Professional Documents
Culture Documents
Marketing Strategy
By Ji Young Lee
• Zara is one of the largest international fashion companies which belongs to Inditex, one of the
world’s largest distribution groups. Zara store’s profit growth has changed from the net income of
$340 million on revenues of $ 3250 million in its fiscal year 2001.
• *Introduction to Inditex: Global specialty retailer which he designs, manufactures, and sells the
apparel, footwear, and accessories for women, men, and children through its chains around the
world.
• *Competitors of Inditex:
• 1) Gap, H&M and Benetton are Inditex’s closest comparable international competitors.
• 2) Zara is more fashionable than other three and price is less than Benetton and Gap, but higher than
H&M.
• 3) Zara and H&M are more fashionable and price is lower.
• Customer is at the heart of an unique business model which includes design, production, distribution,
and sales through an extensive retail network.
• Mission of Zara’s retail store is based on getting smaller where they would like the world to dress in
style, class, and experience an unique design weekly.
Zara retail store’s values…
http://youtu.be/LDIl8KFOq9c
The link above shows the brief Zara retail store’s compatible market
strategy.
*Zara’s focus is on reducing time which holds 6 days worth of inventory while H&M holds 52 days, and
Spanish Retailer holds 94 days of inventory.
*Zara’s store is structured by having men’s clothing and women’s clothing, each is subdivided in lower garment,
upper garment, shoes, cosmetics and complements, as well as children’s clothing (Zara Kids) and Zara
Footwear’s.
http://youtu.be/8p4adY3fF3g The link illustrates women’s clothing trend for 2014.
1) Women’s: Zara produced a range with better fabrics and more “womanly” cuts. Zara Basic essential
fashion-fix pieces and fashion for younger women (Lightness, looser silhouettes and silkytops).
2) Men’s: Zara has produced the range of lightweight cotton tops and print shirts paired with cotton twill
shorts (Hints of ethnic Asian touches like robes and beads which provides hippie-bohemian detailing).
3) Zara Kids: It produces unique and sophisticated range. It feels secure in finding unique, greatquality
clothes with reasonable price point.
4) Zara footwear’s: Zara footwear is leading manufactures which offers wide array of ladies foot wears
which are beautifully crafted ( ladies sports sandal, formal sandal, fashionable sandals, bellies, designer
sandals, shoes, high heel sandals, flat sandals and flat bellies).
Zara women’s wear…
Zara men’s wear…
Growth Rate of Inditex (1997-2007)…
Zara’s Brands Success and SWOT analysis…
5 Keys to Success
• SWOT analysis:
• 1. Strengths:
• -cost leadership strategy -efficient distribution
• -Information technology
• -Fast delivery of new products and trends in the market.
• 2. Weakness: -Centralized distribution system
• -Doesn’t spend much money on advertising
• -Zara has one manufacturing and distribution center in world.
• 3. Opportunity: -Global market penetration
• -Online market -Distribution center in U.S.
• 4. Threats: -Local competitors -Global competitors
• -Zara based in Spain, and has no stores in Europe would dent in revenues.
Production & Distribution of Zara and Design…
*Production and distribution of Zara:
Zara cooperates with any channel of production all over the world so new improvements in
operation technology can be applied into Zara insteadof keep using old ones.
It puts an effort to make more distribution centers which would enable Zara to be faster, effective,
and efficient in distributing their products to retailers.
Store atmosphere: Zara has typical store layout, wide open spaces. It creates an enjoyment of
shopping in the store (positive emotions / comfortable feeling / impulse buying / spending more than
planned).
Zara line has its own section in the store which is consistent with the current store space distribution.
*Design:
The core design value is based on cooperating with vary range of designers so Zara can maintain its
competitive advantage to be the “fast fashion” but remain more and more creative.
Production & Distribution process of Zara cont’d…
Production &
Distribution
process of Zara
cont’d…
Zara’s Target, Price and Vision…
*Zara by working through the whole value chain is vertically integrated and highly
capital intensive.
3) Zara’s in-house production creates rapid product turnover since its “runs are
limited and inventories are controlled. The rapid product turnover creates the
climate of scarcity and opportunity in Zara’s retail stores.
4) The climate increases frequency and rapidity with which consumer visit the stores
and buy the products. Zara’s scarcity allows company to sell more items at full
price. The strategy minimizes Zara’s total cost since it reduces 15-20% of
markdown merchandise compared to the traditional retailer.
Zara’s Strategic Advantage cont’d…
Amancio Ortega has effectively transmitted the values of company which are
freedom, perfectionism, responsibility, rapidness, flexibility and respect to
others. This has created autonomous and flexible corporate culture for Zara.
Since Zara’s target is young, educated one would like the fashion and is
sensitive to fashion. 80-85% of products Zara offers are relatively
standardized fashionable products. The product which sells well in fashion
capital such as New York would also sell well in Milan or Madrid since
fashion has become globally accessible.
Product line and Quality of Zara…
*Zara’s core belief has three components which are concept, value drivers, and capabilities.
50% of he products Zara sells are manufactured in Spain, 26% in the rest of Europe, and
24% in Asian and African countries and the rest of theworld.
*On September 6, 2010, Financial Times reported Inditex launched the first online boutique
for its best-selling brand Zara.
*On November 4, 2010, Zara Online extended the service to five more countries such as
Austria, Ireland, the Netherlands, Belgium, and Luxemburg.
*In November 2011, Zara entered the South African market where there were total of 1763
Zara stores and 171 Kiddy’s class stores. Zara stores operate as Lefties store instead of Zara,
a brand for low-cost fashion.
*Zara continues to open stores around the world until there were stores in seventy countries.
Important Factors of Zara…
1) Political Factor:
Zara as one of the best retail brands worldwide has interactions with governmental policy for an
intervention in an economy and legal aspects in decision making processes.
Zara is required to understand the system of trade for importing the products and goods in
different countries.
2) Economical Factor:
Global growth increased to 3.6 % in first quarter of 2012, and Global trade is parallel with
industrial production in first quarter 2012 which in turn benefited trade-oriented economies,
notably Germany and those in Asia.
3) Social Factor:
In regards to the social media trend development Zara should establish social media relationship
to satisfy customer’s demands due to change in generation choices.
Zara should provide direct social contact to customers as Newsletter, Facebook, Twitter, Pin-
interest, YouTube, Flickr, Web mobile or customer account.
Zara’s Marketing Mix…
2. Price: Zara provides for people with lower income so its prices are
very reasonable that everyone can afford it.
Relationship Handshake between customer and company | Trusted quality, fair exchange of value
Culture Country-of-origin, values it stands for | European, international, good relationship with
customers
Personality What is Zara when it becomes a person | Aggressive yet calm, mature, confident,
beautiful, well-kempt, modest, unpretentious, low profile
Conclusion…
Zara is successful international retailer
less than 30 years.