Marketing report ٭ Zara ٭ By Eleanor Daly
Introduction 1* Brand Analysis 2* Company Overview 3* History 3a* Target Market 3b* Retail 3c* Online 3d* Marketing 3e* Product Insight 3f* SWOT 4* Strengths 4a* Weakenesses 4b* Oppurtunities 4c* Threats 4d* Competitor Analysis 5* Conclusion 6*
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This report will be a brief factual documentation detailing the economic, social and environmental changes and accomplishments of Zara the high street retail brand for the duration of this annual year. Zara is an established Spanish chain run by the Inditex Group who are also owners of other large retail European chains like Zara Home, Pull & Bear, Massimo Dutti, Oysho, Uterque, Stradivarius and Bershka. The Company was Founded Amancio Ortega where he started debuted his
first Zara store in Coruna, Spain. Zara’s key to success was its simplicity, start small aim big. As I am an a avid shopper of the Spanish chain, and knowing the style they aim for and the range in their target market, I though it was achievable to produce a campaign that was truthful and report that was factual, as I essentially am part of the target audience they appeal to.
Introduction 4
Zara dominates the power and investment growth for the Inditex Group. Out of all 8 retail chains Zara runs strongest giving Inditex a 64.8% advantage, which safely allows it to rein as the grossing top spot for one of the world’s largest retail company.
sure that solid values are rooted in the company such as freedom, perfectionism, responsibility, swift movement, flexibility and a fine respect for colleague and customer.
Zara produces around 40,000 new designs every year, more or less out of the 40,000 10,000 are taken to production. The designs are not to dissimilar to those found on the catwalks of couture and ready-to-wear houses. They aim for classis pieces appealing to their target demographic and good quality clothing at affordable prices. Mr. Ortega makes
Brand Analysis 5
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C O M P A N Y
O V E R V I E W
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3a* History Inditex group founded by Amancio Ortega originated in Coruna, Spain. The First store to open was Zara in Coruna, Spain where the companies’ headquarters still stand today. Zara birth was of the promotion of low price clothes that were similar to those found in amongst the designers. After several years of a successful start, he decided to change the design, manufacturing and distribution enabling him to process the clothes quicker which intern allowed the company to get to high class trends quicker. During 1976-1984 this process proved immensely successful permitting Ortega to transform the once humble shop into a successful retail chain all over Spain. 1988 saw the opening of their first international store in Portugal and after this saw the quick expansion of the chain. This then led to the opening of Zara’s 1000’s store in 2007, the first Eco-efficient store located in Athens Greece in 2008, e-commerce was Zara’s next step that arrived internationally in 2010. Currently Zara clothing is available worldwide in 1721 stores. 8
3b* Target Market Zara’s target market covers a wide range of people aged from 0-40+ years, this is possible because they have quite literally designed clothing for every age. Narrowing it down to the main target audience would see aged from 25-40. As they have kids, TRF, Zara women & Mens. Although within their main target audience they appeal to the newly married or single women, who is impressed by fashion but wants it at appealing prices. Appreciates being dressed well with-in the work place and their free time. The secondary target market is very similar but male. This is again a man who is interested in exploring his fashion identity but careful not to be to bold, happy to look well groomed in both work and play. To be more specific, Zara see the typical women that is most likely to shop at their stores, as an everyday women that is seen as looking both sophisticated and chic in the work place but relaxed and at ease in her downtime. Job descriptions could be supervisors, junior managers or skilled manual workers. They could shop at other successful high street brands such as GAP, Topshop and H&M.
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Known for is fast processing of product; Zara innovative business model of flexibility allows the company to move at a quick pace. Garments are designed, distributed and finally market a product in the space of just fifteen days. Although they are always turning over new stock their supplies are limited, this is not to be taken as a negative, it enables a customer to feel special and gives a sense of exclusivity. Something which is essential to Zara is keeping store rack quantizes low, so that items can sell out faster keeping store inventory low.
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Although a thriving online section to this company the main sales are still rotted in the high street. All stores are company owned, unless country regulations say otherwise, when this is the case they franchise the store. Zara is not seen as a concession only as stand-alone stores, they also do not feature other retailers or brands with-in any of their stores.
3c*
Retail
3d* Having only recently in the last two years developed the e-commerce side to the brand, sales are for the online site are representing the country well, bringing in 2.5% of Inditex yearly turnover. One of Zara’s main competitors H&M are lagging in behind Zara’s growing wealth as it only caters to a handful of European countries, unlike Zara who have given their consumer worldwide availability. 11
O N L I N E
It’s very simple, Zara does not advertise. Advertising expensive for the company is minimal (avg. 0.3% of revenue). Oddly enough this generates the company a certain amount of publicity making it easier not to advertise in magazines etc. Money that would normally be spent on marketing is transferred into funds that go towards the redevelopment of shop space or potential good real estate that is connect-
ed to their target consumer. Smaller measures are taken to promote special events such as large poster’s in shop windows showing the customer that there is a sale on, more recently they have used social networking to start word of mouth. Zara prizes itself on customer loyalty, so, by setting up their current face book page, which
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currently has over 8 million likes, it enables them to reach the old and young customers intern increase the core values of the company like brand recognition.
3e*
Marketing
Zara has 5 subbrands within the retail name Zara, Zara Woman, Zara Basic, Zara TRF, Zara Men, and Zara Kids. Zara women contain clothes more formal than the rest of the clothing. It is for women who want to look their best but in a more serious fashion, their clothes match current boutique and high fashion trends and are suited to almost every outfit they own. Basic is exactly what it says on the tin. It offers a wide range of everyday items a woman could ever possibly need. TRF is lower than their target demographic, it is for younger women early 20’s who appreciate fashion and want to be in the know. Zara Men is a for male who is attracted to a Zara Woman, a man who takes pride in his image and enjoys to dress up. It offers both formal and casual combined. Last but
not least Kids this is for parents who want their kids to look scrumptious without the high designer price tag we are more currently finding these days.
the price seems to work for people who want to look effortlessly chic. Zara’s sizes range from XS to XL, quality isn’t done second best and everything is manufactured in Europe apart from some pieces and jeans. Zara promotes a healthy work environment and esthetically pleasing yet eco friendly.
Almost everything is sold within Zara and almost everything is out on display enabling room for the next batch of new trends to been stored in stock rooms and then to be able to be displayed in quick turnover. Zara tries to incorporate trends that are not seen in the high street and only on the runway. Promoting a high quality garment for a fraction of
Product Insight
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Zara gives its price-conscious, young, educated target market low prices for good quality. Here is a break down of their average prices for individual items.
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Jackets from 139 to 49.99 Outwear from 49.99 to 39.99 Knitwear from 19.00 to 14.99 Dresses from 119 to 25.99 Skirts from 39.00 to 29.99 Trousers from 35.99 to 19.99 Shirts from 39.99 to 19.99 T-shirts from 25.99 to 9.99 Shoes from 79.99 to 29.99
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SW OT 4*
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Strengths Wide range of sizes. Well-displayed clothing in-store. Prime locations. Good Visual Merchandising. Well-executed shop window displays. High class trends at affordable prices. Profit is distributed more generously to the accessibility for stores. Publicity from helping people in developing worlds like Bangladesh. New stock twice a week. Opportunities for expansion are always explored. Quick process from drawing board to shop of trends and garments. By not advertising draws the customer to go direct to the stores and see what is new or not new in-turn making it easier for to customer to buy immediately. Zara customers on average got to their stores more than 17 times a year. More exclusivity at less stock. Affordable prices. More work dominates where it originates (Spain) allowing more job opportunities in its hometown. Every member of the family covered in every store. Knowing the product.
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4c*
Opportunities Online markets offer massive opportunity for expansion. Growing within the USA. Emerging market offer best growth opportunities for Zara. International expansion within emerging markets.
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4b*
Weaknesses
Shop locations hold their main competitors. Display clothing not easily found with-in store. Stores have a tendency to get messier as the day progresses. By not advertising mean people are missing people that don’t like physically shopping. Little stock available Only one manufacturing space and distribution centre in the world. Quality means cannot be worn for lifetime. Replicated designs from high fashion brands.
Price tag is above that of major competitors such as H&M. Currency of Euro effecting economy To overpower in Europe. Natural Disaster or Power Outage. Spanish manufacturing prices soar.
Threats
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4d*
Zara stand well rooted in the global high street market globally. Zara’s main competitors are brands such as Gap, H&M, Mango and Top Shop. Other brands such as H&M use different methods of promotions for their clothing as they often have collaborations with personalities and designers such as Masion Martin Margiela and Versace and we more commonly see their advertising in magazines. Both are European based retail companies and are fashion forward in lowering prices within retail, they also offer solid plans for international growth.
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C O M P E T I T O R
A N A L Y S I S
In conclusion to the research I have gathered for the company, they invest money into the presentation of the stores rather than advertisements as this targets one of their core values, which is customer loyalty. They are conscious about the environment and are always looking for ways to improve the sustainability of their products. I am using this part of the report to explain my personal outcomes from constructing this report. Although wanting to peruse a career in Fashion I had never had a chance to understand the more business side of the industry. I was an avid follower of Zara and its progression since early 2008. This gave me more of an advantage when it came to analyzing more in-depth about the company. It also enabled me to have more fun with it, as I was intrigued to find out more about the company I am buying from. As a result, I have gained knowledge and will continue this practice for future projects. 21
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Conclusion 22
Zara By Eleanor Daly