Marketing Advantage Of Inditex

Before sending to each store, clothes are ironed in advance and packed on hangers, with security and price tags fixed beforehand. This system helps staff in Zara utilize their time efficiently with the inventory during busy periods.

The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of

ZARA spend minimal money on their marketing campaign which would make you question, how is ZARA so successful? The answer is their effective, fast supply chain.

The secret to Zara’s achievement is mostly because of Zara deliveries fast-fashion, a model which emphasizes its strategy in focusing on manufacturing catwalk fashion to ready-to-wear clothing quickly and efficiently to allow customers to buy latest trend clothing at the lowest price.

* Zara was able to design, produce and deliver finished goods into its stores in 4-5 weeks in the case of new products and 2 weeks for modifications, as opposed to traditional industry average of 6 months for design and 3 months for manufacturing.

Zara 's unique approach to product development is instrumental to their success. Zara gives store managers significant autonomy in both determining the products to display in their stores and which to place on sale, and relaying market research and store trends back to their headquarters in La Coruña. At headquarters there are teams of commercials who take this information into account to design and effectively plan and produce all of Zara 's products. Zara maintains a design team of 200 people, all of which produce approximately 12,000 new styles per year for Zara. The process of obtaining market information and relaying it to design and production teams expedites product development by shortening the throughput time of a product to 3-4 weeks from design to distribution. This process is very different from its competitors. Many competitors rely on a small elite design team that plans both design and production needs well in advance. Stores have little autonomy in deciding which products to display or put on sale because Headquarters plans accordingly and ships quantities as forecasted.

Zara has created a very creative business model and supply chain technique that is often studied but very rarely copied. Zara has a very centralized headquarters in Arteixo, Spain. This allows Zara to have a good grasp on the business processes. They focus on speed and responsiveness by delivering quick and small batches of clothing to stores at precise times. About half of the manufacturing is either done in Spain or a neighboring country, Europe and if it is not manufactured there then it will be shipped to the distribution center before going to a retailer. This allows Zara to have a competitive edge when it comes to their supply chain. Zara does this by being a vertically integrated retailer. unlike similar retailers Zara controls most of its own supply chain, from designing, manufacturing and distributing to its products. Zara offers

Zara is characterized by its unique and rapid-fire supply chain that is governed by the vertically integrated system that links their shops, designers, and distribution system. The key players in this system are the wholesalers and retailers, so controlling the activities of those mark the success of the business. Zara’s system is so integrated that makes it hard for other competitors to nail the starting point of a similar product.

Zara has created a very creative business model and supply chain technique that is often studied but rarely copied. About half of the manufacturing is either done in Spain or a neighboring country. This allows Zara to have a competitive edge on their supply chain. Zara is a completely vertically-integrated retailer. Unlike similar retailers, Zara controls most of its own supply chain, from designing, manufacturing and distributing to its products. Zara also offers considerably more products than similar companies. It produces about 11,000 distinct items annually, compared

Thirdly, it is unique that Zara spends money on marketing, but concentrates on opening new stores instead. For their business model, Zara has a competitive advantage in areas of development, marketing, cost of production and IT infrastructure. Zara gives power to their store managers in deciding what to display and what to sell in the stores based on market research done by the headquarters. Then managers are able to order clothes to meet customer’s demand. For product development, managers need obtain the standardized information from the market or customer feedback by using a handheld device. Then send it back to headquarters for further market research. As a result, the headquarters can have a more effective plan for design and production. In reality, this allows Zara to produce around 11,000 new styles per year, while their competitors can only produce 3,000-4,000. Zara’s speed makes its product development outstanding from the market and it is important for future success. In the area of marketing, Zara only spends 0.3% of their total revenues for marketing expenses, while their competitors spend 3-4% on average. Moreover, Zara focuses on attracting customers by having a good choice of location for visibility marketing, store layout and the styles of product. For example, Zara has new styles of clothes every week and often not restocked, customers will then be attracted to visit the stores every week to

Its supply chain is completely dissimilar from the other one. Designing, sourcing, manufacturing, distribution to outlets, are the main functions of supply chain.

Fundamentally it is a discussion on the supply chain system of ZARA Fashion and also the innovative strategies of supply chain system of ZARA clothing company also the competitive advantageous they are enjoying while beating the competitors while Putting the lights on the ZARA strategies and thinking styles of vertical and horizontal integration through which they are getting the best outputs.

· Zara – the flagship brand of Spain based Inditex group, founded by Amancio Ortega Gaona and opened its first store in 1975.

Zara believes in Zero advertising. It would rather spend on store expansion than to advertise. However, the minimally advertise in fashion magazines. The rationale behind this is the quick turnaround of store display, which is around 4 weeks, which renders advertising an unnecessary cost. Also, Zara concentrates on efficient design to market cycle and focus on showcasing large number of designs annually. The workforce in Zara is essential to its success right from the production to the store level as the feedback generated about fashion performance at store is percolated to the designer and

Today’s fashion market is highly competitive and companies need to always be up to date. Zara has many competitors such as H&M, Mango and Gap. The successful concept of “Fast fashion” has created many retail stores to change their retail strategy but have not yet to compete with Zara system.