MBA-IB 2018-20

Division A
Salesforce and Channel Management
Semester 2

Akash Sharan 18020241005

Arun J 18020241013
Jasmine Chowdhary 18020241033
Kamya Agrawal 18020241034
Shreya Dasgupta 18020241067
Shriya Chandhoke 18020241039

Assignment 1
Sales Strategy in a Retail Store
Lifestyle store chosen: ZARA

1
Objective: To increase the sale of products through operational strategy in the store.

1. Product analysis

1. Describe the presentation of products in the store (display on shelves, window display,
mannequins, etc.), visibility given to each product category.

Ans: In Zara, we saw that the commercial space had a layout which was sleek with
minimal items thereby, offering a boutique type experience to the customers. The store is
very minimal and when you walk in, you will notice the bear walls so the clothes take
center stage ensuring that the customers aren’t distracted when looking through the latest
collections.
There are two floors with elevators being on the corner. The ground floor is dedicated to
women while the first floor was shared by men and kids collections.
The window display had a thematic presentation of collections with the mention of sale
due to the New Year week and the collection was highlighted by the usage of yellow
lights. The display windows of Zara serve a few main functions, including helping to
attract and draw the potential customers inside.
The color scheme draws customers to pick up more items because the items complement
each other well. Also from the fully dressed mannequins, customers are given more
inspiration from the way that the merchandise is displayed. Zara sets a cool mood,
keeping a certain image by using only wooden or black hangers, as well as placing large
mirrors around the stores and they usually reach from the ceiling to the floor.

2
2. Product categories on ground floor, 1st floor, etc and why such placement?

Ans: The women collection was present on the ground floor while the first floor had kids
and men collection fairly demarcated. The reason behind women collection on the first

3
floor is the impulse buying nature in women. Zara’s interior layout strategy presents the
Zara women section to the right of the entrance, followed by Zara Basic section to the
left, to the middle of the store and then Zara TRF is situated in the back as well as around
the fitting rooms.

Zara Women is presented with a very poised image and throughout the store various
fixtures fill and entice customers such as; fabrics, accessory columns and mixed displays.
Zara’s merchandising strategy heavily relies on colour presentation. It helps the
customers and the workers locate articles effectively.

The product categories were placed in a well-defined manner e.g. the collections are
scattered and the fragrance collection is near the billing desk.

3. Location of private labels (in-house brands)

Ans. The main brand of the Inditex group, the world's largest apparel retailer is mainly
present in the store. Apart from that there were brand like Massimo Dutti and Zara Home
which have specific location.

Any new products to be added or existing ones to be deleted?

They can also

2. Pricing analysis

Give your opinion on pricing strategy in the store.

Ans: Zara is well-known as its high-fashion, low-cost business model. Its ideology is that
people pursue fashion but don’t have enough money. And Zara helps its customers meet
their needs by adopting such a pricing strategy. Zara provides products at a reasonable
price to target customers. It mainly uses value-based pricing approaches. The strategy
focuses on customer’s perceptions of value rather than company’s costs to set price. Apart
from being a luxury brand, Zara prices are quite reasonable.

4
3. Promotional strategy analysis

Analyze the advertising and sales promotion activities carried within the store.

 Zara fundamentally get a lot of attention through word of mouth. Their target
market base is 18-40 year olds that live in and around cities, this is because; this
group is the most fashion conscious, more than any other group. Specifically, the
market segment comprises of women (65%), men (25%) and children (15%) all of
them being fashion conscious, educated and fall in the middle class category.
 Zara also benefits from endorsements from fashion experts and celebrities. The
Duchess of Cambridge has been pictured wearing Zara products

5
 Zara uses a mix of demographic, geographic and psychographic segmentation
strategies in order to serve the growing needs of the customers.
 One of the major strength of the company is that it is able to respond very quickly
to the changing needs of the customers
 The company does not outsource its manufacturing process, making it fully in
control of the products it produces.
 Its unique selling preposition is to create the latest trends. In most cases, new
styles are normally available on the sales stores within two weeks, four weeks
maximum. If a product is not selling in the stores, it is immediately pulled from
the stores.
 Zara has a unique marketing policy of “Zero investment in marketing”. Instead,
the company uses the money it would have used to advertise in opening new
stores.
 The striking thing about Zara is that it has found differences that matter to the
consumers and used that to differentiate itself from the rest of the competition. In
other words, its key marketing strategy is based on exclusivity, experience,
differentiation and affordability.

6
Suggestions for improvement , if any ………………….

4. Store Atmospherics

Describe the ambience of the store? (flooring, lighting, wall textures, music, air
conditioning, etc)

Ans: The ambience of the store is akin to being inside an enormous, upmarket walk-in
wardrobe. It is the perfect environment for a store such as Zara, whose success is built on
understanding the shopping impulses of the customer. The music is quiet and
anonymous. There are few images of models wearing the clothes; with endless mirrors.
An intimate environment is created in which customers are encouraged to assemble their
own outfits. Bright lighting is used in Zara to highlight all of the vivid colours, fabrics
and designs used on the merchandise. Zara strategically places spot lighting aimed at the
walls as they are one of the most valuable areas of Zara, as the right side wall is usually
considered the highest sales area as customers tend to turn to the right when entering the
shop. So Zara places its best-selling merchandise (Zara women) in that area.

5. Loyalty program Analysis

Does the store have a loyalty program ? Describe in detail and suggestions for
improvement. If the store does not have a program, you can recommend.

Zara does not have a loyalty programme for its customers as of now. They believe in
attracting customers based on the fast-fashion trends and do not believe in loyalty
programmes.
Recommendation: Zara should continue the way it is going forward. Having a loyalty
programme would mean that they’d have to sell their products at lower price than what
already is, which would be economically bad for the company.

7
It is noticed that most of the customers do not remain loyal to a brand even after getting
enrolled in a loyalty programme. So it would not guarantee success. Instead, they provide
frequent discounts to the customers.

6. Sales staff analysis

Is the sales staff neatly dressed?

The staff is well dressed and follows a theme of black.

Is the sales staff courteous and helpful?

The considerate and polite nature of the staff helps maintain the customer engagement in
the store. They are always ready to help you with the collection.

Is the sales staff knowledgeable?

The staff is well versed with collection displayed in the store. They always have a items
list on their tab, to which they refer to help the customer know about the size and coluor
availability.

7. Location Analysis

8
1. Describe the suitability of the location of the store (area, strategic location in
mall)
 Zara focuses on choosing the correct area district for their stores in each city
they decide to target. Moreover they believe in settling their stores in a high
population and traffic areas in each particular city.
 Zara know the importance of establishing the recognition, thus they always
attempt to arrange their shops in prestigious districts neighboring location as
compared to other high clothing manufacturers
 Their favorite type of marketing is establishing exceptional stores. Zara does
not do much of advertising , the management focuses more on the appearance
and location of its stores. They make sure that their stores are located next to
high-end brands.
 Company invests heavily on its beauty, historical appeal and locations of its
shops, like they invested $324 million to buy space at 666 fifth avenue in New
York , within the Tamed fishman building
 For e.g. Zara operates 8 stores in the Philippines located at some of the well-
known and business-friendly cities such as Makati, Mandaluyong, Quezon,
Pasay and Cebu. One of their stores is situated at premium wind, also called
the Mega Fashion Hall, of the SM Megamall at Mandaluyong City, one of the
popular malls in the Philippines. This mall attracts an average of
approximately 500,000 people a day.