SCHOOL OF MANAGEMENT
Learning to make a difference
“For a retail organization of your choice evaluate the elements of its retail marketing mix, in terms of the effectiveness with which they are used to appeal to the core target market”
ZARA – flagship chain store
List of Contents
I. Introduction: 2
II. Background 2
III. Retail Marketing Mix 3
1. Merchandise assortment 3
2. Location 3
3. Price 4
4. Store design and Visual merchandising 4
5. Advertising and promotions 5
6. Customer service 5
IV. Competitors 6
V. Conclusion 6
Appendix ...view middle of the document...
The most common elements of each marketing mix are product, price, place, promotion. In the theory of Varley and Rafiq, they are using some more variables which can give us a better picture why and how Zara became such a successful company. That was also one of the reasons for choosing this theory. The variables that are going to be discussed in the report are: Merchandise assortment, Location, Price, Visual merchandising, Store atmosphere, Customer service, Advertising, Promotions, Personal selling.
Zara is a flagship chain store that is part of Inditex Group whose owner is Amancio Ortega – a poor man in the past, started business just with $83, now the richest person in Spain. Headquarter of the group is located in A Coruna, Spain. Over there the first Zara store was opened in 1975. In 1980 Ortega decided to start expansion and change the manufacturing, design and distribution process. That is how the first store in Porto was opened. United States, Mexico, France and Greece followed in the next 15 years. Now there are about 1500 Zara stores in more than 70 countries. For the company 200 designers are occupied and the manufacturing is all based in Spain. Each one of these designers produces 1-2 styles a week. That makes Zara offering more than 11,000 models every year. Zara holds around 86 % of Inditex total international sales, which is significant percentage for just one out of 7 stores part of this group.
III. Retail Marketing Mix
1. Merchandise assortment
The product is very important marketing mix variable. And how Varley and Rafiq write in their book “Principles of retail management” It’s a mean by which a retailer is able to differentiate itself from its competitors.”
Zara offers men, women and kids clothing from newborn to the age of 45 and each one of them is divided on Lower Garment, Upper Garment, Cosmetics, Shoes and Complements. Recently Zara started producing large sizes clothes with equivalent to 16 UK size. Interesting thing about Zara’s products is that it makes its own designs, paying a great attention for understanding the customer’s needs and latest taste of clothes. After figuring out that it produces them and distributes them itself. The greater part of Zara’s products are manufactured in Spain and just a small part is produced outside of Europe. Zara unlikely its competitors prefer to manufacture the products in its own factories rather than using an outsourcing somewhere in the Asian countries where the labor force is significantly cheaper. Zara is producing new clothes throughout the year and permanently changing its displays in the stores. Products in each store vary continuously and the goods are retained in the store for no more than four weeks. If this still happens then this product is sent to the store located more often in developing countries. Process is like a carousel, where the customer is offered with a great variety of choices. This is also the way through permanent change...