ZARA’S

J. Aarthi
 Overview
• Business
• The world’s fastest growing fashion retailer
• Ranks among the three “global winners” with GAP and H&M
• Zara has filled untapped “Armani at moderate prices” niche
 Compelling mix of fashion, price and quality
• First store in 1975. Today, 650 stores in 50 countries worldwide
• Financials
• Sales: $5 Bn in 2003-04
• International sales 60% of total turnover
• Gross Margin: 52.6 % of net sales in 3rd Q2002
• Went Public in 2001
 Business Model

Supply
• Delivers fashion “when the customer desires”
• Twice a week delivery schedule
Demand
• No advertising or promotions
• 10,000 new items at highly competitive price
 Around the world
North America: Europe:
47 stores 407 stores

South America: Africa: 41 Asia - Oceania:

30 stores stores 7 stores
 Fashion Value Chain
Auxiliary
Enterprises

Selling Wholesale
Agents Jobbers

Spinning Knitting Apparel

Apparel&&
Agricultural plants and Converters
Converters Accessory
Accessory Retailers
Retailers
and chemical Spinners and
suppliers Weaving Manufacturer
Manufacturer
Throwsters Mills

Finishers Contractors
Vertically
integrated
Zara controls design, production and distribution
 Marketing Strategy
Product
• Introduce the occidental range of clothes for men
and women
• Introduce a small section of clothes designed by
‘upcoming designers in that particular market ’
through mass customisation
• Introduce cotton garments for the summer and
woollen/synthetic garments for the winter
collections

Price
• Use penetration pricing (20% lower than Benetton)
• Stay away from the promotion by ‘sale’ paradigm
of Benetton
 Marketing Strategy
Promotion
• Promotion targeted at increasing
awareness about Zara and the
concept of ‘Fashion at great value’
• Use of print and television media
• Tie up with colleges to sponsor their
festivals to increase awareness and
‘catch them young’

Place
• Set up factory(abundant labour)
• Launch in tier 1 cities especially in
prime locations initially and then
expand
Questions
Thank
s