Major Project Report

on

“Study of Marketing Strategy of ZARA”

ZARA
Submitted in partial fulfillment of the requirements
for the award of the degree of

Bachelor of Business Administration (BBA)

To

Guru Gobind Singh Indraprastha University, Delhi

Guide: Submitted by:

Dr. Malavika Srivastava JAYESH TANWAR
Associate Professor Roll No.: 02921101717
Batch (2017-2020)

Nurturing Excellence

Institute of Information Technology & Management,

New Delhi – 110058
(2017-2020)
 Certificate

I, Mr. Jayesh Tanwar, Roll No. 02921101717 certify that the Project Report on (BBA-312)

entitled “Study of Marketing Strategy of ZARA” is done by me and it is an authentic work

carried out by me at Zara. The matter embodied in this project work has not been submitted

earlier for the award of any degree or diploma to the best of my knowledge and belief.

Signature of the Student

Date:

Certified that the Project Report (BBA-312) entitled “Study of Marketing Strategy of

ZARA”done by Mr. Jayesh Tanwar, Roll No. 02921101717 is completed under my

guidance.

Signature of the Guide

Date:
Name of the Guide:
Designation:
Address:
Institute of Information
Technology & Management,
New Delhi-110058

Countersigned

Director/Project Coordinator
 Acknowledgement

The success and final outcome of this project required a lot of guidance and assistance

from many people and I am extremely privileged to have got this all along the completion

of my project. All that I have done is only due to such supervision and assistance and I

would not forget to thank them.

I pay my gratitude and sincere regards to Dr. Malavika Srivastava, my project Guide for

giving me the cream of her knowledge. I am thankful to her as she has been a constant

source of advice, motivation and inspiration. I am also thankful to him for giving her

suggestions and encouragement throughout the project work.

I take the opportunity to express my gratitude and thanks to our library staff for providing

me opportunity to utilize their resources for the completion of the project.

I am also thankful to my family and friends for constantly motivating me to complete the

project and providing me an environment which enhanced my knowledge

 EXECUTIVE SUMMARY

Zara is one of the largest international fashion companies. It belongs to Inditex, one of the

world’s largest distribution groups. It has overtaken Gap as the largest apparel retailer in

the world. The main competitive advantage of Zara is its quick response to the customer

fashion trends and producing clothes often with short life spans and Zara’s mission

mainly focuses on domestic manufacturing.

In order to sustain its competitive advantage, Zara adopts Just-in-time (JIT) manufacture

system to implement high quality in-house manufacturing and conducts JIT inventory

approach to maintain inventory level. Meanwhile, Zara conduct EOQ model to control

setup cost. Moreover, Zara should make sure its worldwide retail store network running

well by conducting JIT inventory approach, so Zara conducts an inventory distribution

process involves a forecasting demand model and an optimization model to determine

weekly shipment quantities from warehouse to every retail store and solve some problems

about inventory coordination among retail network. Due to the success implementation of

its current inventory management strategy, Zara gains the capabilities that quick response

to customer trends and high speed to market, which is the fundamental factors to Zara’s

success in the fast-fashion industry.

Inditex faces competition from companies such as H&M and Benetton, but is set apart by

its unique business model. Inditex controls the entire fashion process as well as retail. In

the variable and fast changing fashion world, Inditex prioritizes time-to-market through

vertical integration, making them the pioneer of “fast fashion.” Competitors traditionally

prioritize production cost and outsource manufacturing to China. This strategy is cheap

but creates a long supply chain. Inditex, on the other hand, sources more than half of its

products from Spain, Portugal and Morocco, creating a short, manageable, and more
responsive supply chain. Despite the higher costs, in the fashion world the ability to react

quickly is key. Other companies must predict trends, while Inditex can observe and

respond. Inditex’s computerized inventory system, state-of-the-art production an

warehousing, and a short supply chain cut lead-time to 10-15 days between design and

distribution, compared to the 5-6 month industry average.

Zara, Inditex’s flagship retail format, generated 66% of the company’s overall sales in

2012. Currently, Europe accounts for 66% of group sales, though sales in Spain

accounting for 22% of revenue have stalled due to the poor economy, causing the

company to aggressively seek new markets. Inditex has doubled its store count from

3,000 to 6,000 since 2007 as it expanded its store space by between 8% and 10% a year.

Recently Inditex has opened more than a store a day, or about500 stores a year. It is

reported that this growth rate is to be maintained for the next three to five years, with an

emphasis in Asia.1 Sales also benefited from a global rollout of online stores, starting

with Zara Home in 2007 and each additional retail format in 2010. Zara is the most

prominent online concept currently receiving more than 1.3 million unique visitors per

day.2 Though Inditex has yet to provide more information about online sales, Credit

Suisse estimates online purchases will generate over $782.5 million by the end of 2013,

almost doubling 2012 levels.

 CONTENTS

S. No. Topic Page No

1. Certificate (s) -
2. Acknowledgements -
3. Assignment Directive -
4. Executive Summary -
5. List of Figures -
6. List of Symbols -
7. List of Abbreviations -
8. Chapter-1: Introduction 1
9. Chapter-2: Literature Review 20
10. Chapter-3: Methodology 24
11. Chapter-4: Data Analysis and Interpretation 28
12. Chapter-5: Findings and Conclusion 39
13. Bibliography 46
 LIST OF FIGURES

Figure No Title Page No

1 Zara Store 2
2 Collection of Zara 8
3 Zara Logo 9
4 Vision of Zara 10
5 Zara USP 15
6 4 P’s of Zara 17

LIST OF SYMBOLS

S No Symbol Nomenclature & Meaning

1 % Percentage
2 $ Dollar

LIST OF ABBREVIATIONS

S No Abbreviated Name Full Name

1 Bn. Billion
2 ROI Return on Investment
 Chapter-I:
Introduction

1
1.1 Introduction

Figure No-1: Zara store

Zara is a Spanish clothes and accessories brand, it is the flagship brand of the Inditex

group. Few clothing brands keep up with the latest fashion, are of high quality and yet,

affordable. It is probably the amalgamation of all these qualities that made Zara, the

Spanish clothing brand become the go-to fashion brand for all.

It is the world's largest apparel retailer. The fashion group also owns brands such as

Massimo Dutti, Pull&Bear, Bershka, Stradivarius, Oysho, Zara Home, and Uterqüe.

Zara as of 2017 manages up to 20 clothing collections a year.

Zara the brand which is described as possibly the most innovative and devastating fashion

retailer in the world was originally the brainchild of The Inditex Group owned by Spanish

business Tycoon Amancio Ortega.

2
The group is headquartered in A Coruña, Galicia, Spain, where the first Zara store was

opened in 1975, the city which saw the Group's early beginnings and which is now home

to its central offices.

This Spanish success story encompasses many different styles, from daily clothes, to

casuals up to formals, thereby providing a complete one stop fashion solution for women,

men and children.

Starting with a single store, today Zara has as many as 1,520 outlets bringing exclusive

fashion to all over the world and churning out annul turnovers of 6,824 million Euros.

Most important of which is to note that 75% of these total earnings are a part of their

international sales.

Zara was known, by industry players, to have an extremely particular business model,

especially given the fast-growing and quick-response industry it acted in, where most

companies outsourced garment manufacture to reduce costs and, supposedly, enable

higher flexibility. Zara, however, as a vertically-integrated retail chain, controlled all its

garment production and outsourced only ―basic‖ clothing that could be ordered in

advance and easily adapted to future required styles.

Stores had always been the key to Zara’s system: the face of the brand to the world and its

main source of information on what consumers wanted. Built with a minimalist

environment and big windows; stores were comfortable and designed to ―create an

atmosphere of chaos and excitement24‖, always located in prime, highly noticeable

locations that were fully-owned by Zara (with a few exceptions where cultural and

political factors could act as obstacles). Stores averaged at a size of 1,400 square-metres,

and were furbished with clear lights, white walls and ceilings in order to draw all the

3
focus on clothing. Store refurbishment occurred every 4 years and window displays were

changed every month.

1.2 Marketing Strategy-

Meaning:-

The marketing strategy is the means of achieving the corporate objectives. It gives

messages to the stakeholders, or public. It says:

(i) "This is where we are going", and

(ii) "When we will get there", and

(iii) "This is our stance"

1.2.1 Marketing Strategies of Zara

Handling 7000+ stores across the world and successfully popularising 8 fashion retail

brands globally under its umbrella brand architecture has helped Inditex (parent company

of brand ZARA) in becoming one of the world’s largest fashion retail organisations.

Zara’s 1st store was opened on 1975 in beautiful European nation Spain.

1.2.2 Segmentation, targeting, positioning in the Marketing Strategy of Zara –

Zara uses a mix of demographic, geographic and psychographic segmentation strategies

in order to serve the growing needs of the customers.

Zara has limited stores across the globe due to which it uses selective targeting strategies

to make their products available in the market.

4
Usage-based positioning strategies are used by Zara to highlight its customer’s centric

approach to satisfy the changing fad needs of the customers around the globe. Zara knows

that its customers want new and updated trends and accordingly it targets customers

based exclusively on its designs.

1.3 Competitive advantage in the Marketing strategy of Zara-

(i) Strong parent company:

Inditex, the parent company of the brand Zara have a strong portfolio of 8 brands which is

helping the company in nurturing each brand with its experience and strong financial

base.

(ii) Turnaround time (TAT):

In comparison to the other players in the market Zara makes it new product available to

its stores in just two weeks of launch whereas the average TAT of the industry is 3-6

months.

(iii) Stronghold in the parent nation:

Zara gets 60% of its sales (2015 data) from the European nation out of which 18 % comes

from Spain.

(iv) Advertising & store locations:

The most important aspect of the profitability in the retail apparel industry is the location

of the stores and its advertising while in case of Zara all of its stores are strategically

located in the major cities globally and advertising expenses of Zara is very low as

compared to the peer companies in the industry.

5
1.4 BCG Matrix in the Marketing strategy of Zara –

Zara primarily deals in products lines such as clothes & accessories for Women’s, Men’s

and Kids. Among the 3 line of business of Zara,

(i) Women segment is a star on the BCG Matrix.

(ii) Men’s segment is also star due to high demand of the products yet tough competition

in the market.

(iii) Kids section is question mark because there are many brands for kids which are much

more famous.

Kids section is a line of business which is a question mark in the BCG matrix of Zara.

Men and women’s segment is driving the growth for Zara.

1.5 Distribution strategy in the Marketing strategy of Zara –

Right from design to distribution to sales of its products through their 2100+ stores

around the world, Zara operates all the business and make the newly designed products

available in their stores within the span of 2 weeks.

Apart from the Zara exclusive stores, many multi-brand retail chains sell Zara’s clothing

and accessories items which are helping the company in penetrating in the leading cities

of the nation globally.

The supply chain of Zara is one of the biggest competitive advantage to the brand because

where other retail stores take 21 days to even 2 months to get new designs in the store,

Zara gets it done within 2 weeks. Plus, the stores have these new designs only for a

destined period of time or till stock last, hence movement of material is very important.

6
1.6 Brand equity of Zara –

Valued at $ 10.7 billion this fashion industry retail giant has bagged 53rd position in

Forbes list of world’s most valuable brands.

1.7 Competitive analysis of Zara –

The fashion clothing retail industry is highly competitive with various brands such as H &

M, Mango, Gucci and many other national and international brands fighting with each

other in the same segment. However, the designs made by Zara are based on the

consumer & market feedback which they continuously work upon to be more of the

consumer-oriented brand.

1.8 Market analysis in the Marketing strategy of Zara –

The clothing retail industry is highly competitive and the changing fads, socio-economic

and behavioural culture possess a major challenge for the companies operating in this

industry. Back end integration, high raw material cost and advertising cost are the other

factors that affect the apparel industry companies by and large.

1.9 Customer analysis in the Marketing strategy of Zara –

In men’s and women’s clothing segment customers of Zara are in age group of 15-40

years. Recently it also launched kids section in their stores across the world. Zara makes

customer experience king. Product used to be king, but not anymore. In the new retail

economy, experience matters more than product in the mind of the shopper. Zara

understands this.

7
 Figure No-2: Collection of Zara

1.10 HISTORY OF ZARA

Amancio Ortega opened the first Zara store in 1975 in downtown A Coruña, Galicia,

Spain. Ortega initially named the store Zorba after the classic film Zorba the Greek, but

after learning there was a bar with the same name two blocks away, they rearranged the

letters molded for the sign to 'Zara.' It is believed the extra 'a' came from an additional set

of letters that had been made for the company. The first store featured low-priced

lookalike products of popular, higher-end clothing fashions. Ortega opened additional

stores throughout Spain. During the 1980s, Ortega changed the design, manufacturing,

and distribution process to reduce lead times and react to new trends in a quicker way,

which he called "instant fashions". The improvements included the use of information

technologies and using groups of designers instead of individuals. Óscar had been Zara’s

director for years, witnessing the opening of stores in over 10 new markets, the

continuous expansion of Zara’s e-commerce stores (available in 21 countries by the end

of 2017) and the 2012 cutting-edge refurbishment, design and implementation of Zara

stores worldwide. He knew that the stores were the key to Zara’s business model; the

millions of euros invested annually in locating stores and designing each interior carefully

8
explained why Zara needed no further advertising the stores were the voice of Zara’s

offer.

1.11 ZARA Industry:

(i) 2259 Zara stores in 96 countries.

(ii) Created in 1975

(iii) For women, men, youth and infants up to age 50

(iv) Accounts for 66.11% of Inditex’s sales in 2012.

(v) ―Zara is always striving to meet the needs of its customers at the same time as helping

to inform their ideas, trends and tastes.‖

(vi) Website: www.zara.com

Figure No-3: Zara logo

9
1.12 VISION AND MISSION:

VISION

Our stringent commitment to Global standards of Quality has seen us grow phenomenally

over the last decade, to create a niche of our own, in the highly competitive world

markets. ZARA Textile has been the name of one of the most innovative and leading

textile producers. Our technical perfection, quality standards and innovative impacts are

unique. ZARA Textile has become one of the leading symbols of quality products in the

textile industry. Behind all this success, Directors and their team have a complete vision

in their mind to make their organization as one of the top ranked company. Following is

our vision statement:

“To attain market leadership through unmatched quality, a diverse and unique

product mix, empowered employees, world-class systems, and the highest ethical

and professional standards”

Figure No-4: Vision of Zara

10
MISSION

ZARA Textile is devoted to achieve consistent improvement in the system of providing

products & services to the customers through On Time Delivery & Enhancing Customers

Satisfaction by means of Quality and Value."

1.13 ZARA SWOT ANALYSIS:

Strengths in the SWOT analysis of Zara are as follows:

(i) Low cost and higher profits:

Their design advantage and fantastic physical evidence in stores, Zara rarely advertises

its products. It relies completely on its trendy image to pull the customers to its stores.

This is the reason that Zara has very low cost of operations and at the same time has high

margins.

(ii) Physical evidence of stores:

Another strong positive of Zara is that the service has very good physical evidence of the

stores. Whenever you walk into the store, you will get this open minded feeling instead of

feeling cramped like you do in other showrooms. Zara uses a wide and deep store layout

so that customers would love to walk around the store while picking up and trying out

their favourite designs.

(iii) Superb supply chain:

Zara is known to get its designs from conception to the stores in 2 weeks whereas it takes

other competitors minimum 6 weeks or more, automatically making Zara the trendiest

store which has the latest in fashion. On an average, 450 million items are designed every

11
year by Zara. This naturally pushes the consumers to visit the store again and again to

check out the latest designs.

(iv) Strong presence:

Zara has kept expanding its presence across the globe. On latest count in 2015, it had

2100 stores worldwide with an average sale of 15.9 Billion per annum. In 2016, it has

expanded even further. If it has to survive in retail, Zara has to keep expanding its

presence and it is good to know that the brand is doing exactly that.

(v) Brand value:

The brand is ranked number 53 by Forbes in its brand ranking and is valued at a

whopping 10.7 Billion dollars. There are several positive points leading to the excellent

brand equity of Zara. The performance over the years and the consistent quality it has

provided has given a boost to the brand in recent years. Besides this, the brand has stayed

away from controversies and tried to stay humble even when it came across them. Such a

healthy culture has resulted in the brand being loved by its consumers over and over

again.

(vi) Unique designs:

One of the first and foremost advantages of Zara lies in its design abilities. It has a

plethora of designers on board who understand the Zara brand and the psyche of the

customers who visit Zara very well. The clothes are elegant, superior quality and have

fantastic finishing. They come in a lot of varieties including party wear, office wear, for

kids, for men and women, casuals as well as several others. Even accessories are an

integral part of Zara wear.

12
Weaknesses in the SWOT analysis of Zara are as follows:

(i) Generalised collection:

Zara does not specialise in anything and has everything for everyone. One of the reasons

that a customer shifts to a competitor is when the competitor is focused on one thing. It

might be shirts, it might be pants, it might be dresses or party wear or whatever. Such

immediate focus is lacking in Zara and it is good for the day to day wear or trendy wear.

(ii) Lack of advertising:

While it may lead to a cost advantage and cost is one of the strengths of Zara, the lack of

advertising is a weakness because the brand can double its profit and its turnover by

advertising its collection. It is known to be a trendy fashion outlet and it can easily pull in

more customers with advertising which will generate a lot of positive word of mouth for

the brand.

(iii) Low safety stock:

A regret which Zara stores have is that stocks which are fast moving rarely have a safety

buffer behind it. Low inventory is kept at Zara as a strategy to keep customers walking

into the stores to check out the latest items. But it also means that if a particular design is

a hit with the customers, it won’t reach its potential because there is no safety stock or

buffer for this design.

13
Opportunities in the SWOT analysis of Zara are as follows:

(i) Online E-commerce:

Zara can definitely take advantage of the online buying trend and make its clothes

available not only in its own stores but also on other E-commerce stores as well thereby

bringing a hike in sale.

(ii) Backing some flagship designs:

One of the common traits of top brands is that they have some designs which are flagship

design of their stores. This is lacking in Zara and hence, there should be some designs

which should always be sold from a Zara store, bringing in great demand for these

designs and building even more brand identity for the brand.

(iii) Growing market potential:

A rise in earning potential of consumers results in rise in demand for status symbols. Zara

is one such status symbol in clothing industry which consumers love to wear. Hence,

Zara needs to capitalize on the growing market potential of existing markets.

Threats in the SWOT analysis of Zara are as follows:

(i) Low advertising:

The way that Zara keeps rotating design, it can rope in a lot more consumers if it

advertises the fact that you will get the latest in designs from Zara. But maybe, if its

consumer base increases tremendously, coming up with new designs and differentiating

itself will become more and more difficult. So, the debate of whether Zara should

advertise or not, will be going on in the management room of Zara itself.

14
(ii) Competition:

Zara is not the only one which is known for its chic design. Vero moda, H&M and Mango

are also loved for its design. But the advantage to Zara is that the other brands are quite

costly when compared to Zara whereas Zara gives much better designs at affordable

prices. However, this competition leads to saturation in the semi premium segment

indirectly affecting the margins.

(iii) Reach:

Zara needs to increase its reach tremendously. Zara operates exclusively through its own

store and does not have shop in shop kind of stores or smaller displays (at least in Asia).

This is where the competition gets its tremendous volumes from. But these volumes are

missing in Zara and the only answer to this is that Zara increase its reach. If it does not,

then competitors will eventually affect the brand equity of Zara because of their sheer

power of penetration.

Figure No-5: Zara USP

15
1.14 Channel of Distribution:

The prime of object of production is its consumption. The movement of product from

producer to consumer is an important function of marketing. It is the obligation of the

producer to make goods available at right place, at right time right price and in right

quantity. The process of making goods available to the consumer needs effective channel

of distribution. Therefore, the path taken by the goods in its movement is termed as

channel of distribution. The goods may be sent to the consumer directly or indirectly

through middlemen. The channel of distribution may be classified as:

Selling through direct channels, this is the oldest, shorter and the simple channel of

distribution. The producer sells the product directly without involvement of any middle

man. The sale can be made door to door through salesman, retail stores and direct mail.

Certain industrial and consumer goods such as clothes, shoes, books, hosiery goods,

cosmetics, household appliances, electronic goods etc., may be sold through direct

contact. Perishable goods such as vegetable and fruits can also be sold directly.

All 1,900 Zara stores received shipments with new items twice a week; centrally

managed in Arteixo and ordered by store managers worldwide. Zara had, like all

Inditex chains, its own Distribution Centre, a 40,000 square-metre building located

in Arteixo paired with smaller facilities in Southern America. Regardless of origin,

all merchandise passed through Arteixo’s DC before being shipped to their

respective locations. The warehouse was known as a “place to move merchandise

and not store it21”, most garments only stayed for some hours and none would stay

for more than three days. 75% of shipments were made by truck to stores across

Europe and arrived typically between 24 and 36 hours after the order. Countries

16
outside Europe received merchandise 48 hours after ordering, typically by airfreight

or boat.

1.15 4 P’s of ZARA:

Figure No-6: 4P’s of Zara

(i) Product:

Zara’s position in the affordable fashion industry clearly states it’s not a luxury brand.

The target customers are eager to purchase fancy fashion while still sensitive to the

prices. They want to be different and unique. The most important thing is (instead of

more quantities per style) that Zara produces more quantities of styles. Zara will also

consider new product and develop features such as a product line for a charity or VIP

presents in its collection.

17
(ii) Price:

Zara is providing fashion for people with a lower income, therefore the prices are very

reasonably that everybody can afford it. Cost effectively influences also the supply chain

management which requires a fast decision making process.

(iii) Place:

The constant flow of updated data mitigates the so-called bullwhip effect—the tendency

of supply chains to amplify small disturbances. A small change in retail orders, for

example, can result in wide fluctuations of factory orders after it's transmitted through

wholesalers and distributors. In an industry that traditionally allows retailers to change a

maximum of 20% of their orders once the season has started, Zara lets them adjust 40 to

50%. In this way, Zara avoids costly overproduction and the subsequent sales and

discounting prevalent in the industry. However, it will not allow having all products

online. The decision making process, of which products will be distributed online, needs

to be defined up front. The supply chain has to evaluate the stock availability by

forecasting sales and consider the needed production capacity. Another important point is

the shipment process to the customers and the return handling process. As a high priority,

the shipment costs have to be above a minimum ordering volume free and the return

guarantee has to be customer friendly oriented. An additional service for express (24

hours) delivery, which will be charged correspondently, must be installed in addition.

18
(iv) Promotion:

In the competitive clothing industry, Zara has successfully built a worldwide famous

brand by a unique management system of design, production and supply chains. The ―fast

fashion‖ concept and operation allow Zara to always provide the most fashionable clothes

to their customers and the always renewing collections definitely help build a brand

loyalty. Zara is focussing on internet online marketing opportunities such as e-commerce

strategy and social media to promote traffic on Zara.com as well as attracting visitors to

the online shop. From the original focus on the central European market Zara is

expanding to the Asian market.

19
CHAPTER 2 -

LITERATURE

REVIEW

20
2.1. According to Mazaira et al. (2003, 220), a ―democratization process of fashion‖

took place which made the market highly competitive. While fashion formerly used to be

an elite consumption article, often linked with haute couture brands such as Gucci and

Dior, it is now mass product like everything else. Mazaira et al. (2003) consider this

broadening of the target market as the main reason for increased expectations of fashion

retailers. According to them, fashion retailers have to maximize their speed and at the

same time keep prices low. Walters (2006) argues contrariwise, blaming fast fashion

retailers for this ephemerality. He states that the fast fashion retailers have influenced

consumer expectations for speed, variety and style at low prices and have found it

necessary to make changes to speed up the production cycle‖ (Walters, 2006, 86).

2.2. According to Power and Hauge, ―Branding has become so intertwined with

consumption that today’s consumers have often deeply personal relationships to brands

and brand histories. Branding is an attempt to strategically ―personify‖ products and to

encapsulate a balance between different economic values: quality, utility, symbolic, and

cultural worth‖ (Power and Hauge, 2008). According to Gambetti, Graffigna and Biraghi,

Consumer-Brand Engagement described as ―a dynamic and process-based concept,

evolving in intensity on the basis of the brand capability of increasingly intercepting

consumers' desires and expectations using all possible physical and virtual touch points

between brand and consumers. Consumer Brand Engagement appears as a overarching

marketing concept, encapsulating different consumer decision-making dimensions, from

brand preference to brand purchase‖ (Gambetti, Graffigna and Biraghi, 2012).

Furthermore, Franzak, Makarem and Jae explain about the role of consumer emotions in

21
consumer brand engagement, which encourages brand loyalty by emotional arousal

(Franzak, Makarem and Jae, 2014).

2.3. In the McKinsey Insight report, they have found that companies that use word-of-

mouth as a medium of advertisement and emphasize on in-store execution are more likely

to be on the consumer’s short list for initial consideration are likely to capture the loyalty

of a consumer in emerging markets (Atsmon, Kuentz and Seong, 2012).

2.4. According to Jing Theng So, Andrew Grant, Parsons Sheau-Fen Yap, there is a

significant impact of corporate branding, emotional attachment and brand loyalty in

luxury fashion market. Furthermore, they also examined six corporate branding

dimensions, corporate association, functional benefits and symbol benefits were found to

have a significant impact on emotional attachment which has a significant impact on

brand loyalty. (Jing Theng So et. al.,2013). They also established a positive relationship

between perceived quality and brand awareness and between brand awareness and

advertising attitude To shed more light on their claim, the authors classified the

consumers as: a) Heavy category buyers – they buy a lot The authors state that the heavy

category buyers are the most potential brand loyal customers, also for the competitors. In

addition, they also mentioned that light category buyers may lack awareness of the brand

and result in less purchase of products of the brand. Moreover, to overcome these

challenges that restrict the brand growth, need to be tackled with a strong strategic or by

engaging consumers in enhancing the brand by spreading awareness of the brand through

various loyalty programmes and discounted offerings to the organisations most loyal

consumers.

22
2.5. According to 18 Diaz, the marketing executive of Zara, ―We are fashion business –

not clothing. Our customers buy our products because they like it – not because they are

Zara.‖ (Miguel Diaz cited in Ferdows, Lewis, and Machuca, 2003). Also, states that brand

loyalty is considered to be a behavioral aspect and it is not easy to gain brand loyalty,

measuring and predicting brand loyalty.

2.6. According to King and Newman (2015), state that ―Brands create value in two

ways, when they increase the sales volume when consumers choose to buy the well –

known brand over a lesser known brand or an unknown brand generic product offering

similar features‖. Azoury and Salloum (2013) conducted a study to understand the

relationship between consumers perceived value, brand trust, affect and loyalty. The

authors mainly focused on finding out the relationship between brand value from the

consumers perceptive and brand loyalty using brand trust and affect as a tool to establish

this relationship.

23
 CHAPTER 3 –

METHODOLOGY

24
3.1) Objective of the Study

(i) The purpose of this research is to describe on a specific way how Zara can address the

expenditure on global online sales by providing a customer friendly shop portal, which

allows an easy ordering process and cost-effective shipping and return method.

(ii) The key of this strategy is based on every single customer who had a satisfied

experience by purchasing fashion online and who wants to repeat online shopping.

(iii) Furthermore, it’s not all about increasing the economical profit; moreover to create

an added value of Zara’s brand as an intangible asset.

(iv) To suggest new styles based on trend analysis and competition brand’s offerings.

(v) To understand market analysis, competitive analysis, customer analysis and marketing

strategies.

3.2) Scope of Study

(i) To find what factors customer keep in mind while purchasing a product.

(ii) To find if customers buys product depending upon the advertisements.

(iii) To determine what customer usually buys from the store.

(iv) To analyse the factors that attracts a customer.

(v) To analyse how often the customer visits the store.

(vi) To find out the location of the store is convenient or not.

25
3.3) Sources for Data Collection

The sources of data collection used in this project are both primary and secondary data.

Primary Data:

Primary data is data that is collected by a researcher from first-hand sources, using

methods like surveys, interviews, or experiments. It is collected with the research project

in mind, directly from primary sources. The term is used in contrast with the term

secondary data. Raw data, also known as primary data, is data collected from a source. In

the context of examinations, the raw data might be described as a raw score. For example,

surveys and focus group discussions.

Method of Collection:

(i) No. of Questions – 10

(ii) Nature of Questions – Multiple Choice Questions (MCQ)

(iii) Sample Size – 80

(iv) Sampling Method – Convenience Sampling

Secondary Data:

Secondary data refers to data that is collected by someone other than the user. Common

sources of secondary data for social science include censuses, information collected by

government departments, organizational records and data that was originally collected for

other research purposes. secondary data is information which has been collected in the

past by someone else. For example, researching the internet, newspaper articles and

company reports.

Sampling Unit:

26
(i) Working people (including men & women)

(ii) House wife

(iii) College students

(iv) Senior citizens

Sample Size:

The sample size selected for the study is 80 in the area of New Delhi, India.

Sampling Technique:

Convenience Sampling:

It is a type of non-probability sampling that involves the sample being drawn from that

part of the population that is close to hand. This type of sampling is most useful for pilot

testing. Convenience sampling is a non-probability sampling technique where subjects are

selected because of their convenient accessibility and proximity to the researcher.

27
 CHAPTER 4 –

DATA ANALYSIS AND

INTERPRETATAION

28
4.1) Feedback from the Respondents.

Q1. Do you buy products on the basis of advertisements?

(i) Yes

(ii) No

Interpretation:

60% of people (out of 80) prefer to buy products on the basis of advertisement, while

40% of people prefer not to buy products on the basis of advertisement.

29
Q2. Have you shopped at or visited Zara store in Delhi?

(i) Yes

(ii) No

Interpretation:

30% of people (out of 80) have not visited Zara, while 70% of people have visited the

Zara store.

30
Q3. If yes, how often do you visit the store?

(i) Multiple times a month

(ii) Monthly

(iii) Once every 3 months

(iv) Semi-Annually

(v) Annually

Interpretation:

33.3% of people prefer to visit Zara annually, 20% of people prefer going to Zara

multiple times a month, 20% of people prefer going to Zara monthly, 13.3% prefer going

semi-annually and 13.3% prefer going once every 3 months.

31
Q4. What do you usually buy from Zara?

(i) Formals

(ii) Accessories

(iii) Handbags

(iv) Casuals

(v) Footwear

Interpretation:

46.7% of people prefer to buy formals, 26.7% of people prefer handbags, 13.3% people

prefer casuals, 6.7% go for Accessories, 6.7% go for footwear.

32
Q5. How often do you buy from Zara?

(i) Weekly

(ii) Monthly

(iii) Occasionally

(iv) Rarely

Interpretation:

30.8% of people prefer buying occasionally, 23.1% of people prefer shopping monthly,

23.1% of people prefer buying rarely, 23.1% of people buying weekly.

33
Q6. How do you get to know about the latest collection of Zara?

(i) Social media handles

(ii) Through sms

(iii) By visiting the store

(iv) Friends or relatives

Interpretation:

45% of people prefer to get updated by social media handles, 20% of people prefer to

visit the store, 20% of people prefer to get updated through sms, 15% of people prefer

their friends or family.

34
Q7. Do you find the location of the store convenient?

(i) Yes

(ii) No

Interpretation:

65% of people found the location to be convenient, while 35% of people don’t found

location to be convenient.

35
Q8. How much money do you spend on Zara every month?

(i) Less than 5000

(ii) 5000-10000

(iii) 10000-20000

(iv) More than 20000

Interpretation:

35.3% of people spend 5000-10000, while 23.5% of people spend less than 5000 and

23.5% of people spend more than 20000, 17.6% of people spend 10000-20000.

36
Q9. What do you think about the price of Zara's product?

(i) Cheap

(ii) Expensive

(iii) Luxury

Interpretation:

55% of people found Zara to be cheap, 30% of people found it expensive, 15% of people

found it a luxury.

37
Q10. What do you think about Zara service (including the after sales service)?

(i) Good

(ii) Neutral

(iii) Bad

Interpretation:

70% of people found the services of Zara to be good, while 25% of people found the

services neutral, 5% of people found the services bad.

38
 CHAPTER 5 -

FINDINGS AND

CONCLUSION

39
5.1) FINDINGS

Findings of the project are as follows:

(i) Through the responses it was very clear that 60% of people (out of 80) prefer to buy

products on the basis of advertisement, while 40% of people prefer not to buy products

on the basis of advertisement.

(ii) It was very clear that 30% of people (out of 80) have not visited Zara, while 70% of

people have visited the Zara store.

(iii) Majority that is 33.3% of people prefer to visit Zara annually, 20% of people prefer

going to Zara multiple times a month, 20% of people prefer going to Zara monthly,

13.3% prefer going semi-annually and 13.3% prefer going once every 3 months.

(iv) From the survey, it was clear that 46.7% of people prefer to buy formals, 26.7% of

people prefer handbags, 13.3% people prefer casuals, 6.7% go for Accessories, 6.7% go

for footwear.

(v) Through the responses it was very clear that 30.8% of people prefer buying

occasionally, 23.1% of people prefer shopping monthly, 23.1% of people prefer buying

rarely, 23.1% of people buying weekly.

(vi) Majority that is 45% of people prefer to get updated by social media handles, 20% of

people prefer to visit the store, 20% of people prefer to get updated through sms, 15% of

people prefer their friends or family.

(vii) From the survey, it was clear that 65% of people found the location to be

convenient, while 35% of people don’t found location to be convenient.

40
(viii) Through the responses it was very clear that 35.3% of people spend 5000-10000,

while 23.5% of people spend less than 5000 and 23.5% of people spend more than

20000, 17.6% of people spend 10000-20000.

(ix) Majority that is 55% of people found Zara to be cheap, 30% of people found it

expensive, 15% of people found it a luxury.

(x) From the survey, it was clear that 70% of people found the services of Zara to be

good, while 25% of people found the services neutral, 5% of people found the services

bad.

41
5.2) Limitations:

Limitations of the project are as follows:

(i) Zara’s focus largely lies on imitation of original products which misleads the

customer. Those who are aware of this replication or who have lack of fashion

consciousness do not suffer, but those interested in purchasing original brands

are deceived by these fast fashion trends.

(ii) Another negative aspect of fast fashion is, it stands for inexpensiveness and actually it

is not true.

(iii) Economies of scale distribution problem. One issue that posed a threat to global

expansion was Zara highly centralised distribution system.

(iv) The period of the study is only 60 days.

(v) Zara already has a website and a app but they must market themselves slightly more

aggressively to promote online shopping on their website and app.

42
5.3) SUGGESTIONS

(i) It is suggested to the online website that they should allow customers to place their

orders though telephones.

(ii) The proper promotional strategy has to be implemented and lot of awareness has to be

brought in to other demographic profiles. For example: the aged people who may find it

difficult to physically go to the physical outlets instead can adopt online shopping system.

(iii) The e-shopping must provide clear and detailed information about products so as to

facilitate consumers with the ease and feeling of getting the product that they are looking

for.

(iv) It should reduce its costs by employing more technologies.

(v) Develop an easy and a flexible ordering system with ample of information available to

attract the customer.

(vi) Use of more online promotional tools to enhance the brand value and increasing the

sales volume thereby.

43
5.4) CONCLUSION

Zara has shown significant earnings growth every year, and new Zara shops continue to

open everywhere. It is evident that Zara is enjoying considerable success in the industry

by using effective retailing strategies, such as fast fashion and innovation. The Zara brand

was born with a keen eye on its customer its ability to understand, predict and deliver on

its customers preferences for trendy fashion at affordable prices. In addition to its

effective supply chain, the brand’s ability to have its customers co-create designs is

unique and provides it with a competitive advantage. Most fashion trends often start

unexpectedly, originate from uncommon places and grow out of nowhere. In a world

swamped with Big Data, and yet more collected at an even more rapid pace than before,

brands still need to be careful and observant. Big Data does not provide answers to all

business challenges, and it may be too hyped to be considered as the Holy Grail. One of

the secrets behind Zara’s global success is the culture and the respect for the fact that no

one is a better, authentic trendsetter than the customer himself or herself and this

philosophy needs to be continually reflected in all its business strategies going forward.

Zara does not engage in advertising and instead uses its store locations as a marketing

strategy. However, brand communication is crucial in attracting new customers to the

brand to support its growth. Without advertisements, Zara relies heavily on word of

mouth or social media. This causes the perception of potential customers towards Zara to

be heavily shaped by family and friends, which may not be accurate. In addition, Zara’s

social media platforms such as Facebook and YouTube exist merely as a feed for updates

rather than a platform that consumers can interact with. Its videos on YouTube are also

seeing very low viewership in comparison with its follower count, which is not ideal as

videos are a powerful medium for brands in the fashion industry. This is a gap that Zara

needs to plug immediately as the reach and impact of social media marketing gets
44
stronger. As Zara’s target customer segments start using more social and digital platforms

for communication and for sharing their lives, it is important for Zara to have a strong

presence on such platforms.

45
 BIBLIOGRAPHY

https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-success-a-culture-of-

customer-co-creation/

https://bf71qf.wordpress.com/marketing-analysis/

https://www.zara.com/in/

https://en.wikipedia.org/wiki/Zara_(retailer)

https://in.pinterest.com/zaraofficial/

https://www.grin.com/document/133008

46
 QUESTIONNAIRE

Name – ……………………… Age - …………

Designation - ……………………. Gender – Male/Female

Q1. Do you buy products on the basis of advertisements?

(i) Yes

(ii) No

Q2. Have you shopped at or visited Zara store in Delhi?

(i) Yes

(ii) No

Q3. If yes, how often do you visit the store?

(i) Multiple times a month

(ii) Monthly

(iii) Once every 3 months

(iv) Semi-Annually

(v) Annually

47
Q4. What do you usually buy from Zara?

(i) Formals

(ii) Accessories

(iii) Handbags

(iv) Casuals

(v) Footwear

Q5. How often do you buy from Zara?

(i) Weekly

(ii) Monthly

(iii) Occasionally

(iv) Rarely

Q6. How do you get to know about the latest collection of Zara?

(i) Social media handles

(ii) Through sms

(iii) By visiting the store

(iv) Friends or relatives

48
Q7. Do you find the location of the store convenient?

(i) Yes

(ii) No

Q8. How much money do you spend on Zara every month?

(i) Less than 5000

(ii) 5000-10000

(iii) 10000-20000

(iv) More than 20000

Q9. What do you think about the price of Zara's product?

(i) Cheap

(ii) Expensive

(iii) Luxury

Q10. What do you think about Zara service (including the after sales service)?

(i) Good

(ii) Neutral

(iii) Bad

49