To: G. Bernard Yevin, CMO
From: Joey McNaught
Subject: Case 3: Marketing Excellence: ZARA (Pages 552 - 553)
Date: April 7, 2019
Located in Spain, Zara has been Europe’s leading apparel retailer for a number of years. Their ability to provide consumers with current, high fashion styles at reasonable prices. Zara’s overarching strategy is currently achieving growth through diversification with vertical integrations. This strategy has adapted to couture designs, manufactures, distributes, and retails plentiful amounts of clothes within approximately two weeks after the original design makes its first appearance on the catwalks.
Zara makes approximately 85 percent on the full price clothes they sell, which is above the industry average (60-70 percent). On top of this, unsold items account for just less than 10 percent of its stock, which the industry average is about 17-20 percent.
The problem that they are facing, is that they are having a tough time when they expand into new markets and countries because it provides a risk of losing the rapid progress they make and will have to work extra hard to keep providing new products for their customers. On top of this, they are trying to figure out the best way to make their presence online while still using their current business model.
1. What are the demographics and psychographics of the ideal Zara customer? Justify your analysis.
Like most companies, a demographic is very specific because it is easy to market to people of all ages and different mindsets but for Zara, they try their very best to market to a very specific demographic. The demographics for Zara a men or women between the ages of 18-40, with a mid-range income, and are interested in fashion trends. This specific age group is because that is the typical age group of working people that can provide for themselves. I believe that Zara markets to this specific demographic that is interested in fashion trends because they are always providing new fashion styles for consumer interests.
With demographics, there are always psychographics that go along with those specific segments. Psychographics are the mindsets of the consumers and specifically, Zara’s consumer psychographics are people that live a very hectic lifestyle, are small sized customers, and like plus sized shaped garments. I think that Zara chooses people who live a hectic lifestyle because of the way that the company constantly puts out new products at a rapid pace, meaning that the consumers keep up with the rapid trends, thus living a hectic lifestyle. I feel that they choose to target small-sized customers because with living a hectic lifestyle, their consumers are always on the go and active, which helps with having a slimmer figure and helps the consumer purchase by instinct. Lastly, I feel that they target people who enjoy plus sized garments because more often than not, people feel comfortable wearing larger sized clothes.
2. What are the...