Consumer behaviour

Economics Project
By- Puran Tak
Submitted to – Ms. Hetal Phillip

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Academic Year 2021-22

Subject – Commerce
Class – 12 Aristotle
Name –Puran Tak
Submitted to – Ms. Hetal Phillip

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Acknowledgement
I, Puran tak, had put great efforts in completing
this whole project and it was only possible with the help
of several individuals and I would like to extend my
sincere thanks to all of them.
I was glad that I got an opportunity to complete
this project and I sincerely thank My Principal, Mrs.
Kavita Sharma. I am greatly indebted to my worthy
commerce Teacher, Mrs. Hetal Phillip without whom this
project would seem next to impossible.
I also like to thank my parents, siblings, and
friends for their cooperation and confidence which helped
me in the completion of this project. Without their help
and contribution, I think I wouldn’t be able to complete
this project.
I haven’t complete the project only with the
intention of gaining marks but also knowledge.
Heartily once again, I would like to thank all
those who help me in the completion of project.

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Index
Acknowledgement…………………………………………….3
Introduction to Zara……………………………………………5
What Is Consumer Behaviour? …………………………6
Factors Affecting Consumer Behaviour………………7
What is Customer Behavior Analysis? …………………8
Why it is Important? ……………………………………………8
Comparison between the Companies ………………9
Consumer Behaviour of ZARA …………………………10
Countries in Which Zara Addresses………………………11
Substitute Goods…………………………………………………12
Complementary Goods………………………………………13
Leading Competitors of Zara………………………………14
Why Consumer Prefer Zara? ………………………………16
Conclusion…………………………………………………………..18

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Introduction to Zara
Zara is one of the world's largest international fashion companies . It
belongs to Inditex, the world’s biggest fashion group.
Zara is a Spanish clothing retailer based in Galicia, Spain. Founded by
Amancio Ortega in 1975, it is the
flagship chain store of the Inditex
group, the world's largest apparel
retailer. The fashion group also owns
brands such as Pull&Bear, Massimo
Dutti, Bershka, Stradivarius, Oysho,
Zara Home and Uterqüe. The company
operates over 2,220 stores and is
present in 88 countries. Zara has
consistently acted as a pioneer in fast fashion based in a higly responsive
supply chain. The customer is at the heart of a unique business model,
which includes design, production, distribution and sales through our
extensive retail network.

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What Is Consumer Behaviour?

Consumer behaviour is the study of how individual customers, groups or
organizations select, buy, use, and dispose ideas, goods, and services to
satisfy their needs and wants. It refers to the actions of the consumers in
the marketplace and the underlying motives for those actions.

Marketers expect that by

understanding what causes
the consumers to buy
particular goods and
services, they will be able to
determine—which products
are needed in the
marketplace, which are
obsolete, and how best to
present the goods to the
consumers.

. The study of consumer behaviour assumes that the consumers are

actors in the marketplace. The perspective of role theory assumes that
consumers play various roles in the marketplace. Starting from the
information provider, from the user to the payer and to the disposer,
consumers play these roles in the decision process.

The roles also vary in different consumption situations; for example, a

mother plays the role of an influencer in a child’s purchase process,
whereas she plays the role of a disposer for the products consumed by
the family.

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Factors Affecting Consumer Behaviour

1. Psychological Factors : The human psychology plays a crucial
role in designing the consumer’s preferences and likes or dislikes
for a particular product and services. Some of the important
psychological factors are:

 Motivation

 Perception

 Learning

 Attitudes and Beliefs

2. Social Factors: The human beings live in a complex social environment
wherein they are surrounded by several people who have different buying
behaviors. Since the man is a social animal who likes to be acceptable by all
tries to imitate the behaviors that are socially acceptable.  Hence, the social
factors influence the buying behavior of an individual to a great extent. Some
of the social factors are:

 Family

 Reference Groups

 Roles and statu

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3. Cultural Factors: It is believed that an individual learns the set of values,

perceptions, behaviors, and preferences at a very early stage of his childhood
from the people especially, the family and the other key institutions which
were around during his developmental stage. Thus, the behavioral patterns
are developed from the culture where he or she is brought up. Several cultural
factors are:

 Culture

 Subculture

 Social Class

Personal Factors: There are several factors personal to the individuals that
influence their buying decisions. Some of them are:

 Age Occupation

 Lifestyle Income

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What is Customer Behavior Analysis?

A customer behavior analysis is a thorough investigation of how
customers engage with your company. Using qualitative and
quantitative methods, a customer behavior analysis looks at
every step in the customer journey and provides insight into
what’s driving consumer behavior.

Why is Consumer Behavior Analysis Important?

The goal of consumer behavior analysis is to uncover ways you
can better suit your customers’ behavior patterns and increase
your conversion rate.
Specifically, the results of buyer behavior analysis often help
with things such as:

 Predicting customer value. The better you understand your

customer segmentation, the more easily you’ll be able to
optimize your operations to focus on your most profitable
segments.

 Personalizing customer experience. When you understand

your audience better, you can build bespoke customer journey
maps for your most profitable customer segments to give
them a more targeted, optimized-for-them experience, which
will increase conversions.

 Improving customer retention. Understanding your

behavioral data will help you identify what brings customers

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back, thus increasing customer satisfaction and reducing

customer churn.

Comparison between the Companies

Zara, H&M
Both brands have starkly different marketing communications, with
H&M’s emails often blurring men’s, women’s and childrenswear
together to create a family-focused offer. In contrast, Zara sends more
targeted and directional emails by age and gender. 
With distinct consumer groups in mind, different products are sought
after at each brand. Using EDITED’s Assortment tool, we can drill down
on new arrivals within the past three months that sold out of their
majority SKU’s over that period, revealing the most recent best
performing products by brand. Tops and bottoms are the standout and
delving further reveals this was fueled by strong demand for sweaters,
T-shirts and sweatshirts. However, shirts equal 14% of tops sell outs at
Zara and are less than 10% at H&M, indicating consumers are more
likely to shop for dressier items from the former.
Outerwear follows these top two categories making up 17% of sell outs
at Zara, outpacing H&M’s 9%. Following the success of its viral pink
puffy house dress, dresses are a higher proportion of sell outs at H&M
while accessories are nearly 10% of Zara’s sell outs. 
Another bright spot for H&M is product sets, which are driven by sell
outs in childrenswear. While Zara’s first intimates collection only adds a
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small percentage to its underwear offering, the range sold out of the
majority of its SKUs in under a week.

Consumer Behaviour of ZARA

Consumer Behaviour involves the psychological processes that
consumers go through in recognizing needs, finding ways to solve these
needs, making purchase decision, interpret information, make plans &
implement these plans. The fashion market has evolved over the years &
has become well-known for its quality, competitive price and modernity
and a very good example of this is Zara. The present report focuses on
understanding, what exactly is the perspective of the customers or
general public that drives them to Zara. In today’s scenario there are
various reasons to purchase products form a particular brand. But
according to requirements, people prefer different brands to purchase
any product. So based on various factors, I covered all the reasons for
one to shop at Zara. The questionnaire will help us to understand the
strengths & weaknesses of the brand but more importantly it will help us
understand the reason for the success of the brand from the general
public’s perspective. Specifically, we examine how emotional and
cognitive responses to purchase any product can influence consumers'
intention and their likelihood to purchase from any other brand over the
trusted one. A questionnaire-based empirical study is used to test this
behaviour of consumers particularly for the brand Zara.

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Countries in Which Zara Addresses

Every year Zara has been expanding in countries and places
across the globe. France in 1990. During the 1990s, Zara
expanded to Mexico (1992),Greece, Belgium and Sweden
(1993). In the early 2000s, Zara opened its first stores in Japan
and Singapore (2002), Russia and Malaysia (2003),China,
Morocco, Estonia, Hungary and Romania (2004), the
Philippines,Costa Rica and Indonesia (2005), South Korea
(2008), India (2010),and South Africa and Australia (2011).
With about 6,500
stores across 88
countries ZARA
has kept pace with
the technologically
advancing world.
They pushed out
their stock online in
the year 2010 in Spain, the UK, Portugal, Italy, Germany and
France. In November that same year, Zara Online extended the
service to five more countries: Austria, Ireland, the Netherlands,
Belgium and Luxembourg. Online stores began operating in the

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United States in 2011, Russia and Canada in 2013,and Mexico,

Romania, and South Korea in 2014. India in 4 October 2017.

Substitute Goods
A substitute, or substitutable good, in economics and consumer theory
refers to a product or service that consumers see as essentially the same
or similar-enough to another product. Put simply, a substitute is a good
that can be used in place of another.
Substitutes play an important part in the marketplace and are considered
a benefit for consumers. They provide more choices for consumers, who
are then better able to satisfy their needs. Bills of materials often include
alternate parts that can replace the standard part if it's destroyed.

Some Substitutes of Zara- H&M , GAP , Mango, Revolve, ASOS etc

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Complementary Goods
A complementary good is one whose usage is directly related to
the usage of another linked or associated good or a paired good
i.e. we can say two goods are complementary to each other.
When the usage of good A enhances or requires the usage of
another related good B or in simpler term usage of good A
drives the demand for the use of good B.
One very common example is wine and wine glasses. A person
buying a bottle of wine will always prefer to have the drink in a
traditional wine glass, and thus both are interrelated to each
other to its

consumers who take both the products as complementary goods.

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For example Zara stores can’t be operated without electricity

and online website can’t be run without any internet or device.

Leading Competitors of Zara

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Even though Zara can survive with the highest market share in the
clothing market, still there are those competitors out there that Zara
might gain more of their customers if it applied new marketing strategies
. There’ 4 main competitors that the company should consider, including
H&M, Mango, Uniqlo and Gap. For H&M ,it has the customers that are
mostly similar to Zara which mostly are women that are into fashionable
clothes, want to follow the trends but are more price-conscious and
unwilling to spend a lot of money on clothes comparing to Zara. For this
reason, the company’s objectives are to always provide customer with
new designs under the name of an inexpensive clothing label. Talking
about Mango, just like H&M, Mango has the same target market as
Zara.

However, Mango focuses only women who are into fashion and follow
latest trends. The price ranges of both Zara and Mango are also the same
meaning that mostly they share the same women customers. Unlike
Uniqlo, the company doesn’t segment out
on any target group but focus on market as
whole, women, men and children at every
age. Read also about Zara corporate social
responsibility issues

Like Mary Lawton, a spokeswoman for the

Uniqlo once said. “We’re inclusive of everyone.” Moreover, Zara’s
competitor Uniqlo offer unbeatable low prices to the customers and for
this reasons it attracts customers with every purchasing-power level and
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encourages them to go to its store. Lastly, For Gap its focus group is
ones who concerns with good quality but not willing to pay expensive
prices.
However, regarding the change in taste of the customers and gap still
offers basic clothing which makes its sales have dropped due to the lack
of sense of exclusiveness. As a result, Gap is now stuck in between the
company’s other two brand which are Old Navy, brand that offer low
price clothes and Banana Republic which offer high-end clothes.

Some leading competitors of Zara are as follows

Why Consumer Prefer Zara?

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Listen to feedback.-
Zara collects a lot of consumer data from different places: streets, malls,
and customers. Not all of it will be useful, of course, but the data lets
them know what people like, dislike, and how Zara can cater to their
needs.

Anything you will do will result in feedback. When you exercise, your
body gives you feedback in terms of how you look and feel. When you
deliver a service, people’s responses and behaviors provide useful
information for improvement. They let us know how we’re doing and
whether adjustment is needed.

Reduce uncertainty-
Uncertainty in any decision increases the risk that something will go
wrong. Zara studies consumers continuously to decide what direction it
should take its designs before starting the process. Getting merchandise
as close as possible to current trends means sales will likely increase.

Whenever you need to make a

decision, you have to consider the
information at hand. Missing
information can be critical to
knowing whether to move towards a
direction. Before making big
decisions, it’s best to learn more from
different sources to reduce
uncertainty.

Be willing to change course to adapt.

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Zara’s success is based on its ability to adapt quickly. Unlike many

clothing brands, whose designs are stagnant for the season, Zara is
constantly assessing and reacting to the environment in a matter of
weeks.

The brand designs new styles and pushes them into stores while the
trend is still at its peak. As a result, other brands are feeling the pressure
to release multiple collections each season and become more flexible in
their operations to compete.

Sometimes our environment changes faster than our plans. Yes, plans
are important so we know where we’re heading. But it’s also important
to stay flexible and be willing to reassess the situation frequently.
.

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Conclusion

It was a wonderful learning experience for me while working on

this project. This project took me through the various phases of
differentiation. I enjoyed every bit of work and time I had put in
the research and work I had done . I faced a lot of difficulties
while working on it but with the help of different websites,
books and and all those who helped me in this project I
successfully completed it. It helped me a lot in gaining
knowledge and learning about Financing and its sources .I
would like to thank Ms Hetal Philip for giving me the
opportunity to make this project in the first place.

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Bibiliography

AIMA-Consumer Behavior.ppt
CB-Presentation-Neel.ppt
Zara's Page | BoF Careers | The Business
of Fashion
ZARA.docx - Introduction Zara is a Spanish fast
fashion(clothing and accessories retailer based
in Arteixo Galicia(Spain The company was
founded in 1975 | Course Hero
What Does Consumer Behavior Mean for
Marketing? ｜Appier

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