Marketing Report: Zara's Competitive Positioning and Product Strategy

This report provides a comprehensive analysis of Zara's marketing management, focusing on its competitive positioning within the global fashion industry. It begins with an executive summary and an introduction that highlights the importance of understanding the competitive landscape for strategic decision-making. The report then delves into a competitive review, identifying key competitors such as Gucci, Burberry, and Ralph Lauren, and analyzes Zara's unique positioning in terms of product diversity and price points. The report utilizes positioning maps to illustrate Zara's strategy as a fast-fashion and trendy brand, contrasting it with competitors. A review of Zara's product strategy includes an examination of its brand portfolio through a BCG matrix, highlighting the different brands within its product mix, such as Pull & Bear and Bershka, and their respective target customer segments. The report concludes that Zara should adopt a market development strategy to expand its reach and increase its presence in the global market. The report emphasizes Zara's distinctive approach compared to its competitors, particularly in its focus on offering innovative products, and suggests that Zara should enhance its presence among mass-market customers to ensure long-term business viability. The report is supported by references to relevant academic literature.

Running head: MARKETING MANAGEMENT
Marketing management
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the current positioning of Zara compared to their major
competitors. Some of the close competitors for Zara are being identified in this report and it is
also identified that Zara is maintaining a unique positioning approach in the global fashion line
industry. Moreover, this report concluded that majority of the customers perceive Zara as the
innovative brand, which are offering new designs in the market.

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Table of Contents
Introduction......................................................................................................................................3
Competitive review..........................................................................................................................3
Review of the product strategy of Zara...........................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8

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Introduction
Determination of the competitive scenario is important for the business firms due to the
reason that based on the competition, the strategies are being initiated. This includes the product
strategy and service delivery process. In the current business state of affairs, it is also becoming
important for the business organizations to have their presence in different segments in order to
cater to larger target customers. Zara is one such fashion brand that is having presence in
different fashion categories and worldwide presence (Nenni, Giustiniano and Pirolo 2013).
However with the increase in the competition, it is becoming important for them to review their
strategic positions and competitive advantages.
This report will discuss about the positioning of Zara in comparison to their major
competitors along with discussing about the products mix of them. In addition, this report will
also discuss BCG matrix from the business perspective of Zara.
Competitive review
In the global scenario, intensity of competition is high for Zara with the presence of
number of competitors. Some of the major competitors for them are Gucci, Burberry, Ralph
Lauren, Prada and Hugo Boss. All these brands are operating in the global scenario and catering
to premium customer segments (Gabrielli, Baghi and Codeluppi 2013). However, it is identified
that Zara is having diverse brand presence compared to these competitors with having different
sub brands in different segments. Thus, the customer segment is much larger for Zara compared
to their competitors. On the other hand, brands such as Gucci and Ralph Lauren are more niche
players and they are being positioned as more premium over Zara. Thus, the customer retention
and loyalty is more for them compared to Zara.

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High price
Low price
Product diversityProduct class
ZARA
BURBERRY
GUCCI
RALPH LAUREN
PRADA PULL&BEAR
BERSHKA
The above positioning map shows that all the competitors in the high end fashion sector
are competing on the basis of product class and standard and diversity. This refers to the fact that
brands such as Gucci and Ralph Lauren are operating in higher price points compared to Zara
and they leveraging on the class, standard and aristocracy associated with the fashion line
(McNeill and Moore 2015). Thus, social value is more for their products. On the other hand,
Zara is competing on the basis of fast fashion by launching the innovative designs in the market.
Thus, the designs and variety of Zara are more and customers are having distinctive styles with
Zara. Moreover, with the sub brands such as Bershka and Pull & Bear, Zara is also competing on
the basis of offering products such as accessories (Choi et al. 2014).

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High price
Low price
High product trendinessLow product trendiness
ZARA
BURBERRY
PRADA
GUCCI
According to the above perceptual map, Zara is positioning them as fast fashion and
trendy brand in the market compared to the class and standard based positioning of their
competitors. It is also being identified that majority of the customers perceive Zara as the trendy
brand, which offers new designs in the market. Moreover, the customers are also aware about the
fact that products of Zara are not having the social value as Gucci and Ralph Lauren but the fast
fashion concept and early adopter of new designs are compensating for that (Caro and Martinez-
de-Albeniz 2015). Thus it can be concluded that even though the high end fashion retailing is
highly competitive but the unique positioning of Zara is helping in targeting different customer
segments.

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Market shareHigh Low
High
Low
Market growth
Review of the product strategy of Zara
The above BCG matrix of Zara states that they are having different brands in different
categories and this states that some of their brands are having the potential for having higher
market share in the long term. In terms of the product mix of Zara, they are having different
brands in different sector such as Oyosho in the women undergarment sector, Uterque in fashion
accessories sector and others in the fast fashion clothesline sector (Runfola and Guercini 2013).
It is identified that among all the fashion garment brands of Zara, different brands are targeted
for different customer segments. For instance, Pull & Bear is for the youths with more causal
preferences and Berska is for the customers having preferences for innovations and
distinctiveness.
Zara is having different strategies when compared to their competitors. This is due to the
fact that the product strategy of Zara is more concentrated towards offering distinctive products
Star
Zara
Bershka
Question mark
Pull & Bear
Cash cow
Uterque
Dog
Oysho

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to the customers over the price based strategy of the brands such as Gucci and Prada. It is
reported that in the last five years, Zara has not introduced any new brands. The last brand they
introduced is Uterque in 2008 to cater to the high end fashion accessories segment (Yang, Song
and Tong 2017). This helped them in diversifying their market area and includes more products
under their fast fashion category. Thus, it can be concluded that introduction of Uterque can be
treated as category development due to the reason that it helped Zara in extending their fashion
line with accessories such as sunglasses. This helped in offering more diverse product offerings
to the customers and covering larger target segments compared to their competitors (Liu et al.
2013).
Conclusion
Thus, it can be concluded that Zara should initiate market development strategy in order
to cover larger market area. This is due to the reason that majority of the competitors of Zara are
operating in the niche target segments and thus market development policy will help Zara in
enhancing their potentiality. Moreover, they should also have larger presence among the mass
market customers in order to increase the brands presence across different markets around the
world. The more will be the presence of the brand in the market, the more will be the level of
penetration in the global scenario, which will further ensure the business viability in the long
term. The positioning approach of Zara identified in this report concluded that they are
maintaining different and distinctive strategy in the market compared to their competitors.

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Reference
Caro, F. and Martínez-de-Albéniz, V., 2015. Fast fashion: business model overview and research
opportunities. In Retail supply chain management (pp. 237-264). Springer, Boston, MA.
Choi, T.M., Hui, C.L., Liu, N., Ng, S.F. and Yu, Y., 2014. Fast fashion sales forecasting with
limited data and time. Decision Support Systems, 59, pp.84-92.
Gabrielli, V., Baghi, I. and Codeluppi, V., 2013. Consumption practices of fast fashion products:
a consumer-based approach. Journal of Fashion Marketing and Management: An International
Journal, 17(2), pp.206-224.
Liu, N., Ren, S., Choi, T.M., Hui, C.L. and Ng, S.F., 2013. Sales forecasting for fashion retailing
service industry: a review. Mathematical Problems in Engineering, 2013.
McNeill, L. and Moore, R., 2015. Sustainable fashion consumption and the fast fashion
conundrum: fashionable consumers and attitudes to sustainability in clothing
choice. International Journal of Consumer Studies, 39(3), pp.212-222.
Nenni, M.E., Giustiniano, L. and Pirolo, L., 2013. Demand forecasting in the fashion industry: a
review. International Journal of Engineering Business Management, 5(Godište 2013), pp.5-36.
Runfola, A. and Guercini, S., 2013. Fast fashion companies coping with internationalization:
driving the change or changing the model?. Journal of Fashion Marketing and Management: An
International Journal, 17(2), pp.190-205.
Yang, S., Song, Y. and Tong, S., 2017. Sustainable retailing in the fashion industry: A systematic
literature review. Sustainability, 9(7), p.1266.