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Kalifa Okezie DESN 1355 Fashion Marketing 201017716
How Zara and Acne implement the Marketing Mix
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2386 words excluding references
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Contents: Page 3: Abstract and Introduction Page 4: the 4P’s Page 5: Methodology Page 6: The Product Pages 7-12: Zara’s Marketing Mix Pages 13-17: Acne Studios Marketing Mix
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Abstract: The aim of this report, is to efficiently outline the differing methods by which two successful retailers implement the elements of the marketing mix throughout both their physical and ecommerce presence. This report will outline the ways in which each brand applies the different aspects of the marketing mix, consisting of product, place, promotion and price, in accordance to two differing market levels. In addition to this, this report outlines comparisons between two similar products sold by the two companies, incorporating factors such as fabric choice, price and fit.
Introduction: From both primary and secondary research, of the brands Zara and Acne, I have constructed an in depth analysis of the various methods by which the two brands implement the different characteristics of the marketing mix. An essential marketing tool, which is at the forefront of every successful company. he marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market. The 4Ps make up a typical marketing mix - Price, Product, Promotion and Place. However, the marketing mix has been adapted by various companies to incorporate other factors such as Packaging, Positioning and People. All of the different elements of the marketing mix affect one another, if one element has not been efficiently executed, it could form detrimental consequences for the remainder of the mix, in turn affecting the brands image and sales margins. (Economic Times) The 4P’s were created in 1960 by E. Jerome McCarthy (Professional Academy. com) And has since been developed by theorists such as Kotler (Mahajan, 2013.)Lauterborn created a model the 4C’s adapting the 4P’s model, as Lauterborn claimed the original model did not address today’s issues. This consisted of Customer needs and wants, costs to the consumer, convenience and communication. (Lauterborn, 1990) In addition to this, some of Jackson and Shaw’s comments regarding the power of consumers provides questioning over the relevance of the 4P’s: “Arguably the balance of power has now shifted more towards consumers and away from business. Today´s consumer is well-informed about brands, products and prices, and has a sophisticated and continually evolving set of complex needs and wants which can be satisfied by a range of competing alternatives. The shift in power has also resulted in many consumers feeling that they ‘own’ or have a strong emotional attachment to a brand.”(Jackson and Shaw, 2009)
Price: refers to the value that a company places onto a product, incorporating production costs,
wholesale and retail prices, profit margins and the quality of the product or service. (Economic Times)
Product: refers to the item actually being sold. The product must deliver a minimum level of perfor-
mance; otherwise even the best work on the other elements of the marketing mix won't do any good. The Product should always be seen as representing good value for money and be of a particular quality standard. The total product concept theory suggests there are four levels to a product, describing the tangible and intangible features a product has. These four levels are core product, the actual/expected product, the augmented product and the potential product. (Levitt, 1980)
Place: refers to the location where the product or is sold or accessed by the public. This can consist
of distribution channels, brick and mortar stores, logistics, transportation and e-commerce platforms. Ways in which companies provide consumers with access to their products consist of online or telephone purchases, concession stands, carboot sales and fashion events. (Posner, 2015)
Promotion: this refers to all the activities undertaken by business generate public awareness for the brand and its products and services. (Economic Times) This is inclusive of all the tools available for marketing and communicating the brands products and services to consumers. Promotional activities are referred to as the promotional mix including advertising, direct marketing, PR and personal selling. Social media is now an essential part of promotion for fashion brands due to its significance within society today. (Posner, 2015)
4P’s:
Methodology: I began by selecting a popular product, which had been circling the high street during the winter season, which I knew both Zara and Acne Studios sold. I then began to conduct primary and secondary research regarding Zara and Acne’s marketing methods, this included visiting the Zara store in Westfield White City Shopping centre and the Acne Studios store in Oxford Street, Central London to gain first hand insight to the layout of the stores in busy populated Fashion Capital, where lots of sales are generated. As well as this I researched and acquire information regarding both of the brand’s, including visiting their own websites enabling me to make comparisons between the different identities the two brands possess.
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The Product: Topshop
All Saints
Acne Studios Fig 10:
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Boohoo.com
Missguided Fig 13:
Zara
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Zara
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Zara is a popular ‘fast fashion’ high street store, operating a network of more than 2,000 retail outlets in 88 markets located in the central shopping districts of large cities. ("Zara’s ‘Fast Fashion’ Business Model", 2016) The brand is one of the largest international companies and is part of the major group Inditex.
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Product: The garment is a black faux fur, biker, and Aviator jacket; with the outer layer and the lining made from 100% polyester fabric and the coating and embellishment made from 100% polyurethane. The Size selection ranges from XS- XXL, however when I visited the Zara store in London the only size available was small, although Medium was also available online. This may be due to Zara’s strong focus on the exclusivity of products and therefore supplies limited quantities of these items. This strategy allows Zara to sell more items at full price because of the sense of scarcity and exclusiveness the company exudes. Zara’s total cost is minimized because merchandise that is marked down is reduced dramatically as compared to competitors. (Lu, C. Dec, 2014) A garment at Zara takes an average of 41 days to first sell out at Zara, which is significantly faster than Zara’s main competitors, 153 days at H&M. (Smith, 2014.) From my research I uncovered that a fast fashion nature is at the centre focus of the firm with an estimated 40,000 designs being generated annually. (HBS Working Knowledge) The jacket has a baggy and slightly oversized fit, as I was able to wear several layers of clothing underneath it. The product was of high quality and very insulated due to the faux fur inner which is reflective of the price.
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Price:
The product is currently priced at £89, which is at the premium end of Zara’s price architecture, however this is due to the type of garment being a large jacket. Majority of Zara’s products range from £15-£50, as Zara pride themselves as offering high quality products for affordable prices. Pricing is made possible by optimizing development and training costs. However in a survey I conducted previously, consumers did not believe that Zara’s products reflected the quality levels and many considered the brand’s products to be overpriced, however due to the aesthetic appeal of the products, consumers continue to purchase items from Zara stores. Zara also offers a Basics range with more equitably priced garments. . Cost-plus style pricing is a technique which Zara avoids, Inditex first identifies the prices customers are willing to pay for products sold by their major competitors such as H&M, through constant market research, the company then establishes target prices for its own products, which are often 15 percent below those of competitors. Following this, the search for suppliers begins taking into consideration profit and sales margins. (Crofton, O. 2012)
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Place: Zara operates an intensive and exclusive distribution strategy holding 2,100 stores internationally, (Forbes, 2016) utilising just in time production processes in order to minimise stock levels. (Lu, C. Dec, 2014) The vast number of stores provides convenience and great accessibility for consumers worldwide. Zara has developed an efficient agile supply chain, critical to the company’s success; with all designers, buyer experts and management in one place and production all in close proximity, allowing for flexibility and maximum agility for the brand; which Jackson and Johansson consider to be an essential business concept. (Jackson and Johansson, 2003.) 50% of all items are manufactured in Spain, 26% in the rest of Europe And 24% in Asia and Africa. In addition to Zara’s brick and mortar stores, Zara operates on an e-commerce platform with the Zara App and the store website, which is compatible with mobile phone devices, Laptops and other digital gadgets such as the Apple Watch. This is due to the digitally savvy nature of the majority of Zara’s consumers. (Zara.com)
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Wesfield White City Store
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Promotion:
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Limited promotional activities are devised by the fashion retailer, in comparison to their competitors. Zara relies on the clothes to sell themselves, by providing particular aesthetics which appeal to customer needs and wants; often adapting the creations of luxury brands for high street level. (Thompson, 2012.) Zara’s advertising budget is spent on the layout and of their stores which are often situated next to luxury brands. From my store visit to Zara in Westfield White City, Zara is located next to the Village which is an array of luxury brands. Although the brand do utilise some forms of promotion such as billboards, yet this is limited to large cities such as New York and London. (Thompson, 2012) In addition to this Zara have a strong social media influence particular on outlets such as Instagram, which helps the brand to gain awareness and public interest for their products. The brand currently have 18.8 million Instagram followers, higher than their competitor Topshop’s 8.6 million. ("Topshop, Instagram Photos and Videos") .(Schlossberg, M. 2015)
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Acne Studios which stands for Ambition to Create Novel Expression, (Cochrane, 2013) is a luxury fashion house originating from Stockholm, Sweden. The brands collections cover men’s and women’s ready-to-wear, footwear, accessories and denim, across 45 stores worldwide. (Acne Studios.com)
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Product:
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The garment was a Shearling Biker Jacket/ Velocity Jacket, made from 100% real dyed sheared lamb shearling with the following features: dual zip, front closure, shearling interior, buckle closure at neck, side zip pockets and belted waist. The wash label reveals, the garment, must be dry cleaned only, reflective of the high quality materials used. ("FWRD.com") The sizes available range from 32-42 EU sizing however, the jacket was not available in store when I visited in London, although variations of the jacket could be purchased from the online store and the concessions Acne have with luxury department stores such as Nordstrom, La Garçonne, Net-A-Porter, Shopbop, Barneys, LN-CC, Acne Studios, Sense, Saks Fifth Avenue, Browns Fashion, MyTheresa & Jades24. (‘Intheircloset.com’)These stores also provide different variations of the jacket. Acne’s products are defined by Jonny Johansson’s the Creative Director’s use of signature juxtaposing design and attention to detail, with an emphasis on tailoring and an eclectic use of materials and custom-developed fabrics. (Acne studios.com) ) Each year the brand produces two main women’s and menswear collections, alongside Two Pre-collections for women’s wear, two smaller Capsule collections per year and external collaborations. (Acne Studios social report 2012)
Saks Fifth Avenue
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Forward Acne Studios.com
Nordstrom
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Price: Acne’s velocity shearling biker jacket is priced at £2,267.05, indicating the garment belongs to a luxury brand. However the price of the jacket differs in price on the online department store websites. Priced at £2,314.74 on Nordstrom (Nordstorm. com) and £2,171.74 in Forward concessions. ("FWRD.com") The high pricing of the brand’s products is reflective of the high quality fabrics and intricate detail used to create their garments. Acne commented: “We are never willing to compromise on our design or product quality and always strive for prices to be reasonable in both parties’ perspective.” (Acne Studios social report 2012)
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Place:
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As well as acne’s brick and mortar stores, the brand possess an e-commerce website, which can be easily navigated on mobile phone and laptop devices. Acne ship products to all countries within EU, Switzerland, Norway, United States, South Korea, Japan, China, Australia and Hong Kong which is free on all orders over 150 euros. (Acne studios.com) Acne operates a selective and exclusive distribution strategy, with limited quantities of stock from their collections being available both online and in stores across 21 major cities worldwide. (Acne Studios social report 2012) this was reflected in store upon my visit due to the fact the jacket was unavailable. Although Acne products can be purchased across many department stores, yet the quantity of each product is also limited. The location of Acne’s stores are in affluent areas such as Pelham Street and Central London, Dover Street in Mayfair; in close proximity to the notorious Savoy hotel. The selective location of the brands stores add to the luxurious aesthetic the brand conveys. Acne also hold a concession store in the department store Harrods on Knightsbridge, also an opulent area, this highlights the demographic acne want to attract.Acne is concerned with providing sophisticated simplicity of the kind more usually seen in a gallery from the style of visual merchandising used in their stores. (Ryan et al.2014)
Acne Studios Dover Store
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Promotion:
Acne utilise several elements of the promotional mix such as personal selling via their stores and concessions, as well as PR from collaborations with eclectic artists such as Jack Pierson in 2016. These collaborations have been publicised on fashion publications such as Vogue. In addition to this the brand own the magazine Acne paper, which has published 15 editions launched in August 2005 discusses matters in fashion, art, photography and culture. A Social media presence is also instilled by the brand with an Instagram page of 1.8m followers, in addition to profiles on Facebook and Twitter. ("Acne Paper") . Celebs such as Rihanna, Blake Lively and Rachel Weisz as well as personal style bloggers like Gala Gonzalez and Betty Autier have all been spotted wearing an Acne Studios Velocity Oversized Shearling Biker Jacket on social media generating public awareness for the product. (Intheircloset.com’)
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Conclusion: Moreover, both Zara and Acne Studios implement the marketing mix in different ways, with more focus on different elements in relevance to their brand identity. Both brands, despite being from different market levels uphold an ecommerce and social media presence, this is due to the society’s reliance on technology and digital devices and the wide demographic that can be targeted from these platforms. From my research, it has been made clear that the 4p’s are still relevant despite much debate amongst theorists, however these elements must coincide with changes within society. In addition to this, the claim that one element of the mix is more important than another is flawed due to the success of Zara who’s main focus is on brand identity and the development of products. From this I have come to the conclusion that the importance of each element is solely dependent on the underpinnings of the brand itself.
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