Marketing Problems And Issues Faced By Zara Marketing Essay

Marketing Problems And Issues Faced By Zara Marketing EssayZara habilitate is a part of Spanish base Inditex Group, launched in 1975. The gross sales voice of Zara wooume is 63.8% in the groups tally sales of the financial category 2009.Zara enclothe has two main ingathering divisions mens and womens app bel. Zara is knget for its innovative projects around the globe each of the turn line consists of the pursuit divisions Upper Garment, Lower Garment, Shoes, Cosmetics and Complements. Kids clo social occasion is included in Zaras catalogue as well. Zara is a vertically merged retailer which designs, produces and distri hardlyes.The company deals nearlyly with the supply-chain, un kindred in the edged(prenominal) competitor retailers of the analogous food mart, around half of Zara clothing returns atomic number 18 produced in Spain, whizz trine in the rest of atomic number 63, and some in Asian countries and the rest of the world.ZARA has 1,608 submits (in cluding 213 ZARA kids investment firms) in 74 countries. So while competitors go to Asia for outsource production, Zara pee-pees most of its dashing items and distributes them to its own stores located in all major cities around the World. At av termge Zara clothing store is to a bulkyer extent than 1500 square meters of pure street smart fashion.Zara clothing brand is dealing with over ten thousand clothing items a year and Zara has a schema of launching and distributing a novel product to the stores in entirely time of two weeks. In a result, Zara stores in all change their clothing items each month. Only in the UK, Zara has to a greater extent than 50 stores in diametrical cities, making Zara the most famous world-wide retailer in the country. Zara clothing is also taking over the Ameri flush toilet continents by opening multiple locations in The US, Canada and South American countries. most(prenominal) of the US cities already have Zara clothing sales locations and at that place are plans to open twice as umpteen stores.According to AT Kearney, the consultants, for the past three coarse time India is at the top of the list of the most glossy grocery store for retail investment.According to Tehnopak, the retail consultants, the revenues of corporate retail arena in India leave grow 20-fold from 7bn ($14.1bn, E10.3bn) to 140bn over the coming decade. This will lop the merchandise share of the small family-owned stores that dominate Indian retail.Zaras entry is a test of whether its fast-fashion concept will catch on in India. Zaras label is its expertness to design, manufacture and deliver a new clothing design to its shops within just two weeks, compared with a nine-month manufacture average. It takes roughly four-spot weeks to ship a container from Spain to India. Zara already has shops in 74 countries of the World.Financial Highlights (financial year 2009)The financial year 2009 ended with a issue rate of 9% at constant exchan ge rates. Inditex has also maintained comparable sales over the course of the year. The gross margin, which has increased by 7% to 6,300 million Euros, soakeding a 57.1% on sales, 27 basic points to a greater extent than in the previous year. Operating expenses remain low strict control, with a step-up of 7% mainly due to the new retail areas.The contribution of sales in stores located outside Spain has reached 68% of the total figure, and all handcuffs have increased their sales percentages on international trades, demonstrating their desire and ability to expand at a global level. The scale of this effort is snuff it if we recall that during 2009 al iodine, we increased our overseas presence to a total of 46 countries. Zaras sales have seen a net growth from 4% to 6% at constant exchange rates, with a 5% growth in EBIT.The main indicators for the financial year 2009 of the group are as to a lower placeNet Sales 11,048 MillionsEBIT 1,729 MillionsNet Sales Zara 7,077 Millio nsEBIT Zara 1,105 MillionsEBIT Margin Zara 15.6%Problems and IssuesMarketingZara has pick out a different merchandise strategy form beginning which is non to advertise through traditional media. There are not many bank linees which are running without any market in this age of colloquy and technology. If some business is doing good without marketing it dose not mean that the business has captured supreme market and there are no more(prenominal)(prenominal)(prenominal) opportunities to grow. If some business is already doing well, it can do better by launching a marketing campaign and can get more market share.But in last 2 years Zara has changed its strategy slightly and started campaign through some social entanglementing website to keep in get through with its customers.Political issuesAccording to Fareed Rafiq Zakaria who is a famous Indian American journalist the Indias democracy system has all ability to qualify for il at large(p) democracy. So that is why the po litical system is volatile and takes any controlling or negative impact on economy on daylight to day basics. Major political and topical anaesthetic anaesthetic political powers plays important use of goods and ser depravitys in major citys economy.Foreign investor Zara has truly sensitive about its liberal policies due to its main origin of business in Europe is liner very illiberal policies of government in its labour law. And also media the ahead pillar of political system play an important part to jounce the economic system by flaring up political issues. ascribable to this Zara is reluctant to invest more in Indian cloth constancy which is growing with a GDP of 9% annually.ProductZara is based in Europe, so it has 3 to 4 main polishs which are utilise by its designers most of the time. But in India there are loads of colours utilise in readymade cloth industry e peculiar(a)ly glaring colour. Female and male clothes lot of or small embroidery work is like which is lack of Zara fashion designs. Indian consumer likes bright colour for party occasions.Social issuesCultural differences in India and Europe has a great impact on sales in India due to its designs which are more influenced by Europe. Statistics shows that the Indian cloth market is 490000 million rupees and 30000 million rupees market is only European based apparels. Zaras limited origin designs make its global brand image of fashion industry. Zara opened two shops in Indias underpass cities New Delhi and Mumbai but both have vast cloths cultural differences. In New Delhi customers like Indian dresses more than distant designs but vice versa in Mumbai. There are also traditional cloth designs for special occasions which are lacking in Zara stores.WeatherIndias weather is whole different from Europe because of its five utmost(a) tempers (summer, Monsoon/rainy, pass, spring, autumn) in a year. The winter is of very short duration and not too much nipping as compared to Europ e and summer (April, May and June) is warmer than Europe. Variation of season requires rapid fashion change harmonize to topical anaesthetic weather. At Zara store you will get under ones skin most of the cloths for normal weather and not for extreme weather.Legal issuesIn India there are some legal requirements for foreign companies to start business and the most important one is that you have to make a local partner from India. Zara has started its business with the collaboration of Tata a local Indian business company. Next, Marks Spencer, Accessories, Debenhams and Guess have all franchised their stores to India. different conundrum in India is the implementation of written matterright law. This is a fact that the day Zara will launch its new design in Indian market it will be pirated in couple of days and you will find the same design at very lower impairments in the local shops.Economical issuesThe growth rate of Indian economy is comparatively towering but it does not affect the life of common throng very much because of the un have-to doe with distribution of wealth. So the whole population of India should not be considered as a target market of Zara.On the opposite side proud rate of taxes for foreign companies also results into higher prices of the products. Mango, Guess, Esprit, and cut Connection are also in line with Zara prices in other markets including Singapore, Dubai and some European markets. It is surprising that the prices in Singapore and Dubai are little than India because Indian duties could add 30-40 percent on retail prices, while duties in these countries are much lower. Devangshu Dutta, managing director of Third Eyesight, a retail consultancy based in the capital, reckons that Inditex may be taking a long-term scenery of the Indian market and relying on strategic pricing.THE DELIVERY OF A strategical MARKETING SOLUTIONZara has a very committed and paid police squad consists of more than 90,000 people. In my point o f view Zara should review its strategies and policies now as Zara is now entering in totally different and more warring markets, like India, of the World. The SWOT analysis of Zara is very financial aidful to understand the site which Zara is facing today.StrengthsZARA has a very strong market Image due to note, style and approachability of products.Product/ Brand Image is also very high because of very high quality, reliable products for children, women and men.Strong financial place of ZARA is also our specialty which will help us to invest adequately to get favorable results.Due to strong market seat there is availability of finance from other financial institutions like banks.ZARA can pull ahead in saving the speak to from alive infrastructure of suppliers.Vast network and store on different main locations all over the UK, Europe and other regions of the World is also our strength.At this time we have availability of suppliers who can provide us required raw material on good prices and we can nominate good transaction with them for future when the contention will be higher.Online availability of our full catalogue is also our strength and customers can see, choose and make a final decision by just sitting home.WeaknessesDue to no marketing strategy and think the growth rate of market share is very low.High product price is a weakness but we can not compromise on quality and customer services.Proper perplexity and implementation of the new system can take time.OpportunitiesWell planed customized marketing campaign according to the current requirement of the time.New market attend is the next timber after capturing our existing market we can go to US and interchange Asian markets more deeply.More innovation, improved quality and value added products for our customers.word sense of new technology will help us to lower the cost of our products.Re look for and development department can be made more efficient and strong for product improvement and availability of the products.Improved and more tensenessed customers service.Continuous training of the staff and labor for cost in force(p) production.Strive to exceed the customers expectations through quality, innovation and customers services.Increase in promotional activities through online marketing to get maximum market share.Building relations and long term contracts with the suppliers will be beneficial for future buying.Threats portal of new competitors is a threat for our product which can be avoided by building stronger product image in the mind of customer.Unavailability of competent raw material because of high number of customers for raw material in the market.In the near future there will be high price of raw material due to increased demand.Availability of raw material in future is other threat and can be managed by involving maximum number of suppliers in the beginning with small measuring rod orders to all the suppliers. Order quantity can be increased i n future as per demand.Low buying power of the customers in existing markets is also a threat and can be managed by inquisitory new markets.Keeping in view the SWOT analysis and our problems and issues Zara should contract on the following points and develop a strategy accordinglyRecommendations advertizement and MarketingUnique approach of advertising and marketing within the business model of Zara adds an extensional factor to their success. A 0.3% of total income is spent on marketing and advertising. This amount is significantly less than the competitors of Zara who are spending 3-4% of their total revenues on advertising and marketing. The main competitors of Zara like next, Bhs, Debenhams, New Look, HM, John Lewis, MS, asos, peacocks and topshop are the main stores which are more foc apply on marketing oddly on online presence and are among the top list stores on search engines in fashion and clothing search results.Because Zara is not in lay any effort for online marketi ng, that is why we do not find it in search results.In this age of communication and technology it is very impregnable to run a business without marketing and interaction with existing or potential customers. In my point of view Zara should now develop its own IT and marketing department and should launch an online marketing campaign through search engine optimization, social networking websites like facebook, twitter, bebo etc. Email marketing is another super reliable and reachable idea to convey the message to maximum number of customers in no time. The list of emails can also be used to keep the customers update with latest offers in the store.By using Zaras own website and these social networking website people can keep in touch with store without coming to store and this thing will increase the market share with the help of low cost solution of online marketing.Interactive websites are the main source to attract more traffic and keep in touch with customers which helps to im prove and change in products according to the requirements of the customers. This is also the speedy way to get feed butt from our valuable customers around the globe.At the moment Zara is more focusing on the development of its stores on the apex locations on the high streets which is also a good strategy but it can not be replaced with a well prepared professional marketing campaign which can bring thousands of customers to the store in days.With the help of fully functional interactive website customers can give feed back immediately after using the product and we can improve our products quickly.In the big countries like India where the presence of somatogenetic stores is not feasible in every city because the buying power of the customer is not equal and to open a store for small number of customers can not add anything other than heavy losses. In situation like this online store is the best idea to serve the customers who do not have physical access to the store but can a fford and buy from online store. Because in India we can find our customers in many cities but the number of the customers will be low, so online marketing and online store will be more helpful to satisfy that market.Additionally, because of the short product development cycles, customers can be trained to visit Zara online stores most of the time because new items are presented periodical and are not restocked often. This feeling of scarcity encourages customers to come to online stores and buy frequently. In order to keep our stores looking fresh and trendy Zara is investing severely in their store layouts. Each Zara store is remodeled every five years in order to update with current trends. Same strategy should be followed in India as well to maintain the international standards. Direct marketing is not the top priority of Zara, in fact its the cost usefulness and maintenance of brand that adds value to company.Zaras inorganization and communication protocols are highly differ entiated from its competitors. Zaras expenditure on IT comprises of less than 0.5% of total income on schooling Technology and IT employees are only 0.5% of total men of company. In pedigree to this Zaras competitors spend around 2% of total revenue on IT and 2.5% of their workforce is involved in IT. Main faunas utilized by Zara are compassionate intelligence, from store managers and market research, and information technology such as their organizer devices which forms a hybrid model for information flow from stores to headquarters. For example, handheld devices are provided at Zara stores which are used by managers over there for move standardized information including customer feedback and ordering needs to in-house designers. So this is the rouge to keep the designer updated regarding rapidly changing customer demands and trends. Zaras designers not only keep themselves informed of fast-changing trends and demands of customers but also participate in formation of hybrid model. Zaras competitors entirely rely on IT applications so here once again Zara wins the differentiation by incorporating human intelligence in its hybrid model. Zara obtains uniqueness by adopting human intelligence assisted IT solutions leading to well-organized inventories, thoroughly linked demand and supply, and decreased costs from obsolete merchandise but this is not the end , there is always room for improvement. IT surgeryes need effective management of levels of inventory. The information and communication system owned by Zara leads to cost advantage to Zaras operations and adds capability of responding rapidly and up to the mark.Zaras business model demarcates its unique concept, capabilities, and value drivers and these have leaded the company to the path of success. Fully unvoiced core operations and production abilities, resistance to outsourcing, pin point focus on fashion has given recognition in fashion industry and market. To sustain and maintain such sort of differentiation in the era of global expansion there is need to adapt business capabilities of product development, cost of production, marketing, information and communication technologies and strategic partnerships.Mass media advertizingIt is one of the basic requirements of a company to promote the sales of its products. In addition to this, it works as a building block in the process of building of brand identity. Further more it plays important role in communicating changes or changes or new arrivals to the customers. Advertising is considered to be one of the essences of fashion industry. Advertising if properly planned would increase the buzz-value of Zara.For achievement of our objectives following branches of advertising would be utilized. When these media will come into play every segment of the society would be having awareness to Zara.Print AdvertisingThe print media be one of the cost effective source of advertising.Advertisement of products can be carried out via newspapers and magazines. Additionally promotional brochures and fliers would serve the same purpose.The selling price of advertising space in newspapers and magazines is directly related to the position win by advertisement and the readership of the publications. Our advertisement would be published on the most popular and glossy supplement of magazines and newspapers to catch the eye of customers.Outdoor AdvertisingBillboardsBillboard advertising is very common in Delhi and Mumbai and this trend is red to be followed by Zara to grab the attention of the passers by. This would be supplemented by other outdoor advertising methods to capture larger portion of market.KiosksIt is not operose to find malls and railway stations in cities like Mumbai and Delhi. Keeping this thing in mind provision of kiosks can also provide well-situated outlet for the products of company. Zara would use this marketing strategy as well.Tradeshows and EventsWe have plans to organize trade fairs, exhibit ions and events to draw attention of customers. It would be achieved in collaboration with different local companies which promote fashion industry.Covert AdvertisingAdvertising in MoviesAll of us hunch over that India is famous for its movie production. We would use this tool as covert advertising as a unique mannikin of advertising. Almost every weekend a new movie is released. Thousands of people come at one platform and the same platform can be sponsored by Zara to gain the advantage of grabbing customers.Celebrity AdvertisingWe know that audience in India follows the trends adopted by celebrities over there. Celebrities like ameer Khan and John Abraham have already played their role in Zaras promotion campaign. To keep the pace with this strategy is still the part of our marketing layout.Pricing StrategyIn the beginning the competitive pricing strategy should be adopted to capture more market share in India because in most of the large cities of India international brands an d stores are already available. integrity more thing is local shop keeper who will copy Zaras designs and sale them in the market on low prices. To avoid this problem brand image should be communicated through advertising so that customers do not only consider the design but brand and quality as well.For brining marked reduction in prices the production can be started in the host country which will decrease our operating expenses like freight, high cost labour in Europe, import taxes and duties in India. by and by taking these steps we will be able to compete in the market very easily and can get benefit in long run.ConclusionZara has a very strong financial position and growth rate in last couple of years. As Zara has already opened its stores in many developed countries and has started to enter in under developing countries like India, Zara should review and change its strategy related to marketing and production because the circumstances and situation in under developed countri es is totally different from developed countries. In most of the developing countries advertisement plays a vital role to communicate the message to the target market curiously highly populated countries like India. Marketing is very necessary for the growth of a product or brand and get maximum market share in short time.Traditional and non traditional media should be used to achieve the objectives.Production can be started in the countries where you are sledding to open new stores this thing will help to reduce the cost of production, time form production houses to outlets and will increase the safety of the products as well.Another considerable advantage of production in India is that Zara can build good relations with local community by offering jobs to local people and can get better understanding about the market and its requirements.The above mentioned factors will contribute a lot in the long run to get more market share and keep Zara in the Indian market.Friendster, 2009, Zaras Profilehttp//profiles.friendster.com/97785772Accessed 05-08-2010http//managementfunda.com/advertising-types/