Introduction

Marketing Management Strategies for Zara will be analysed in this report, including the application of Segmentation, Targeting, and Positioning at Zara. Big data, data-driven analytics and information from a wide range of sources play significant roles in relationship marketing because data reveals authentic information about the needs, preferences and demands of customers in a precise format. It enables businesses to be informed about customers’ preferences which change on a regular basis. The writer of this report has been assigned as an external consultant of an organization and is appointed to make a formal report on how businesses use sales and marketing data to make business decisions. An organization has been selected for this report: Zara SA which is a Spanish apparel retailer owned by Inditex Group (Inditex, 2020). It sells fast-fashion clothing items, accessories, shoes, beauty products and perfumes. Zara has businesses in 202 markets globally through its online platform and has 2,262 stores in 96 countries (Inditex, 2020). The company works with 1,801 suppliers and 7,799 factories worldwide to manufacture the products it sells (Inditex, 2020). The report has mainly been divided into four segments. The first segment will evaluate the importance of data to enhance relationship marketing with a critical emphasis on customer expectations and service excellence. The second section will assess the application of STP (segmentation, targeting, and positioning) at Zara. The third section will evaluate the rationale of innovation in product and service design to meet customers’ needs and expectations. Finally, the fourth section will suggest and evaluate a viable solution to a given problem to meet customers’ problems of a certain group.

You may feel interested to read below blogs:
International Marketing Strategies of MNCs
Digital Marketing Strategies of Pret A Manger
Unique Selling Points of Nando’s
Unique Selling Point of Toyota
Brand Management strategies of Unilever
Global Versus Local Marketing Strategies

How data helps companies to improve relationship marketing:

Members (2019) has revealed in his research that data indicates the complex and large data sets that need to be processed and analysed to reveal significant information which benefits companies in many ways. On the other hand, relationship marketing is the process of managing customer relationships by focusing on customer loyalty and longer customer engagement to maintain repeatable sales (Gummesson, 2011). Data plays an outstanding role in improving relationship marketing in different companies. The ways how data helps Zara to improve relationship marketing are evaluated below:

Data helps companies to increase customers’ engagement: Companies can find out the way through which customers interact with them the most; therefore, companies can use the way to increase customers’ engagement (Hennig-Thurau & Hansen, 2013). For instance, data shows that 51.53% of people use mobile to visit a website which means that Zara has to target more ads of their products to mobile (Statista, 2020). As a result, the company will be able to ensure more customer engagement by communicating more with mobile ads, and the customers will maintain repeatable purchases from Zara.

It helps to create value: Companies can get the information through data on what kind of products and services customers prefer and it helps companies to deliver products of customers’ choice that create value for them (Christopher, Payne, & Ballantyne, 2013). Zara will be able to know and identify customers’ choices and will be able to customize its products according to the choice, which will create value. As a result, customers will be loyal toward Zara, and it will help the company to hold on long term relationships with their customers.

Companies can understand customers’ type: Companies can understand customers’ type by evaluating their search, and it helps them to connect in better ways (Peck et al., 2013). Zara will understand their customers’ type and their needs by evaluating their search data which will help them to build emotional attachment by providing relevant content to their needs. As a result, customers will be gratified toward them and will maintain purchases from Zara.

Data helps to improve customers’ expectations: Through collecting data, companies conduct research on their customers, which improves customers’ expectations because customers know that the companies are researching their need to deliver their desired products (Kitchin, 2014). Zara will be capable of improving its customers’ expectations by utilizing data. The company will take time to understand the need and interests of its customers and will provide significant information to the customers in order to attract them by understanding their desire. Zara will use the content their audience are interested in consuming, and it will deliver their marketing messages to the customers; therefore, they will get effective result. For instance, Zara will identify which content the customers will like, such as read blog posts, watching videos and listening to broadcasts and will use suitable content according to customers’ choice. As a result, customers will be attracted and will be encouraged to purchase their products because Zara will meet their expectations.

Data helps to improve service excellence: Data helps organizations to improve service excellence and helps companies to make customers gratified (Sagiroglu, & Sinanc, 2013). For instance, companies provide follow-up services and have feedback from their customers through e-mail, social media, mobile messaging and other media. Zara can provide after-sales service to their customers and collect feedback from them through using e-mail, social media, mobile messaging and other media with a genuine attitude. It will help them to make customers’ experiences positive by solving the problems they are facing. By doing this, Zara will be capable of improving its service excellence.

STP (Segmentation, Targeting & Positioning)

Camilleri, (2018) has found in his research that STP stands for Segmentation, Targeting & Positioning, which is a marketing tool, and marketers can identify their target audience and make the right marketing message according to the target group of customers. STP of Zara will help them to create an outstanding place within the target market because they will target the right group of customers who will purchase their clothing. The success of Zara’s clothing performance will depend on the effectiveness of its segmenting, targeting and positioning. Therefore, Zara should behave wisely while segmenting the right group, target them and will position themselves in the targeted market place. As a result, the clothing Zara will be capable of bringing higher revenue for the company.

Segmentation of Zara:

Segmenting refers to the process of listing out all potential market segments that a company can target in their marketing campaign according to their different facts such as lifestyle, gender, geographic location, interests, behavioural patterns and other issues (Andaleeb, 2016). Zara will be able to make its marketing campaign successful by conducting proper market segmentation, and it will minimize its wastage of resources and time because the company will conduct a marketing campaign for potential customers by avoiding others. As a result, Zara will be able to fulfil its objectives of attracting potential customers through effective marketing.

Companies can choose appropriate market segmentation from various types of market segmentation. Geographic features, demographic features, behavioural features, situational scenarios and psychographic features are the factors that Zara has to consider while segmenting market.

Andaleeb (2016) has revealed that companies should not segment the market according to every feature, rather they should segment the market on the features which are pertinent and compatible with the business. According to the viewpoint, Zara segments their market with demographics of customers such as age, gender, and psychographic, including the fashion sense and style they follow, such as grunge, trendy, Latino, classic, contemporary, etcetera. The company will focus on matching the variety of tastes of the segmented customers through their product offering to generate higher revenue.

Demographic segmentation is the way of breakdown customers on the basis of a combination like gender, income, age, marital status, ethnicity, household, education, length of residence, size and profession (Schlegelmilch, 2016). The official website of Zara clothing conducted demographic segmentation because people will buy the clothes according to their choice, lifestyle, fashion sense, education level and social status (Zara-1, 2020). For instance, trendy women who are well-educated and fashion-conscious will buy the clothing of Zara because it has trendy dresses which are different and uniquely designed (Zara, 2020). They will wear these clothes in office, college, parties or for other occasions to look different and stylish from others. The price of Zara’s clothes is more reasonable than the clothes of boutiques and expensive fashion houses, which will attract stylish girls, women and men across the world to buy their clothes in order to have the best look within their ability.

Customer Targeting of ZARA SA

This refers to specifically targeting a range of customers for the products and services. This includes details specifications of target customer groups such as their gender, age, income, occupation etc. The clothes Zara is always trendy and fashionable, and famous across the 88 countries in which it has a business (Business Fashion, 2020). Zara clothing is the most famous cloth brand in the world and possesses a top position among all global fashion brands (Business Insider, 2020). Targeting customers in a specified manner will assist Zara in establishing effective marketing communication with targeted customers. The features Zara should consider while targeting its customers are stated beneath:

Characteristics	Features of Targeted Customers
Education	College Graduate
Annual Income	£80,000 to above
Gender	Both Men and Women
Socio-economic status	Middle-class to higher-class people
Age	18-year-old to 55 years old
Benefits-sought	Look trendy and fashionable
Occupation	Students, businessmen and women, Actors and Actresses and service holders.

Zara will be capable of reducing its marketing costs by conducting marketing communication with the targeted customers of the features stated above in the table. As a result, the profitability of the company will increase. Narrowing down the target market will enable the company to specifically collect required data and make promotional campaigns.

Positioning of Zara:

Positioning is the way that shows how a brand aligns its products in the targeted market, and the aim of positioning is to offer unique and best products than competitors (Perner, 2013). The positioning of Zara is the brand image that customers see.

The above-stated positioning has been presented by focusing on the quality and prices of the products of all fashion brands. It is seen that Zara provides the best quality of their competitors, but the price is higher than others because of the quality. Therefore, Zara has to maintain their quality to hold on the leading position in the industry.

Rational for innovation in product and service design of Zara’s strategy

Before moving further to explore the rationale for innovation in product and service design in Zara’s strategy, it is more important to identify the strategies of Zara.

Area of Strategies	Specific Strategies
Customers	Keep at the centre of everything by creating beautiful and responsible fashions.
Stores	Aesthetic, innovative, and eco-friendly design along with online presence to ensure pleasant customer experience and sustainable business relationships.
Design	Knowing the inside out of the customers and changing needs to ensure sustainable fashion in the stores.
Sourcing	Finding sustainable and fast manufacturing sources. Such as ensuring wood-based materials do not come from ecologically critical forests.
Products	Thoroughly tested and evaluated in in-house labs and implement the reflections of customers’ preferences.
Logistics	Efficient and eco-friendly technology in storage and transportation.

Table: Strategies of Zara (Inditex-1, 2020)

Importance of Innovation in product design:

Steen, Manschot, & De Koning (2011) defined product innovation as either radical innovation, meaning inventing a new product or service or incremental innovation, meaning improving the performance, functionality, or quality of existing products or services. Research by Harvard Business School found that only 5% of new products are successful; this is exactly what explains the significance of innovation to stand out of the crowd and be successful (Ghelber, 2019). This section will critically assess the importance of innovation in product design at Zara.

Kindström & Kowalkowski (2014) revealed that the fashion industry is highly dominated by uniqueness and new and innovative features. The above table also shows that uniqueness and newness are the underlying principles of Zara’s fashion sense and product design. Emphasizing innovation can play a great role in helping Zara to bring unique features and new designs to the fashion items. Innovative features in product design will empower the designers and related people to critically investigate the insight of customers, their requirements, changing needs and preferences of the market, and most importantly, bring a famous history in a contemporary design sense. All of the above are important in the fashion industry because it is dominated by newness and uniqueness. In line with the above analysis, Zara does continuous research and innovation on the needs and requirements of the customers, and the company introduces new designs frequently. Such emphasis on product innovation increases customer engagement and increases footprint in both the physical and online stores.

Sustainable fashion is one of the most cited terms in the global fashion retail industry because conventional clothing production does much harm to the environment (Shaw et al., 2018). The design of the fashion determines how much harm the product can cause to the environment. For example, conventional denim (jeans) trousers will use about 25 litres of water and chemicals which will later be dumped into water sources (Patrício et al., 2011). In contrast, eco-friendly designed denim trousers will not use any water or chemicals, thus reducing the chance of polluting the environment. This clearly implies that innovation in product design has a greater role in making the fashion sustainable through new approaches to treating the clothing and accessories. Innovation in product design will help Zara to meet their objectives of sustainable fashion and create an excellent brand image of being a responsible fashion business.

Importance of Innovation in service design:

Service design is the management, relocation and arrangement of people, processes, infrastructure and technology to make interactions between service providers and service users (Visnjic, Wiengarten, & Neely, 2016). Wiser companies put high efforts into ensuring efficient and responsive service design to ensure a pleasant customer experience because service design involves the touch-points where customers interact. The above analysis shows that Zara should be highly concerned about the service designs of the whole system: physical stores, online stores, after-sales services, logistics etc. Innovation can bring interactive, responsive and flawless communication and management of service design.

Innovation in service designs at stores can help Zara to build aesthetic, innovative, and eco-friendly stores, which are the strategies of the company as outlined in the table. The innovative team can conduct in-depth research and bring either radical or incremental innovation to the service designs at physical and online stores (Ojasalo, Koskelo, & Nousiainen, 2015). For example, the innovation team can conduct research and make an excellent approach to home delivery through drones. The innovation team critically assesses the service complaints or existing bottlenecks in present services and bring solutions to the problems to make a further pleasant experience for the customers.

Problem with a customer group:

The selected target group and their needs are illustrated on below table:

Target group	Specific needs/problems
Zara’s customers aged above 50 years	Due to the COVID-19 impact, this group of customers are more vulnerable to the virus because of their age. Thus, they feel high demand for an interactive and vibrant presence of Zara from where they can purchase online, pay online and can get home delivery.

Solutions to the problems:

Making an interactive online platform: An interactive online platform would enable a company to display all the products and services and would help customers to get the required information (Stoneman, 2010). Thus, Zara could solve mentioned problem for the target group by building an interactive and informative online platform. Additionally, it should be as much responsible as possible to deliver asked information to the customers.

Making the online platform easy to use and display all goods: Zara should also ensure to make the online platform easy to use and should display all the products with the required information. The company should use high-definition and well-explained images to attract a large number of target customers. Additionally, it should adopt digital marketing approaches such as Search Engine Optimization, Google Ads, and social media advertisements to reach a large number of target customers.

Ensuring all features of a transitional e-commerce website: The online platform of Zara should be a fully transitional e-commerce site where customers can purchase goods, can make payments either by credit cards or by internet payment such as PayPal.

Featuring home delivery and after-sales services: Zara’s services should also include home delivery, after-sales services and addressing the needs and demands of customers. The company can have its own home delivery service, or third-party assistance can be sought.

Assessing the effectiveness of the solutions:

A fully functional, interactive and transitional e-commerce website will solve most of the problems faced by the new Corona Virus, for which aged customers cannot go out shopping. The website will help the customers to check a wide range of clothing items and accessories from Zara, can place orders, can make payments and get the products delivered to homes. Therefore, the proposed solution will solve all the problems stated in the table.

The proposed solution will also be effective for Zara as well because it can enhance sales, customer outreach and customer engagement through a new channel. Additionally, many young customers will also visit and place orders online though the service was intended for old people.

Conclusion:

Data plays a significant role in relationship marketing through knowing, understanding and reflecting on the knowledge gained from the target group of customers through big data collection. Data particularly plays a greater role in meeting customer expectations and service excellence. This report has found that marketing activities such as segmentation, targeting, and positioning help a company to precisely target a group of customers and to make tailored and specific plans to meet their needs. This report has also found that innovation plays a significant role in enhancing and improving product and service design. These increase customer engagement and customer satisfaction by creating a sustainable positive impact on the customers.

References:

Andaleeb, S. S. (2016). Market segmentation, targeting, and positioning. Strategic Marketing Management in Asia.

Business Fashion, (2020). Company Snapshot. [Online] Retrieved from: https://www.businessoffashion.com/organisations/zara [Assessed on: 12 August, 2020]

Business Insider, (2020). 20 companies dominate the world’s fashion industry. Here’s who makes the list. [Online] Retrieved from: https://www.businessinsider.com/nike-zara-tj-maxx-top-list-global-fashion-brands-2018-12 [Assessed on: 12 August, 2020]

Ghelber, A., (2019). What Is Product Innovation and why is it so important for brands (2020). Revuze by Nielsen SAP. [Online] Retrieved from: https://www.revuze.it/blog/what-is-product-innovation/ [Assessed on 11 August 2020]

Hennig-Thurau, T., & Hansen, U. (Eds.). (2013). Relationship marketing: Gaining competitive advantage through customer satisfaction and customer retention. Springer Science & Business Media.

Inditex, (2020). About Us: Inditex Around the world. [Online] Retrieved from: https://www.inditex.com/en/about-us/inditex-around-the-world#continent/000 [Assessed on 10 August 2020]

Inditex-1, (2020). How we do business: Our Model. [Online] Retrieved from:

https://www.zara.com/ww/ [Assessed on 10 August 2020]

Merrymoonmary, (2020). Brand Positioning Map. Retrieved from: http://fmckeiraobrien.blogspot.com/2019/02/brand-positioning-map.html [Assessed on: 12 August, 2020]

Sagiroglu, S., & Sinanc, D. (2013, May). Big data: A review. In 2013 international conference on collaboration technologies and systems (CTS).

Statista, (2020). Share of global mobile website traffic 2015-2020. Retrieved from: https://www.statista.com/statistics/277125/share-of-website-traffic-coming-from-mobile-devices/#:~:text=Mobile%20accounts%20for%20approximately%20half,since%20the%20beginning%20of%202017. [Assessed on: 11 August, 2020]

Zara-1, (2020). Zara. [Online] Retrieved from: https://www.zara.com/ww/ [Assessed on 10 August 2020]

Zara, (2020). SHOP THE LATEST TRENDS WITH ZARA’S JUST IN COLLECTION. Retrieved from: https://www.zara.com/us/en/woman-new-in-l1180.html [Assessed on: 12 August, 2020]