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Theme : Marketing Plan of

ZARA
Prepared by:
Naser Nuhi
Erza Kadriji
Flamur Murtezi
Amra Alija
Fisnik Kalisi

Mentor:
Gordana Petrusevska

BRIEF SUMMARY
Why Zara?
Marketing Strategy Focus
Zara Vertical Integration Production ?
Store Location All Around The World
Advantages from Using Single Distribution Centre ?

COMPANY PROFILES
Zara is the flagship chain store of
Inditex Group owned by Spanish
tycoon Amancio Ortega, who also
owns brands such as Massimo Dutti,
Pull and Bear, Oysho, Uterqe,
Stradivarius and Bershka. The group
is headquartered in A Corua, Spain,
where the first Zara store opened in
1975.
Zara has resisted the industry-wide
trend towards transferring fast
fashion production to low-cost
countries. Perhaps its most unusual
strategy was its policy of zero
advertising; the company preferred
to invest a percentage of revenues
in opening new stores instead

MAIN ISSUES
The elements supporting Zaras business structure and strategy are also
greatly interlinked and interdependent. The following three factors stand out:
Extensive market research providing a constant stream of inputs into the
product development process, rather than in batches or discrete seasons.
Locating various business function in close proximity of the headquarters,
and tight control, allows the various functions to coordinate and take jointdecision very quickly. Control also refers to early investment in raw
material, and direct or indirect ownership of processing and production
capacities. These provide the capability to respond very quickly to the
market research-influenced decions.
Communication and information Technology are absolutely vital to
managing the constant interface of various and management of the huge
variety of product information.

AND ALSO...

How Zara manage the strategy of distribution and vertical


integration ?

PROBLEM STATEMENT
On which way can vertical integration of zara be
an advantage for the company?
Cutting cost because they do not outsource any
channel.
Cutting time, more faster, effective, and efficient.
Avoid conflicts emerge from different channels.

WHAT TO DO Store
BEFORE
atmosphere

Target market
Zaras target market is people from
teens to adults, men and women.

Product assortment
Zara is broadly and deeply assorted.
Procurement
Establishing merchandise sources,
policies and practices.
Prices
Zara product price is affordable
Services
Prepurchase service, postpurchase
service, ancilary service.

Zara stores athmosphere is


high end but
classy, high lighting, no
pictures on the
wall.
Store activities and experiences
Stay update through the
website.
Communications
No advertising, but free press
is good
advertising.
Location decision
Zara locates themselves in
central
business districts with as many
outlets
as possible.

OVERALL ABOUT ZARAS VERTICAL INTEGRATION

Zara manufactures and distributes products in small


batches. Instead of relying on outside partners, the company
manages all design, warehousing, distribution, and logistics
functions itself

STRATEGIC ADVANTAGES

Zara has been able to


achieve
excellent
financial status due to
its core competencies
that provide the chain
with
a
competitive
advantage
over
traditional retailers in
the industry

Zara is an apparel chain that works differently from


traditional retailers. Generally, a traditional retailer
outsources all of its production while focusing on
distributing and retailing those goods. This is due to the
fact that the global apparel industry is highly-labor
intensive rather than capital intensive

Zara is a chain that has


developed a successful
diverse method of doing
business in the fashion
industry. Zara by working
through the whole value
chain is very vertically
integrated
and
highly
capital intensive

VERTICAL INTEGRATION
A distinctive feature of Zaras
business model, has allowed the
company to successfully develop
a strong merchandising strategy.
This strategy has led Zara to
create a climate of scarcity and
opportunity as well as a fastfashion
system.
Zara
manufactures 60% of its own
products. By owning its in-house
production, Zara is able to be
flexible in the variety, amount,
and frequency of the new styles
they produce

Zaras in-house production purposely creates a rapid


product turnover since its runs are limited and
inventories are strictly controlled. This rapid product
turnover creates a climate of scarcity and opportunity in
Zaras retail stores

HUMAN RESOURCE GOES BETTER

Zaras unique quick response system, composed


of human resources as well as information
technology, allows Zara to respond to the demand
of its consumer better than the competition. Zara,
who focuses on the ultimate consumer, places
more emphasis on using backward vertical
integration to be a very quick fashion follower
than to achieve manufacturing efficiencies

Zara has human resource teams in the retail


and manufacturing environment that work
exclusively toward this goal. In the
manufacturing environment, Zaras product
development teams are responsible for
attending high-fashion fairs and exhibitions
to translate the latest trends of the season
into their designs.

IN THE RETAIL ENVIRONMENT

Zaras managers and sales


associates are in charge of
transmitting
the
sales
analysis, the product life
cycles, and the store trends to
the designers. This allows the
designers in Spain to develop
the right products within the
season to meet consumer
demand

OTHERS ZARAS ENVIRONMENT


Accelerated IT software to transfer spesific
communication and design
Zara Centralized distribution facility, Zaras internally or
externally produced merchandise goes to the distribution
center
Targeting a broad market to international advantages
over its competitors

EXTENDED INFORMATION :
SPECIFIC ZARAS TARGET MARKET

Zaras target market is very broad because they do not


define their target by segmenting ages and lifestyles as
traditional retailers do
Zaras target market is a young, educated one that likes
fashion and is sensitive to fashion

OTHERS QUESTION FOR ZARAS ?


On which way can the fact that
zara has a single distribution
centre be an advantage?
Centralized control, avoid
misunderstanding or conflicts.
Manageable time scheduling, focused
on one rather than managing several
different time schedules.
On which way can this be an
disadvantage?
Diseconomic of scale in long term, the
costs is getting higher and higher.
Because of managing distributions on
their own, designing and production
process might not be in its optimum
level.

RECOMMENDATION
Design
Cooperate with vary range of designers so Zara can maintain its competitive
advantage to be the fast fashion but remain more and more creative.

Production
Cooperate with any channel of production all over the world so new
improvements in operation technology can be applied into Zara instead of keep
using the old ones.

Distribution
Making more distribution centres so they will enable Zara to be more faster,
effective, and efficient in distributing their products to the retailers.

Advertising
Advertising might be important in the future when competitors are becoming
more competitive and demands are declining.

THANKS FOR YOUR


ATTENTION
ANY QUESTIONS ?
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PROFESSOR NOW
OUR CREDITS PLEASE.