Project on ZARA - Clothing Brand

INTRODUCTION

Zara  is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Ortega and Rosalía Mera. It is the flagship chain store of the Inditex group, The world's largest apparel retailer, the fashion group also owns brands such as Massimo Dutti, Pull and Bear, Uterqüe, Stradivarius and Bershka.

It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year. 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. This has increased the idea of Zara as a "fashion imitator" company and low cost products. Lack of advertisement is also in contrast to direct competitors such as Uniqlo and United Colors of Benetton.

Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world."

BRAND ARCHITECTURE

HOW DOES ZARA DIFFER?

       Two key factors that distinguish Zara from other fashion brands are design (most fashionable) and speed of launching a new collection (fast); these factors make it easier to implement a good brand strategy. Zara brand managers are more likely to use design and brand name to carry out a brand strategy, and there is almost no advertising involved. In the fashion industry, the design of Zara plays the most significant role in the success of developing a strong brand. In addition, Zara is positioned in the premium price (price dimension) and impressive approach (intrinsic dimension) by managers, and the material and quality of it is relevant to this price strategy. 

        The chosen values of Zara fulfill not only the material need of consumers (e.g. clothing is for security), but also consumers’ demand for self-actualization (e.g. wearing Zara, they feel they are beautiful). Besides these, there is a positive image (which can be obtained from Zara’s fashionable design) and a high brand-added value (which has high perceptions of quality and high brand name awareness) of Zara for consumers. For instance, Zara’s name springs to consumers’ minds when people mention the high street fashion brands.

     Design is one of the determinants of the brand’s success in the fashion industry, and Zara has more than 250 designers (Inditex, 2007). “Zara was a fashion imitator. [Design of its product] focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season’s trends via fashion shows and similar channels of influence, which the fashion industry traditionally used.” (Kumar and Linguri, 2005) Zara’s product design is one of the most differential features in comparison with other brands, which also occupies an important position in a brand strategy. This is an active product design because consumers are able to make associations relative to Zara, such as ‘fashionable’ and ‘beautiful’.

          In addition, Zara chooses a premium strategy in the price dimension of positioning; its price Is neither too high (like Prada) nor too low (like Primark) for consumers. Finally, the irresistible combination of latest fashion and quality (i.e. product design) at an affordable price is one of the most valuable differentiation of Zara, which results in Zara’s brand being strong. This characteristic also promotes brand images to a high level.

Brief background of a product brand

    

      Zara’s product design is one of the most differential features in comparison with other brands, which also occupies an important position in a brand strategy. This is an active product design because consumers are able to make associations relative to Zara, such as ‘fashionable’ and ‘beautiful’. These associations are then transformed into positive brand images, as “A brand image is a subjective mental picture of a brand shared by a group of  consumers” . So design can affect brand images; an excellent one offers a strong brand image to consumers. In addition, Zara chooses a premium strategy in the price dimension of positioning; its price is neither too high (like Prada) nor too low (like Primark) for consumers. Finally, the irresistible combination of latest fashion and quality (i.e. product design) at an affordable price is one of the most valuable differentiation of Zara, which results in Zara’s brand being strong. This characteristic also promotes brand images to a high level.

Product strategy of Zara

          Product strategy is one of key components of a brand strategy, and a special one can lead to brand strategy’s success. Zara provides a considerable number of products, which are more than rival corporations in the fashion industry. It produces approximately 11,000 different products per year, while its major rivals only produce 2,000 to 4,000. Zara spends four to five weeks on the process of designing a new product and getting finished products in its stores (Inditex, 2007). So, Zara is the leading brand in `fast fashion’. It can redesign existing products in no more than two weeks. The shorter the product life cycle, the larger success it will have in meeting consumer preferences. “If a style doesn't sell well within a week, it is withdrawn from shops, further orders are cancelled and a new design is pursued. No model stays on the shop floor for more than four weeks, which encourages Zara zealots to make repeat visits. ” (Roux, 2002) The above unique product strategies are successful due to data gathered. In Spain, a high street shop has an expectation that consumers (or zealots) will visit it three times a year, whereas that rises to seventeen times in Zara’s case. This uniqueness offers a positive image to consumers. Hence, these particular product strategies help Zara to become a powerful brand in the fashion industry.

Zara’s target group

  Market Segmentation:

 In regards to the information read and personal knowledge, Zara has clearly segmented itself into many regions. For instance, Inditex has conglomerated various clothing line designers such as Bershka and Massimo Dutti in addition to Zara. This clearly demonstrates their demographic intentions to segment consumers with various tastes towards clothing as well as pricing preferences. Inditex, and Zara in particular tend to create the full value of certain products and services differently from one another.

Market Targeting:

Based on the research through primary or secondary data, Zara creates demographics options for the particular targeting group. Zara is mostly attempting to target young teenagers, which are looking for stylish clothing for a cheaper price because many do not earn their own income. Zara tries to implement a certain fashion direction by attempting to catch older consumers that are willing to become young morally just by wearing Zara clothing. Moreover, Zara tries to target high fashion followers as they produce modern clothing.

Market Differentiation: 

Zara has carefully targeted certain groups such as young teenagers or fashion freaks, in regards to targeting, they believed in differentiating themselves by offering high quality for low value. Hence, offering stylish fashion deals that were for premium price by other clothing manufacturers.

    Promotion:

1. §  Zara uses 0,3 % of its revenue sales in advertising.
2. §  Zara believes that promotion is done through location of their shops at a busy and traffic based area.
3. §  The tactic used in Zara is strictly hoping to achieve word of mouth throughout consumers.

How does current communication differentiate against competitor’s communication?

   Zara does not spend much money on advertising. The firm spends only 0.3 percent of its annual turnover on advertising, normally at the beginning of the sales season or the occasion of a new store opening. The store is considered its most effective communication tool, which makes it stand out of the other brands.

  Zara’s major international competitors in terms of market share are H&M and Gap Inc.

Only .3 percent of sales are spent on advertising for the company compared to that of its competitors who spend around 3.5 percent. Zara is more concerned with finding the exact retail site that best suits the company rather than spending the extra money on luring customers into the store

Zara has several basic product lines. Women’s and men’s clothing are the most important product line in Zara, whereas there are perfume, shoes, belts and cosmetics lines also.

My Opinion on the advertising strategies

     According to me, What Zara does by spending its 0.3% of the revenue on advertising is a premium and a royal way of being there in the market and being a market leader. Also by not giving the Zara online in india makes the brand a more craving for the brand. But certainly if the advertising expenditure increases to 3-5% then it may result in a better sales but the platform of advertising should be fashion magazines, Top Newspaper, cover page and teasers.