Marketing: Supply Chain Management and Zara

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ee Designing a Customer-Driven Strateg y and Mix VIDEoCase Progressive Progressive has attained top-tier status in the insurance industry by focusing on innovation. Progressive was the first company to offer drive-in claims services, installment payment of premiums, and 24/7 customer service. But some of Progressive 's most innovative moves involve its channels of distribution. Whereas most insurance companies distribute their products to consumers via intermediary agents or direct-to-consumer methods, Progressive was one of the first companies to recognize the value in doing both. In the late 19805, it augmented its agency distribution with a direct toll-free-number channel. In 1995, Progressive moved into the future by…show more content…
11 '5 also prolific. In a typical year, Zara launches about 11,000 new items. Compare that to the 2,000 to 4,000 items introduced by bot h H&M and Gap. In the fashion world, this difference is huge. Zara stores receive new merchandise two to three times each week, whereas most dothing retailers get large shipments on a seasonal basis, four to six times per year. As part of its strategy to introduce more new items with greater frequency, Zara also produces items in smaller batches. Thus, it assumes less risk if an item doesn 't sell well. But smaller batches also means exclusivity, a unique benefit from a massmarket retailer that draws young fashionistas through Zara 's doors like a magnet. When items sell out, they are not restocked with another shipment. Instead, the next Zara shipment contains something new, something different. Popular items can appear and disappear within a week. Consumers know that if they like something, they have to buy it or miss out. Customers are enticed to check out store stock more often, leading to very high levels of repeat patronage. But it also means that Zara doesn 't have to follow the industry pattern of marking products down as the season progresses. Thus, Zara reaps the benefit of prices that average much closer to the list price. THE VERTICAL SECRET TO ZARA 'S SUCCESS Just how does Zara achieve such mind-blowing responsiveness? The answer lies in its distribution system. In
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