(3) Zara spends little money on advertising, for instance their advertising costs are equivalent to 10% of competitors’ expenditure. Zara applied a different promotion of the brand- making its stores more visible and appealing to the customers, which is crucial to the success of the business. Before they open a new store, they make an extensive market research, which is focused on prestige locations, remarkable building, layout and decors. (4) Zara is not producing a high quantity of clothes, but prefers fewer
Castellano and Ortega shared the same beliefs that quick response to customers, use of computers, and disintegrated decision-making were important to build the business (McAfee, Dessain, & Sjoman, 2007). Zara model has become phenomena, and many fashion companies tried to imitate it, yet no one succeed to achieve the distinguish place of Zara in the fashion industry. One of the reasons for this originality is the innovation oriented process that has been used since the opening of the company. In the following pages, Zara model, innovation, process, flexibility and many other issues is going to be discussed through the answers to three questions. Q1.
Executives therefore rushed to fashion hybrid strategies, companies would centralize production, research and technology, but localize marketing, distribution and PR to accommodate cultural and geographic differences. In this article, it is mentioned that most people choose one global brand over another because of differences in the brands' global qualities. Rather than ignore the global characteristics of their brands, firms must learn to manage those characteristics. That's critical, because future growth for most companies will likely come from foreign markets. Going global is highly attractive, as it is mentioned in the article, it not only represents a perception of excellence but it comes with a challenging set of obligations that many do not anticipate or plan for.
Positioning is extremely important for a retail firm, because of course a retail store cannot be everything, and firms that were previously positioned to target this generation were now left wondering what to do next. Market share was also getting more competitive with pressures for lower pricing, fast-fashion, and ethical behavior. Le Chateau was faced with the problem of positioning itself in the post-boomer market to achieve market share and profitability goals as it had done for the past 50 years. Target Market and it’s Evolution Le Chateau initially focused on marketing its apparel to fashion leaders. London’s Carnaby Street was a new fashion wave described as modern in the 1960’s.
Zappos does not complete on price because it believes customers want to buy from the store with the best service and selection. The company strives to create a unique and addicting shopping experience. The spirit of simplicity, innovation, and great service extends to Zappo’s inventory and distribution systems as well. Zappos has one of the few live inventory systems on the Web. If Zappo’s displays an item, it is in stock.
Name: _________Sarah Yarnall________________ Grade: _______________ Date: _____________1/26/15________________________ Case #: __________1__ Case Name: ___Zara: Fast Fashion from Savvy Systems___ 1. What is the “conventional wisdom” of the fashion industry with respect to design, manufacturing, and advertising? Convention wisdom suggests that leveraging cheap contract manufacturing in developing countries can keep the costs of goods low. Contract manufacturing, which involves outsourcing production to third party firms, companies do not own plants or directly employ the workers to produce the requested goods. By doing this firms can lower prices and sell more product or maintain higher profit margins- all good for the bottom line.
It helps the market to anticipate and answer the “needs” of the consumers and what they will wish next. 2. The methodology: trickle up theory This forecasting process happens when we can see a trend starting in the lower levels of society that it’s diffused to the high level ones. It can happen through music, art, style and attitude and it’s normally transported through fashion designers into their collections, magazines etc. The final result of this phenomenon is for example celebrities wearing flip-flops and tattoos, the Saint Laurent’s FW13 collection with a strong influence of street style and even princesses wearing overalls (Princess Diana in the 80’s).
This can be clearly clarify by following factors. Zara began as a garments retailer in Spain in 1975 and got consolidated inside Inditex in 1985. From its first commencement, Zara cantered its development in the residential business. In 1988, Zara was persuaded to scan for new markets when the Spanish market got immersed. From 1989 to 1996, Zara ventured into businesses geologically.
If that wasn’t enough the companies long-time creative director, Joanne Ooi, is leaving the company creating a void in the leadership role of the company’s brand vision. To solve all of this the company can hire from the outside or promote from within but despite this decision they have to handle how they can defend their domestic market share, their international market share, and be able to move into new markets while not straying away from its fundamental values of being a sophisticated, individualistic, and ancient Chinese inspired luxury brand producer. To solve this problem the company should promote its current Chief of Clothing Design, Joseph Li to the role of creative director. This will help the designers feel respected by the management and help improve their work as they feel they are a better part of the process with one of their own running the process. Also, Joseph has international experience at various other companies and can help with the expansion into new markets and since he is Hong Kong-born Chinese he still has a connection to Chinese culture.
The company is a wholly owned subsidiary of Fast Retailing Co. Ltd., listed on the first section of the Tokyo Stock Exchange. Considered part of the ‘big three’ of high-street retailers (along with Zara and H&M) UNIQLO differentiates itself from the conventional fast-fashion model. Their approach is the polar opposite of Zara’s: UNIQLO is able to keep the selling/retail price low because they do not change their merchandise plans based on the latest trends (in terms of producing classic/high quality products versus trendy/seasonal garments). Instead, UNIQLO reserves factory capacity in advance to enable the production of garments at a constant rate rather than rushing to produce fashionable garments. By manufacturing well-designed, fabricated, technologically driven, classic garments and managing to sell them at affordable, competitive prices largely due to reined-in factory costs; UNIQLO is able to maintain customer demand without chasing trends, thus defying the traditional fast-fashion model pursued by the majority of high-street apparel