GROUP 8 ABHISHEK GUPTA CHANDRA KISHORE BHARTI MEGHNA GAHLOT SHRADDHA KOTHARI

Inditex is the world's largest fashion group, which has around 100 subsidiary companies. Formed in 1985 Owns brands such as Zara, Bershka, Pull & Bear

 Spanish clothing retailer, founded in 1975 by Amancio Ortega Biggest brand of Inditex Group 1721 outlets in 70 countries

Known as Armani for common people It does not advertise much (only 0.3% of the total revenue) Known for its fast fashion concept

 Zara develops a business model that incorporates moderate prices with new clothing styles faster than its competitors.

It maintains design, production and distribution processes well to respond to the quick shifts in consumer demands.
They are flexible enough to produce 12000 new items annually. The company can design a new product and have finished goods in its stores in four to five weeks.

 They believe in shortening the product life cycle =greater success in meeting customer preferences

They have a design team of 200 people ,which produce 12000 new styles a year.
They keep a close watch on new trends and buying behaviour through market research .

 Zara is an example of a company which exploited the value chain to get competitive advantage. The company aims to achieve the customer satisfaction by introducing variety of fashionable products One distinctive feature of the value chain system of Zara is its agility. In other words, flexibility and quick response to the market demand.

Zara excels by targeting technology investment at the points in its value chain where it will have the most significant impact, making sure that every penny spent on technology adds value.

COMPETITIVE BRAND: H&M

H&M is a Swedish multinational retail clothing company, known for its fast fashion clothing

The design team in the companys Sweden office controls the steps of production, from merchandise planning to establishing specifications
The production is outsourced from approximately 800 factories in Europe and Asia

 Zara, unlike its competitors DOES NOT use outsourcing Zaras competitors face a lack of flexibility in changing orders based on current trends. Inventory costs are higher for competitors because orders are placed for a whole season well in advance and then held in distribution facilities until periodic shipment to stores. Thus, Zara has a competitive advantage especially in the area of product development

ZARA CUSTOMER SATISFACTION ANALYSIS

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Desk Research Online journals Reports by Consulting Firms

PARTICULARS

ZARA

H&M

Promotional Offers Price Tags

Less Consumers were less concerned about the price of the apparels

High Consumers at H&M had been observed to be conscious about the price tags of the apparels

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PARTICULARS
Direct Marketing Buzz Marketing Promotions

ZARA
No Yes Yes

H&M
Yes No Yes

Banner Ads
Celebrity Endorsements

No
No

Yes
Yes

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PARTICULARS
Market Share Unique Selling Point Market cap Number of Stores in UAE

ZARA
13% Imitate latest trends in 2 weeks and make it available on the sales floor within 4 weeks $ 2.10 bn 12

H&M
14% High end clothes at cheap prices, use of organic cotton $ 2.31 bn 19

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ZARA CUSTOMERS
60% 50% 43% 40% 30% 20% 10% 0% GENDER Male Female 57%

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ZARA CUSTOMERS
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% AGE 16 - 24 Years 25 - 30 Years Above 30 Years 28% 32% 40%

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LIKERT SCALE Scoring from 1 to 5 1 strongly disagree and 5 strongly agree

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Sample size 30 Method: Multi Level Sampling Reduces sampling errors Procedure survey questionnaire across 3 different locations (Dubai Mall, Deira City Center, & Mirdiff City Center) Electronic Form technology used for the survey

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Quality Price Deals Store Image

Brand Association
Loyalty Ad Campaign

GENDER

MALE, 12, 40%

FEMALE, 18, 60%

AGE
16 - 24 YEARS, 8, 27%

ABOVE 30 YEARS, 12, 40%

25 - 30 YEARS, 10, 33%

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Step 1: MULTI RESPONSE ANALYSIS

Step 2:
TWO STEP CLUSTER ANALYSIS

MULTI RESPONSE ANALYSIS (MACRO LEVEL ANALYSIS)

0.00%

QUALITY

PRICE DEALS
0.00% 6.70% 16.70%

0.00%

0.00%

Strongly Disagree
41.70% 58.30%

Strongly Disagree

Disagree Neutral Agree

33.30%

Disagree
Neutral Agree
43.30%

Strongly Agree

Strongly Agree

0.00% 1.70%

STORE IMAGE
0.00%

0.00%

BRAND ASSOCIATION
0.00%

0.00%

28.30%

Strongly Disagree
Disagree Neutral Agree
45.00% 55.00%

Strongly Disagree

Disagree
Neutral Agree Strongly Agree

70.00%

Strongly Agree

AD - CAMPAIGN
0.00% 0.00% 0.00%

LOYALTY
0.00% 0.00% 8.30%

Strongly Disagree
40.00%

Disagree Neutral Agree

31.70%

Strongly Disagree

Disagree
Neutral Agree
60.00%

60.00%

Strongly Agree

Strongly Agree

TWO STEP CLUSTER ANALYSIS (MICRO LEVEL ANALYSIS)

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TWO STEP CLUSTER ANALYSIS

16- 24 years
QUALITY PRICE DEALS STORE IMAGE AGREE AGREE AGREE

25 30 years
NEUTRAL DISAGREE AGREE

Above 30
AGREE DISAGREE AGREE

BRAND ASSOCIATION
LOYALTY

STRONGLY AGREE
NEUTRAL

AGREE
AGREE

AGREE
NEUTRAL

AD CAMPAIGN

DISAGREE

STRONGLY DISAGREE

DISAGREE

STRENGTHS QUALITY STORE IMAGE

BRAND ASSOCIATION
WEAKNESSES Advertisement Lack of Promotional Offers Customers are not particularly loyal to the brand

OPPORTUNITIES Zara can increase the share of youngsters (16 24 age group)

THREATS Others brand can attract the customers who are not loyal

From the analysis we have done, we suggest Zara two major things: 1. Their is an opportunity to increase the customers between age group 16 24 years as they are generally satisfied on all the parameters. 2. As the age group of 30 + constitutes major percentage of Zaras customers, we should implement plans for their retention of this segment.

To achieve this we have proposed the following suggestions:

Price Deals Special promotional offers must be given to the young professional & senior executives like providing special discounts if they show their business ID.

Loyalty Loyalty Club Cards must be introduced to give rewards for frequent shopping Advertisement Zara must increase their advertisement budget to attract more customers and increase awareness.

THANK YOU

Q&A