Zara Marketing Strategy - Coursework Example

MARKET ANALYSIS IN MELBOURNE: THE ZARA BRANCH Introduction In June Zara Melbourne branch opened up to cheers of new followers and old sof Zara’s line of apparel and fashion. Zara’s introduction was graced with her apparel and clothing sold at typically low prices. Customers were excited at Zara’s entry in Melbourne. This is the second branch in Australia, the other one is in Sydney. This early, her competitors were preparing for her coming. Before the Melbourne opening, they had anticipated heavy traffic of buyers, and some of them opened earlier than the newcomer while another store closed just an hour later than usual. (Burn, 2011) Organisation Background Zara is a global firm. It is originally a Spanish business firm owned by Inditex which manages a chain of 1900 stores throughout the world. It has been in the international apparel market and fashion for decades now. Products are quality oriented; 60% is produced in-house while the rest are outsourced. (Craig et al., 2004) The question now is - How will Zara manage and cope with a new market in Melbourne? Is the market segment properly identified for Zara? Vertical integration is Zara’s corporate strategy amidst globalization. This allows Zara to be ahead of its competitors. As stated, 60% of its products are manufactured in-house. Its trained personnel analyzes product quality, including its cycle and trend in stores up to the designers. Because of this, local designers in Spain are able to design products that meet customer specifications (Ghemawat quoted in Craig, Jones and Nieto 2004). The Marketing Issue The marketing issue is: how will Zara cope with the new market? Zara must hire a research company to research on consumer insight and the new market in Melbourne. Some questions that need immediate answers will be: How will the new market increase sales? How and when is the time the apparel and fashion industry peak its sales? How should customer focus be dealt with? Discussion of possible sources of error and what can be done to reduce them A question that always seems to linger in a marketer’s mind is: What do consumers think and want? Global organisations, like Zara, think of more appropriate terms and strategies in this new marketplace, or new target market, the fashion generation of Melbourne. Globalization has revolutionized many aspects of marketing. Zara has to adopt and introduce measures and changes in marketing strategies. This includes product orientation, employee management, and other organizational strategies. (Vitale, 2006, p. 2) Zara has to refocus and acquire more knowledge about the new segment and demographic. Knowledge is an important asset to the company (Callingham, 2004, p. 23). Marketing research on experience focuses on what the customer wants. Benefits are in the form of satisfaction and customer experience of the product. Consumer behavior for example has three aspects which are: creation of information, behavioral concept theory, and consumer attitude theory. These concepts provide consumer insight on consumer experience. (Schmitt, 2010, p. 55) In response to the complexities of the time, i.e., the existing pressure of globalization, marketers have reformatted the way they collect and utilize market intelligence. Marketers need more information and are redefining goals to suit to the present trend of intense globalization. In a study by Morash and Lynch, they found that customer closeness is one of the requirements for customer focus and loyalty. It is important in demand-oriented capabilities and performance. Customer closeness is associated with responsiveness to customers and customization. Supply chains can also be aimed at customization. It is a strategy that combines operational excellence with customer closeness. (Jobber and Lancaster, 2003, p. 10) There are questions that Zara’s managers in Melbourne want answered, these are: What attracts customers to Zara’s products? Why do customers want and like these products? How do customers receive the information from advertising and commercials? When is the appropriate time to convince them to buy the products? An important strategy that Zara should adapt in meeting the needs and wants of customers is introducing an approach to supply chain that focuses on the customer. Knowing the customers’ needs has become a foundation for which a company is founded. A company has to be marketing orientated, and for this, a number of changes has to take place in the organization, for example practices and attitudes. The marketing concept has evolved over the years of business and globalization. The marketing concept states that the organization should be able to meet the customers’ needs and wants. This is customer focus that can lead to loyalty. Consumer Insights In the study of consumer insights, we refer to behavioural sciences that tell us more about buyer behaviour. Knowledge, information, and technology are some of the resources needed to know consumer insights and behaviour. This should be the main focus of the research. Consumer insight has two meanings. First, the singular form “insight” refers to one’s talent or capability to think clearly and deeply. It refers to a marketer’s deep knowledge of the consumers, which can help in the company’s decision making. This type is very important; it is a deciding factor in customer loyalty. This does not mean knowing about some pieces of a puzzle but having all the necessary ingredients to produce a complete picture. (Stone et al., 2005, p. 1) The other meaning of “insight” is the plural form, which refers to ideas or discoveries that can provide opportunities. Zara can have tools to help her in the new marketing – databases, market research, Information Technology. Consumer insight is also referred to as the “voice of the consumer”. It can influence or become a basis for better decision making of a company like Zara. Product planning and development, customer relations, department communications and management are more made effective when there is fundamental understanding of the consumer. (Vitale, 2006, p. 9) Consumer insight cannot be attained from simple research but from combined sources, such as databases, planning data, reports, market intelligence, feedback from people in the field, even consumer complaints, and everything about consumers. The importance of consumer insight to marketers has been established. The implications for business and organizational growth with a well-defined and well-research customer insight are significant. But consumer insight will continually change over time because of the demographic changes and the changes in the market forces. Marketers will have to adjust, introduce new innovations, and continue to need customer insight because of the following factors: Customers will not make themselves available to traditional marketing. Brands will be very important as customers will prefer a select few. That is why, it is important that organizations have a database of consumer insights.(Gamble et al., 2007, p. 70) Customer interaction in websites can help in having more information about customers and their preferences. Marketing peers, such as those from the media, will be less cooperative and so there will be resentment among the various groups in the media. Brands will not be easy to build. Consumers will be more bright and wise and so traditional brand builders will find it difficult to succeed. Database Marketing and Consumer Insight Database marketing refers to the relationship of consumer and organization when both are in the process of communicating, exchanging all possible information for a particular and actual purchase of a product or about certain service issues that a consumer wants clarified. While the traditional characteristics of the marketing mix focus on consumer and relationship with supplier and product, database marketing is narrower. This is focusing on the organization’s desire to sell more. (Stone et al., 2004, p. 59) Another focus on this particular marketing strategy is customer care. Customer care is simply taking care of the customer. It includes everything or every activity and product that satisfied the customer. Examples are a well-polished and beautiful store where storeowner and employees wait and expect the customers’ “orders”, a state-of-the-art website where company and customer interaction is an awaited feature and readily available with administrator providing 24-hour service to customers’ questions and complaints, and everything about good service. Staff and employees treat well the customers. These are some of the features of customer care. (Stone et al., 2004, p. 111) Conclusion Marketers have to be flexible and creative in communicating to the outside world. Zara has to refocus and find new ways of collecting and analysing marketing intelligence because of the new forces and trends of globalization. Information is the key. There are vast amounts of information about consumers out there that have to be collected and analysed. What Zara needs is “insight” and a careful study of the information and data acquired from the field by sales people. New thrusts and new directions are needed for the new market. This should be the main purpose of the research. Vast amount of information of the market segment is needed by the company. The questions that were asked from the beginning, on how to increase sales and when is the time the apparel and fashion industry peak its sales, are some of the subjects the research company should address. The answers will delve on issues of consumer insight, customer care, database marketing, and much more information about the new market. This will provide a lot of changes for Zara in penetrating the global market. Management and employees should also consider the cultural differences in the new market. Two types of cultures have to be considered: organizational and ethnic culture. The marketing strategies and orientation will have to emphasize along this line. Zara’s success in the new market will depend on a new strategy that will be more customer focus. Customer focus pertains to meeting the needs and wants of the customers. Zara can get closer to the target market, the fashion generation of Australia, with this thrust. The results of the market research will provide more information on customer insight, what the customer wants, and how customer loyalty can be attained. References Burns, J., 2011. Shoppers thrill to embrace of Zara. Available at: http://www.theage.com.au/lifestyle/fashion/shoppers-thrill-to-embrace-of-zara-20110615-1g3tv.html [Accessed 8 December 2011]. Callingham, M., 2004. Market intelligence: how and why organizations use market research. United Kingdom; USA: Market Research in Practice. Gamble, P. et al., 2007. Marketing revolution: the radical new approach to transforming the business, the brand & the bottom line. Great Britain and the United States: Kogan Page Limited, 2007. Jobber, David and George Lancaster. Selling and Sales Management, Sixth Edition. England: Pearson Education Limited, 2003. Schmitt, B., 2010. Experience Marketing: Concepts, Frameworks and Consumer Insights. Foundations and Trends® in Marketing, vol. 5, no 2, pp 55-112. Stone, M. et al., 2004. How customer care and database marketing use customer insight. In M. Stone, A. Bond and B. Foss (eds.), Consumer insight: how to use data and market research to get closer to your customer, 59-60. United Kingdom and USA: Market Research in Practice. Vitale, D., 2006. How smart companies apply customer knowledge to the bottom line. New York: Paramount Market Publishing, Inc. Read More