Marketing And Brand Management Of Zara
Task: You are required to prepare an individual essay of 3,000 words. First choose one of the top 100 brands in the world for your assignment (please see www.interbrand.com for a full list of top 100 brands). Your essay must address the following four points:
Critically analysis the marketplace (competitor, customers and advertising) which your chosen brand is in? Critically apply brand management tools to explore why your chosen brands is one of the top 100 brands in the world? Critically assess how your chosen brand should market themselves in the future? Correct use of the Harvard referencing system and at least 10 sound academic references.
With increasing competition in the global business environment, both marketing and brand management have become of utmost importance for brands to survive in the market for long run. It has become essential for the marketing departments of the companies to display their economic values by not only communicating the products and brand names to the customers but also reinforcing them to compete with others (HanssensandPauwels, 2016). In this regard, branding is undertaken efficiently by valuable firms in the business environment as it helps in letting customers know what they can expect from the company and its products. Both marketing and branding strategies and tools are being used increasingly for distinguishing oneself from competitors and presenting themselves in front of the customers (Armstrong, et al., 2012). For this purpose, various tools or activities are involved in this branding. Companies often look for various ways to connect with their customers to become irreplaceable and establish relationships. This makes branding essential for these firms.
The purpose of this essay is to critically analyse the marketplace of the chosen brand Zara, then apply brand management tools for evaluating the company and assess how it should market itself in the future. The main priorities of Zara are offering attractive and responsible fashion for the customers by catering to their changing needs, responding to latest trends and acknowledging valuable feedback alongside improving experience (Inditex, 2022a). The core values of the brand are sustainability, beauty, clarity and functionality. It consists of women’s, men’s and kid’s collection of apparels.
Marketing and Brand Management of Zara
Critical Analysis of Marketplace
Despite the outbreak of the COVID-19 pandemic, the global fast fashion market amounted to around $68,634.9 million in the year 2020. Furthermore, this market is further expected to grow at a compound annual growth rate (CAGR) of 19% to $163,468.5 million in the year 2025 (PR Newswire, 2021). The increasing preference towards trendy clothes, rapid penetration of social media, rising demand of sports and performance wear and low production costs are some of the factors contributing towards the growth of fast fashion market. Some of the major players include H&M Group, Uniqlo, The Gap, ASOS Plc, Nike and others(PR Newswire, 2021).The female segment has emerged as the largest segment of this fast fashion market, which is expected to become the fastest-growing with a CAGR of 30% by the year 2025. In this industry, the top ten competitors account for 29.13% of the entire market as of 2020(PR Newswire, 2021). Thus, the attractiveness of the fast fashion industry has encouraged various players to enter into this market, thereby enhancing the competitive intensity. Besides, United States, China and Japan constitute the three world largest apparel markets with the four main product categories being womenswear, children swear, menswear and sportswear (Smith, 2022). Despite being countless fast fashion retailers across the world, the biggest companies like TJX Companies, H&M and Inditex control the majority of the market. Moreover, while Gap Inc became the top selling retailer in casual apparel, Louis Vuitton was the top one in luxury clothing as of 2020(Smith, 2022). Various other valuable fashion clothing brands include Adidas, Gucci and Nike. The intense competition makes it essential for well-established brands like Nike to work hard for maintaining their sharein this market (Smith, 2021). Thus, large players continue to produce new styles of apparel for both men and women.
Fast fashion customers have become more demanding that has been forcing retailers to provide them with the right product at the right time. The consumer market remains fragmented based on the consumption patterns, thereby making fast fashion more preferable to the customers (Hooley, Piercy and Nicolaud, 2012). This fast-fashion has emerged as a consumer-driven approach that provides information and trends across the globe at rapid speeds for catering to the changing needs and demands of these customers. Thus, proper marketing strategies for enhancing the satisfaction of fast fashion customers has become essential for the retailers. Furthermore, the target market of these brands mainly consists of female customers belonging in the age group of 18 to 35 years as it is the largest segment of the brand. These customers are generally young, price conscious and highly sensitive to changing fashion trends in the market (McDanieland Gates, 2012). This makes it essential for the brand to produce new styles for their changing preferences and tastes with the fluctuating fashion styles in the industry. For example, Zara follows a customer-centric business model for responding effectively to the needs of its customers through delivering best experience. For this purpose, the brand focuses on delivering the exact products as its customers want irrespective of their locations by paying close attention to details and using industry-leading technologies (Inditex, 2022b). The brand constantly emphasizes on meeting customer needs, refreshing stores and online platforms with new products twice every week. Customer-focused innovations are also undertaken for responding to their needs both face-to-face and online with technologies like radio frequency identification (RFID) system and integrated stock management system (SINT) (Inditex, 2022b). Various other customer advances provided by the brand are store-mode concept, virtual fitting rooms, same-day delivery and returns consolidation service. These strategies help in catering to the needs and demands of the customers.
Various advertising strategies and techniques are undertaken in the fast fashion apparel industry for reaching the target customers. Retailers often use omni-channel for maximizing advertising efficiency through focus on brand features, centralizing supply chain management and consumer services (Ye, Lau and Teo, 2018). It has been observed that this addition of more channels in a volatile fashion and apparel industry helps in bringing short term sales through mass advertising. Furthermore, fashion retailers undertake digital various marketing materials such as word-of-mouth advertising, content clicking and sharing for enhancing digital consumer engagement as means for staying connected with the customers (Thompson and Brouthers, 2021). In this type of advertisements, the retailers focus on various cultural perspectives and national cultural differences for reaching and engaging with the customers. Mass advertising is another strategy that fashion brands use for reaching large number of prospective customers through different mediums like television, social media, magazines and outdoor advertising (Lee and Carter, 2012). Television can be considered as the fastest means of telecommunication medium for transferring and transmitting multicoloured images and videos to people every day, while social media platforms are used for posting links of products and brands. Magazines help in influencing the decision making through building relationships with customers and outdoor advertising involves billboards, banners, posters and others displaying a story of the fashion brand and its products (Lee and Carter, 2012). Besides, the portrayal of women in fashion advertising has changed over the years for influencing the target customers. While previously women were stereotyped and objectified in such advertisements, now this portrayal has transformed into display of women in powerful positions in fashion ads. This has helped in gaining increasing attention of young female customers comprising majority of the target market of fashion apparel brands (Drake, 2017). Moreover, Instagram has emerged as a highly preferable platform in the fashion apparel industry for its visual business. An increasing number of these fashion apparel brands are growing based only on online platforms without any physical presence, which shows the power of social media advertising. Instagram provides a visually aesthetic and interactive forum with active participation from the prospective customers in the form of comments, followers, likes and views (Bharti, 2021). Fashion brands often collaborate with influencers over this platform that helps in reaching out to a large number of audiences. Thus, these are the ongoing trends of advertising in the fast fashion apparel marketplace.
Application of Brand Management Tools
It is essential for companies to cultivate a brand culture for powerfully, competitively and consistently delivering its brand, products and brand name in the market. This helps in reaching out to the target customers and persuades them to purchase from the brand (Schembri and Latimer, 2016). Brand culture encourages the employees to abide by the company values, mission and principles of the organization. Zara cultivates a culture of customer co-creation by responding to their changing needs and preferences with new styles and products. The fashion brand was successful in identifying a market gap that few clothing brands were capable of addressing with their products and services (Martin Roll, 2021). This helped it to undertake this opportunity and build a brand culture of keeping pace with the latest fashion trends and changing customer preferences in the fast fashion industry. While other clothing brands have often failed to identify the needs and wants of the customers, Zara closely watches the current market trends and the changing fashion styles everyday for including them in its products (Martin Roll, 2021). It takes into consideration these latest styles and trends for creating new designs and putting them up in the shelves within two weeks. This shows that the fashion brand extensively focuses on the customers’ preferences for producing its styles and products, which is the reflection of its co-creation culture. In this regard, the company not only solely depends on market research but also customer feedback for knowing about the latest designs, trends and styles and consequently, incorporates them into its product range.
Brand strategy can be referred to as the long-term plans, goals or activities undertaken for enhancing the preferences and identification of the brand in the eyes of the prospective customers (Blythe, 2009). It is the systematic alignment with the business strategy of the company for ensuring positive experience of both customers and prospects with the products or services. Zara uses different branding strategies for increasing its brand awareness and preference amongst target and prospective customers in the fashion apparel industry. It undertakes a powerful marketing pull strategy by creating customer curiosity about its products and services (Danziger, 2018). This strategy emphasizes on pulling customers towards the brand instead of pushing the products to them. In this regard, it offers augmented reality experience to the customers in the stores for providing them with the opportunity of seeing models wearing selected clothes. Furthermore, Zara has evolved the four P’s of marketing into 4E’s through experience replacing product, exchange as new price, evangelism as promotion and every place as distribution(Danziger, 2018). These strategies have helped in putting customer at the centre of the business model around which the brand has been evolving. Besides, Zara focuses extensively on the customer as it enhances experiences for them, exchange with them, ensure evangelism through customers and make sure to offer products at every place for them. Instead of product, experience is considered more important for the shoppers, which is taken seriously into consideration under Zara’s brand strategy(Danziger, 2018). Thus, it makes sure customers have seamless experience at both retail outlets and online stores.
Retailers should focus on building successful brand architecture for enabling customers to express their preferences and opinions about other product ranges through proper interaction and learning with the brand (Brexendorf and Keller, 2017). It helps in organizing brands, products and services so that the audience are able to access or relate to the company. In this regard, Zara follows an upside-down business model unlike the top-down approach undertaken by other fashion brands. It collects information from the customers about their tastes and preferences by going out in the streets, malls and other destinations for reviewing what they are wearing (Chu, 2019). Furthermore, store managers also analyse what customers like for reporting them back to the marketing and manufacturing department at the headquarters. This approach has enabled Zara to create designs based on customer feedback and tailored based on their regional preferences. Besides, the company also relies on this approach for advertising(Chu, 2019). While other fashion brands dedicate their advertising budgets on billboards and commercials, Zara depends on the customers to advertise about the brand and its products through word-of-mouth advertising. This helps in attracting more customers to the brand as they naturally believe on first hand feedback rather than commercials or advertisements of the companies. Moreover, Zara also eliminates the risk of products not resonating with the buyers as it designs, produces, distributes and sells the collection in just four weeks instead of several months as taken by other competitors in the market(Chu, 2019). Thus, the brand further updates its stores with two new designs every week by keeping low inventory levels.
It can be referred to as the act of building perceptions in the target customers’ minds by distinguishing itself from the competitors. Brand positioning is a marketing strategy that helps in designing the image and products of the company to occupy a distinctive place in the target market (Dwivediand McDonald, 2018).Thus, it is more than the brand logo, design or tagline present in the company. Zara undertakes a user-generated approach to fast fashion by relying on a global network of shopper-feedback for modifying the product designs. It collects feedback from fashion apparel shoppers across the entire world for introducing them in its next designs (Thompson, 2012). This helps in shipping back the clothes and changing the stock frequently, thereby motivating buyers with a “now or never” choice for trying on clothes and purchasing them. This positioning strategy has become successful as the brand has created a successful image of providing the latest designs that survive in the stores for only two weeks. Besides, instead of spending excessive budget on advertising, it advertises itself as affordable luxury fashion brand in the target customers’ minds(Thompson, 2012). Thus, it undertakes an efficient, cheap and short supply chain strategy for delivering similar luxury and latest fashion designs at much lower prices to the target customers.
Marketing in Future
With the outbreak of the COVID-19 pandemic, the buying behaviour and consumption patterns of customers have transformed. Fashion retailers have experienced substantial shocks to their business models and operations including Zara (Shabirand AlBishri, 2021). Seasonally based offerings, short shelf-lives of inventories and outlets closed during lockdowns made it difficult for the retailers to sell their product lines. Shoppers were being prevented from or unwilling to visit physical stores, which made it essential to rely heavily on digital channels for incurring revenues. In this regard, Zara has performed successful as its parent company Inditex had already established digital sales strategy in the past(Shabir and AlBishri, 2021). Customers switching to online shopping in large numbers must be addressed in the coming future. Zara should continue to focus on offering multi-sensory shopping experiences to the customers with the aftermath effects of the pandemic. Furthermore, consumer behaviour has transformed because of the pandemic. Customers are now preferring loungewear while working from home and remaining in lockdown, which is expected to increase further in the coming years(Shabir and AlBishri, 2021). The fashion brand needs to introduce new designs and styles of both gym wear and loungewear in the women’s section for catering to these changing needs. Besides, the pandemic has created financial crises for individuals and the economy, thus, customers now prefer products at affordable prices(Shabir and AlBishri, 2021). This makes it essential for Zara to continue offering fashionable and latest designs at low prices to address the customer demands. Furthermore, Zara needs to alter some of its marketing strategies for coping with future challenges. It should focus more on digitalization for handling the changes in consumer behaviour. In this regard, it must modify its shopping website and application for enabling customers to have a more pleasant and seamless shopping experience that can enhance their brand loyalty. It can invest further in virtual reality for providing the offline shopping experiences at the online platform. This will help the customers to imagine the scenario when they wear selected clothes, thereby making it clear how they will look in the products. Thus, virtual reality will help in reducing returning of apparel products and enhance competitiveness of Zara in the fast fashion market. Besides, the brand needs to use social media platforms for enhancing its advertising. This is because e-commerce platforms require more promotion for gaining the attention of the target customers. In this regard, Zara can collaborate with online influencers over Instagram, YouTube and Facebook for promoting the launches of new styles and designs. This will enable the brand to capture the attention of the followers of these influencers and identify prospective customers from them. Moreover, the fashion brand needs to continue upgrading its products for surviving in the future to enhance its brand image in marketing. It can introduce better fabric quality for producing high-quality products and building a high-end image amongst the target customers. This improved quality and texture of the apparel products can cater to the preferences and needs of the rising middle class across the world.
The purpose of this essay was to evaluate and analyse various marketing and branding strategies of the chosen company Zara, which is one of the largest fashion retailers in the world. For this purpose, the introduction section provided a brief background about the importance of branding and marketing in today’s competitive business world, followed by a background of the chosen fast fashion brand. The main body of the essay focussed on three fundamental questions or objectives. It critically analysed the marketplace of Zara by taking into consideration the competitors, customers and advertising strategies generally used in the fashion apparel industry. This part helped in identifying the presence of large number of competitors, increasingly aware customers and effective digital advertising techniques used in the marketplace. The second objective was fulfilled by applying different brand management tools such as brand culture, brand architecture, brand positioning and brand strategy for understanding why Zara is considered as one of the top 100 valuable or best brands in the entire world. Each of these tools helped in finding out how the brand has been successfully operating in the competitive fashion industry by keeping customers at the heart of its business model. The, third objective or question was answered by providing different ways and strategies that Zara needs to undertake in the near future for its marketing and branding effectiveness. Thus, each of these essay objectives enabled in displaying the importance of proper marketing and branding that helped Zara to emerge as one of the successful brands.
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