Marketing Principles Report

This comprehensive report analyzes Zara's marketing strategies, focusing on its application of marketing principles to achieve competitive advantage in the UK market. It examines Zara's marketing mix (product, price, place, promotion), incorporating an extended mix to include people, process, and physical evidence. The report delves into micro and macro environmental factors influencing Zara's decisions, using SWOT and PESTLE analyses. Market segmentation, targeting, and positioning strategies are explored, along with a detailed discussion of buyer behavior and the differences between B2C and B2B marketing approaches. The report concludes by summarizing Zara's effective strategies for international market expansion and brand building.

MARKETING
PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1...........................................................................................................................................1
1.2...........................................................................................................................................2
TASK 2............................................................................................................................................2
2.1...........................................................................................................................................2
2.2...........................................................................................................................................4
2.3...........................................................................................................................................5
2.5...........................................................................................................................................5
2.4...........................................................................................................................................6
TASK 3............................................................................................................................................7
3.1...........................................................................................................................................7
3.2...........................................................................................................................................8
3.3...........................................................................................................................................9
3.4...........................................................................................................................................9
3.5.........................................................................................................................................10
TASK 4..........................................................................................................................................10
4.3.........................................................................................................................................10
4.1.........................................................................................................................................11
4.2.........................................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Marketing principles can be defined as a process of communicating value of product to
consumers along with proper quality and brand which will lead to selling of that product and
with respect to it, business organization will get a competitive advantage over their competitors.
In this context, present report is based on Zara which is a Spanish clothing and accessories
retailer and mentioned company is considered as the world’s largest apparel retailer (Deshpande
and Rundle-Thiele, 2011). Further, Zara has become Spain’s best known fashion brand and the
flagship includes branded groups like Inditex, Amancio Ortea Gaona, etc. Moreover, cited
company has almost 200 stores and firm is promising to double the store in the coming decade.
Further, this report is based on evaluating different elements of marketing process.
Further, this report will also showcase the macro and micro environmental factors which will
influence the marketing decisions. Moreover, this study will also have its significance on
focusing on different products which will lead organization in order to get the competitive
advantage over other firms.
TASK 1
1.1  There are different types of elements which Zara consists of and some of them
have been discussed as below:Aim and objectives- Zara has set their marketing objectives
in order to gain higher profits and revenue. Further, goals and objectives of company are
quite different from their major competitors and firm is focusing on giving the best of
apparels to their large customer base in order to develop healthy brand image (Palmer and
Quinn, 2007). Marketing Mix- Mentioned firm’s essential element for marketing strategy is the
marketing mix and Zara has set their product, price, place, promotion elements by
considering the income group and demand of customers.
 Micro-macro factors- Zara has to adopt some major strategic tool in order to give their
competitors a tough competition. In order to accomplish this, cited organization can
implement SWOT analysis, PESTLE analysis, Ansoff’s matrix and Porter’s five forces
model for judging the effectiveness of organization.
 Market segmentation- Zara’s market is large as mentioned company is producing quality
of accessories and clothing to large customer base. Further, Zara opt different types of
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segmentation for attracting men, women, teenage and kids towards their clothing
apparels.
1.2
Market orientation is a business model for organization which generally focuses on
delivering high quality of products at an affordable price to consumers. Zara in order to attract
customers can produce product either with product oriented or market oriented approach.
Product oriented approach is the one where organization develops product according to their own
wish (Golding and Peattie, 2005). On the contrary side, market oriented approach is the one
where corporate produces only those types of goods which are mostly demanded by the
customers. Furthermore, costs and benefits of cited organization have been explained as below: Cost: In order to increase the sale and productivity off their clothing apparels, there are
different costs which usually Zara spends in order to develop a particular product in the
market. Moreover, organization has got healthy trust of their customers from whole over
the world because cited company spends a lot of money in the market research.
Moreover, in order to develop a healthy product in the market, Zara usually do healthy
advertisement expense which helps organization in order to increase the sale of their
clothing and accessories.
 Benefits: By incurring higher cost on both advertisements as well as on promotion, Zara
gets many benefits as mentioned company is able to achieve the hearts of large number of
customers. Once developed, customers will always be there for Zara if cited company
would satisfy the needs and demand of customers in an effectual manner.
TASK 2
2.1
Micro environmental factors are the factors which are linked with the cited company and
can significantly influence the performance of Zara. SWOT analysis of the cited firm has been
studied as below:
 Strength: Organization’s strength is their retail stores as Zara is having almost 74 stores
around the globe. Further, mentioned company is considered as one of the biggest
Spanish retailers in the world. Zara’s supply chain management is of very low cost and
their major operations like manufacturing and operations are integrated with it
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(Nwankwo and Gbadamosi, 2010). Further, company’s products are trendy as well as
designed.
 Weakness: Though Zara’s customer base has an immense trust on organization’s
products and services, this is the only reason because of which cited company uses
unusual strategy for the advertisement. Further, customers are price sensitive therefore;
target segment might go for cheaper and newer collections.
 Opportunities: As mentioned company is planning to start their retail outlet in UK, there
are more global markets where Zara can explore their trendy products and accessories.
However, with the popularity of online marketing and e-retailing, company can focus on
that too.
 Threats: Zara can have a major threat from high end fashion merchandisers. Further,
economic downturn in any country can act as the major threat for their target customers
(Olimpia, 2011). However, company also faces tough competition from their major
competitors namely Uniglo, Mango, H&M, etc.
On the other side, macro environmental factors are those which generally impact the
corporate performance from different outside sources and some of them have been explained as
below:
 Political: Political factor is considered as a policy of government which Zara has to
follow for effective functioning in the country. Further, it comes when local body
interferes in the economy as they come up with the laws which change the way in which
things are done in country for Zara. Further, Zara has to understand the system of trade in
order to import and export goods from one country to the other.
 Economic: These factors include change in the taxation rates, interest rates, inflation rate
as well as stock exchange rates. These economic factors have potential to create a lot of
problems for Zara in the coming time period. Further, the price of product will also vary
from country to country (Rosen, 2009).
 Social: This factor plays a crucial role for Zara as alteration in the social trend may affect
the demand for the product and also the willingness and availability of consumers to buy.
Further, company has to work on the current trends in order to satisfy the demand of
teenagers. Discount and concessions also have their own importance.
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 Technological: Technology is getting innovated day by day as bar coding, computer
related designs and online shopping are the latest improvements in the business sector.
Further, efficient technology can minimize the cost for the firm as well as it can enhance
the product quality as well.
 Legal: Media is fascinating the cited company from copyright issues and further, the
firm, Top shop is purchased by Arcadia who has the best quality of dresses starting from
£40-£60 (Kotler, 2008).
 Environmental: Earlier earthquake in Japan has destroyed large number of factories for
many global organizations like Honda, Nestle, etc. Mentioned company has to take care
of this factor as it is uncontrollable.
2.2
Segmentation generally provides lots of benefits to both customers as well as to
organization itself. This segmentation helps Zara to treat all their customers in an equal manner.
Mentioned Spanish Company is planning to set their new empire in UK; therefore, mentioned
firm is planning to develop their existing products into new market in order to increase their sales
as well as revenue (Henley, Raffin and Caemmerer, 2011). Further, cited company can bisect
their products on the basis of following segmentation: Geographic- On the basis of region, population, size of metropolitan area and climate. Demographic- Demographic segmentation for Zara consists of age, gender, income level,
occupation, social class, ethnicity, etc. Psychographic- This segment groups the customers as per their behaviour, interest,
attitude as well as opinion.
 Behavioralistic- It is usually based on consumer behaviour towards the product as it can
be the user status, occasions, readiness of individuals to pay, etc.
For increasing their brand image, company is planning to sell all the existing apparels and
accessories in UK market from the head office. In order to meet this, junior manager of cited
company has focused on two segments namely the demographic and psychographic
segmentation (Ruckman, Saraf and Sambamurthy, 2015). With the development of global brand
in UK, many customers will be attracted towards the organization’s product and by giving them
discount offers in the initial stages; Zara will be able to achieve the hearts of customers in UK as
well.
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2.3
As winter is approaching, Zara in UK will have major emphasis on leather jackets and
blazers for both men and women. Further, after the accomplishment of market segmentation
criteria, Zara can develop appropriate targeting in order to give tough competition to their major
competitors. Furthermore, different pricing strategies have been discussed as below:
 Differentiated strategy: Differentiated strategy is the one where organization focuses on
two or more market segments by developing appropriate market mix for each segment.
 Undifferentiated strategy: It is a strategy where organization sends a single promotional
message to all the potential customers. Further, this strategy is helpful only when a
company’s product have fewer strugglers in the market.
 Concentrated strategy: Concentrated strategy focuses on designing promotional
message which will communicate the advantage of a product for a particular segment
(Armelini and Villanueva, 2011).
Further, for promoting the leather jackets and coats for men and women, cited company
can implement differentiated strategy as Zara has to advertise different promotional messages for
both men and women segmentation.
2.5
Positioning may be defined as the process of establishing the brand image of the products
or services in the minds of the consumers thorough well developed measures of designing,
promoting and packaging. It is marketing activity which focuses on developing the brand image
of the company in the minds of the buyers. This process also includes improving the perception
of consumers regarding the experience they had after using the mentioned company’s product.
The most effective strategies adopted by the company to position the product induces effective
integration of marketing mix elements and designing promotional measures accordingly.
Further, if customers like Zara’s product then they will reach either to physical store of the
organization or purchase the same product online. Moreover, Zara has clearly mentioned the
price and size of product which will attract the minds of customers (Ferrell and Hartline, 2012).
Further, mentioned firm’s motto is to attract the middle class as well as higher upper class
people. By seeing this, Zara produces the best clothing product at an affordable price.
Positioning strategy adopted by Zara includes:
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 Product differentiation: the company has developed an effective and renowned brand
image within the economy. The quality products and service range has helped in
effectively positioning the product within the market.
 Service differentiation: the well trained team of employees provide effective standard
consumer services which has developed an up street brand image for the company. This
has helped in developing exclusive market demand for products and services.
 Image differentiation: The renowned brand image and high quality perception for
products and services of Zara has helped in effectively positioning the product.
Further, aforesaid company can implement price positioning strategy as Zara can set the
price of clothing according to different sizes and even by considering the aspect of men and
women approach towards the product.
2.4
Illustration 1: Model of buyer behaviour
Customers generally use the products and services according to their needs and demand.
Further, Zara can face buyer behaviour towards their merchandise in UK because buyers will
have their own perception in order to choose the products. Zara cannot force people to choose
their clothing apparels and accessories (Henley, Raffin and Caemmerer, 2011). Model of
consumer behaviour clearly represents that marketing environment helps in developing buyer
response within the market however the black box model considers the two major factors which
helps in determining consumer demand. The buyer's characteristics of the models considers the
following factors:
 Cultural: These factors considers cultural factors associated with the buyers. This may be
include factors regarding cultural values, sub cultural values, social class etc. Zara is
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fashion retail giant. These factors help the company in analysing the demand and needs
of the consumers and develop products accordingly to attract buyers.
 Social: These factors deals with the collective impact on individual preferences. These
factors are influenced some dominant factors such as reference groups which has direct
and indirect influence on the buyers, family which helps in developing effective choices,
status and roles etc.
 Personal: these factors defines the demographic factors of the buyers which includes age,
lifestyle, occupation etc. These factors widely helps in influencing buyers demand thus
the company makes products accordingly.
 Psychological: these factors of the buyers helps in developing effective perception
towards products and services and also develop consumer motivation towards the same.
Zara use these factors in designing and developing promotional activities.
Moreover, customers are generally price oriented therefore; Zara has to set the price of
men as well as women’s product quite low at an earlier stage. This is because; it will attract the
potential customers in order to buy Zara’s products. Company is also having the liability to give
wide variety in the jackets for attracting consumer’s attention. Mentioned company is giving
varied colour options so that customers would get satisfied and will become loyal towards the
organization (Ruckman, Saraf and Sambamurthy, 2015).
TASK 3
3.1
Zara produces only those goods and services which give organization a competitive
advantage over their competitors. Competitive advantage is considered as a positioning of
organization’s products in the eyes of customers as the product gives maximum satisfaction as
compared with the other products (Armelini and Villanueva, 2011). This instance certainly
happens when business enterprise develops a genuine brand loyalty in the eyes of their large
customer base. Some of the competitive advantages which mentioned company can use are
stated as below:
 Product differentiation: If products of Zara are unique as compared with of other
competitors then certainly differentiation will come into place. Further, price of Zara
products differ on the material which they are taking in order to produce that product.
However, company generally cares for their customers’ needs and demand and
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generally focuses that customers would get the best quality of products at an affordable
price.
 Cost competitive advantage: It is the one where company utilizes its skilled employees,
inexpensive raw materials and excellent operations in order to generate the maximum
value to consumers (Ferrell and Hartline, 2012). Some companies use offshore methods
for keeping their cost of production at down level.
3.2
An effective distribution system of the company focuses on making availability of the
products to ultimate consumers on timely and effective measures. It enhances consumer
convenience and demand within the market. Effective and well defined distribution channel
helps the company in making high and quick availability of the products which helps consumers
in developing trust and loyalty for the company. Online availability of companies has helped in
developing the process in the economy. For managing the same companies develop a well
managed and integrated system of logistics and product availability in the market. Effective
sup[ply chain management is a clear example for the same.
Distribution channel play a crucial role for Zara in order to provide more convenience to
the consumers. Company will focus on providing apparels and accessories at a place where a
mass of individuals reside so that more customers will approach the retail outlet. Further, main
aim of distribution channel is to keep the distribution cost as low as possible. Further, to develop
effective sale, cited company can choose: Intensive distribution: This distribution strategy will focus on making maximum
availability of products within market so that customers would get the best quality
product at an affordable price.
 Selective distribution: Selective distribution focuses on creating high market sales by
developing effective sales and by making the product available in the company’s outlet
itself.
3.3
Prices for clothing apparels need to be set in order to achieve the value for Zara (Henley,
Raffin and Caemmerer, 2011). Further, cited company is focusing on increasing higher sales in
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UK market which will simultaneously increase the goodwill of Zara. Further, some pricing
strategy has been discussed as below: Competitive pricing: Prices are set for the clothing and accessories by considering the
needs and demand of customers. Further, cited company constantly checks the price of
their competitors’ products namely Uniglo, Mango, H&M, etc.
 Premium pricing: Zara is focusing on some clothing apparels which will only target the
rich and high income class people. As cited company is a popular brand in Spain,
corporate has loyal customers from whole around the globe which generally increases the
demand and brand image for the corporate (Kim and Hyun, 2011).
3.4
Promotional activities play a significant role in order to achieve the marketing objectives
as promotion is considered as an important element of the marketing mix. This promotional mix
helps Zara to promote their brand and helps in making effective goodwill. Promotional measures
which are adopted by the cited organization are: Advertisement- Advertising on TV is a common practice which is followed by each and
every organization. Advertisement shows pricing strategy and place strategy i.e. the
location of customers. Further, product should be easy in reach of individuals. Personal selling: Personal selling constitutes sales person who tries to convince the
customers to buy their product with additional discount. It is further treated as a door to
door service which showcases relationship between organization behaviour as well as
customer behaviour (Akaka, Vargo and Lusch, 2013).
 Online promotion: Online promotion is recent and the most effective means of promotion
within competitive market which is generally increasing the sale of clothing industry.
Online promotion can be through different tools like Add words, Search engine
mechanism, Social media marketing, etc.
3.5
Marketing mix is performed by Zara after distinguishing the marketing strategy. Apart
from the major four P's namely product, price, place and promotion; author has extended 3 more
P's and these are people, process and physical evidence. These are explained as below:
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 People: Employees are the one who increase the sale and productivity of cited company
as they produce the best quality clothing in order to attract large customer base (Huang
and Sarigöllü, 2012). Further, by recruiting right qualified staff at right time increases the
efficiency of company as these individuals give rise to personal selling and other sales
promotion activities of the product. Process: Managing quality and cost of production is one of the crucial requirements of
cited organization. Further, Zara should have well tailored process in order to minimize
the cost (Belohlavek, 2008). Moreover, online and physical sales help Zara to increase
revenue as these measures attract consumers to choose cited firm’s product instead of
their competitor’s product.
 Physical evidence: This shows the way in which Zara and its product is perceived in the
market place. Further, physical presence of product with all innovative features explains
the usability of product. Moreover, organization should have multiple stores at
metropolitan areas in order to increase its sale and productivity.
TASK 4
4.3
International market means transfer of goods and services from one country to another
whereas in domestic market, goods and services are transferred within same country. Further, in
international market, exchange is done on the basis of different currencies whereas in domestic,
it is with the same currency (The Impact Of Micro and Macro Environment Factors on
Marketing, 2015). In context to this, international marketing constitutes with the following
factors:
 Cultural factors: International marketing has to effectively consider the cultural values
and factors of a particular region to intensify the consumer perception and values of
product. Zara efficiently focuses on evaluating the overall cultural values before
marketing products in the international market.
 Global branding: For developing global brand image of corporate, Zara develops
effective branding measures within market. Moreover, company has developed adoption
strategy which stresses on marketing products by following the local needs and demand.
Pestle Analysis
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