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Products and Services of ZARA

1. Introduction
The fashion industry is maintained on a sense of uncertainty, trends change all the time
making it even harder to predict a market and in turn forecast the required supplies and raw
materials needed to make a product In recent times, the retail industry has possessed
characteristics parallel to a push model where the retailer pushes clothing styles and outfits to
the market. This strategy in todays retail environment will effectively fail as new entrants
and competitors can enter the market on any given day and time, this in turn forces retailers
to listen to their customers and deliver products according to their desired demands,
essentially allowing the customers to have an important role in the overall success of the
Fashion chains like Zara emphasise the importance of recognising what makes a customer
tick and can then respond quickly to satisfy their needs. In addition, different geographic
locations have different patterns of spending, styles and customer incomes. Accurate
evaluations must be made in establishing the given demand within respective markets. This
paper will focus solely on key points relevant to the demand management of established fast
fashion retailer; Zara. Firstly, the demand management techniques used by Zara will be
discussed accordingly and will attempt to explain how they provide the organisation with a
competitive advantage over its competitors. The latter part of this paper will focus on current
implementations within Zaras business model that may have the potential to weigh the
company down and will suggest possible recommendations that can be made.

Zara is Spanish clothes and accessories brand, it is the flagship brand of the Indicted
group. Few clothing brands keep up with the latest fashion, are of high quality and yet,
affordable. It is probably the amalgamation of all these qualities that made Zara, the
Spanish clothing brand become the go-to fashion brand for all. It is no surprise that
Zara, which started off as a small store in Spain is now the worlds largest retailer and
its founder, Amancio Ortega, the 4th richest man in the world.
The secret to Zaras success largely was because of the way it kept up with street
fashion with the changing times. The brand takes a look at how fashion is changing
every day. It makes new designs and puts them into stores in a week or two. Most other
fashion brands would take a whole six months to get their new designs into the market.
Thats where Zara beat the rest of them and became the favourite brand among people

who liked to keep up with the fashion. Ortega was famous for his view on clothes as a
perishable commodity; that people would love to use them and throw them away, just
like yogurt or bread. It is often cited that he produces fresh baked clothes that survive
the changing street fashion trends for not more than a month or two. You go to the store
a week too late and all the clothes would be changed.
Zara is also known to be one of the most eco-friendly companies. It uses solar panels
and wind turbines in the headquarters in La Coruna. Zara is also known to be one of the
few clothing brands that produce 100 % toxic-free clothing, but not until after the
uproar that was caused on how it was using the cancer-inducing ago dyes in its clothing.
Theres one thing about Zara that is surprising. The name has poor marketing for all the
success it continues to bask in. The brand does not advertise itself in any form at all.
Ajaccio had never spoken to the media nor has in any way advertised Zara. Zara needed
no advertisement to become such a widely loved brand. Talk about quality doing all the
work. Zara has stores in over 88 countries, with just over 6500 outlets. Zara has flagship
stores on Fifth Avenue in New York, Oxford Street in London, Called Serrano in
Madrid, Via del Coors in Rome, Champs-lyses in Paris, Nevsky Prospect in Saint
Petersburg, GUM in Vladivostok, Shibuya and Ginza districts in Tokyo, Myeongdong in
Seoul, amongst many others.

2. History
It all began when Ortega established a dress-making factory, Inditex, in the year
1963.Ten years later; he started off a small store that was named as Zorba in La Coruna,
Spain with a budget of a meagre 30 Euros. He then changed the name as Zara with no
particular intention. And thats how the worlds favourite fashion brand of today was
born. Zara slowly expanded its empire from the town in Spain to the rest of the country
and then later to Portugal. By the 1990s the store had expanded into the United States,
France and most of the Europe. Today, Zara has close to 6500 stores across 88 countries
around the world. Marked as the first prestigious venture of the Inditex group the first
store of Zara, the chain of Spanish fashion stores came into reality on central A Corua
Street in 1975. In 1985, Amancio Ortega integrated Zara in a new holding company,
Industrial de Diseo Textile. The Zara fashion concept was well received by the public
later in 1976, allowing it to expand its network of stores to the other main Spanish
cities. During 1981-1988 with the growing popularity Zara started new ventures by
multiplying in number not just in Spain but around the world. In 2003 enjoying being
the eye candy among the fashion followers Zara entered the home furnishing market by
opening the first Zara home store. Everything else is a history; today Zara is present in
73 countries, with a network of more than 1,540 stores, ideally located in major cities.
Its international presence clearly shows that national frontiers are no impediment to
sharing a single fashion culture.

Ortega and his business partner Rosalie Mera opened their first store in the city of A Coruna,
close to Arteixo, in 1975. They wanted to call the shop Zara, after their favourite film, Zara
the Greek. However, a bar further down the street had adopted the same name, so Ortega and
Mera were forced to adapt. Given that the Zara name was already on the store, they tried to
think of a name that would still use most of the letters. They settled on Zara, a brand now
present in every corner of the globe. This flexibility and efficiency has remained at the heart
of Inditex, the company built from Zara that now runs 6,500 shops in 88 different countries
and includes seven other brands, including Bershka, Pull & Bear, and Massimo Dutti. The
business model built by Ortega is unique. Zara stores around the world receive deliveries
twice a week and products designed at the headquarters in Arteixo reach stores three weeks

later. This is a staggering pace, helped by the fact that between 51pc and 55pc of clothing is
manufactured in what the company describes as proximity markets, Spain, Portugal,
Turkey and Morocco, instead of Asia. This model is regularly described as fast fashion, but
Pablo Isla, chief executive and chairman, insists Inditex is much more than that. It is too
narrow for everything that is Inditex, he explains. You see the stores and you cant imagine
what is behind them. If there is a secret to Inditexs success it is the connection between
stores, the in-house designers, and its factories. Twice a week, a store manager will send an
order to HQ. This is based on the sales data for the store but also anecdotal evidence from
shoppers about what they like and dont like. The commercial team will then compile the
order, adding in new products and balancing out demand with other stores, before sending it
to Inditexs manufacturing hub. Within two days, the order has reached the store.

At the same time, the commercial team is a liaising with the in-house designers, who they sit
next to in the offices at Inditex HQ. When sales trends are identified either from evidence in
stores or the catwalk the commercial team will work with the designers to develop new
products to meet the trends. New fashions are then produced in relatively small batches, so
flops can be disregarded after their first appearance and hits can be followed quickly by
similar incarnations. The commercial and design teams are vast covering a large proportion
of the 1.7m sq ft of offices at Inditex HQ. The result of this structure is that the product range
in Zara stores evolves rapidly. Rather than relying on one product range per season like
Marks & Spencer will for autumn and winter the retailer will enjoy four or five waves of
new products after the initial seasonal launch. A mock high street of Zara stores, built within
the headquarters, allows store managers and the commercial team to examine the new ranges.

3. Products and Services of ZARA

Creativity and quality design together with a rapid response to market demands. Mainly
focused on clothing but spreading its activity in homeward and related items from
grandmother to grand-daughter, a catalog for everyone. A new kind of t-shirt that fits both
men and women specially treated cotton that moves moisture away from your skin. Special
edition by a strange Japanese designer. From XS to XXL to reach the widest market target
possible. Huge variety of colours to make it easy to find the one that fits your current clothes.

Zara stores have men's clothing and women's clothing, as well as children's clothing (Zara
Kids). Zara's products are supplied based on consumer trends. Its highly responsive supply
chain ships new products to stores twice a week. After products are designed, they take ten to
fifteen days to reach the stores. All of the clothing is processed through the distribution centre
in Spain. New items are inspected, sorted, tagged, and loaded into trucks. In most cases, the
clothing is delivered within 48 hours. Zara produces over 450 million items per year.




They have about 74 stores all over the world.

Part of one of the biggest Spanish retailers in the world.

Have a well established brand name worldwide.

Their supply chain management is extremely low cost as well as most of their
processes like operations, manufacturing are all vertically integrated.

Unlike other retailers they handle all their processes as well as follow Just in Time

Clothes are produced at a low cost with the most innovative and fashionable

Extremely trendy, well designed and fast delivery of new products.


They use an unusual strategy of no advertisements.

Target segment is not extremely consumer loyal and might go for cheaper and newer


There are more global markets which they can explore.

They can also enter into segments and expand those areas where they havent.
Online marketing and E Retail is gaining importance.


The high end fashion merchandisers can be a major threat to them.

Economic downturn can also be a threat to their target segment.

There is a large amount of consumer switching taking place.

Political Factor:
The political factor considers to the policy of the government for involvement in the legal and
economy aspects. Zara is required to understand the system of trade for importing the
products and goods in different countries.

Rioting in region of England, 2011.

Top shop was shut down throughout London because of rioting. In simple words,
closing of shops means losing something on the trading house.

Economical Factor:
The economic factor comprises changes in the taxation, rates of interest, inflation economic
growth and rates of exchange. In current time, to compete well with the Competitors, the
Company must aware of duties, tariffs and GST. They are related upon categorization of the
valuation, goods and origin of the country.

In 2008, shops were closed because of the recession.

Import and transportation cost is impacted by the weak pound

Overseas competitors

Social Factor:
This factor is very important because alterations in the social trends may affect the demand
for the products of Zara and the willingness and availability of the people to work. The
Company is required to work as per the current trend and fashion and fulfil the demand of the
customer because of the changes in choices of the generation.

Celebrity endorsement

Sizes of clothing 6-16

Maternity range, baby range and Tall range

Discount & concessions.

Technology Factor:
It is very clear that technology has become innovative and advanced in the current world.
Bar coding, computer related designs and online shopping are sort of improvements to the
business. In, fact technology may minimize the costs and enhance the quality. These

developments may benefit the consumers of Zara and the organization through effective
source of the technology.

Applications on phones, like blackberries and android phones.

Interactive maps

I Pads used inside few Top shops

Environmental factor:
It has been examined that Earthquake in region of Japan impacted several factories to be
destroyed, comprising Honda, Nestle and heavy industries. The earthquake happened on 11
March 2011 around 14.46pm.

Legal Factor:

Media fascination from the copyright issues

Top shop is purchased by Arcadia

It is viewed that Top shop has fair section of online in which range of dresses varies
from 40-60.

6. Conclusion
Demand management is an essential aspect of many organisations. Reflecting back to Zara,
demand management plays a pivotal role in the overall successes of the organisation within
fluctuating demand and a competitive fast fashion market. The various demand management
principles implemented by Zara has as a result allowed the organisation to set itself apart
from its competitors and become a leader in its respective market. The case study of Zara has
portrayed the success the organic stations has, and as a result has become the worldwide
benchmark for supply chains due to its successful supply chain principles whilst
understanding their loyal customer demands. In hindsight, this paper has also identified
instances where the organisation itself may find downfalls to its overall competitiveness.
Adequate recommendations have been made in order to mitigate any unforeseeable events
that could potentially have a negative impact towards the organisation and its goal of
providing customers with high end fashion, at reasonable price and in quick time. In
conclusion, Zaras success and high competitiveness in todays extremely competitive and
changing fashion retail market is paramount to the high respect emphasised on the
organisations demand management model, the implementation of world class demand
management practices has undoubtedly contributed to Zara having a stronghold within the
quick fashion retail market.

7. Reference