General introduction (including a concise consumers and category market/ trend overview) Entry mode -The suitable mode of entry for Zara to enter the clothing industry in Vietnam is franchising. -As Vietnam’s joint venture regulations are strict; the Vietnamese investors must own at least 51% of the enterprise’s capital. This will create some difficulties to Zara in term of controlling the business. Therefore, franchising is more suitable because the mode of entry is suitable for entering a small country and subject to significant cultural differences from Zara’s home base (Spain) as Vietnam. -In term of financial, franchising creates another source of income for Zara, through payment of franchise fees, royalty and levies in addition to the possibility of sourcing private label products to franchisees. In term of strategic, franchising can be Zara’s mean of spreading risk by multiplying the number of locations through the franchisees’ investment. SWOT analysis Market segmentation and targeting – Segmenting and Targeting the market* -Zara’s target customers are paying attention in high trends and want to have the latest fashion trends. -Geography, demographic, psychographic, benefits, and usage rate are the main bases for segmenting consumer markets. -Demographic segmentation plays a big role for Zara. It includes gender, age, ethical norms, and family life cycle. -Zara’s target market is mostly women and fewer men. Zara designs more clothing for women. -It is focused on people of different age, including generation X and Y. Those who earn enough money and are able to buy clothes from Zara shops. – Positioning the company* -INDITEX currently runs 5154 stores segmented into eight branded chains: its flagship brand Zara5, Pull ;amp; Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque. Zara has positioned its brand to deliver the latest fashion, well made, at a price that makes it attainable by millions of people. -ZARA is positioned more fashionable compare to its competitors but surprisingly with a relatively low price behaviour. – Estimate market share Marketing objectives – Set marketing objectives* * · Fast lead time – differentiating the design, manufacturing and distribution progression – keep costs down by keeping stocks low products are available on the shopping floor and regularly replaced, given the short life of items * · Fast fashion – used information technologies and groups of designers – through point of sale system into what the shops sell as their feedback is sent back to the head office * · Brand name more well-known – international expansion (stores, distribution centres) * · To deliver the right product, so that make sure meet the needs and expectations of specific target customer segment * · Provide quality clothing and customer service at a reasonable price
Marketing mix strategies According to Kotler, Keller and Burton (2009), marketing mix strategy is required to expand the segment positioning strategy, which includes all aspects such as product, price, promotion and place. Zara sells a largely homogeneous product for a global market (Flavian and Polo, 2000). Nevertheless, there are some adjustments in its marketing mix because of the customer’s size differences in Asian countries (Monllor, 2001). What differentiates Zara’s business model from that of its competitors is the turnaround time, and the store as a source of information.
Zara’s strategies like just-in-time manufacturing, delivery and sales, flexible structure, low inventory rule, quick response policy and advanced information technology enable a quick response to customer’s changing demands (Castellano, 1993, 2002) Product and Brand Strategy Brand strategy – raised its brand awareness by adopting several new brand strategies, for example, offering ultimate fashion at a low cost. – educate this market and influences consumer shopping habits (Blanco and Salgado, 2004) to achieve the word of mouth throughout consumers and build positive brand equity. use social media such as YouTube, Facebook, and Twitter as a good communication channel to its consumers and a tool to develop brand community. – not only focuses on customers but also its employs by applying internal branding, which prods its staff to better understanding, managing and delivering Zara brand. Product strategy Product strategy is one of key elements of a brand strategy that leads to the success of a brand strategy. – create its culture to customers: “you better get it today because you might not find it tomorrow” by leaving large areas empty in its expensive retail shops and encouraging occasional stock-outs. gathering information to make the decisions on garments sold in all the markets where Zara operates (Bonache and Cervino, 1996). – store managers decide the specific garments that will be put on display in the store to meet the customer’s taste in that area (Fabrega, 2004). – launch new features with high quality standard – differentiate its products to meet customer’s requirement and needs: product production and delivery in fifteen days; Changes of an existing garment can be put on display within two weeks; manufactures its “live collections”; lauching 11,000 new items every year (Ghemawat and Nueno, 2003). Service strategy* * Physical evidences Evidence is a product help consumers understand our product. It is not directly involved in consumer buying them, but it can influence consumer behavior. * Process This is the service process when customers entry into Zara store, including after-sales service * People The salespersons in our shop have a good and professional level of service. This is the most direct task that to improve satisfaction with consumers. * Customer Information Analysis and Reporting point of sale system: using data gathered through these chat transactions, feedback Pricing strategy set the price for its products =;gt; marketers and product line managers do/buy research reports + to have a better understanding of Vietnamese expenses and its target consumer psychology + to get reference prices of existing competitors in this market. – significant growth in brand awareness and fashion consciousness – a high demand in fashion industry, especially on quality clothes, whose sales are projected to grow around 15% by the end of 2012. 1 According to consumer behavior, it is shown in graph below that Vietnamese consumers spent 13. 9% of their incomes on clothes. (An image about Vietnamese expenses will be inserted here) Source: Vinaresearch Company (2012)) (RNCOS research report (2012), Vietnam Retail Analysis (2008-2012) ) – Zara prices in international markets are generally higher due to longer distribution channels (Ghemawat and Nueno, 2003) can affect its positioning in those countries and therefore, its brand image (Ghemawat and Nueno, 2003). – focus on providing fashionable clothes for teenagers and office people with an average and higher income. – “Zara prices are based on comparables within the target market, subject to covering costs plus a target margin” – the prices are estimated to be reasonably and affordable to these target customers. create deals by offering few pieces from the same collection as a batch for a lower price. Distribution Strategy Distribution is the main point of marketing strategy of company, including market logistics, online stores and physical stores retailers. Market logistics – Zara has its own centralized distribution system – Zara can open a distribution or satellite centers in Vietnam, where it is easier to deliver its products not only inside Vietnam but also China, Thailand, Singapore and other Asian countries around. open shops in big cities in Vietnam such as Ho Chi Minh City, Ha Noi, Da Nang, apply local sales program and pricing strategy to gain some advantages. Online Channel – Zara sells its products via online shops at www. zara. com and launches application on IPhone to let browsers search through the latest information regarding new collections. – build Zara Vietnamese website with Vietnam Dong only price, promotions, and so on, and restrict Zara website to deliver the products to Vietnam.. Retailing and stores – Zara believes that its shop windows, the contents of which are also decided in La Corua are all the advertising it needs. Its promoting and advertising tool mainly bases on word’s mouth. + Vietnam: focus on choosing high population, many offices, universities and traffic areas such as District 1, 3 or Tan Binh District in Ho Chi Minh, commercial city, for settling its flagship stores. – arrange its shops in prestigious districts neighboring other high clothing manufacturers, which establishes the recognition faster in the market. – Globally, Zara standardises the key strategic elements, namely the location, window display, interior design, store layout, store display rotation, customer service, information systems and logistics.
The rest of the elements are customised to the market to suit local preferences (Fabrega, 2004). + Vietnam: offer fresh assortments of designer-style garments and accessories—shoes, bags, scarves, jewelry and, more recently, toiletries and cosmetics—for relatively low prices in sophisticated stores in its prime locations to draw masses of fashion-conscious repeat customers. – recruit employees locally to get a better understanding of the local market preferences (Martinez, 1997). – Promotional mix (IMC), strategy and rationale* * Advertising (advertising budget) Unlike other fashion retailers, Zara only use 0. %, but impressive brand awareness around the world. The company believes that its shop windows, the contents of which are also decided in La Corufia, are all the advertising it needs. The company’s success has achieved without any advertising or promotion and without outsourcing it’s manufacturing to low labor cost countries * Promotion Strategy Promotion will be primarily outdoor advertising, radio, and TV With Zara’s promotion we will compare results, analyze, track responses, and measure profitability to insure their promotions are profitable Zara will implement pull strategy in order to build consumer awareness and demand. The designers who are close to the consumer are effectively taking over forecasting duties, so that pulling the products through the supply chain (Jose, 2010). As Pearson (2010) mentioned, pull view is executed in response to a customer order, the demand is known with certainty, and as reactive processes that react to customer demand. Pull approach enables Zara to produce only what are women and men real required with right price, in the correct quantity and at the correct time.
Implementation plan and measurement tools Product One of the greatest issues to face and overcome is how to make potential consumers. Place Choose a great place for advertisers to inform people with latest information of products. Price Compare Zara and H&M Table Promotion The promotion is the key to gain distribution in the market by encouraging trial of Zara products. * Research and Development Aim 1) Identify and create products & services that are need in the market 2) Get feedbacks from the other companies Objective ) Complete identifying products and services 2) Develop platform Strategies 1) Assigning new tasks to employees 2) To form a questionnaire to do a research on the market 3) To compile and analysis the result of the questionnaire Implementation Plan Task| AssignedPersonnel| Given TimeFrame| Date CompletedBy| Look out for innovative products (if applicable)| | | | Forming a questionnaire| | | | Send out the questionnaire| | | | Compile and analysis the result of the questionnaire| | | | * Sales and Marketing Department
Goal 1) To successfully market the product to the global market and by giving each type of product individuality, zara focus on the strengths that the product has. 2) To return customers make up for a lot of income. Objective 1) Increase our sales figures. 2) Meet with customers often to establish a good relationship. Strategies 1) Sales – Offer discounts to customers. – Offer promotion deal. 2) Marketing – Assign a product to each member of the group to take responsibility for coming up with original ideas to promote the products. Final ideas should have a strong impact on customers at first sight. – Advertising – Work with IT Department to market the product successfully on the Internet. – Market research – Frequent surveys, questionnaires, etc. – Under Promise, Over Deliver Implementation Plan Task| Personnel and Departments Involved| Time Allocated for Task| Date to be Completed By| Communicate with customers to find out about their general happiness with the products. | | | | Coming up with ideas to promote the products| | | | Working with the Research Dept. to analyse the results. | | | Drawing up advertisements to hand in to IT department| | | | Implement the ideas| | | | Introduce promotion deals to customers| | | | Conclusion and strategic recommendations Tokatli, Nebahat; Journal of Economic Geography, January 2008, v. 8, iss. 1, pp. 21-38 Caro, Felipe; Gallien, Jeremie; Operations Research, November-December 2012, v. 60, iss. 6, pp. 1404-22 Philip Kotler, Kelvin Lane Keller. (2012). Chapter 9 Creating Brand Equity. Marketing management. England: Person Education. Simchi-Levi, D. , Kaminsky, P. , Simchi-Levi, E. 2008), chapter 9 Procurement and out-sourcing strategies, Designing and Managing the Supply Chain, 3rd edition, US: McGraw-Hill Irwin Kasra Ferdows; Michael A. Lewis, Jose A. D. Machuca (2004). Rapid-Fire Fulfillment. Harvard Business Review; Nov2004, Vol. 82 Issue 11, p104-110 Carmen Lopez, Ying Fan, (2009) “Internationalisation of the Spanish fashion brand Zara”, Journal of Fashion Marketing and Management, Vol. 13 Iss: 2, pp. 279 – 296 Castellano, J. M. (1993), “Una ventaja competitiva: el factor tiempo. El caso Inditex-Zara”, Papeles de Economia Espan? ola, Vol. 56, pp. 402-4.
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