Marketing Management And Strategy Assignment Sample

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Introduction of Marketing Management And Strategy Assignment

Marketing and advertisements are the most crucial factors for organizational services. A proper and strategical action plan for marketing is required for promoting the products. Without the proper marketing plan, brand awareness does not increase. Moreover, the brand may face a huge obstacle due to high competition in the market without an effective marketing strategy. In this report, a sustainable fashionable product development company, ZARAZ, has been chosen for utilizing the marketing strategy and plan. The report describes the segmentation, targeting and positioning, distribution strategy, and also a market analysis has been included in this report.

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Background

ZARA is a Spanish fashion shop based in Arteixo, Galicia. The company's rapid fashion services include dresses, accessories, footwear, swimwear, and cosmetics. It is the most powerful company in Inditex, with Bershka, the largest global clothing retailer. By 2020, Zara was handling around 15-20 fashion lines every year. The company has aimed at developing sustainable operations in product development by reusing and recycling the fibers for developing products (ZARA, 2022) ZARA has developed its image as the world’s largest fashion industry that follows the best quality and cost-affordable approaches for meeting the demands and requirements of the customers. The company also claims that by 2023, it will have eliminated single-use plastics from consumer purchases and would recycle or reuse 100% of waste generated at its offices and stores. As per Inditex, 88% of the effluent is currently reused or recycled. In order to progress toward a circular economy, the firm ensures that all of its stores will be provided with bins for accepting unwanted garments that will be recycled and repurposed. Nearly 34,000 tonnes of worn clothes, apparel, and accessories have been accumulated by these specialized clothing warehouses.

ZARA

(Source: ZARA, 2022)

ENVIRONMENT AND SITUATIONAL analysis

The environmental and situational analysis of ZARA includes the analysis of PESTLE for understanding the impacts of the external environment on the company. Porter's five forces to analyze the competitor analysis and customer analysis.

PESTLE

PESTLE

Political factors

These factors have an impact on how government can influence ZARA's growth. The government may adopt additional taxes or tariffs, affecting the organization's primary source of revenue. A government's fiscal policies, tax changes, trade tariffs, and other political concerns may have had a significant influence on the economy during the course of a year.

Economic factors

These are elements that have both short and long consequences on the performance of the company. The corporation's ability to decide pricing for specialized goods will be influenced by an increase in the rate of inflation. It can also affect a customer's purchasing power and habits. High inflation, interest rates, foreign currency volatility, and long-term socioeconomic trends are just a few of the economic consequences that must be considered while establishing commercial activities. When determining the pricing of items, this also takes FDI into account. Also, the GRP rate, economic condition of the country, per capita income, economic development, and unemployment rates are also important to consider before making any decisions to set the product price and marketing strategies.

Social factors

Customers' needs, preferences, and choices must all be taken into consideration by ZARA. Cultural attitudes, population, demographic trends, and the sector's socio-cultural environment are all included in these aspects. This may be seen in market shopping behavior during high-volume periods like festivals or the Holiday period.

Customers from different demographic areas, different geographic places, and from various cultural beliefs demand various products. It has a huge impact on the organization's marketing strategies and product development strategies. The products are developed to the demands of the customers.

Technological factors

The impact of technology on businesses has been significant. Social media and other digital media outlets have brought people together. Online shopping, payment services, and product reviews are also common. The company must improve the workplace's technological system in order to update procedures employing technology. Artificial intelligence and machine learning can be used to assess customers' purchasing patterns. They may also use a range of social media platforms to build relationships with customers and solicit feedback.

Legal factors

The Environmental Protection Act, the Environment Act, the Employment Act, the Consumer Protection Act, the Pollution Control Regulations, and the Workforce Safety Act must all be followed in order for ZARA to function effectively.

Environmental factors

Environmental elements have an influence on corporate functions as well. The corporation must adhere to regulatory norms covering plastic usage, as well as recycling of waste plastic materials and other pollution controls. The corporation must follow the organizational functions in light of these variables. ZARA needs to maintain the carbon emissions during product development. It is also important that the company uses eco-friendly products and services.

(Source: ZARA, 2022; Henry, 2021)

Porter’s Five Forces

Porter's Five Forces Analysis is used to examine how Zara's competitive environment affects its market. The purpose of the research is to evaluate the organization's position in light of factors such as newcomers, substitutes, buyer bargaining power, supplier power, and competitive pressures (Ford, 2020).

Zara's Five Forces analysis aids in determining a company's present market position based on criteria like competitors, buyers, suppliers, financial strength, and potential alternatives.

Threats of new entrants

Zara is a low-competition "fast-fashion" apparel company. The company's customer interaction strategy, branding tactics, market dynamics, and economy of scale provide substantial obstacles to new competitors. It benefits from supply-side economies of scale, which lowers overall product costs while making it more difficult for entrants to succeed (ZARA, 2022). Although buyer switching costs are modest, Zara's value proposition is to give customers simple access to apparel brands at a cheap price, resulting in brand loyalty and distinctiveness, which is difficult for newcomers to the market.

Threats of substitute products

In the retail industry, there are also multiple companies that offer a wide range of pricing, durability, and product offers, therefore product substitution is prevalent. Nonetheless, because there are several replacements for clothing, substitution by need is uncommon. Zara is still not in danger of getting evicted. In the fashion industry, all substitutes boil down to competition. There are very insignificant or minimum chances of substitute products to compete with the sustainable products of ZARA in the market (Mahardika, and Wayansantika, 2021). The companies delivering the products made of recycled and reused clothes are less in number. Therefore, the threats of substitute products are low or minimum for ZARA.

Bargaining power of the customers

The bargaining power of the buyer is moderate. They have indirect negotiating power, driving Zara and other fashion shops to innovate and vary in order to attract and retain customers. Because customers are not concentrated in one location, they have varying degrees of negotiating power (ZARA, 2022). As customers' switching costs are cheaper, Zara is under pressure to stay relevant and meet consumer requests while maintaining cheap prices. To compete, they employ a customer-centric strategy and strive to improve the consumer experience. Zara's supply chain network employs a vertical integration approach to ensure that its customers receive the most up-to-date fashion on a daily basis, resulting in higher consumer satisfaction. As the products with recycled and reused materials have no or minimum substitute products, the customers have minimum or zero chances to shift to other companies. This is why the bargaining power of the customers is low.

Bargaining power of the suppliers

 Bargaining power among suppliers is limited, if not non-existent. Zara outsources its manufacture, with the majority of its products coming from India, Portugal, Morocco, and other nations. Due to the wide range of items, the supplier's bargaining strength is restricted. Zara and other apparel giants set the pricing, and suppliers only get a small cut of the profits (ZARA, 2022). There is no variance in the items given by suppliers, giving the company a competitive advantage. The danger of supply chain forward integration is limited since it necessitates huge expenditures. The corporation has purchasing power because it can swap or replace suppliers or vendors at a fair market price or use enhanced integration (Ford, 2020). Zara also has its own production facility. Zara even has its own production facilities, reducing its reliance on third-party suppliers. As a result, it is strategically reliant on developing-country suppliers, where labor is scarce but supplies abundant.

Competitors

Zara competes with UNIQLO, GAP, H&M, Forever 21, Mango, and other large merchandising brands. There are a plethora of fashion retail operators, ranging from local to international, making this a highly competitive and price-sensitive industry (ZARA, 2022). Zara's brand and consumer involvement, as well as its diverse product offerings, allow it to compete successfully. As a brand, it is worth more than 14 billion euros. It focuses on a scalable and repeatable business model, producing unique and updated current styles on a regular basis at excessive costs, giving it a competitive advantage. Zara's supply chain approach employs vertical integration to ensure that its customers receive new attractive clothing on a regular basis, leading to increased consumer satisfaction.

Porter’s Five Forces

(Source: Ford, 2020)

Customer analysis

The customers of ZARA are people from different age groups starting from 15 years age to 40 years of aged people. Diverse demographic regions and age groups of people are the main segment of customers of ZARA. Men and women are the main targeted customers of the company.

Internal audit

Zara is concentrating on opening flagship stores in high-profile locations throughout the world and releasing high-fashionable consumer products every 4-5 weeks. Zara should keep in mind that there are potential new customers all over the world who may not be able to visit Zara in the United States owing to time constraints. Zara is not the best choice because of its inconvenient location (Mehmonov, 2019). It is also too cumbersome in terms of organization and location for a young lady who is juggling career and family responsibilities.

Despite the fact that Zara's online stores serve all of the primary functions, they do not conform to Zara's local appearance, which is unfortunate, especially when compared to H&M's innovative approach, which includes saving garments and sharing them on Facebook, Twitter, and other social media platforms.

Aims and objectives

The main aims and objectives of ZARA are to reuse and recycle the clothes for developing other products using those products. The company also aims to deliver the customers the products that are recycled. It will help in reducing environmental pressure.

SMART

Specific

Measurable

Attainable

Realistic

Timely

Development of social media marketing strategy

It can be measured when the customer base will be increased or the sales will increase.

It can be attained by using various social media platforms to connect the customers.

It is realistic as it helps in reaching out to the maximum number of customers at the same time. Also, it helps in analyzing the needs and requirements of the customers which can help in product improvement.

3 months

Improvement of brand image

It is measurable when the company can achieve a huge customer base by retaining the existing customers and attracting the customers.

It can be attainable by increasing the sustainability of the products, delivering cost-effective products, and maintaining the customer's satisfaction and loyalty.

It is realistic as increasing brand image can help the company enhance its development and growth.

3 months

Development of customer satisfaction

When the loyalty of the customer's increases.

It can be attained by Using the strategy to meet the requirements and needs of the customers can help the company increase customer satisfaction.

It has also a real purpose as increasing customer satisfaction can help the company increase its competitive advantage. Moreover, it also assists the company to acquire a market position.

3 months

(Source: Swann et al., 2022)

Target audience

The targeted audience of ZARA is men and women from the age group of 15 to 40 years. It is important to target a particular segment of customers. Targeting a particular type or segment of customers can help the marketing managers set strategies for the marketing plans. Setting a targeted audience is crucial because when the marketing managers target the audience they can identify the customer’s demands. It also helps in improving the product and service quality (Saraswat, 2018). The managers of ZARA can target the audience by focusing on some major areas to determine the targeted audience. The marketing managers need to research the market, customer base, customer requirements, competitor's customer base, and their products. These components can help the marketing managers of ZARA set their targeted audience.

Marketing strategy

The marketing strategy of ZARA follows some major areas including:

Segmentation, positioning, and targeting

To suit the changing demands of its customers, Zara employs a blend of demographic, geographical, and psychographic segment strategies. It uses a selective targeting technique to make its commodities available to customers because it has a restricted network of branches across the world (Camilleri, 2018). Zara uses usage-based positioning to emphasize its customer-centric program in order to fulfill changing consumer expectations throughout the world. Zara recognizes that its customers want unique and up-to-date designs, thus it caters to them exclusively through its merchandise. Zara has a limited number of stores throughout the world, therefore it uses targeted marketing to make its items more accessible.

Distribution strategy

Zara oversees the whole process of creating, transporting, and selling its items through all of its stores across the world, and ensures that new products are accessible in stores within two weeks. Zara's garments and accessories are distributed via many multi-brand shop outlets in addition to Zara's own stores, assisting the brand in its expansion into the world's urban areas (Saraswat, 2018). Zara's supply chain has been a competitive advantage for the business because it takes less time to deliver items. Using social media marketing strategies, the company will deliver the products to the customers through the online portal.

Marketing mix

The company's marketing mix is comprised of product, pricing, position, and advertising strategies.

Product

ZARA's executives will create high-quality products using recycling and reusing the clothes to increase sustainability in the environment. Customers' demands and needs will be addressed (Maruši?, 2019).

Price

The price can be determined by considering the effects of per capita income, economic growth, and the costs of competing businesses' commodities. The corporation will also establish a fair price for the items.

Place

The goods will be reasonably priced in all ZARA stores. Managers must also devise a plan for supplying goods over internet networks (Saraswat, 2018).

Promotion

In addition to social media, broadcasts, and advertisements in magazines, brochures, and TVs, the business's marketing plan should include social media, broadcasts, and advertisements in magazines, brochures, and televisions (Maruši?, 2019).

Marketing mix

(Source: Maruši?, 2019).

Implementation plan

Strategies

Action plan

Reason for plan

Possible outcome

Risk

time

Social media marketing

On various social media platforms like Facebook, Twitter, and Instagram, the managers will post the product details to the customers.

I will reach a maximum number of customers.

Brand awareness will be generated.

High risk

3 months

Customer engagement

Customers will be engaged by advertisements and promotional activities regarding the recycled and reused products for innovative product development and enhancing sustainability in the environment.

It will enhance the customer base and sales of the company.

The number of customers will increase.

Risk is moderate

3 months.

(Source: Pitt, and Treen, 2017; Roncha, and Montecchi, 2017; Saraswat, 2018)

Conclusion

Therefore, it can be concluded that the fashionable and sustainable produce development and their promotion need some effective stages. The company managers need to make a thorough research on the market, customer’s preferences and requirements. It is also important that the marketing managers have set some strategies to promote the products. Setting goals can help in obtaining the desired goals and objectives effectively. The apparel retailing market is very competitive, and shifting trends, socioeconomic factors, and psychological culture represent a major obstacle for businesses in this industry. Back end integrations, high material costs, and advertising expenses are some of the biggest problems that may have an overall impact on the garments industry.

References

Camilleri, M.A., 2018. Market segmentation, targeting and positioning. In Travel marketing, tourism economics and the airline product (pp. 69-83). Springer, Cham.

Ford, J.B., 2020. Competitive advantage. In The Routledge Companion to Strategic Marketing (pp. 141-150). Routledge.

Ford, J.B., 2020. Competitive advantage. In The Routledge Companion to Strategic Marketing (pp. 141-150). Routledge.

Henry, A., 2021. Understanding strategic management. Oxford University Press.

Mahardika, I.P.D. and Wayansantika, I., 2021. Strategies For Creating Competitive Advantage Through Product Development, Design And Quality (Case Study on the ZARA Brand in Badung Regency). American Journal of Humanities and Social Sciences Research (AJHSSR),5(1), pp.279-282.

Maruši?, T., 2019. Importance of marketing mix in successful positioning of products and services on the market. Ekonomska misao i praksa, (1), pp.431-446.

Mehmonov, S., 2019. IMPROVING METHODOLOGY OF INTERNAL AUDIT IN THE BUDGET ORGANISATIONS. International Finance and Accounting, 2018(1), p.18.

Pitt, C.S. and Treen, E., 2017. Understanding communication in disaster response: A marketing strategy formulation and implementation perspective. Journal of Public Affairs, 17(3), p.e1639.

Roncha, A. and Montecchi, M., 2017. The underpinning strategies leading to high value perception of luxury fashion brands. IUP Journal of Brand Management, 14(3), pp.7-21.

Saraswat, S., 2018. Strategies v/s Consumer Perception of Brand Zara-India. IITM Journal of Management and IT, 9(2), pp.68-80.

Swann, C., Jackman, P.C., Lawrence, A., Hawkins, R.M., Goddard, S.G., Williamson, O., Schweickle, M.J., Vella, S.A., Rosenbaum, S. and Ekkekakis, P., 2022. The (over) use of SMART goals for physical activity promotion: A narrative review and critique. Health Psychology Review, pp.1-16.

ZARA, 2022. ZARA India | New Collection Online. [online] Zara.com. Available at: <https://www.zara.com/in/> [Accessed 16 March 2022].

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