Issuu on Google+

BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

ZARA Gunnlaugur Arnar Elíasson, Sandra Ósk Kristbjarnardóttir and Clara Sofia Escobar Lopez


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

COMPANY  OVERVIEW Zara  is  a  Spanish  chain  store  of  Inditex   Group,  one  of  the  world’s  biggest  retail  store   in  the  world,  who  are  also  owners  of  brands  like  Massimo  Du?,  Pull  and  Bear,  Oysho,   Zara  Home,  Uterque,  Stradivarius  and  Bershka.  Founded  by  Amancio  Ortega,  he  first   opened  a  Zara  store  in  1975  in  downtown  A  Coruña,  Spain,  where  it’s  sRll  home  to   it’s  headquarters  today. At  the  beginning  Zara  sold  low  price  clothes  that  resemble  designs  from  the  couture   designers.   Then   he   changed  the  design,  manufacturing  and  distribuRon  so  he  could   make  clothes  quicker,   and  that   way   react   to  trends  faster.   This  strategy   proved   so   successful  that  between  1976-­‐1984  Zara  extended  its  network  and  opened  stores  all   over   Spain.  In  1988   they   opened  their   first  internaRonal  store  in  Oporto,   Portugal,   and   have  been   ever   since  expanding  their  stores.   In   2007   Zara’s  shop  number  1000   was  open  and  in  December  2008   they  opened  their  first  Eco-­‐efficient  store  in  Athens,   Greece.  On   17th  December  2009  an  applicaRon  for   mobiles  came   out  and  it  wasn’t   unRl   last   year   on   the   September   2nd   2010   that   merchandise   became   available   online.   Today   there   are   1688   stores   in   the   largest   ciRes   in   over   70   countries   in   Europe,  Asia,  Africa  and  America. What   is   the   key   to   Zara’s   success   is   that   it   has   a   quick   constant   exchange   of   informaRon.  All   is  managed  in  one  design  and  producRon  centre  in  Coruña,   where   there  is  3  spacious  halls,  one  for  women,  one  for  men  and  one  for   children;  it’s  much   more  expensive  but  they  can  work  more  efficiently.

COMPANY  IMAGE


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

Zara  is   a  fast   industry   but   it’s  unique  business  model  is  based  on   innovaRon  and   flexibility.   They   design  and  distribute  a  garment  to  market  in  just   fiaeen  days.  They   have   always-­‐new   products   but   in   limited   supply.   The   costumer   feels   there   is   an   “exclusivity”,  since  only   few   items   are  on  display   even  thought  stores   are  spacious;   they  feel  they  have  to  buy  it  because  they  won’t  find  it  again. Zara’s  designers  create  approximately   40,000   new  designs  annually   of  which  10,000   are  produced.  These  designs  resemble  latest  couture  creaRons  or  classic  pieces.  They   are  giving   the  costumer   the  same  products  made  with  less  expensive  fabrics  and   lower   prices.   Their   producRon  is  massive,  of  each   design  they   normally   make   5   –   6   colours  and  5  –  7  sizes. They   also   care   about   the  environment,   animals  and  workers.   Two   years  ago   they   demanded  their  Bangladesh  jeans  supplier   to  close  their  factory   and  built  a  new  one   with  befer   condiRons  for   their   workers  aaer  they  found  about  the  poor  condiRons  in   which  they  where  working. As  well,   Zara  stores  are  eco-­‐friendly,   is  against   fur   and  they   use   ecological  fabrics,   organic  cofon  and  PVC-­‐free  footwear. Mr.Ortega  transmits  the  values  of   the  company   which  are  freedom,  perfecRonism,   responsibility,  rapidness,  flexibility  and  respect  to  others  to  his  Zara  team.

VALUE  DRIVERS Increase   net   margin   on   operaRon   and   their   market   capitalizaRon   and   increase   customer  loyalty   and  brand  recogniRon.  Zara’s  business  model  provides  great   value   to  shareholders  and  makes  them  different  from  their  compeRtors.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

MARKETING  POSITION  /  COMPETITION Right  now  Zara  is  well  posiRoned  in  the  market  globally.  They  produce  women,   men   and  children  arRcles.  They  are  giving  the  costumer  quick  choices  regarding  fashion. Comparing  quality   against  price,  Zara  sells  a  good   quality   for  it’s  value,  plus  current   fashion  trends. At  more  or  less  their   same  level  of  quality   vs  price,  their   main  compeRtors  are  the   other   high   street   fashion   brands,   such   as   Mango  (also  from  Spain),   Top  Shop  and   H&M.   H&M   differs   from   Zara   because   they   outsource   all   of   their   producRon,   spend   more   money   on   adverRsing,   and   is   price-­‐ oriented.  The  key  similariRes  for  comparison   between   Zara   and   H&M   are   that   they   are   European   based   companies,   are   fashion   forward  at  lower   price  retailers,   and  have  a   strong  internaRonal  expansion  strategy.

STOCK  MARKET  INFORMATION Inditex,   whose   other   brands  include  youth   label   Bershka   and   the   upmarket   Massimo   du?,   posted   a   net   profit   of   1.18   billion   euros  (1.52   billion   dollars)   during   the   first   nine   months   of   2010,   a   42   percent   jump   over  the  same  Rme  in  the  previous  year.    

NUMBER  AND  LOCATION  OF  STORES Their   first   store  was  opened  in  Spain,   then   Portugal,   USA,   France   and   the   rest   of   the   world. They   had  1,688  stores  by   the  end  of   October   2010,   in   77   countries  all  around  the   world  and  counRng. They   are  opening  stores  all  the  Rme  because  they   prefer  to  invest  in  expansion  befer   than  in  adverRsement. For  2011  Inditex  is  planning  on  opening  their  first  store  in  Australia  and  South  Africa.   They  are  also  expanding  the  number  of  Zara  stores  available  in  the  Asian  market.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

METHODS  OF  TRADING The  stores  are  company  owned,  unless  the  countries  regulaRons  say   otherwise  and   in  these  cases  they  franchise  the  store. The   business   model   they   have,   avoids   the   main   fixed   costs   associated   with   internaRonal  expansion  because  they  don’t  have  distribuRon  centres  per  country  and   they  don’t  adverRse  when  entering  a  new  market. They   have  in-­‐store   shopping  and   launched  their   online  store  last  year.  They   have  a   web  page  where  you  can  browse  their  catalogue,  lookbook  and  all  the  new  garments   that   are  arriving  every  week.  It  also  has  a  Store  locator  with  direcRons  and  maps.  All   this  informaRon  is  also  available  in  their  applicaRon  for  iPhone  and  iPad. Zara  online  sales  began  just  for  France,  UK,  Italy,   Germany,  Portugal  and  Spain,  then   Austria,   Ireland,   Belgium,   the   Netherlands   and   Luxembourg.   They   have   a   strong   commercial  proposiRon   and  have  had  a  saRsfactory   customer   recepRon  since  they   went  on-­‐line.   They   are  planning  to  open  online  shopping  for  Japan,  South  Korea  and   Canada  this  year.

T A R G E T   C U S T O M E R   DEMOGRAPHICS In   their   company   profile   presentaRon,   Inditex   has  an   age  target   for   Zara  that   goes  from   0  years  to  40+  years  because   they  produce  clothing  for  every  age. Zara’s  main   target   is  women,   and  their   primary  age  group  is  between  25  to  40.   They   are   looking   for   the   women   that   likes  to  be  fashionable  but  at  a  low  cost.   The  everyday   woman   that   wants  to  go   well   dressed   to   work.   They   are   supervisors,   junior   managers,   and   skilled   manual  workers.  They   work  near   busy   streets,  that’s  why   the  majority   of   the   stores  are   around   this   areas.   They   can   be   single,   or   recently   married,   no   children   yet.   They   browse   the   store   every   week  or   every   two  weeks  to   see   what  has  arrived  new. The  secondary   target  customer   for  Zara   could  be  man  in  the  same  age  range,  25   to  40.   Classic  men  that  like  fashion  but   that  are  not  going  to  the  extremes.   They   want   to   be   well  dress  to   work   and   in   their  leisure  Rme.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

TARGET  CUSTOMER  PSYCHOGRAPHICS Zara’s  customer   spends  their   weekdays  busy   in   the  office  or   in  their  workspace  and   likes  to  hang  out   with  their  worker  friends  or  with  other  couples  on   the   weekends.   They   are  classic  but  understand  about  fashion  and  don’t  want  to  take  it   to  far.  They   like  comfort   and   good  fi?ng  but   don’t   care  that   much  about  quality   because  they   can  wear  what  is  new  at  a  low  cost.

TARGET  CUSTOMER  BUYING  BEHAVIOUR Zara’s  customers  are  early   majority.  They   love  fashion,  they  are  aware  of  fashion  but   they   are  more  conservaRve  in  their  dressing.  Zara  has  been  characterized  for   having   the  latest  trends  on  their  collecRons,  many  Rmes  criRcised  for  doing  garments  similar   to  other  top  European  designers.

PLACE •

LOCATION

Their   shops   are   always   situated   in   a   prime   locaRon,   in   the   middle   of   the   most   commercial  streets  in  Barcelona,  that  way  they   can  afract  their  prime  costumer  into  


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

the   store.   Zara's  target   market  is  comprised  of  urban,  fashion-­‐conscious  consumers   who  shop  frequently  for  the  latest  trends. Normally   Zara  It’s  easy   to   reach   by   the  metro,   bus  or   walking.   On   weekdays  the   stores  are  packed  with  people  that   come  for  shopping,  and  also  from  the  people  that   are  just  passing  by  in  their   way  to  work  or   study.  On  the  weekends  it  gets  really  busy   with   people  not  only  from  Barcelona  but  also  from  the  surroundings  that  comes  for   window-­‐shopping,  shopping  and  just  to  hang  around  for  the  day. The  store  locaRons  are  always  located  at   presRgious,  high-­‐traffic  locales.       The  stores   are   designed  with  wide-­‐open  spaces   and   well-­‐defined   layouts  to   insure  customers   enjoy  their  shopping  experience  at  Zara. ParRcularly   Passeig  de  Gracia  with  Arago  shop  is  very   important   for  Zara  because  it   gives  her   a  lifle  more  of  presRgious  and  also  catches  costumers  that   have  a   lifle   more  economic  capacity  in  their  shopping  around  Passeig  de  Gracia. •

STORE  DESIGN

The  stores  are  huge,   with  big  window   displays.   They   are   always  very   modern  and   very  well  organized. Zara  has  always  characterized   because   they   don’t   adverRse   so  their   windows  are   really   important.  They  always  have  an   amazing   display   to  make  the  costumers  come   in,  and  you  can  noRce  they  spend  a  lot  of  money  in  it.  You  just  have  to  walk  by  to  see   their  ulRmate  collecRons  and  be  tempted  to  come  in.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

The  doors  of  the  store  are  big  to  let  in  and  out  the  large  quanRRes  of   shoppers  that   come   daily   to  the  store.   They   are  placed  in  all  the  corner   of   the  to  streets  so  it   is   accessible  really  easy. As  soon  as  you  get   in  you  get   a   good  vibe,   it   is   kind   of   a  bouRque,   but   huge.  The   inside  always  goes  with  the  window  display.  It  looks  luxurious. The  lighRng  is  yellow,   comfortable,  it  invites  you  to  stay  and  look  around.  The  colour   of   the  store  are  classy,   they   use  brown  and  beige  tones.  They  play  music   not   so  loud   and  melodies  that  are  singed  and  that  are  relaxing. The  store  materials  are  shiny  silver  metal,   glass  and   glossy   wood.  They  have  mirrors   everywhere  so  people  can  try  on  things  if  they  are  in  a  hurry.  The  dressing  rooms  are   easy  to  find  and  they  use  curtains  and  have  good  space  inside  for  trying  outits. •

METHODS  OF  MERCHANDISING  AND  DISPLAY

You  can  find  mannequins  that  support  the  windows  display   everywhere  showing  the   costumer  how  they  can  combine  the  different  garments  and  showing  what  they  have   available. The  clothes  are  separated  by  brand. The  layout  of  the  store  displays  clothes  against  the  wall  in  a  very  parRcular  way  with   some  clothes  hanging  and  accessories  on  the  bofom  and  in  the  top.  They   alternate  a   lot   of  their  clothing  with  shoes  so   the   people  want   them  even  thought  they   where   there  just   to   buy   clothes.   The  garments   are   displayed   in  racks  all  around  the  floor   mixed  with  tables  that  have   clothes  folded  on  top.   Their   hangers  are  of  metal  and   wood  or  the  combinaRon  of  both. The  clothes  are  display   by  theme  nor  by  trend  or  by  colour.  They  look  for  clothes  that   can   make   a   good   combinaRon   and   place   them   together.   They   have   a  secRon   of   formal   clothes,   other   with  more  lay   back  clothing.  They   combine  pants,   blouses,  t-­‐ shirts,   tops,   shoes   and   jackets   in   each   secRon.   The  clothing   is  really   well   display   making  it  easy  to  reach.  The  shops  are  comfortable  to  walk  and  to  shop.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

PRODUCT •

BRAND

Zara  has  5  brands: 1. Zara  Woman,  that   it   is  a  brand  a  lifle  more  formal.  For   women   at  their  work   or   for  women  that   go  out   but  they  like  their   looks  to   be   more  serious.  They   also  have  clothes  that  go  with  the  trends  and  that  are  fabulous. 2. Zara  Basic  (woman),  it  is  a  brand  that  has  all  the  basics. 3. Zara   TRF,  for  younger  women,   it   has   the  trendy   clothes  for  young  girls  who   love  to  be  up  to  fashion. 4. Zara  Men,  with  all  the  clothes  for  men.  Both  casual  and  formal. 5. Zara  kids •

PRODUCT  MIX

In  Zara  they  sell  almost  everything.  Jeans,  blouses,   skirts,   trousers,  jackets,   knitwear,   coats,  t-­‐shirts,   shorts,  shirts,  sunglasses,  shoes,  scarf,  belts,  hats,   handbags,  leggings,   head  accessories. As  part  of  this  corporate  concept,   the  stores  try  to  hold  very  low  levels  of  inventory,   oaen  having  their  enRre  inventory  out  on  display,  in  order  to  sell  out   and  make  room   for  the  next  wave  of  fashion. •

MAIN  FASHION  TREND

Zara's   global   strategy   is   to   offer   cu?ng   edge   fashion   at   affordable   prices   by   idenRfying   which   styles   are   "hot"   at   fashion   shows   and   moving   simulaRons  into   producRon  even  before  the  original  designer  can. They  always  have  the  latest  trends.  You  can  find  the  trendiest  pieces  mixed  with  the   basics. •

SIZE  AND  QUALITY

Zara  has  sizes  that  go  from  the  XS  to  the  XL.  Their  quality   is  good;  all  their  clothes  are   made  in   Europe  with  the  excepRon  of  some  pieces  and  jeans.  They   are  well  known   for   promoRng   befer   quality   for   the   workers   and   they   where   involve   with   the   improvement  of  installaRons  in  the  fabrics  that  made  their  garments  in  Bangladesh.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

PRICES

Zara's  pricing   is  lower   than   its  compeRtors,   but   profit   margins  are   higher   due  to   direct  efficiencies  gained  from  a  shortened,  verRcally  integrated,  supply  chain. Zara's  global  target   market  is  a  young,  educated  one  that  likes  fashion  and  is  sensiRve   to  fashion,  but  is  price-­‐conscious. Zara  is   a  brand   that   it   is   really   well  posiRoned.   They   give   to   their   costumer   high   fashion  at  low  prices.  Their  quality  it  is  in  a  good  price  for  the  value.   They  use  the  psychology  of  prices  by  ending  their  price  tags  in  .99. • Jackets  from  139  to  49.99 • Outwear  from  49.99  to  39.99 • Knitwear  from  19.99  to  14.99 • Dresses  from  119  to  25.99 • Skirts  from  39.99  to  29.99 • Trousers  from  35.99  to  19.99 • Shirts  from  39.99  to  19.99 • T-­‐shirts  from  25.99  to  9.99 • Shoes  from  79.99  to  29.99

PROMOTIONAL  ACTIVITIES •

ADVERTISING

Zara   doesn’t   adverRse.   Zara's   adverRsing   expenses   are   minimal   (avg.   0.3%   of   revenue)  compared  with  3%  to   4%   for   other   specialty   retailers.   These  helps  lower   expenses  and  preserve  strong  profit  margins.  Zara  prefers  to  invests  more  money   in   renovaRng  its  storefronts  and  buying  prime  real  estate  for   store  locaRons  where   it   gets  all  the  promoRon  that  it  needs  as  visibility  markeRng. They   just   use  posters   in   their   windows  whenever   they   are  in  sale   with  just  a  small   word  that  reads  sale  and  post  it  on  Facebook  and  online. •

SALES  PROMOTION

Zara  uses  the  same  sales  period  as  the  other  brands,  but  Zara  stock  it’s  low,  and  it  is   always  being   renewed,   so  the  sales  aren’t  that  important.   Recently   they   have  been   posRng  on  Facebook  and  on  their  web  page  whenever  they  have  sales.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

P.R.

They   get  a  lot  of  publicity   from  the  fact   they   don’t  adverRse  and  because  they   are   helping  the  people  in  the  industries. Zara  also   has   a  Facebook   page  where   they   currently   have  7’818.477   people  who   “Like”   them  or  follow  them.  They  post  videos,   photos  of  new  arrivals,  making  of  the   photos  for   the   lookbook   and   catalogue,   invitaRons   to   new   stores  opening   events,   sales  informaRon,  new  countries  with  online  shopping  available,  etc.   This  way   they   are  ge?ng  into   the  social  network   trend   and  reaching  new   and  old   costumers,   strengthening   their   core  values  which   are  to   Increase  customer   loyalty   and  brand  recogniRon.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

STRENGTHS  AND  WEAKNESSES STRENGTHS • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

Amazing  locaRons. BeauRful  windows  display. Well  displayed  inside  the  store.  BouRque  style. Great  range  of  sizes. Give  the  ulRmate  trends  at  a  budget  and  quickly. They  use  their  money  in  opening  new  stores. They  get  free  adverRsement  helping  the  people  in  Bangladesh. They  bring  new  items  twice  a  week. By   focusing  on   shorter  response   Rmes,   the  company   ensures  that   its  stores   are  able  to  carry  clothes  that  the  consumers  want  at  that  Rme. Offers   its   customers   a   unique   mix   of   affordability,   exclusivity   and   differenRaRon. The   company   keeps  its  operaRng  income  elevated,   has   a  strong  and  unique   business   model,   and   has   various  opportuniRes   for   expansion   in   the   retail   industry. They   have  developed  a  very   successful  verRcally   integrated  company   which   can  design,   manufacture,   and   distribute  garments  to   retail  stores  in  just   two   weeks. By   owning  its  in-­‐house  producRon,  Zara  is  able   to  be  flexible  in   the  variety,   amount,  and  frequency  of  the  new  styles  they  produce Not  adverRsing   makes  the  costumer  go   by   the  store   to   check  out   what  they   have  new  and  knowing  that   they   don’t  have  the  same  every   week  this  make   the  costumer  buy  it  immediately. The  Zara  costumer  goes  more  than  17  Rmes  per  year  to  the  store. Having  lifle  stock  makes  it  more  “exclusive”. Zara  stores  have  men’s,  women’s  and  kids  clothing,  shoes  and  accessories. Great  variety  of  colours  and  sizes. Design  and  produce  products  really  quickly  (only  2  weeks). Supply  their  stores  twice  a  week  with  new  products. Accessible  prices  for  every  one. Up  to  the  trends. 50%  of  the  products  Zara  sells  are  manufactured  in  Spain,  so  they  give  a  lot  of   work  to  people  in  their  country. They  have  an  environmental  and  animal  welfare  policy. They  tune  with  the  customer. Make  the  customer  feel  they  are  buying  exclusivity. They  care  about  the  workers  of  their  suppliers It’s  a  well-­‐known  brand  around  the  world;   the  people  recognize   it   and   buy   there. They  know  the  product.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

WEAKNESSES • • • • • • • • • •

There  is  a  lot  of  compeRRon  around  their  locaRons. SomeRmes  it’s  not   easy   to   find   the   displays  from   the  windows   inside  the   store. Aaer   certain  Rme  of  the  day   the   store  gets  really   messy   and  it  is  difficult  to   find  the  garments  you  are  looking  for. By   not   adverRsing  they  are  missing  people  that  don’t  like  going   to   the   store   just  to  see  what  is  new. They  have  lifle  stock  available  and  when  you  go  you  cant  find  your  size. Zara  only   has  one  manufacturing   plant   and  distribuRon  centre  in  the  world,   which  can  be  a  huge  weakness  and  threat,  if  something  goes  wrong. Not  good  quality  can’t  be  worn  for  long. A  lot  of   waste  in  their   massive  producRon   because  all  their  stuff  can’t   be  sell   unless  they  have  sells  all  the  Rme. They  use  designs  from  other  designers. Monopoly  markets  with  low  cost  clothes,  affecRng  smaller  brands.

SUITABILITY  OF  MARKETING  MIX Zara  take   a  faster   approach  at   producing  clothing  items  that   customers  want  at  the   present   moment.   They   find   current   popular   trends  and  ask   consumers  what   they   want   and  need  instead  of  predicRng  future  trends  and  spending  the  average  of   5-­‐8   months  to  develop  a  collecRon  for  a  season  like  other  brands  do. The  one  thing  that  makes  Zara  different  is  the  designs  that  make  it  to  Zara  store  racks   are  low  in  quanRty,  which  cause  items  to  sell  out  faster.  Keeping  store  inventory  low   and  clothing   in  demand  is  key   to  Zara.   Also  the   styles   on   store  racks  are  changed   every   week  in  order  to  keep  people  wanRng  to  come  back  to  see  what  is  new,  which   in  turn  keeps  customers  buying.     Another  major   advantage  that  makes  Zara  strong  in  its  market  is  that  it   targets  the   young   fashionable  consumers  who  are  always  looking  for   the  latest  hip  trends  and   the  older  consumer  who  is  looking  for  a  bargain  plus  a  good  quality  clothing  item.


BRANDING  PROJECT  

 

 

 

 

COMMUNICATION  AND  MEDIA

BIBLIOGRAPHY • • • • • • • • • • • • • • •

Zara  (clothing),  Wikipedia. www.zara.com     Zara’s  secret   for   fast   fashion  by   Kasra  Ferdows,   21   February   2005,   Harvard   business  review. Zara   is   launching   online   shopping   –   it’s   about   Rme!   By   Bee   Shyuan,   17   September  2009,  on-­‐line  arRcle. Fashion  novelRes  of  Zara  and  Zara  Home,  12  December  2009. Improving   working   condiRons   in   Bangladesh   garment   factory,   20   January   2010,  BBC  radio. www.inditex.es Inditex  company  profile hfp://www.facebook.com/#!/Zara hfp://icheersapp.com/ipad/lifestyle-­‐ipad/zara-­‐shopping-­‐online.html hfp://www.bbc.co.uk/news/business-­‐11155437  -­‐  Web  page  news   hfp://www.inditex.es/en/press/press_releases/extend/00000800  -­‐Web  page   news hfp://news.yahoo.com/s/afp/20110110/bs_afp/ spainretailfashiontexRlecompanyearningsinditexzara   -­‐   Stock   market   informaRon  on  Zara  news hfp://www.modernights.com/shop/zaraclothing/  -­‐  ArRcle   <hfp://www.123HelpMe.com/view.asp?id=97642>   "Zara’s   Business   Model,   InformaRon  and  CommunicaRon  Technologies,  and  CompeRRve  Analysis."  


Zara Brand Analysis