Zara and their New Image Campaign - Case Study Example

Zara and their New Image Campaign Zara and their New Image Campaign For over the past few decades, the luxury fashion industry has witnessed an alarming growth in its products and services. The advancements and reputation of the fashion industry have been as a result of the improvements in textile technology, as well as the commonly witnessed “product promotion” and marketing of fashion products and services to the public (Doran, 2014, pp. 245). Evidently, Zara brands have been among the top brands within the fashion diligence (Willis, 2011). Established in 1975 by Rosalie Mera and Ortega Amancio, Zara is a Spanish retailer of clothing and fashion accessories, with its base in Arteixo Galicia. Zara serves as the world’s leading apparel retailer, and is the top chain store of the “inditex group” (Inditex Group, 2008). A number of marketing and retail documented sources claim that while lots of fashion retailers require an average of six months to develop a new brand/product and get it into the stores, Zara requires only two weeks to do so, and launches about ten thousand new designs every year (CNN.com Europe/Business 2001). This paper thereby analyses Zara’s new image campaign, which aims to further inform the public of their products hence broaden their market base. It further scrutinizes the challenges that the retail company may encounter or encounters in its services and product marketing, as well as the possible solutions to such challenges. May be we would start by asking: what is it that offers Zara the impressive public brand image and its brands highly sighted after? What gives them the advantage over competitors or are they fashion savvy? Do they involve in producing brands that fade within some few months? More ample about Zara, it is all about an instant “runway” where fashion is made available and accessible for everyone (Nieto, 2008, pp. 29). They consistently delivers new brands by taking control over most supply chains as well as customer experience. This strategy incredibly allows for quick product development and distribution at low prices (Hansen, 2012, pp. 15). Their production of a range of products presumably deceives and motivates the target customers to visit their stores much frequently hence avoiding every other supplier who looks the same. Zara also owns a number of stores which ensure that they gain a wide and firm control over the brand buying experience. They are renowned for rebuffing expensive sleek campaign, as well as celebrity endorsements (Louise, 2012). Strategically, they open stores at high-end and heavily trafficked retail destinations or locations. As well, they firmly rely on their store experience, customer service and store windows in order to shape the brand. It is never about what they say, but it is about what they do. Successfully, Zara has now extended into about 78 countries globally, and their “globalization” policy also aids them circumvent the generic “chain” brooch (CNN.com Europe/Business, 2001). After heavy market research, every location currently receives drops of individualized products. Apparently, Zara is quite successful and is becoming the “number one” retailer within the fast growing fashion world (Giulia, 2008). One of the essential characteristics which contribute to Zara’s success is grounded upon efficiency and flexibility in their chain of supply (Maya, 2011). The only way of maintaining profitability at the era when fashion trends are emerging as fast as they fade is via the products’ refreshments that opt to go the same rate (as quick as the trends emerge and fade). In order to reduce the process-period, Zara involves in the production of merchandises that are so close to their central market. To further propel their process to a higher level, they create a network or link of local sub-contractors who responds and synchronizes Zara’s products and services to the market changes. As well, they develop awareness that helps their customers alongside the entire public to recognize their possible future fashion pattern. Zara acts to be a very unique clothe Retail Company since it does not only design, but it also produces its unique merchandises (Maya, 2011). This characteristic strategy enables the company quickly respond to the market trend changes, and thereby introduce the fastest and latest trend of the time.Giulia (2008) affirms that Zara’s brands (clothes) are produced in fashionable way, good quality, but in small quantities. Consumers are thereby made to believe that if they don’t buy or purchase Zara products quickly enough or as soon as possible, then it shall have gone after a shot while (Hansen, 2012, pp. 17). Such beliefs make the target group or customers more willing and interested in consuming Zara brands. Since female love to purchase things that are hard to get, the reputation from the word-of-mouth will soon draw in more customers.Success of the company thereby rests upon the fact that it holds a total control over every part of its business operations (CNN.com Europe/Business, 2001). While a number of clothing companies invest much of their money and efforts in advertising campaigns, Zara partially does that owing to its belief that the content of its window shop serves to be the best advertisement of itself to the public (Louise, 2012). To confirm this, if not all then most of Zara stores have window displays and the best decorations ever seen. This creates the most luxurious environment every customer would desire to shop in (Doran, 2014, pp. 239). As well, instead of making heavy investments on advertisements, Zara invests money in making the best choice for its store locations; most of Zara stores or shops are located at high-traffic zones and downtown centres (Paloma, 2010, pp. 64).Zara’s success thereby proves one word- “difference.” Their uniqueness makes their brand stand out of the crowd of other clothing or fashion retailers. As opposed to the regular custom of the clothing industry, Zara neither outsource manufacturing to labour intensive nations nor advertise its products heavily (Hansen, 2012, pp. 16). Nonetheless, its difference aids it in building a remarkable brand image via doing nothing rather than meeting customers’ demands and market trends. It is thereby no secret to say that Zara products grab “inspiration” from the runways. Despite all the advantages and benefits that it enjoys, Zara faces a several challenges resulting from a vast number of competitors. Nonetheless, due owing to its characteristics, it appears like there are only two major competitors: Gap and H&M. Gap is an American brand whereas H&M is a Swedish brand. Regardless of the existence of these competitors, there are a number differences between how Zara operates as compared to its competitors. The competitors (basically Gap and H&M) outsource a vast part of their manufactured products, and they tend to spend much time creating new designs and new lines (Nebahat, 2006). Until their brands make presence in their shops or stores, in takes the competitors approximately nine months while on the contrary, Zara spends only two or three weeks in the entirety of this process. While several clothing design companies spend huge amount of money on advertising campaigns, Zara simply uses its window shops to exhibit its new collections. In plans for the company’s new strategies, it would be attention-grabbing to take an overview at the firm’s situation, taking a close focus at what we commonly refer to as SWOT analysis (Whittington, 2005, pp. 124). SWOT analysis takes an acute look at an organization or firms activities, highlighting its strengths and weaknesses while pointing at the most possible opportunities, as well as threats that the given entity may be subject to. By first giving attention to the company’s strengths, when you have to follow strategies, the core point is to find the definition of the target market, and this is the point upon which Zara holds an international advantage over its rivalling competitors. This is due to the broad market base upon which its products get direction towards. Whereas its competitors act and serve as traditional retailers who tend to fragment their target market via lifestyle and age, Zara is absolutely dissimilar. By taking an outward look, the company may seem to target and direct its collections the younger market while is real sense, it channels its collection towards a broad public base. Not only does it direct its collection to the young and teenage groups, but also to the elderly public; not only to women, but also to men (Paloma, 2010, pp. 67). The basis of this idea is that it matters not to whom Zara brands are directed, but the actual essentiality is that its collections get directed to everyone, as long as you are fashion sensitive (Willis, 2011). Currently, fashion is improving and is increasingly becoming globally standardized as people are gaining much more access fashion brands and information all through television, magazines and other news sources (Nebahat, 2006). Zara is much aware if this hence it utilizes this factor to its maximum advantage through offering the latest clothes and accessories in the fashion trend. Owing to this advantage, its team of marketing tends to believe that since fashion is becoming more global and easily accessible, any popular garment within the fashion capitals such as Moscow, New York, or Paris will automatically receive the highest sales, as well as within the cities such as Hong Kong, Milan, or London. This is the principal reason why about 80-85 percent of Zara’s brands reflect the standardized fashion products. Through its logistics, the company counts on and values its centralized system of distribution with its business headquarters located at Zaragoza and Arteixo in Spain. In its processes, the company operates as follows: (i) being the company’s business centre, Arteixo receives clothing and fashion products from all over the globe twice a week, (ii) within about 24-36 hours, the products are then delivered to European stores, and (iii) in about 24-48 hours, products arrive in the stores situated outside Europe. This strategic operational plan ensures that Zara have no obligation to store products for long. As a result, the company utilizes a “just in time” process that aids a rapid and effective distribution process.Zara has an extremely strong and firm market image owing to the style, quality and availability of its products. Whittington (2005, pp. 119) elicits that Zara’s central opportunity is that while other fashion retailers concentrate and direct much of their efforts and funds on brand image building via advertising campaigns and marketing strategies, it is one of the few brands that spend nearly zero amount of money on advertising (Beckham & David, 2014, pp. 51). For instance, while other fashion retailers spend an approximate average of 3.6% of their total revenue on advertisements, Zara spends only about 0.3% of its revenue. Its clothing brand deals with above ten thousand clothing items annually and it has a strategy of launching and supplying a new brand or product to all or most of its stores just in two week time. Consequently, Zara stores completely change their clothing items every month. Only in the UK, the business owns over 50 stores located in strategic locations within the renowned cities, winning it the tittle of being a global leader in fashion retail business within the country (Hansen, 2012, pp. 17). Additionally, Zara brand is gradually taking over within the American continents through opening up its sores in numerous places in Canada, the U.S. and some sections of South America. Considering Zara’s operational model, it has a variety of weaknesses as opposed to the other traditional retail competitors. The problem arises owing to the fact that Inditexhas of late invested extra capital into Zara since it was the principle reason as to why the entire organization’s sales were progressively becoming globalized (Inditex Group, 2008). It is for this reason that Zara receives sufficient support in breaking into the international markets. Nevertheless, the company’s sole worry is that should Inditex fail or fall into any trouble, it may as well indulge itself into the same trouble unless it formulates its strategies again. Another problem that Zara recklessly attempts to penetrate the U.S. market. This risk could rely upon the fact that the American populace may have different taste as compared to the Europeans. The other reason for threat is that the company has never been at a position of developing a strong chain of supply, meaning it lacks strong logistics and this factor could lead into diseconomies of scale (Xteena, 2012). Even though the company has better supply strategies, it might not be capable of supplying any more storessince it relies upon a centralized model of logistics. Possibly, another threat could be that Zara in the Middle-East and American markets may force the use of euro. However, in the current economy, euro is growing stronger against the U.S. dollar and other currencies from the East (Xteena, 2012). This infers that every production made within Europe may tend to be expensive and this scenario may have upshots over the end consumer. Owing to the absence of marketing planning and strategy, the company’s market share growth rate may tend to be very slow. At times, the high product prices may be regarded as a challenge to the company’s attraction for its target market; however, this can never compromise the quality of its products as well as customer services. The above threats, weaknesses, or challenges may thereby call for a different marketing strategy and operational changes, which will further aid the company’s further success (CNN.com Europe/Business, 2001). In the contemporary world of advanced communication and technology, it would be quite hard and challenging to run an organization or business minus product marketing and interaction with the potential or existing customers (Beckham & David, 2014, pp. 49). It is thereby advisable for Zara to develop a personal marketing and IT department, and launch its marketing campaign online through the social network websites such as tweeter, Facebook, bebop, as well as through search engine optimization. Email marketing is also another reachable and reliable marketing strategy that Zara opt to employ in order to effectively and conveniently convey its message and product related information to a number of target customers just in a short while. Through emails, the company can also use a list of updates that keep the customers updated with the latest brands and offers available within the stores. By creating its presence on an own website, as well as over the social networking websites, Zara stores can be able to keep in touch with their potential customers without the customers making a physical appearance at the store, hence increasing its market share via the help of low cost solution or cheap online marketing. One of the major sources of attraction for more traffic to a business is interactive website. It also helps the business keep in touch with customers, improve, and change its products in accordance with the consumers’ demands or customers’ requirements. As well, this serves to be the quickest and best way of getting feedbacks from potential customers from the entire globe. Zara should thereby never hesitate to employ this strategy amongst its potential marketing strategies. Currently, Zara directs much of its focus on the development of stores at strategic locations on the heavy traffic streets; this is also a better marketing strategy (Doran, 2014, pp. 47), but it can never replace a well-organized and professional marketing campaign, which can possibly attract thousands of target customers to the store just in days (Louise, 2012). With the adoption of a completely functional and interactive website, Zara customers will be able to leave feedbacks as soon as they use the products hence pushing for a quick product improvement. Sales promotion of a company or business’ products is one of the basic necessities for its operations to run smoothly. Additionally, it serves as a building block during the process of creating a brand identity. Mass media advertisement plays a vital role in the communication of changes or arrival of new products to the consumers (McCrea, 2013). According to Beckham and David (2014, pp. 47), advertising is one of the cruxes of the fashion industry, and if properly planned for, it would greatly improve Zara’s tinkle-value. Such advertising activities can be achieved through the print media such as newspapers and magazines, and through outdoor advertising through billboards among others (McCrea, 2013). Alternatively, in collaboration with a diverse range of local companies that promote the fashion industry, Zara should organize exhibitions, trade fairs, and other events that would easily and quickly attract customers’ attention. In conclusion, it could be possible and easier to affirm that Zara’s success is grounded upon its strategies, taking a complete control over every section, component and part of its business operations (Maya, 2011). That has been possible through design, production and distribution of itself, alongside control of the entire process that shifts from the manufacturer to the shop floor. Such strategies enables Zara to remain flexible for quick reaction to the market changes, which possibly alters every fashion trend and consumers’ taste in order to instantly offer them what they need. Zara’s central threat is the competition for the market share with the other fashion clothing retailers such as H&G and Gap. Even though the company’s central strength is “not advertising,” it should now be able to grab the trending opportunities in marketing strategies such as the internet or online marketing, which no any other business can afford to avoid in this 21st century. References Beckham, H. & David, J. (2014). Fast fashion communication: Advertising campaigns. Ethics and Fashion Inspiration, 13(7), pp. 46-59. CNN.com Europe/Business. (2001). Zara, a Spanish success story. Retrieved on 29th Nov, 2014 from http://edition.cnn.com/BUSINESS/programs/yourbusiness/stories2001/zara/ Doran, S. (2014). Connecting, inspiring and informing the world’s leading luxury professional: Is Zara the newest luxury fashion competitor? Division of Digital Luxury Group, 117(85), pp. 237-248. Giulia, N. (2008). Zara fast fashion. Retrieved on 29th Nov, 2014 from http://www.laju.it/pdf/ZaraCaseStudy.swf Hansen, S. (2012). How Zara grew into the world’s largest fashion retailer. The New York Times, 8(3), pp. 14-18. Inditex Group (2008). Who we are: Inditex timeline. Retrieved on 28th Nov, 2014 from http://www.inditex.com/en/who_we_are/timeline Louise, H. (2012). Advertising campaign for Zara: Be wonderful, be memorable. Retrieved on 28th Nov., 2014 from https://www.behance.net/gallery/3858233/ZARA-Advertising-campaign Maya, A. (2011). The features that make Zara a success. Retrieved on 28th Nov, 2014 from http://blogs.ubc.ca/aliceguo/2011/03/07/the-features-that-make-zara-a-success/ McCrea, L. (2013). Successful media examples by fashion brands: Apply their success to your business. Retrieved on 28th November, 2014 from http://www.ignitesocialmedia.com/social-media-strategy/successful-social-media- examples-by-fashion-brands-apply-their-success-to-your-business/ Nebahat, T. (2006). Global sourcing: Insights from clothing industry- the case of Zara, a fast fashion retailer. Retrieved on 28th Nov, 2014 from http://joeg.oxfordjournals.org/cgi/content/full.ibm035v1 Nieto, M. (2008). Zara: Fashion follower and industry leader. The New York Times, 7(4), pp. 24- 32. Paloma, S. (2010). Zara case study: The Company where everything communicates. Harvard Deusto Marketing Yentas, 101(1), pp. 60-68. Whittington, R. (2005). Exploring the corporate strategies, 7th ed. London: Prentice Hall. Willis, B. (2011). The Zara brand effect. Retrieved on 28th Nov, 2014 from http://www.trulydeeply.com.au/madly/2011/06/16/zara-brand-launch-marketing- australia/ Xteena, C. (2012). Curiosity killed the consumer: An economist’s take on modern-day consumerism.Retrieved on 28th Nov, 2014 from https://curiositykilledtheconsumer.wordpress.com/2012/04/23/strategic-seduction- casting-light-on-zaras-window-design-4/ Appendix Fig. 1: Image showing one of the Zara’s strategically located stores Fig. 2: A collection of jackets awaiting inspection at one of Arteixo’s clothing stores in 2012. Read More