Introduction:
The Marketing Strategies of Zara will be evaluated in this report by applying the marketing mix or 7Ps of marketing. Marketing refers to identifying the marketing gap and finding the best solutions to close the gap by establishing a profitable relationship with customers. Marketing Mix or 7Ps plays a big role in critically making the right combination of product, price, place, promotion and other elements of the mix. This report will be divided into two sections. The first section will make a comparative assessment of how companies apply the elements of the marketing mix in their respective scenarios. This will demonstrate the competitive position. The second section will advise a basic marketing plan.
You may feel interested to read below posts:
Marketing Management Strategies for Zara
International Marketing Strategies of MNCs
Unique Selling Points of Nando’s
Unique Selling Point of Toyota
How to deliver excellent customer service
How Zara uses marketing Mix to achieve business objectives
Product:
Product is one of the elements of the marketing mix; it means the product or services that a business offers to the target customers (Kotler et al., 2018). The product includes the quality, its features, values, how frequently designs are changed etc. All these factors of the product are generally determined by the corporate objectives related to the product of a company. Zara, a globally reputed fast fashion brand which is best known as an affordable brand, aims to present its target customers with frequently updated fashion products. To achieve this objective, Zara introduces 12,000 new designs in 20 seasons in 12 months (Segran, 2019). This implies that the company provides multiple new designs multiple times in stores. Zara has been showing such an aggressive attitude towards products based on the corporate strategy to be people’s first choice of a fast fashion brand worldwide. However, such an aggressive attitude towards introducing new products has a negative impact on the environment, and this issue has led many critics to criticize Zara’s strategy (Bowman & Mccammon, 2019).
On the contrary, Gucci, a competitor of Zara has moved in the opposite direction to Zara. Gucci has decided to reduce the number of styles it introduces to the market every year. The company has decided to divide the year into two seasons only instead of many to bring more positive impact on the designs and attributes it makes (Samaha, 2020). The difference in product offerings between the two companies is embedded in their corporate business strategies. Zara is more inclined to increase the number of new styles. Thus, the company offers new designs frequently. In contrast, Gucci is more careful about the quality of its designs. Thus, they were conservative in introducing new styles and products to the market.
Price:
Keegan (2017) noted in his book on Global Marketing Management that price refers to the value customers are willing to pay to avail of the products and services. The author also explained that the pricing strategy of a brand is closely associated with the corporate strategy, and the same is reflected in how the company does R&D, how it manufactures the products and services, how it does marketing campaigns, and how it determines the prices. It has been seen that Zara does mass marketing campaigns for a large number of customers. Thus, the same strategy is applied to its pricing strategies. Kamath (2016) reported that Zara reduced the pricing of products by 10 to 12%, which implies that the company targeted mass consumers who liked fast fashion at affordable prices. This matches with the corporate strategies of the brand to reach as many people as possible.
On the other hand, Gucci’s pricing strategy is different, and it is mainly determined by the overall corporate business strategy. The corporate strategy of Gucci is not to be the choice of the common people, rather the brand declares itself as a luxury brand. Thus, Gucci prices its products accordingly. Compbell (2017) reported that Gucci priced its products 6 to 8 times higher compared to other fashion sellers, given that the quality of the products is similar. The report also explained that it happens mainly because of the reputation of the brand and its locations at expensive places.
Promotion:
Promotion refers to the approaches in how a company makes different methods to reach consumers and make campaigns to deliver brand and communication messages to target customers (Hollensen, 2019). This is a very vast area of knowledge combining marketing concepts, digital marketing concepts, e-commerce etc. The promotional strategies of a brand are also determined by the business strategies. For example, Zara will showcase the brand message to the places where incoming middle people come across because it aims to target the mass consumers wishing for affordable, fast fashion. Promotional message texts, images, and mediums of communication are all parts of total marketing communication, and promotions and all of these are closely and highly associated with overall marketing and corporate objectives. For example, Zara introduces itself as a fast fashion brand, thus, the company announces that it brings more than 12,000 new designs in every 12 months (Segran, 2019). Another evidence of Zara’s mass communication and target to mass consumers is its marketing campaigns in social media and locations in a wide range of places, including emerging and developing nations. All this evidence implies that Zara is truly inspired to be mass people’s fast fashion choice.
In contrast, Gucci shows a much more conservative attitude towards promotional and marketing campaigns. As part of the overall marketing strategies and corporate strategies, Gucci has established itself as a choice of luxury consumers. This is reflected in the promotional campaigns of the brand. It publishes advertisements in expensive magazines such as GQ Magazine, Vogue Magazine etc.
Place:
Place refers to the selling points, locational strategies of the stores, distribution channel etc. (Brassington and Pettitt, 2012). The decision of places of selling strategies is closely related to the marketing and business strategies of a company. Convenient locations, easy purchasing options, easy delivery and payment opportunities etc., are parts of the place elements of the marketing mix. Zara has about 2,264 physical stores in 96 markets on all the continents of the world (Inditex, 2020). Moreover, the brand sells products in more than 202 markets worldwide through its online channel platform (Inditex, 2020). The above evidence clearly implies that Zara has obvious strategies to reach a large number of customers worldwide, and accordingly, the brand has expanded its business in every corner of the world. To make its locations more attractive, the company has adopted innovative strategies to engage and attract more customers. Danziger (2018) revealed that Zara adopted Augmented Reality (AR) to help the customers view themselves without wearing the dress in stores. These new features attracted a large number of customers in the stores. The situation of COVID-19 has presented the world with new scenarios where people fear coming to stores. In such a situation, brands such as Zara should find alternative solutions to reduce costs and reach more customers.
In contrast, Gucci has only 487 stores, mainly in Europe and North America (Kering, 2018). The stores are generally located at the centre of cities in expensive locations. Thus, the brand aims to reach the richest people in the world through marketing and promoting high.
People:
The element: people refer to the individuals who are involved in presenting and selling the products and services to the target customers (Groucutt and Hopkins, 2015). The evolution of digital platforms added a new form of artificial individuals involved making selling on online platforms. However, it is expected that Zara should make the online selling platform more engaging and active. Zara trains the workforce at the stores and at offices so that they can understand the intentions of the brand and make their plan accordingly. Gucci recruits and trains highly sensitive people to manage its sensitive customers in its luxury stores. Gucci is also active in its online selling platform.
Process:
Process refers to how the products come from the design stage to the doorstep of the customers (Jobber and Chadwick, 2012). The efficiency, sustainability of the process determine how well the marketing process will work. Varma (2017) reported that Zara’s so-far success can largely be attributable to its use of big data and an agile supply chain. The source also reported that Zara takes only 20 days to bring a product to stores from a sketch in just 20 days. And the brand can deliver major products to all international stores in the shortest possible time. Such agile management of the supply chain and prompt actions have enabled the brand to be a fast fashion company. In contrast, the supply chain of Gucci is not as responsive as that of Zara because Gucci has only two seasons in a year.
Physical Evidence:
Physical evidence refers to the attributes of the products, brand message, and visible attributes that a brand wants to communicate to customers to build a sustainable brand image (Kotler and Armstrong, 2013). Zara emphasizes enriching the physical evidence by delivering the brand communication message to the customers through packaging, and effective customer communication. As a result, the brand has been able to build a sustainable relationship with its target customers. Gucci is even more successful in delivering the brand message and attracting customers through engagement campaigns.
A basic marketing Plan
A marketing plan is an excellent approach to outlining the marketing objectives and strategies to meet them (Mcdonald and Wilson, 2011). This marketing plan consists of a number of sections, such as the marketing objectives of Zara. This objective has been extracted from the scenario analysis of the Marketing Mix conducted in the previous section. The plan also includes marketing processes such as Segmentation, Targeting, Positioning (STP), Marketing Mix, implementation plan and evaluation.
Marketing Objectives for Zara:
Situational analysis through conducting Marketing Mix in previous section found a number of problems and scenarios. This marketing plan has streamlined the complex processes and has suggested a convenient approach for Zara to be customers’ choice. The below section will demonstrate a table with problems and their solutions:
| Problems found in scenario analysis | Solutions as marketing objectives |
| Many customers have a tendency not to go outside for shopping. The COVID-19 situation enhances the rise of e-commerce | Rise of the digital platform through a fully operational, transactional e-commerce website. |
| People have a negative perceptions of Zara’s approach to fast fashion as they have negative impacts on the environment. | Widely adopting sustainable business approaches in its supply chains globally. |
| Zara emphasizes more on physical stores. | Closing some of the stores and emphasising digital marketing. |
The left side column shows the marketing problems found about Zara in the situation analysis conducted through Marketing Mix. The right side column shows the possible solutions which will be considered marketing objectives for this marketing plan. Adopting the solutions as the marketing objectives for this basic marketing plan will play a great role in helping Zara not only to understand the problem but also to solve the problem with justifications.
Segmentation, Targeting, and Positioning (STP)
Customer segmentation for Zara:
Customer segmentation refers to segmenting the market based on different criteria (Wilson & Gilligan, 2012). Dividing the market based on characteristics such as demographic features, geographic features etc., plays an excellent role in providing a company with market insights.
Above figure 1 shows that Zara has a number of options available to segment the market. Hutt & Speh (2012) revealed that a company should differentiate the market based on the nature of business, types of products, scale of business etc. Zara does business with fast fashion and accessories items in the global scale. Deepak & Jeyakumar (2019) found that retail fashion items are closely associated with segmenting the market based on demographic features such as age, gender, income level, social class etc. features. However, Zara should also segment the market based on geographic areas, mainly in 3 categories: Europe, North America, Oceania, Middle East, and Asia. The rationale of segmenting the market based on geographic features is that customer preferences and needs in mentioned areas largely vary from one region to another. Therefore, Zara should segment the market in upper stream of the market. Afterwards, demographic segmentation should take place.
Customer targeting for Zara:
Targeting refers to selecting the group of customers whom a company wants to serve and provide the communication and marketing messages (Mullins et al., 2013). Zara should target below groups of customers:
| Demographic Features | Target market qualifications | Geographic Range |
| Gender | Men, women and children | Europe, North America, Oceania, Middle East, and Asia |
| Age | 21 years to 65 years of age | |
| Education | Guardian should be minimum college graduate | |
| Income | $35,000 to more (per year) | |
| Socio-economic status | Middle class to upper | |
| Occupation | Service holders, business people, independent workers, students | |
| Race | Any race | |
| Family Status | Single or combined family | |
| Benefits sought | Convenient shopping online |
In above table, target age range has been determined at 21 years to 65 years because this group of people can purchase online, children cannot. Education level of target group is fixed as minimum college graduate because educated people can make online purchase better.
Brand positioning for Zara
Brand positioning refers to how a brand wants to build its position in the perception of the customers (Mudie & Pirrie, 2012).
Above figure shows how Zara wishes to see itself among the perception of the customers. The company is a fast fashion providers with affordable prices for mass consumers.
Marketing Mix for Zara:
Product:
Product offering of a company should comply with the marketing goal (Leonidou & Leonidou, 2011). It has been reviewed on scenario analysis that product offering of Zara is controversial because it offers a large range of products than its competitors and it has negative impact on the environment. Therefore, it is recommended that Zara should emphasize on making sustainable fashions. It should make sure that all the materials come from sustainable sources. This will significantly help Zara to create a good brand image as a maker of sustainable fashions. Additionally, this will also help the environment to recover the damages happened due to environmental pollution.
Price:
Zara has reputation in the market for offering fashions at affordable prices. Therefore, it can be concluded that its pricing strategies are accurate with for the stores pricing. However, its store prices and ecommerce pricing strategies should not be same. Ecommerce price should be less than store prices because digital platform does not have high rental expenses as physical stores. Moreover, such reduction prices in ecommerce website will attract more customers to grow a habit of purchasing online. It will highly benefit Zara because the company can capitalize the popularity of online sales to grow market globally.
Promotion:
Business growth depends on how extensively a company adopts the marketing strategies (Kumar & Meenakshi, 2011). Zara needs to take a wide range of strategies to promote its online shopping platform. The company should make a fully operational, transactional ecommerce website where customers can place orders, can pay online and can get delivery staying at home. Zara should adopt a wide range of digital marketing platforms such as Search Engine Optimization (SEO), Google ads, social media promotional campaigns. All these mean to inform customers about the new initiatives and to engage them with Zara’s new digital platform. Zara should particularly be careful about social media promotions because large number of people now a days spend time on the social media.
Place:
In this case, place refers to the online platforms such as ecommerce website, and social media pages of the company. Zara should make sure that it presents nicely edited images with all details descriptions with the image. For example, an image should have size charts so that customers can place orders along with required size. The company should also make sure to be as active in social media pages as possible. Zara should regularly update about its initiatives, about its new platforms or about new products, or even about social campaigns that might have positive impact on the environment. All these update will engage large number of customers and they will interact with Zara.
People:
People will play the greatest role to implement the new marketing plan of Zara, therefore, people should be trained with required skills and capabilities. Otherwise, Zara cannot reach its marketing objectives. For example, ecommerce website development team should be capable with skills to develop advanced features enriched ecommerce website which will be customer engaging. Additionally, Zara will need a large force of employees handling potential customers asking for information in the digital platforms. This team of query management should be educated with expert knowledge on how to provide information to customers in convincing ways.
Process:
Zara already has a very fast process of converting the design to production in just 20 days. However, the process of product ordering, payment method, online tracking methods, delivery system, and good returning method should also be convenient if a company wants to gain customers’ faith (Foxall, 2014). Zara should assure that online reviewing system is convenient and easy for customers to view details of the products. Secondly, Zara should make sure that customers can easily place the orders, can make secured payment online, can track deliveries and can exchange defected goods. All these strategies will establish good brand value of Zara as a digital seller.
Physical evidence:
Zara should assure to present all the features, attributes of the products in the digital platform. At the same time, the company should clearly declare the value the products will provide to the customers. All these will create positive brand image of Zara.
Conclusion:
Marketing mix refers to different elements of marketing such as product, price, promotion, place, people, physical evidence, and process. A company should make the right combination of the elements of marketing mix. Adoption of different combination of marketing mix completely depends on the marketing objectives and corporate strategies of a company. It was found in the report that Zara is a fast fashion retailer having business globally. It offers products to mass consumers at affordable prices. The report has found that Zara has made different combination of marketing mix. For example, to demonstrate its activeness as a fast retailer, it introduces more than 12,000 new designs every year. It has been suggested in the report that Zara should more widely adopt digital marketing strategies and should sell products on ecommerce website.
References:
Bowman, E., & Mccammon, E., (2019) Can Fast Fashion And Sustainability Be Stitched Together? NPR. (Online) Retrieved from: https://www.npr.org/2019/07/27/745418569/can-fast-fashion-and-sustainability-be-stitched-together [Assessed on 20 August 2020]
Compbell, L., (2017). Why Is Fashion So Expensive? It’s Not Quality That Costs So Much. The Huff Post. (Online) Retrieved from: https://www.huffingtonpost.com.au/2017/06/15/why-is-fashion-so-expensive-its-not-quality-that-costs-so-much_a_22327386/ [Assessed on 22 August 2020]
Danziger, P. N., (2018). Why Zara Succeeds: It Focuses On Pulling People In, Not Pushing Product Out. Forbes. (Online) Retrieved from: https://www.forbes.com/sites/jackbrewster/2020/08/20/high-priced-boats-massive-pools-photos-show-indicted-we-build-the-wall-founder-lived-lavish-lifestyle [Assessed on 23 August 2020]
Inditex, (2020). About Us: Worldwide. (Online). Retrieved from: https://www.inditex.com/about-us/inditex-around-the-world#continent/000 [Assessed on 21 August 2020]
Jobber, D. and Chadwick, F. (2012) Principles and Practice of Marketing. 7th Ed. Maidenhead: McGraw-Hill.
Kamath, R. K., (2016). Fashion brand Zara cuts prices by 10-12%. Business Standard. (Online) Retrieved form: https://www.business-standard.com/article/companies/fashion-brand-zara-cuts-prices-by-10-12-116050100687_1.html [Assessed on 19 August 2020]
Kering, (2018). Financial Reports. (Online) Retrieved from: https://keringcorporate.dam.kering.com/m/3ba17a6b64aae82d/original/2018-Financial-Document.pdf [Assessed on 19 August 2020]
Leonidou, C. N., & Leonidou, L. C. (2011). Research into environmental marketing/management: a bibliographic analysis. European Journal of Marketing.
Samaha, B., (2020). Gucci Opts for Two Seasonless Shows a Year, Shaking Up the Fashion Calendar. Hearst Magazine Media, Inc. (Online). Retrieved from: https://www.harpersbazaar.com/fashion/designers/a32672233/gucci-alessandro-michele-two-seasonless-fashion-shows/#:~:text=In%20a%20video%20conference%20held,why%20the%20decision%20was%20made. [Assessed on 21 August 2020]
Segran, E., (2019). Zara built a $20B empire on fast fashion. Now it needs to slow down. Mansueto Ventures, LLC (Online). Retrieved from: https://www.fastcompany.com/90379824/zara-built-a-20b-empire-on-fast-fashion-now-it-needs-to-dismantle-it [Assessed on 20 August 2020]
Varma, A., (2017). Zara’s secret to success lies in big data and an agile supply chain. The Straits Times (Online). Retrieved from: https://www.straitstimes.com/lifestyle/fashion/zaras-secret-to-success-lies-in-big-data-and-an-agile-supply-chain#:~:text=It%20takes%20Zara%20about%2020,get%20their%20clothes%20even%20faster&text=Share%20gift%20link%20below%20with%20your%20friends%20and%20family. [Assessed on 20 August 2020]