The Retail Mix Analysis for Zara in Uk - Coursework Example

INTRODUCTION Indetix group has a lot of brands functioning under its umbrella butthe most prominent brand is Zara. The other brands that exist are Pull Bear, Massimo Dutti, Uterque, Bershka and Stradivarius. Zara is a fashion store that offers its customers fashion at minimal costs and lets them dress trendy in the way they desire. It had been established in 1975 and is famous for the accessories and the fashionable clothing that they have to offer. It is a brainchild of Amancio Ortega and Rosalía Mera. Unlike other fashion stores, Zara does not outsource different stages that are involved in the production of its products. The communuication between different channels is so well linked that it requires a total of two weeks to produce the product and make it available in stores. The time that is required by other fashion retailer is around six months and the reason is that they outsource the different aspects in their production line. Zara has a huge number of new design range that they offer throughout the year. They do not spend any time or money in advertising instead they establish stores which act as an advertising medium for them. The other competitors spend billions in advertising every year which is in contrast with the practice at Zara. RETAIL MIX Zara has been operating in 59 countries altogether. The reason for the success is that they do not create a design and impose it on the consumers rather, the whole concept behind the fashion retailer Zara is that they offer to their customers what they want at affordable prices, they do not claim to offer highest quality. In fact it is a popular fact that the goods that they offer are all medium quality and this has been set considering the consumer preference to trade the quality bit with the lowered prices for fashion ware. Provision of medium ranged prices is possible for Zara because they are overseeing each and every aspect of the supply chain and there are no costs incurred in outsourcing the production. This is in contrast with the other fashion retailers. They oversee their supply chain even for the international stores that they have from production till delivery to the outlets. Design and Visual Merchandising About the marketing strategy of the Zara, a business magazine has mentioned it in an article, that Zara has been always considered as a fashion imitator. They do not introduce a fashion and then promote it rather they create an item and then deliver it to the customers. The other thing is that Zara does not use the usual channel of communicating the trends. This clearly shows that they offer to their customers what the customer needs rather than creating a need for the product that they have already designed. Pricing It has also been seen that the competitor retailers have outsourced the production of clothes and other products to the third world countries so that they can create an advantage for themselves in the form of low prices incurred for the production of the goods. Zara has done nothing like that, its major factories are in Portugal and Spain, the labor here is cheaper as compared to the rest of the Europe, but the closeness of the market and the production facility has made it easier for them to cut down costs. Advertising and Promotion As compared to the competitor retailers Zara creates a lot more products. They produce around eleven thousand distinct items, while their competitors average around two thousand to four thousand products. The finishing time that is involved of the product is less than four to five weeks while they can manage to modify the design of their product within two weeks. The quickness that is involved in the manufacturing of their products and its designs has made it a successful brand. The short life cycle that they have is a clear victory of the consumer choices as the things that the customers demand is readily available to them without any delays or issues. Since they are not involved in the marketing of their product, they simply introduce a design into the markets, if the design is not liked by the consumers and has less sales than originally expected then the designs are simply removed from the stores, the remaining orders on the design are cancelled and a new design is pursued days (BAJAJ, SRIVASTAVA & TULI, 2004). Customer services and Selling It has been generally seen that the product that Zara has to offer has a basic line of fashion, the designs that are created usually follow a simple pattern and are therefore, the customers are sure about their availability. There are some designs though which are available for a shorter period of time and hence the customer is forced to make repeat visits so that they can lay their hands on the product. The Indetix group has also launched an online store itself for Zara as it is known as the best brand for their group. This online shop has made it possible for the customers who could not visit the store due to some issues can simply place their orders online and get hold of the product that they want. The website that has been designed is of very simple design and therefore it is user friendly. The customers can simply browse through the different items that are present and then using the super zoom feature that is available on the website they can view the product from close and satisfy themselves before making a decision about the purchase of the product. Store Layout and Design Zara is looking forward to make itself a very established brand in the international arena of fashion as well. The Zara store has two distinctive features that it competitors lack, first of all the timely production of the goods that are required and the adaptation of the needs of the market. The prices of the product are all set keeping in mind the market average and the amount that the customers are willing to pay. The store itself is considered as the communication with the customers. With the advertising costs being zero, the money that they spend is all on stores, as they use store as the means of communicating with their existing customers as well as the potential customers (FERNIE & SPARKS, 2009). Marketing Communications The retail managers are the ones who provide the designers with the needs and preferences of the consumers. The retail managers have been empowered in the way that they are considered as the mode of communication between the customer and the company. Zara had invested in the provision of hand held computers and palm tops quite early on, each retail manager has been given that, they are required to enter the information that they gain about the consumer choice into those computers. The hand held computers or I pads are connected to the main server and the server is responsible for collecting the data that is arriving from all the outlets of Zara. There are employees who are responsible for sifting through the data that has been collected. This gives them a first-hand insight into the requirements of the consumers. The internal communication is maximized by having all the people who are responsible for designing on one floor. This helps the required information to travel quickly hence the time loss is reduced as well. They tend to introduce new products twice a month and keeps the customers attracted to them .The don’t advertise much of their products unlike many of their competitors. ANALYSIS OF ZARA in UK WITH REFERNCE TO PLIN MODEL: The PLIN model consists of four factors that determine the potential that a company has to establish itself in the international market. These factors are the ones that differentiate the kind of strategy that the company has employed in its local market and the international market. The factors are Product, Lifestyle, Image and Niche. For being able to sell internationally it is necessary that they should be a very successful brand in their home countries. In case of Zara it is true they are the most successful brand of fashion clothing in Spain and this is what has acted as a propellant to push them to the international markets. Product Since they are looking forward for further globalization of their products therefore, they need to take a number of factors under consideration. The most important are the internal stakeholders, who are going to be directly affected by any kind of decision that would be made by the board. The management, employees and customers of the organization are some of the major stakeholders of the firm. The management for instance is quite concerned about the level of success that they will be able to achieve as they go for further globalization because they are paying high costs to garner success. The employees are also at a great benefit from the impending internationalization as they will gain better opportunities to work abroad and gain a lot of new experiences. Secondly, they will have to undergo trainings that will improve their skills and make them better prepared for the corporate at local and international level. The employees would also learn about the preferences of the international customers as well and thus they will become an asset for other companies too. They will have better opportunities in employment as well because of their job skill set. But to make sure that they as a retailer are successful, they need to train their employees in the best way possible. The Human resource department and the career development department are the two departments that are entirely responsible for training the employees in the best possible way (VARLEY & RAFIQ, 2002). The manager of the department has the highest responsibility of making sure that the employee is trained according to the new skills that he would require to counter the globalization that is happening. It is the duty of the departmental head to make sure that his employees are working as required. In this case, the departmental heads at Zara should make sure that their employees are trained to function effectively and efficiently. Zara is managing all aspects of its supply chain. They have to be mindful of the employees’ training. It is crucial that the employees are trained according to different cultures in which they are working. There have been many mishaps with some of the biggest multinationals where the company failed to take in the cultural difference and therefore ended up making blunders. The departmental head of the various aspects of supply chain should make sure that the employee development is not neglected and the required training parted duly. The easiest way to discover if any kind of gap exists in the training and the requirement is to keep a constant eye on the various trainings and the external requirements. The gaps could be identified by simply matching the trainings imparted and the external factors. When the strategy of action is being formulated by the manger for his department so as to set course for his department the core competency that are required to be displayed by an employee should be defined accordingly. This will help the employees function in a way that is beneficial for the department and will help the employees reach the goals that have been defined for them. The competency and the skills of the team should be analysed on regular basis so that the gaps if any can be identified and treated immediately without any hassle. If there is neglect in such fields then there are long reaching effects which will cause trouble for the department in the long run. It is the duty of the manager to convey the gaps that he identifies in his employees and make this information available to the Human Resource department so that the department can suggest any kind of training that is available. This process should occur quite often so that the departments are up-to-date and do not cause any kind trouble for the company. It is very important that the training requirements if any of the department are identified clearly and they are conveyed to the higher authorities so that the exact gap that exists is treated in the most appropriate way possible. It is the duty of the departmental heads that they should identify the gaps that exist in their employees but people usually overlook that and try to move the responsibility to the heads of Human Resource department. The departmental heads should be aware of the fact that they need to act as the catalyst for the trainings that are to be provided to their employees. It is not the sole responsibility of the Human Resource department to identify and fill the training gaps that exist. Human Resource Department of every organization conducts training need analysis on regular basis, it has become a regular feature in nearly every organization today. The training need analysis is a very necessary step that helps the organization in learning the things that are required further so as to enhance the capabilities of the workforce. It is always an investment that the organization is making on it employees in the form of the training that they are providing to their employees. It has been claimed by many of the researchers today that today that most crucial part of the human resource development of any organization is to have their employees trained as per the requirement. The better trained the employees the better chances the company has of weathering any kind of difficulties and this helps the company create an edge over other companies as well (SAVITA & KULSHRESTHA, 2012). Lifestyle Zara has differentiated the different products that they have according to the customer demands. Zara is a brand that offers fashion and trends at reasonable price. The rotation of the products at the store is quite high. The high point in Zara’s customization for the sake of customers is that they anticipate the trends that customer desire. They also keep a check on the fashion through the demands that the customers make and this helps them treat the customers according to their prefernces. Niche One of their policies is the selection of the location of their shops which has appeal itself. They have such strong clientele base that they get advertised by their customers rather than spending on advertising themselves. ZARA’s are very good at innovations and keep the fashion fast forward making it hard for their competitors to keep up with their pace. Some of the experts tend to pen down their thoughts saying the business model ZARA had opted for is very vulnerable for keeping up with their own pace would become quite difficult in the near future (ZENTES, MORSCHETT & SCHRAMM-KLEIN, 2007). CONCLUSION ZARA is a leading and well recognized brand in the apparel industry and had achieved a great spot in marketing and advertising worldwide. The basic theme of the marketing policy for this brand is that the clientele is the backbone and the driving force and hence given special attention. The reason for their success is the extra care given to the customers which tends to attract more buyers. The interior and exterior of the shops are also gives special care and designed with architectural perfection. The intelligent and carefully crafted strategies have earned the most distinct position for this apparel store. The pace with which they change their trends and fashion have helped them establish in just any society keeping in view the fact that it is one of the most spanned brand names. Friendly customer oriented atmosphere is a one of the fundamental incorporated in their business model. Furthermore, their policies have been made keeping in view each and every person that is individualism and differentiation is part of the customer focused development program. An analysis is carried by hired professional to understand the reaction of the clientele to the existing products and what their reservations are. In spite of having so many stores dealing with clothing’s ZARA has managed to come up with 11,000 distinct items to their name. One thing that has been understood by the policy designers at Zara’s is that the consumers have become more tasteful and demanding. One of their wining polices is the plus size consumer behavior considerations. The biggest impact that Zara has had on the fashion industry is that it has instilled in the other brands the need to rotate their stocks quickly and this keeps the customer interested. It also helps identify the demands that the consumer has. If a customer is returning for a certain kind of stock again and again this means that the certain design has been taken well by the consumers and should be re-launched to satisfy the needs of the consumer. Zara has always been able to identify the preferences of the consumers before it is too late for tehm to take the required action. It has been noted that the time during which Zara had moved to the external markets was the time when Spanish people had started preferring to spend their extra money of travelling or education rather than spending on clothes. Moreover, the modest prices for such quality fashion, the loyalty of customers it has managed to capture and the augmenting growth rate are the strengths of this leading brand-a result of their extensive research and clever formulation of policies. ZARA produces, designs, distributes, and advertises all by itself making it in a cohesive and assimilated retailer. With all these good points we do see a lack of e-commerce in their marketing policies. They need to have computer-aided designs, and online marketing to compete with the experienced old competitors. There modest approach and style at inexpensive prices have made it a household name. Listening to the customers and then deciding their policies and even expansion has made it possible for them to increase their approach to almost 77 countries. REFERENCES 1. COX, R., & BRITTAIN, P. (2000). Retail management. Harlow, Financial Times/Prentice Hall. 2. NAIR, S. R. (2009). Retail management. Mumbai, Himalaya Publishing House. http://site.ebrary.com/id/10415539. 3. FLEMING, P. R., & FLEMING, P. R. (2004). Retail management. Cirencester, Management Books 2000. 4. BAJAJ, C., SRIVASTAVA, N. V., & TULI, R. (2004). Retail management. New Delhi, Oxford University Press. 5. FERNIE, J., & SPARKS, L. (2009). Logistics & retail management emerging issues and new challenges in the retail supply chain. London, Kogan Page Ltd. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=280315. 6. VARLEY, R., & RAFIQ, M. (2002). Retail management. Basingstoke, Palgrave. 7. SAVITA MOHAN, & KULSHRESTHA, N. (2012). Retail management. New Delhi, Enkay Pub. House. 8. 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Outlines & highlights for retail management: a strategic approach by barry berman, joel r. [S.l.], Academic Internet Publish. 16. BERMAN, B. (2009). Retail management a strategic approach + great ideas in retailing. [S.l.], Prentice Hall. 17. BERMAN, B., BERMAN, B., & EVANS, J. R. (2007). Great ideas in retailing: [to accompany] Retail management : a strategic approach, tenth edition. Upper Saddle River, NJ, Pearson/Prentice Hall. Read More