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Marketing Plan of Zara Company

Introduction

The marketing plan is necessary for any company, no matter whether it produces, sells, or distributes. Consequently, it should be well-organized, strategic, and creative. Moreover, the marketing plan should cover all aspects of the company. It should include its external and internal environment, control and monitoring, marketing goals, and marketing analysis. For Zara Company, the marketing plan is crucial as it helps to determine the possible threats and weaknesses, the ways of development, and increasing profitability. The marketing plan of Zara Company includes the peculiarities of the organization, environmental analysis, target audience, and SWOT analysis. Consequently, current paper suggests the aspects of the marketing plan for Zara Company.

Zara Company Background

Zara Company is an experienced Spanish clothing retailer in the market. It operates in the US and Europe and has 1, 751 stores worldwide. Zara belongs to the Inditex group, and its main products are clothes and accessories. Zara stores specialize in the upper garment, lower garment, children’s clothing, cosmetics and complements, and shoes. Such variety of products proves a proper business strategy of the company. Zara has been operating in the market since 1975. However, it does not lose its competitive advantage. The ability to manage the stores in 81 countries proves its exemplary leadership and marketing success. The key competitors of Zara Company are Mango, H&M, Reserved, House, and Stradivarius. Zara produces the most stylish and fashion-sensitive items to be always in trend and differ from its competitors (Zara, 2015).

An Environmental Analysis

The environment of Zara Company depends on competitive, economic, political, legal, technological, and sociocultural forces. Such competitors as Mango, H&M, Reserved, House, and Stradivarius make Zara innovate, develop, and struggle for its competitive advantage. It is evident that clothing industry is a competitive area. Consequently, it is crucial to be unique and not to copy the rivals. The economic forces are also influential for Zara Company. They include the economic processes in the market and the customer’s buying power. The political forces are related to Zara’s obligation to pay taxes in the countries where it operates. The legal forces include the obligation of the company to follow all governmental regulations, national, and international laws. The technological forces drive Zara Company to the innovation and change management process. The sociocultural factors are related to the demographic issues and customers’ concerns on the quality of Zara products.

The Primary and Secondary Target Markets

The primary target market of Zara Company includes the American and the European customers. First of all, these are teenagers and young people who prefer buying Zara clothes and accessories. One should say that Zara segments its target market suggesting the products according to age and gender offering male, female and children clothes, and accessories. Such strategy helps to find an individual approach to every customer. The secondary target market includes the customers from the Asian market. Consequently, the products of Zara Company are divided into the high-quality items and the products for mass market. Zara can refer to two areas: clothing and fashion. Consequently, its marketing strategy presupposes orientation on fashion and its possibility to changes. Moreover, fashion industry demands such quality as brand awareness and recognition (O’Cass, 2004). One can say that the growth of the primary and target markets proves that the customers are aware of such brand as Zara.

4Ps Marketing Mix

  • Product. Shoes, cosmetics, clothes, and accessories are the key groups of Zara’s products. The organization changes them according to the fashion trends and the latest styles.
  • Price. The prices of Zara Company are reasonable. This brand belongs to neither luxury nor mass market. Consequently, their prices are neither very expensive nor cheap.
  • Promotion. Zara uses the diverse ways of promotion from the direct (advertisement on billboards, in Internet and TV) to indirect (stores’ opening).
  • Place. The stores of Zara are in 81 countries. Consequently, it means that the company uses different ways of distribution such as selling via stores and online selling (Zara, 2015).

5Cs-Analysis

  • Customer. Zara Company satisfies the customers’ demands related to the high quality of items, reasonable prices, stylish and fashionable look, and availability in the market. The target audience of this company includes teenagers and young people.
  • Company. Zara is in the position to meet the customers’ needs and demands as it has the necessary human, physical, and financial resources (See Table 1).

Table 1

Financial Ratios 2014 Fiscal Year for Zara (About Zara, 2015)

Net Sales

18, 117

Gross Profit

10, 569

Gross Margin, %

58

Operating Profit

5, 000

Operating Margin, %

59, 6

Net Financial Items

6, 000

Profit after Financial Items

2, 501

Tax

-1, 500

Profit for the Period

1, 999

  • Competition. The clothing and fashion industry is a highly competitive area. Consequently, it is a must for Zara to overcome its weaknesses and reinforce strengths to save its competitive advantage and be no worse than Mango, H&M, or M&S.
  • Collaborators. Zara Company refers to the Inditex group that owns such brands as Massimo Dutti, Bershka, Stradivarius, Uterque, and Pull and Bear. Consequently, these companies are Zara’s collaborators.
  • Context. The political, economic, technological, sociocultural, and competitive forces benefit the development and growth of Zara Company. The organization uses them as driving forces. However, the violation of the governmental regulations can make the political factors the restraining forces for the company.

STP-Analysis

  • Segmentation. The segmentation of the market is done according to the age, gender, cultural peculiarities and economic possibilities of buyers. For example, if Zara manufactures clothes for the Indian market, it will include their national ornaments and styles. Fashion marketing demands the segmentation of the market to make it more favorable for the company (Easey, 2002).
  • Targeting. Targeting is one of the most crucial aspects of Zara marketing that presupposes finding customers worldwide. Targeting is done with the help of manufacturing of the particular items and studying customers’ demands.
  • Positioning. Positioning is the marketing aspect of Zara Company that intends to find the locations for the products. It should be noted that positioning is successfully realized at Zara stores in 81 countries (Zara, 2015).

The Main Goals

Within the next year, Zara should fulfill such short-term goals as providing needs-based segmentation and collaboration with the luxurious designers to achieve the competitive advantage. During the next five years, the company should fulfill such long-term goals as creating the future development plans and overcoming weaknesses related to the quality of the items. The short-term and long-term goals of the company can be defined with the help of SWOT analysis, evaluation of website visiting, sales, and profits. Five Porter’s model or PEST analysis can also be recommended for determining short-term and long-term goals. Such metrics as increases in market share, customer value, and rate of growth can be the indicators of success of the company.

SWOT Analysis of Zara Clothes

Strengths

1. Efficient distribution.

2. A large number of stores worldwide.

3. Cost leadership strategy.

4. Huge variety of customers.

5. Fast delivery of new trends and products.

6. Strong brand image.

7. Information technology (Zara, 2015).

Weaknesses

1. Does not spend much money on advertising.

2. Following after luxury brands.

3. One manufacturing and distribution center.

4. Lack of control over production.

5. Centralized distribution system (Zara, 2015).

Opportunities

1. Online marketing.

2. Emerging of organic clothing line.

3. Global market penetration.

4. Distribution center in the US (Zara, 2015).

5. Collaboration with luxury designers.

Threats

1. Local and global competitors.

2. Always changing street style.

3. Rising labor cost in Asia (Zara, 2015).

Needs Analysis

To overcome the weaknesses and predict possible threats, Zara needs the financial, human, and physical resources. The financial resources are necessary to solve the problem of lack of the qualified employees. The human resources are needed to achieve the competitive advantage and become more creative and unique. The physical resources are necessary to implement the innovations (Judith, Fun, & Lynn, 2005).

Feasibility of Zara Clothes

In the present times, Zara is feasible in the Peru market as it is the secondary target one, and the company should adapt its items to it. Moreover, it demands a sustainable and unique position to occupy a leading place there (Mihm, 2010). Consequently, to avoid feasibility and other possible risks, Zara Company should establish a unique clothing line for each market as what is interesting for the European customers can not be always understood by the Asian customers. The fashion industry is a highly successful and competitive business. One can distinguish four main components of its success: reputation, monopoly, architecture, and technology (Cholachatpinyo, Fletcher, Padgett, & Crocker, 2002). However, feasibility is inevitable even for such a successful company as Zara.

Conclusion

To sum up, Zara Company is a successful clothing retailer that is famous in the American and the European markets. However, its desire to win the Asian market is seen in the well-organized business strategy and marketing plan that help to determine its strengths and weaknesses. The external environment of the company is favorable and preconditioned by the ability of the company to handle possible economic issues. The marketing plan proves that clothing and fashion industry can be a favorable environment for such companies as Zara if it takes care of its brand image, provides quality, and puts the customer in the center of business.

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