Zara's Marketing Strategy: Analysis, Objectives and New Product

This report provides a comprehensive analysis of Zara's marketing strategy, focusing on the fashion industry's dynamic landscape and consumer preferences. It leverages tools like market analysis, PESTLE analysis, competitor analysis, and SWOT analysis to evaluate Zara's position and potential. The report also delves into STP analysis for targeted product placement and the marketing mix for effective promotion. Furthermore, it outlines a plan for evaluation, implementation, and control, emphasizing the introduction of a new recycled clothing line as a sustainability initiative. The analysis covers Zara's company overview, buyer behavior, marketing objectives, and a detailed examination of the competitive forces shaping its market.

Marketing Strategy
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EXECUTIVE SUMMARY
The Fashion Industry are growing at a fast phase and they are also being quite dynamic
according to the Tastes and preferences of the customers. The fashion industry is known as the
broadest sector which is continuously evolving and adapting changes so that it can grow and
expand in many ways by providing the best of products and services to the customers so as to
gain various advantages. ZARA is Considered as a well reputed brand which is the Priority of
various groups of Society as the Brand is excellent in providing the best of quality to the
customers all around the world. The Market analysis and Pestle analysis are considered as an
important tool which can be helpful in evaluating about the external forces such as political, legal
as well as the various competitive approaches which can be an opportunity or a threat for the
Company. The competitor analysis is referred as a tool to examine various aspects of the
Competitors. These tools are important in knowing about the Position of the Company in the
market and how it can maintain its position in the long run. The term Swot analysis is referred as
a strategic tool which is used to analyse the internal aspects of the company I.e., analysing about
the strengths, weakness, opportunities and threats. The Other term which is relevant for keeping
a Good brand image is referred as the STP analysis which is very helpful in making the products
available to the different segments of the market along with the better positioning. Marketing
mix is defined as the strategic tool which is an effective component of the marketing term. This
tool is opted to manage the activities which are relevant to manage in order to complete the
effective marketing procedure. This tool has various components which can be helpful to
generate the best results by promoting the products and services in the Market so as to satisfy the
needs and wants of the Customers.
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Section 1 – The company and situational analysis.................................................................4
Company overview............................................................................................................4
Market Analysis.................................................................................................................5
PESTEL analysis...............................................................................................................6
Porter’s 5 forces.................................................................................................................7
Buyer behaviour.................................................................................................................9
SWOT analysis................................................................................................................10
Section Two: New Product/Service Objectives and STP.....................................................11
Marketing Objectives.......................................................................................................11
Target audience identification.........................................................................................12
Targeting strategy proposal.............................................................................................13
Product Positioning..........................................................................................................13
Section 3: New Product/Service Marketing Mix..................................................................15
Marketing Mix along with recommendation...................................................................15
Section 4: Evaluation, Implementation & Control...............................................................17
Evaluation, Implementation and Control Plan.................................................................17
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20
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INTRODUCTION
Marketing plays an important role in making aware customer about company's offerings and
products. It is important to creates a sense of awareness among customers so that it becomes
easier to attract larger customer base. Marketing helps in selling of goods and services in order to
generate profit. It starts with identification of customer's needs and ends at delivering satisfaction
to customer (Wee, 2017). It is considered as one of the most important aspect which contributes
in success of organisation. The function of production and distribution strongly on marketing
function. It may be referred as the process of introducing and promoting product or service of
company in order to encourage sales. This project is report is based on Zara, complete men,
women and children clothing store in UK. This project report will cover a brief outline of
product proposed and competitor analysis along with SWOT. Further, it will cover objectives,
STP and Marketing mix of process. In addition to that, it will cover a detailed plan for
evaluation, implementation and control and will focus on introducing a new product line which
will be based around recycled clothing range made entirely from waste materials as a part of a
new sustainability initiative.
MAIN BODY
Section 1 – The company and situational analysis
Company overview
Zara, a clothing company in UK which offers fashionable and trending clothes to every
segment of people. It regularly updates its wardrobe with new clothing and fashionable
accessories at reasonable price. It also gives discounts on its product so that it can attract larger
customer base. The main key factor in making company successful is quality along with
customisation print. Customers can opt print and colour based on their choice. This makes
company different from their competitor and by opting this tactic it can benefit in remaining
competitive in dynamic business environment. It consists of wider variety of clothing to almost
every segment of customer. It offers clothing and accessories such as belts, perfumes, bags and
other fashionable items at reasonable price to customers.
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Market Analysis
The market in which company operates its business is Clothing and appeals. It is one of
the most elevated industry in terms of customer reach. This industry is highly competitive as
there are many competitors which provide similar type of products at lesser price. There is a cut
throat competition in this industry and marketers use pricing strategy to make their business
more successful (Novikov, 2018). The crucial factor which influences the profitability of
company is changing rends. If a company is not updating its stock according to trend, then it
would suffer consequences in terms of lowered profits. So it is needed for company to identify
changes in fashion and bring latest trendy clothes in order to remain competitive in market.
Trends are based on demographics, brand awareness and shopping. By conducting an extensive
research helps company in identifying customer needs and wants in order to satisfy their needs
and wants. The fast fashion industry within which Zara exists and dominates thanks to its
advanced marketing think tank has gone through major negative ramifications mostly owing to
the COVID-19 pandemic. However, after nearly 2 years of constant disruption, future outlook
does contain avenues for pursuing growth owing to advances in sustainability, changing category
landscapes along with demand for fashion stores to go fully digital. According to official
industry reports such as Mintel and official deports developed by the consulting giant, McKinsey
regarding the fashion industry, there are many rising trends which Zara can take advantage of
which are listed herein.
 The fashion frontier is going increasingly digital as mass investment in development of
vast digital infrastructures are rising
 The demand for sustainable and ethical fashion is at an all-time high as goods which are
made from recycled material or companies which are working and advertising their
efforts to make their supply chains more sustainable have met with positive responses
 The advent of new technologies such and circular textiles are also gaining increased
relevance globally as they help contain textile and manufacturing waste while also being
more cost friendly and sustainable in the long run
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PESTEL analysis
 Political Factors – There are various political factors which impacts on business
operations and it is important to take into consideration while formulating business
strategies. Due to political instability, it can impact in either positive or negative way.
Political factors influence fashion trends. Change in policies and rules and regulations
may affect business operations. Zara is a Spanish brand which enjoys all the benefits and
advantages of European Union. The Biggest Benefit of the company running in the
European union is the Extensive trade of the country (Alanzi, 2018).
 Economic Factors - the economy is still recovering from impact of COVID-19 which
have affected almost every business industry. But after the pandemic, people are more
spending on fashionable products and accessories. It can be seen in expansion of trending
clothing for youngsters. The price of clothes varies for brand to brand and it is human
tendency to buy quality product but by paying minimum price. The brand Zara is Spanish
and it has the Highest unemployment rate as compared to other countries. It has low cost
of Labour in comparison to other western countries (Morrison, 2022).
 Social factors -These factors affect mostly fashion industry as rapid change in society of
UK can affect. Due to change in lifestyle among people, it is important to taken
preference of customer in order to provide quality products. There are various clothes for
different occasion based on culture and custom of country. Zara is a fashionable brand
which makes it a priority of the Customers all around the World. The Brand is also quite
famous and well reputed among the Buyers by which it has maintained a good relation
with its customers.
 Technology – As technology emerging day by day and it becomes easier to attract large
customer base by using digital platforms. Change in buying pattern such as online
shopping has affected fashion industry of UK positively. It helps people to buy their
products from websites. The Company is also using various new and upgraded version of
technologies such as Use of Big Data and other soft wares so that it can increase the
reach of its customers (Hollensen, 2018).
 Legal factors -There are various legal factors in UK which affects business operations.
The government have formulated different rules and regulations and it is needed to
comply with all for smooth functioning of business enterprise. Some of the factors are
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export restriction, tax restrictions and inflation rates. It has been analysed that there has
been a hike in inflation rate of UK in fashion industry which have negatively affected
whole industry. Along with that, The Legal policies of UK are Quite complex which
should be followed by Every Business and the Organisation such as Zara as it also
maintains its copyrighting policies and other laws so that it can run effectively and
Efficiently (Lund, and et.al 2021).
 Environmental Factors – Apart from profit making, company have to take care of
environmental resources as they can impact on business operations. Many clothes are
made up of cotton and transportation of raw material emits harmful gases which is toxic
to human health. Natural calamities and disasters can affect supply chain of material and
thus impacts on company's operations. The Fast Fashion is Affecting the Fashion
Industries and other factors in many ways such as wastefulness, environmental harm,
Zara is focused on producing the Sustainable products so that it can contribute towards
the environmental concern and could not harm the Environment buy any of its product
(Dennis,2020).
Porter’s 5 forces
 Threat of new entrants- Being well established brand, it is bit difficult for other clothing
company to enter in this industry. As Zara has already build each and every strategy
which easily creating differentiation in the products in comparison to their current
competitors in the market. Company is utilizing the unique pricing strategies where
customer can get all types fashion in very cost effective prices.
 Bargaining power of customers – Overall bargaining skill of customers in Zara is quite
reasonable. As company offers varieties of offers on its brand to attract the wide range of
customers and hold them in the long run. Zara is completely aware about the fact that the
transferring cost of their customer to another brand is relatively low. For this it is
necessary to opt creative changes by considering all the trends in the market
(Draskovićand and Peterse 2018).
 Bargaining power of supplier- It is very difficult for the suppliers to control the supply
management of Zara. This organisation holds several countries from like Bangladesh,
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Spain, Morocco, etc. to whom a continuous supply of clothes is being conducted. On the
other hand, Zara also has its own manufacturing unit, which reduces the dependability of
the company on suppliers. By this it is clear that company has complete freedom to drive
the cost of the product which they are purchasing from the retailers.
 Competitive Rivalry- Chanel, H&M, Mango, forever 21 etc. are some of the
competitors of Zara in the fashion industry. It is important for the company to explore the
marketing strategy which these companies are applying in the functioning of their
management. By this Zara can gather the relevant information through which they can
reduce the market share of these rivals. But the positive side is that Zara has invested
large amount of fund to promote the innovation in offering new fashion trends in the
market. Sales structure of H&M and Zara is represented below in the form graph-
Sales of H&M
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Sales of Zara
 Threat of substitutes- In fashion industry, lots of local brands are working on
improvising the quality of their products to attract the residents. Company must be aware
about such retailers in the market, because they offer new fashion clothing in very
economical prices. So, Zara must focus on reducing the substitutes for their product and
services in the market.
Buyer behaviour
The buyer behaviour in the context of global fast fashion industry has also gone through
major changes in the last few years mainly owing to the growing digital transformation and the
changes in the lifestyle of people owing to the pandemic. Zara can find potential growth
opportunities by capitalizing on some of the major consumer trends which are listed herein.
 The people have become hyper aware in regards to the sustainability quotient of the
product which they are purchasing as they are cautious about the materials being used,
the source of procurement along with the environmental impact of the company’s product
offerings (Diddi, and et.al 2019).
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 Any form of recycling and efforts made to improve the environmental impact and
becoming more socially ethical is responded extremely positively by the people and
companies which undertake such CSR practices are more favoured by consumers
 The complex taste of people pertaining to fashion in 2022 is more about purchasing
clothes which make a public statement and stand for a personal or social cause. Products
which are grounded in reality and are marketed using real life issues penetrate the given
market in a more effective manner
SWOT analysis
It is a management tool or framework which is used to assess strengths, weaknesses along with
opportunities and threats of company (Baines, Fill and Rosengren, 2017). On the basis of the
above conducted situational analysis, there are many opportunities that the company can take
advantage of and some threats it needs to be wary of which are listed herein in the form of a
SWOT analysis.
Strengths
 Zara has an extensive client base which
is extremely devoted to the company
and this can help the company
undertake risky initiatives such as
introducing new product lines
 Being a major multinational clothing
brand, the marketing mix of Zara is
capable to undertake large scale
promotion which can help popularize
the offerings in the market
Weaknesses
 The supply chain of company lacks as
it can face shortage in case of high
demand and excess at time of low
demand (Ye and et.al., 2021).
 It does not have EOQ software which
can help in assessing level of stock so
that it can eliminate risk of excess and
lower inventory.
Opportunities
 With the advent of increased customer
focus on sustainability, the company
has a chance to grow by making its
Threats
 There are various competitors in market
and rapid change in fashion industry
becomes a major threat for company
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supply chain more sustainable and
leaner in the long run
 By coming up with new clothing
products made from recycled material,
the company can take advantage of the
market gearing towards sustainable fast
fashion
such as Chanel and Christian Dior
 The company is yet to recover from its
pandemic induced losses which is why
any new investment in new product
lines is a risky undertaking
Section Two: New Product/Service Objectives and STP
Marketing Objectives
On the basis of the situational analysis of Zara which has been conducted in the above
sections of the report, it has been identified that in order to grow their business further, the brand
must capitalize on growing ethical fashion and sustainability centric consumer choices. This will
be done by introducing a new product line which will consist of basic clothing for both men
and women consisting of shirts, jackets, outerwear’s and accessories which will be made
entirely of recycled waste material. Some of the major marketing objectives are listed herein
pertaining to the first year which will fulfil the SMART objective criteria which stands for
Specific, Measurable, Achievable, Relevant and Timely and helps set goals which have a high
chance of getting executed to perfection.
 Increase in the market share of Zara by 3% owing to the introduction of the new product
line
 Initiating a successful launch of the new product line based around clothing built from the
ground up using waste material by the end of the year
 Increase website traffic and social media engagement of the brand and the new product
line by 15% for the year at hand (Martin,2018).
All three objectives which have been formulated above are well within the SMART
framework as they are specific to the new product being launched, it is achievable within the
year due to the massive resources that Zara has and is measurable through key metric such as
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financial reports and company analysis. All the three goals are relevant as they are tied to the
success of the company and all are timely as they are to be achieved within the given year.
Target audience identification
STP is a framework which is used in positioning of product to various groups of target
people more effectively and efficiently (Baines, Fill and Rosengren, 2017). By conducting STP
analysis, company can get to know about what is the segment of their product, whom to target
and where to position product in order to create awareness of product. It will help company in
eliminating wasteful activities and can use its efforts and time in doing other essential activities.
It will also help company in saving of financial resources and gets clarity in their actions
(Lahtinen, Dietrich and Rundle-Thiele, 2020). Zara wants to target youngsters who are fond of
trendy and fashionable clothes at reasonable price. There are various factors on which company's
customer rely on such as demographics, Psychographics, values, beliefs and lifestyle. The range
of Zara's customers ranges from 15 to 40 years old. Fashion forward customers and value driven
customer are more likely to be in favour of getting product of company. In order to target
audience, it is needed to conduct market research and based on that, company makes decision
(Tapp and Spotswood, 2017). In order to undertake the successful market launch of this new
recycled product range of sustainable clothing, the main segmentation variables which will be
used are listed herein.
 Demographic – These will be the main variables which will be used for the developing
the marketing efforts needed for the robust launch of the new product line and the major
factors which will be used for segmenting the market include age, income and
educational level. The main target audience which will this new product will be marketed
towards will be the youth between the ages of 18 to 30 which is known to have a
considerable level of disposable income in UK and is quite educated. Studies have also
shown that this target group is socially aware and is more geared towards supporting a
sustainable cause due to being highly educated
 Behavioural – Since Zara has immense social media and digital marketing capabilities
the same will also be used a basis to filter the market. The company will analyse the
internet footprint, search history and the target market’s past transaction history with
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