Fashion Retailer Zara - Assignment Example

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The essay explores Zara strategic aspects of marketing. The Inditex’s group net profit in 2004 rose to Euros 628 million, which is 41 percent increase compared to 2003, with an annual return of 11 percent. The group expanded its shops sales resulting in 54 percent increase…
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Fashion Retailer Zara
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Download file to see previous pages The essay "Fashion Retailer Zara" discovers the marketing strategy of Zara. Zara designs all its clothes and majority of it is in Spain (about 80 percent). It focuses on shorter response time, which enables it to meet the constantly shifting fashion trends. However such moves do not take months, but this swift process is complete within in 30 days. And with this short time, Zara identifies the trends, design it clothes, supply it to all its stores. In short it means catching up a trend when it is in vogue in the fashion circles, rather than discusses it for months and then ask the overseas producers to work on it. On the contrary, even the smallest retailer takes up. Three to four months research, thinking, discussion for any such project, while bigger retailer take up to 9 months to produce to similar result. When the analysts start to forecast the fashion trends, Zara moves ahead for next trend. The trend identification is done through extensive research process in which every one in the organisation is involved. In the manufacturing environment, Zara’s product development teams fashion shows and catwalks and exhibition and then translate the latest fashionable ideas into products. Zara development teams visits universities and clubs to track the customer’s preferences and choices and understand the changing consumer’s needs. There are also teams in the international arena who also observe the latest fashion trends and report to the head office. Zara mangers also help in tracking customer....
t the Zara mangers also help in tracking customer demands through sales analysis, all of this process enables Zara to meet customer's needs and be ahead of its rivals. The research is not traditional research, but it includes email and phone calls from various stores to head office, to which Zara manufacturing machinery responds by designing the proposed item within 2 weeks time. Thus we can see, that it is the lead time and keeping up with the fashion trends which makes Zara the leader of the fashion industry.
Low Risk Low Production
Normally any proposed item (apparel) among other retailers is made in bulk, which always has the risk being a failure. Zara reduces this risk by producing in lesser quantity, thus instead of going for bulk production, it prefers fewer items. This approach gives Zara's double benefit, such as lesser risk and creating more demand
by making artificial scarcity, which means it can charge more and earn extra profit. It is natural with all objects especially fashion products; they become more desirable making them more profitable for the company. Normally it is very rare to find a product in its early launch days, a customer has to request the item, which is taken into notice by the store manager and produced within a shortest period of time. Another benefit of this approach is that if the product does sell well, it can be easily scarped back due to lesser quantity, which is not possible for other retailers or in some cases it is moved to another location, where it is selling well.
Leading in Innovation
As for other retailers their profits comes through mass sale and bulk production. Zara instead produce more styles (new items) than any other retail store and generates profit through greater number rather than bulk production. For ...Download file to see next pagesRead More
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