Marketing Strategy Of Zara

Zara is a clothing retail store for women, men and children, concentrating sixty percent of their effort to the women clothing market. Besides retailing, Zara also designs, produces, and ships their lines of clothing to their Zara stores. Zara 's corporate concept is to offer fashionable, trendy, designs at a reasonable price. The key to their corporate success is to offer the latest trends and fashions before their competitors. They believe that they are in the fashion business, not the clothing business. As part of this corporate concept, the stores try to hold very low levels of inventory, often having their entire inventory out on display, in order to sell out and make room for the

Zara is a high-end street store offering the latest tastes in fashion for women, men, and children alike. Amancio Ortego, Zara’s founder, has made the store grow with rapid success in both its home country, Spain, and internationally. One of the distinct reasons why Zara is such a unique company compared to its competitors is its foundation of the quick response system. Today, Zara’s cycle time is six weeks, in which it responds to its customers’ demand very quickly, unlike most stores that take half a year. Overall, Zara is distinct from most apparel stores in its ability to travel globally and from its international strategy.

Zara International is considered a high end clothing store that is affordable. Due to its quality in fashion, low prices and immediate availability, popular stores such as Gap and H&M fail to keep up with Zara’s success. Zara’s well known tactic of fast fashion has separated them from their competition. The ‘fast fashion’ objective is to distribute top trends of fashion within the runway to customers by selling them in local stores. Zara has been able to achieve the fast fashion perspective by hiring approximately 200 people that will assist in getting these trends out in stores within a matter of weeks.

Zara’s strategy is to offer cutting edge fashion at affordable prices by following fashion and identifying which styles are “hot”, and quickly getting the latest styles into stores. They can move from identifying a trend to having clothes ready for sale within 30 days (whereas most retailers take 4-12 months). This is made possible by controlling almost the whole garment supply chain from design to retail.

The brand is well-known for its capability to distribute new clothes to the stores “fast and in a small batch, twice a week”, the store managers order clothes and other items, on a schedule that they follow in all Zara stores, so the new garments arrived just in time. To reach this Zara controls most of its supply chain than the majority retailers do. On opposed to H&M, Zara keeps a nearly all of its production in-house.For Zara, the supply chain is its competitive advantage. In house production allows it to be elastic in the quantity, occurrence, and multiplicity of new products that are gone to be launched. Zara commits only 15 to 25% of a season’s line. And it curls in only half of its line by the launch of the season, sense that up to 50% of its garments are designed and manufactured during the season. If items become highly popular all of the unexpected, Zara respond directly and create a new design in that popular style, so that gets new stuff into stores while the trend is still

Designs are conceived with the target market in mind - women and men between the ages of 16 and 35 who desire inexpensive, yet ahead-of-the-trend fashions. Zara’s design conceptualizations can go from design to production to delivery in fifteen days. Their sourcing strategy entails a mix of 60% external fabrics sourcing, 40% internal fabrics sourcing, 50% in-house manufacturing, and 50% external manufacturing.

Zara is one of the Inditex’s largest international fashion brands. The company first opened in La Coruna in 1975, still lives by the simple idea of Amancio Ortega to link customer demand to manufacturing, and link manufacturing to distribution. Castellano and Ortega shared the same beliefs that quick response to customers, use of computers, and disintegrated decision-making were important to build the business. It has built distribution and information system which allows to keep latest design in stores in just one or two weeks. Its supply chain has made it so successful and popular among its customers (Zhang, 2008).

While the model itself is often very easy to replicate, technology is essential to creating and enabling novel approaches to business that are defensibly different than rivals and which can be quite difficult for others to copy. The fashion market has changed considerably over the past few decades. Fashion products, which used to be an elite consumption product and now, are mass consumption market, are embodying what has been called “the democratisation process of fashion”. In the last years the fashion market has polarized. On the one hand there are producers and retailers of premium products on a high price level offering luxury products. On the other hand the low price young fashion producers, often foreign international operating chains like the Swedish chain H&M (Hennes & Mauritz), the Dutch chain C&A(Clemens and August ), the Spanish chains Mango and Zara or the American chain Gap. Zara is considered as an example of the relationship between technology and strategic positioning. Inditex describes Zara in this way: “Zara is a high fashion concept offering apparel, footwear and accessories for women men and children, from newborns to adults aged 45. Zara stores offer a compelling blend of fashion, quality and price offered in attractive stores in prime locations on premier commercial streets and in upscale shopping centers. The in-house design and production capabilities enable us to offer fresh designs at out Zara stores twice a week throughout the year. ”Zara’s target market is very broad because they do not define their target by segmenting ages and lifestyles as traditional retailers do. Its target market is a young, educated one that likes fashion and is sensitive to fashion. Today, people around the world through various communication devices have more access to information about fashion.

Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia. Founded by Amancio Ortega and Rosalia Mera in 1975, it is the main brand of the Inditex group and also the world’s largest apparel retailer (Inditex). It is one of the first store’s to showcase low-priced look alike products of high-end clothing brands. Later on, it was viewed as an ‘instant fashion’ company as it revised its logo, manufacturing, and distribution process along with improvements that included information technology and the use of designer groups instead of individuals. Beauty, clarity, functionality and sustainability; over the years it has remained loyal to its core values expressed in these 4 simple words. With its current portfolio of 2,169 stores worldwide, Zara generated revenue of about US$15.9 billion in 2016. Its target market is young, price-sensitive, and highly responsive to the latest trends (Harbott). They hold a strong competitive advantage over other retailers because they don’t define their target market on the basis of age or lifestyle segmentation, providing them a relatively broader market to target.

Zara is a clothing and accessories retailer selling stylish apparel at affordable prices, and it is also the most profitable brand of the Spanish clothing retail group Inditex SA. Ortega planned for this new Zara outlet, located near his factory in La Coruna in northern Spain, to sell this overstock merchandise himself. Since then, Zara has expanded into 500 stores in 68 countries as of January 2007 and has become a leader in customized fashion retailing. This assignment presents core competencies to help Zara achieve competitive advantages in fashion industry. Besides, we also offer five competitive objectives about quality, speed, flexibility, dependability and cost to evaluate

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.

The retail giant Zara have proven that utilizing all resources and different management techniques branded the store as a fashion empire. However, Zara has been named one of the most profitable retailers in the world. Zara has expanded and is operating stores all over the world which makes the retailer global. The philosophy behind the retail giant is immersing new fashion fast. Furthermore, Zara focus is producing high-end quality clothes through creativity. The retail giant uses a rapid response system to trending clothes which increase Zara profits and market demands. The retailer implemented several business models to reflect the current state of the business. For example, capabilities, utilize short lead times, reduce inventory risk, decrease quantities that are produced and increase choices and styles, value drivers and concept. Following this business model allowed Zara to be branded as supplying the consumer with what they want and fast. Nevertheless, the retailer offers moderate pricing, customer loyalty, and a turnaround time of the latest trends of 24 to 48 hours. These goals formulated the fundamental concept of monitoring production, maintaining designs and tracking the distribution processes. The entire process has enabled Zara to exploit and execute all competitors. Also, the strategy behind Zara planning is maintaining total control over production and keeping manufacturing and all designing in-house. Within this case study, five question will be answered

Zara prides itself on fast moving fashion with new designs restocked in limited quantity every two weeks. This encourages consumers to frequent the stores for new designs and to snap up interesting outfits on the spot in order to guarantee themselves a piece. This provides a sense of exclusivity to shoppers.

Zara is a Spanish store that deals in clothing and accessories. The store is one of Inditex fashion distribution retail store based in Artexo, Galicia and founded in 1975 (Harbott) by Amanico Ortega (Shankar). It is a flagship chain store and the world’s largest apparel retailer. The first Zara store dealt in low priced attractive higher-end fashion clothing that looked alike. It was a success and the founder, Ortega, started opening more stores across Spain. In the 1980’s he began changing the process of design, manufacturing and distribution to reduce the times of lead and counter new trends in a faster manner. The evolution of Zara stores reflects the changing culture of modern man where speed, customer relations, quality, and feedback

Amancio Ortega, had a simple idea of linking customer demand to manufacturing and manufacturing with distribution, when creating ZARA in 1975 in la Coruña, Spain Zara came under the holding company Inditex in the year 1985 and is today the biggest fashion brand of the group. Zara believes that the prime factors for running a successful business are quick response to customers, use of computers, and disintegrated decision-making (McAfee, Dessain, & Sjoman, 2007)