ZARA-Bee Kanpaibool,  Dylan Yong Ziyi, Jonas Chiu, Karan Aryaman Marwaha

CONTENT• Introduction• Models• SWOT• Booms and Bitners (1981) Extended Marketing• Social Marketing• Green Marketing • Production Strategy• McDonaldization• Four Dimensions• Survey• Problems and Recommendation• Conclusion+Reference List

pLEASE SAVE YOUR QUESTIONS TILL THE END.

IntroductionOwned by Inditex

✓Based in La Coruna, Spain ✓Fast fashion strategy

✓30,000 designs per year✓40% of designs produce in-house

✓Stock updated twice a week✓Vertical Model – Limited Outsourcing

✓Zero Advertisement

SWOTStrengthsA top game player in fashion industryDifferentiated in High price fashion retailing marketOwned more than 1,540 stores worldwideDedicated supply chain processFast Fashions

OpportunitiesExpanding into potential new market eg. China, AustraliaConstant use of social media marketing strategyExplored the Online marketing strategy

WeaknessesInsufficient of advertisementsNot many countries have online stores Stocks are running out quickly

ThreatsFacing rival competition in the industryCheaper alternatives may be available in economic downturnHigh head office cost given ZARA based in Spain

analysis map of zaraAdapted from the Survey.

Services Marketing

•Service processes•Customer experience

•Customer perceptions •Physical appearance

•Service Delivery•Brand differentiation

E-Commerce and marketing

• Online Retail: Sales have risen by 17% of the

overall sales. (BBC, 2012.)

• The Zara online stores operate in 32

• countries.

• Social Networking:• Facebook: 16million LIKES.

• Twitter: 175k followers.

• Instagram: 168 followers.

Why spend a penny on above the line

adverts when you have this.

AIDA

Attention (Zara, 2010)- Providing mass of products- Building good will

Interest (Zara, 2010)- Selling fashionable clothing at

reasonable price

Desire (Dailymail, 2011)- Using celebrities to stimulate

consumption. (Kate Middelton)

Action (Adhiya, 2008)- “Fast fashion” at affordable price- Advertising through Internet

Marketing mix

Product (Fashiongear, n/d)

•Affordable and fashionably up-to-date

•Opening Zara Home

•Ecological fabrics and raw materials

•Stalk is updated every two weeks!

•10,000 DESIGNS A YEAR. NEARLY 28 NEW DESIGNS A DAY!

Price (Zara, 2012)

•Low prices

•Cutting costs with maximum efficiency

•Online shopping

Promotion

•Below the line advertising (Hoang, 2007)

•Cutting costs significantly

Marketing mixPlace (Marketing Mixx, 2011)

•One of the largest clothing retailers

•Location considering demand and timing

Physical Environment

•The Stores atmosphere sells itself!

People (Phillmore, 2009)

•Very Particular about who they hire.

•Lean organization structure.

gREEN MARKETINGZara in Rome: 30% less energy

70% less water. 5000 (Indidex) STORES 77 countries all are being converted to eco establishment.

Ethics in distribution and place (Zara, 2010)

-Biofuel-Packaging: recyclable-Electricity: reduce carbon foot printIs this Green Marketing? ZARA vs.

H&MEthics in production(Zara, 2010)-Cloth: fabrics are bio degradable-Recycling-FSC/ PEFP mark

Reputation and production

Good Will-Hire Handicap Workers-Start producing more ECOfabric-They make sure they portray themselves

and the good guys.Batch production

(Hoang, 2007)-“Fast fashion”

Cell production- Batch Production-Producing goods in cells-Along with batch production

zARA AND McDonaldization

In what ways are Zara behaving atypical of Mcdonadlisation and how has it differentiated itself against it?

Atypical

- Increasing proliferation of its existence worldwide headed by Inditex

Differentiated

- Less hierarchical and conventional structure within zara that is otherwise typical of a mcdonalised company

- Putting customer’s preferences as priority

How can Zara be used as an example of the increasing trend of Mcdonaldisation worldwide?

-Fast fashion retailing-What consumers have expected of high street fashion

-Benchmark of how future companies keen on this particular segment of the fast

fashion retailing industry should base their business models on.

[VIDEO]

MCdONALDIZATIONFOUR DIMENSIONS

Efficiency

- Quick respond

- Time Management

- Efficient supply chain

- Rapid production process and distribution process

Calculability

- Quantity > Quality

- Production process broken down to smaller assembly lines

- Specialization

MCdONALDIZATIONFOUR DIMENSIONS

Predictability

- Low predictability

- Short life-cycles of products

- Fast-fashion shifts trend extremely fast

- Difficult to expect and forecast

Control

- Produce in Europe

- Better control of production lines

- Higher costs due to high wages for labour

rationality and irrationality

What exactly is the ‘irrationality of

rationality’?

Rationalization can be seen as essentially

paradoxical. The ‘rationale’ for

rationalization, its a priori assumption, is that

increased efficiency, predictability, and

calculability is akin to an increase in the

ability of man to manipulate his environment,

to adapt, to conquer the chaotic elements of

life so as to obtain a quality of life that can be

considered ‘better’ than previous times.

However, the standard of living’ has come to

be defined not in a qualitative manner, but

rather as a quantity: of income

(Reymer,1995).

Recommendations and problems

Zara Process

Calculability Problems-

- Emphasis on high efficiency and fast

production processes

- Specialisation

- Demotivation of workers

- Quality drops

- Zara do not keep track of their inventory

- Zara lacks the ability to check inventory

within stores therefore real time counts and

scan must be done.

- Time consuming

Recommendations and problems

Zara structural flaws

Communication problem:

Absence of email address that allows efficient customer-corporate relations

Lack of advertisement: Advertising is the bridge between customers and companies and it is a part of marketing. The absence of this translates again to the lack of communication between both agents.

No networking capabilities:

Zara is not able to communicate between its stores and the home office in a fast and efficient manner due to the inability of individual POS terminal within Zara stores to communicate with any other terminals.

Survey1) Why do you shop at ZARA?

We found that most interviewees shopped at ZARA because of the fashion’s style, the current fashion trend and also the brand itself. Some respondents had also addressed price and location is one of the key determinant to shop at ZARA.

2) How often do you come to ZARA to shop?

Our respondents shopped ZARA at a range from once a week to once in three months’ time. The most responses we received are more than once within the month. This shows our respondents are keen to keep coming into stores to look for new products.

3) Do you feel that ZARA has become too commercialised?

Most respondents disagreed. This may suggest ZARA relies on ‘Word of Mouth’ rather than mass advertisements. 4a) List the following brands in order of your perception on their price? (1 being the most expensive brand and 8 for the lowest price) All Saints, Superdry and Hollister have been rated for the most expensive brand. ZARA has been rated by the respondents as middle priced brand, and Sport Directs is perceived as the lowest price amongst these options. 4b) List the following brands in order of your perception of them being fashionable brands? (1 for the most fashionable and 8 for the least)All Saints again was rated the highest in terms of fashionable. ZARA and Hollister have also been highlighted by our respondents as second or third most fashionable brand. Marks & Spencer and Sports Directs were perceived by our interviewees as the least fashionable brand.

Survey5) Do you prefer to shop online or come to the store?

We have received equal responses for both, and these were supported by different reasons to shop in store or online. We discovered that people prefer to shop in store because they wanted to try if it’s fit or not. In other hands, respondents tended to shop online because it is more convenient, more sizes and more choices.

6) Do you think ZARA keeps up with the current market trend?

Nearly all respondents suggested ZARA as one of the fashion market leaders, so with no doubt it is keeping up with the current market trend.

7) Are you aware that ZARA is under the Spanish firm inditex and what brand do you think are the biggest fashion retailer in the world?

Just one or two interviewees aware ZARA is a subsidiary of inditex. Many respondents suggested H&M and Marks & Spencer are the biggest fashion retailer in the world.

8) Do you think ZARA is ethical in its business practice or environmentally friendly?

Most respondents have said ‘NO’ in terms of ethics of the organisation. However, for those who have said ‘YES’ explained that ZARA have used paper bags to reduce wastage of plastic bags, which supports ZARA as an environmental friendly organisation.

9) How would you rate the quality of products of ZARA?

Almost all respondents were satisfied with the quality of ZARA’s clothing. Some of the respondents have specified that high quality deserves for high price in ZARA.

10) What do you think about the level of service that ZARA provides?

We have received many different views in regards to service standard, from which our interviewees have come up with various ideas for improvements. The majority of respondents suggested the service level in ZARA were just above standard, many of them were dissatisfied with the waiting time of queue and lack of personal care to its customers. There are also some suggestions to recruit more staff members and increase the number of changing rooms.

Conclusion

NOT completely McDonaldized

Main producers are european

HIGH Quality Standards

Survival and Efficiency=McDonaldization

reference listRitzer, G. (2010) The Mcdonaldization of Society 6, United States: Sage Publications.

Kluyver, C. (2010) Fundamental of Global Strategy, New York: Business Expert Press.

Ferdows, K., Lewis, M. and Machuca, J. (2003) ‘ZARA’, An International Journal, vol. 4, no.2, pp.62-65

Philmore, K. (2009) Zara’s Organization Structure.Available on: http://tortora.wordpress.com/2009/11/18/zara%E2%80%99s-organizational-structure/Accessed on: 19th February 2013

Paxman, L. (2011) A Race on Lace.Available on: http://www.dailymail.co.uk/femail/article-2071581/Kate-Middletons-Zara-dress-latest-frock-sell-hours.htmlAccessed on: 21st February 2013

Forgaard, K. (2010) The Strong Organization Culture at Zara.Available on: http://blogs.ubc.ca/kforgaard/2010/01/26/the-strong-organizational-culture-at-zara/Accessed on: 18th February 2013

Hansen, S. (2012) How Zara Grew Into the World’s Largest Fashion Retailer.Available on: http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-retailer.html?pagewanted=all&_r=1&Accessed on: 20th February 2013

ANY QUESTION?

thank you