This document is a presentation of the Zara group's strategy through a series of questions and answers that address the company's marketing strategy, sales organization, management of logistic flows, etc.
Extract from the document: "The consistency of the marketing mix of Zara is based on two key issues. First, they provide fashionable products, and are getting closer to haute couture collections for the widest possible consumer panel. Then, they go shopping for distributors having genuine communication tools in their own right. The brand wants to market products based on the major fashion designers and small series”.
Therefore, this product mix requires a mix enabling efficient distribution and constant supply of Zara stores. Moreover, to reach a wide target, prices must be affordable for consumers. These low prices are possible because of the absence of advertising and the desire to reduce stocks to lower the production costs.
Finally, using a range of products inspired by haute couture and a dense network of stores, displays and merchandising are the key strengths of the communication mix.
Zara is primarily involved in high value-added operations such as the creation, design and finishing. This allows some control over the product quality and manufacturing processes.
Routine tasks are outsourced because the cost is lower when it is handed over to a contractor and the workers require only basic skills. This system is especially used for products that are not ‘fashionable' as the price is even lower, and the finish is not given much importance.
Tags: Zara group strategy, analysis of sales strategy, outsourcing
[...] Unmasking Zara - Questions and answers on its business strategy Questions: 1. Present the marketing mix of Zara and show its consistency Develop and analyze a diagram that presents the process of creating and manufacturing a jacket at Zara How does Zara use value analysis for the design and manufacture of its products? 4. Develop and analyze a diagram that presents the logistics (information and material) within Zara Show through examples, nestings of the marketing function with the function of production and logistics (the role of the supply chain) What do you think are the strengths and weaknesses in Zara? [...]
[...] The routine tasks are outsourced because the cost is less and those who perform these tasks only require basic skills. This system is especially used for products that are not fashionable because the price for these is lower and the finishing touches are not essential. Therefore, the best way to do this is to hire an Asian sub-contractor (for the labor). Question 3 First we must define what value analysis is. This is a method that is utilized to improve organization and the creative branch to meet the needs of the consumers by a specific approach to make the design both functional and economic .The basic idea is to achieve the best fit possible between the expectations of the consumers and the revenue and costs associated with the product. [...]
[...] Commercial services analyze the data and transmit them to stylists. While making sales forecasts, the output will influence the commercial logistics and the input is concerned with the procurement of fabrics. Production decisions are taken if the designers, salespeople and buyers are in agreement. Finally, each store can place orders and the product will be delivered in three days and thus reduce inventory and unsold goods that can be returned. With the supply chain, the overlapping of the marketing functions is numerous. [...]
[...] The goal is to market a product in an industry where customers expect it and remove it from store shelves where that product is not selling. The value analysis method operates at the level of product design. Its purpose is to provide optimum satisfaction to consumers. The economics of the method involves a reduction of the costs that are associated with products. The Zara group tries to reduce production costs through a network of sub-contractors that are located close to Inditex factories. [...]
[...] The budget for marketing communication is of its turnover. They market their products in the display windows of their stores. Their stores are located at city centers or malls. Their stores are large as they have to accommodate numerous collections. The arrangement of these stores and their fronts is essential to promote the brand. They invest a lot of money on opening new stores. - Distribution: They distribute their designs to Zara stores and these are supplied with fresh stock twice a week. [...]
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