commerce records to perform any research and to promote
any product online they will need the help of the IT department. Nowadays audiences
are prone to shop online so the online promotion via social media and social media
marketing both should be handled properly for increased rate of sales. The
management of ZARA, UK should pay attention to the fact that both of the department
needs to have an open communication while maintaining accountability for success but
any one of them should not overpower another department to maintain a healthy
relationship.
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LO2
Compare ways in which organizations use elements of the marketing mix (7Ps) to
achieve overall business objectives.
P3 Compare the ways in which different organizations apply the marketing mix to
the marketing planning process to achieve business objectives.
Elements ZARA, UK H & M
Product ZARA, UK has products for
both male and female.
ZARA, UK has a range of
kidswear which is known as
ZARA, UK kids. There is a
high demand for a wide
range of accessories,
manufactured by ZARA,
UK. ZARA, UK has
generated 1485 million
pounds by selling their
products.
The brand has a variety of
different products such as
daily wear, yoga wear and
others. The brand is the
protagonist of the fast
fashion trend. The brand
has introduced the cheap
Monday collection which is
a denim collection for both
men and women. Their
weekday product is
especially for young adults.
The brand also has a range
of classic wear and
accessories in their product
portfolio. H&M has
generated 1977 million
pounds from their
merchandise.
Price ZARA, UK uses a
competitive pricing strategy
as the brand does not want
to compromise product
quality with the price.
ZARA, UK products usually
targets the higher income
group of UK.
H&M product’s prices are a
little bit lower as they use
affordable pricing strategy
(Edlin et al., 2014). H&M
has a higher sales rate than
ZARA, the UK as the
affordable and highly stylish
products attracts the
youths.
Place ZARA, UK has 7475 shops
all over the world. ZARA,
UK also has an online store
and ships to more than 11
H&M has more than 4500
stores. The company also
has an online presence
which has helped H&M to
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countries. 90% of ZARA,
UK’s stores belong to the
company so the stores are
designed actually same.
expand their business and
become the second largest
global clothing brand. H&M
produces their products in
an area where labors are
available at low cost and
then they transport the
product overseas. The
strong distribution strategy
is the reason behind the
lower price of products.
Promotion ZARA, UK has a unique
marketing strategy, which
leads to zero investment in
promotion. The brand
advertises less than other
brands. The brand focuses
on designing the stores
more than any other brand.
The organization uses their
stores for promotion.
H&M promotes their brand
by multiple methods. The
brand makes creative tv
advertisements and
promotes their brand online
via social media platforms,
which attracts the youths.
Sometimes H&M provides
some offer or coupon codes
that help to attract
customers.
People ZARA has 10000
employees. The company
involves friendly employees
in the customer service
section so that the
customers can have a nice
experience and turns to be
their loyal customer.
The workers of H&M are
well trained and the brand
encourages their
employees to produce more
innovative and quality
products. H&M collaborates
with the most popular and
talented global stylists to
create a new trend.
Process ZARA uses just in time
system, which has helped
the company to design a
new business model
(Pheng and Meng, 2018).
The model is moderated
throughout four different
stages such as raw
material, production,
H&M uses the traditional
manufacturing process,
called JIC. In this model,
the products are created in
a large amount and in
advance. There is a chance
of wasting materials
because the catalog could
not be maintained.
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completion and distribution,
which has helped ZARA to
distribute products in a
short time.
Physical Evidence The initial letter of the brand
is used as their brand logo.
The stores of ZARA are
almost same and
monochromatic on the
inside. The floor, wall and
ceiling are significantly
black, white and silver. The
color of the store name can
vary among the black,
white, and gold color. The
same design has helped
customers to be more
familiar with the stores.
The initial letters of the
brand name signify their
logo. The brand involves
PR engagements. H&M
involves celebrity designer
and others to promote their
brand. The celebrity
involvement helps to attract
a young crowd. The stores
of H&M are well decorated
but not as much luxurious
as ZARA.
Table 1: Comparison between H&M and ZARA
(Source: created by the learner)
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LO3
Develop and evaluate a basic marketing plan.
P4: Produce and evaluate a basic marketing plan for an organization.
Executive summary
The study analyzes the value and importance of marketing strategy. In this marketing
plan, a marketing plan has been produced and evaluated for an organization. The study
conducts research on a marketing plan to identify the internal and external factors,
which may be favorable or unfavorable for ZARA, UK.
Vision
The mission and vision of ZARA, UK should be giving their customers a range of
choices and achieve a quick turnover than other competitive fashion brands. They
should focus on satisfying the customers by improving the quality of the service.
Objective
 To cope up with a challenging situation
 To understand the competitive market and customer’s demand
 To conduct research on external and internal factors
 To improve the quality of service provided to the customers
 To build the company stronger and be the trusted brand of customers
Situational analytics
External
This study analyzes The PESTEL analysis of an organization
Elements Description
Political Britain has voted to withdraw their
membership from the European Union.
Tariffs are not imposed on export and
import amongst the member states in the
European market (Dhingra et al., 2016).
Britain used to be benefited by EU and
other powers that would not happen any
longer. That will affect ZARA, UK, as they
will not be able to expand their business in
neighboring countries so that the
organization should not invest in expanding
the business.
Economical The inflation rate has risen to 2.7% last
year and according to a report, it will rise to
2.44% in 2019. Brexit caused a 2.1% lower
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GDP. The inflation rate has hit the highest
peak in almost 6 years (Ons.gov.uk. 2019).
The salary of people will be reduced and
the unemployment rate will increase so that
will leave an impact on their buying power
and product pricing as well. ZARA, UK may
lose their customers.
Social The population of UK has been increased
by 9.7 million since the past 25 years
(Ons.gov.uk. 2019). It unlocks a great
opportunity for ZARA, UK to increase their
production rate and earn higher revenues.
The organization also has a chance to
introduce new and different product line, for
which the organization will have a chance
to be famous brands
Technological Technology is changing day by day in such
advanced country like the UK. NIA, the
paper shows the changes brought by new
technology and discusses the supply chain
and infrastructure. According to a report,
84.55% of the total population can access
the internet so there is a great opportunity
for ZARA, UK to expand their business
online, which will lead to increased sales
rates.
Environmental Recently the UK was powered without
using coal and planned to reduce the use
of coals by 2025. This proves that the UK
government is concerned about the energy
sources. ZARA, UK should use renewable
energy sources that will help the brand to
maintain their brand name. If ZARA, UK
initiates in saving the environment it will be
beneficial for keeping a healthy bonding
with the UK government (Hajat et al., 2014).
Legal UK law covers the copyright act. ZARA, UK
should design their own products from
being copied and take proper action if the
product is being copied for commercial use.
Under health and safety act, the workers
deserve to be protected at their workplace.
This act covers the workplace safety and
other things in which ZARA, UK shall focus
on that will help the organization to
establish itself as a trusted brand.
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Customers of UK hold some rights while
purchasing anything so the organization
shall pay attention to solve customer’s
problems to maintain brand loyalty.
Table 2: PESTEL analysis of ZARA, UK
(Source: created by the learner)
Internal analysis
Strength
 The main strength of ZARA, UK is
in its design ability.
 The brand has around 7475 stores
all over the world.
 The brand has worldwide
popularity.
 They have integrated the processes
vertically so the management of
supply chain costs less.
 ZARA, UK not only produces trendy
clothes but also manufactures
trendy accessories.
Weakness
 There are some limitations in
marketing and promotion as they do
not invest in promoting their brand.
 ZARA, UK does not have any safety
stock as the brand uses low
inventory to attract customers.
 The brand has to face a highly
competitive market as some other
brands provide highly designed
clothes at a lower price.
Opportunities
 ZARA, UK can make their designs
available at various e-commerce
site apart from their own online
store.
 The brand has become popular so it
has an opportunity of exploring the
global market.
 Targeting a segment can be a great
opportunity for the growth of the
business.
Threats
 The high-end fashion retailers are
launching the highly stylish product
at a low price that can be a major
threat to ZARA, UK.
 The customer switching will be a
threat to the brand, as they do not
promote their brand.
 Political factors such as Brexit can
also be a threat as the brand would
not be able to expand their
business.
Table 2: SWOT analysis on ZARA, UK
(Source: created by the learner)
Segmentation
ZARA, UK should conduct research on marketing segment and target a customer
segment. The brand should divide the customer segment and target the medium to the
high-income group. The brand should also divide the segment based upon the age
group of customers that will help the brand to achieve their goals.
Targeting
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