Marketing channel design an optimal marketing channel strategy of zara vietnam

VIETNAM GENERAL CONFEDERATION OF LABOR TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION MARKETING CHANNEL DESIGN AN OPTIMAL MARKETING CHANNEL STRATEGY OF ZARA VIETNAM Lecturer: Group: Course: Major: MBA PHAM VAN PHAT A&B 2020 – 2024 Marketing Management (CLC) HCMC, DECEMBER 2022 LIST OF MEMBERS Member Student ID Task Completition Nguyễn Thị Mỹ Huyền 720H1384  How to approach the needs and problems  Limitations & caveats Vũ Thụy Thanh Hà 720H1375  Introduction  Market background and context 100% Trần Hương Quỳnh 720H0992  Recommendations for optimizing the marketing channels system 100% Nguyễn Như Ngọc 720H1394  Needs and Problems identification 100% Huỳnh Anh Tài 720H1411  How to approach the needs and problems 95% Trần Nguyễn Bảo Ngọc 720H0947  Word  Powerpoint 100% Ngô Trần Hồng Quyên 719H0902  Key findings / results 100% 51900509  Needs and Problems identification  Conclusion 100% Phùng Gia Hy 100% i THANK YOU In fact, there is no success that is not tied to the support and help, whether more or less, directly or indirectly from others During the time since I started studying at the university until now, I have received a lot of attention and help from teachers, family and friends With the deepest gratitude, I would like to send to all the teachers at the Faculty of Business Administration - Ton Duc Thang University who, with their knowledge and enthusiasm, imparted valuable knowledge to us in the future throughout the school year And especially, in this semester, the faculty organized for us to have access to a subject that I think is very useful for students of Marketing, which is Marketing Channel I would like to express my sincere and deep thanks to Mr Phạm Văn Phát for his dedication to guiding us in each class session as well as in conversations and discussions on professional fields Without the guidance and teachings of the teacher, I think my lesson would be very difficult to complete Finally, I would like to wish the teachers of the Faculty of Business Administration, Mr Phạm Văn Phát, good health and faith to continue to carry out his noble mission of imparting knowledge to future generations Best regard! Hồ Chí Minh City December 15, 2022 Group A&B ii TEACHER COMMENT ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… ……………………………………………………………………………………… iii CONTENT THANK YOU .ii TEACHER COMMENT .iii INTRODUCTION .vi I MARKET BACKGROUND AND CONTEXT 1.1 Manufacturer/producer & products’ overview .1 1.1.1 Background: .1 1.1.2 Successful: 1.2 Environmental factor 1.2.1 Economy 1.2.2 Technology 1.2.3 Competition 1.2.4 Social-culture 1.2.5 Government II NEEDS AND PROBLEMS IDENTIFICATION .5 2.1 From manufacturer / producer’s perspectives .5 2.1.1 Product 2.1.2 Place 2.1.3 Price 2.1.4 Promotion 2.2 From the intermediaries’ perspectives 2.2.1 Product 2.2.2 Place 10 2.2.3 Promotion 10 2.3 From the customers’ perspectives .11 2.3.1 Product 11 2.3.2 Price 11 2.3.3 Place 12 2.3.4 Promotion 12 III HOW TO APPROACH THE NEEDS AND PROBLEMS 13 3.1 Primary data 13 3.1.1 Question table 13 3.1.1.1 Demographic 13 3.1.1.2 Survey .13 For Zara’s Customer: 13 iv 3.1.2 Data analyze 14 3.1.2.1 Demographic 14 3.1.3 Part .15 3.2 Secondary data 20 IV KEY FINDING / RESULTS .23 V CONCLUSIONS 26 VI RECOMMENDATIONS FOR OPTIMIZING THE MARKETING CHANNELS SYSTEM 27 5.1 Channel structure [Channel strategy] 27 5.2 Optimal marketing / distribution channel [Channel motivation] .28 5.2.1 Vertical Conflict Vertical conflicts are conflicts that occur between members at different levels of distribution in a channel 28 5.2.2 Horizontal Conflict 28 VI LIMITATIONS & CAVEATS 29 APPENDIX .30 REFERENCES 31 v INTRODUCTION   In particular, fast fashion, also known as instant fashion, is a term used to refer to items inspired by the latest fashion trends, which are produced very quickly to be shipped to stores.  and sell for user users.  This fashion industry allows consumers to purchase striking new, innovative, on-trend designs at affordable prices that are affordable to most people   Fast Fashion's target audience is a group of young customers who always have a fashion sense that follows "trends".  Because of this special feature, Fast Fashion is transforming the traditional fashion industry with new collections and product lines that are launched in an orderly seasonal fashion.  In fact, it's not surprising that Fast Fashion brands continuously launch new designs, even within a week to catch up with the new trend of the market   When it comes to big brands in the fast fashion market, names like: Zara, H&M Group, UNIQLO, GAP, Topshop, Esprit, Primark, Fashion Nova and New Look.  Not on the list of luxury fashion brands like Hermes, Chanel, Louis Vuitton or Versace.  but Zara has become a major brand in the world and in the affordable fashion market with its ability to capture the top trends.  Ingenious turning the outfits on the catwalk into everyday clothes is Zara's first secret.  Just after the brief fashion week, people saw the real versions of the Christian Dior, Prada dresses.  has a price worth in zara stores with similar design for less than $100   Despite bringing many benefits to customers and businesses, this fashion industry is also only cited quite a lot because it narrows down the waste of wasted life.  That's why there is another name for this industry that is disposable fashion.  Many Fast Fashion followers, especially young people, students, and students who not have too many economic conditions, also admit that they only wear clothes they have bought once or twice, they feel bored and don't wear them again vi I MARKET BACKGROUND AND CONTEXT 1.1 Manufacturer/producer & products’ overview 1.1.1 Background: In the first months of 2022, the export of sewing needles (exports) from Australia can be estimated at about US$22.3 billion (an increase of nearly 18% over the same period in 2021) and the full year export target is 42-43 billion of USD For many years, Vietnam's garment exports have always stood in a high position, always in the "top" of the world's garment exports, but "forgotten" the domestic market To fill the gap of the market, in the past, a series of foreign fashion brands such as Zara, H&M, Uniqlo have landed strongly in the Vietnamese market and the scene of "snake dragons" customers queuing to buy Shopping on the opening day shows the increasingly strong attraction of fashion to Vietnamese consumers In particular, Zara - a foreign fashion brand that has been welcomed and favored by Vietnamese consumers in recent years, with products priced similar to Vietnamese products of the same type, but the biggest difference is that most of the clothes Zara's clothes are modeled from high-end brands' designs, fashion designs are always updated and changed so customers feel they can always buy those outfits unified, but the price is not mixed up like other fashion brands Zara is the first store chain of Inditex Group, the world's largest clothing retailer Inditex itself is a fashion retailer owning brands: Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home Amancio Ortega - founder of Zara, who adapted a unique, innovative and flexible business model This makes Inditex one of the largest retailers in the world Amancio Ortega opened the first Zara store in 1975 in Spain and merged it into Inditex in 1985 1.1.2 Successful: Zara's success stems from its ability to reduce delivery times and react to trends almost instantaneously The company is unafraid to go against conventional wisdom, vertically integrating its supply chain and moving production to Europe (near-shoring), while many in the fashion industry choose to outsource manufactured in lower cost factories in Asia The vertically integrated business model covers all stages of the fashion process: Design, production, logistics, distribution for their own stores The key to this model is the ability to deliver products to customers according to their wishes in the shortest possible time Time is the main factor considered to be comparable to the cost of production in ZARA Zara disrupted the fashion industry by shortening its time to market to less than three weeks, creating a new category of affordable fast fashion This model allows the company to become a heavyweight in the highly competitive fashion industry: to date, Zara has been present in over 88 countries with over 6,500 stores, of which are located in Vietnam and Its net profit for the three months to the end of October 2021 hit an "all-time record" of 1.23 billion euros ($1.39 billion), up 42 percent year-on-year 1.2 Environmental factor 1.2.1 Economy - Cheap labor source: As mentioned before, Zara is a Spanish brand Spain has one of the highest unemployment rates in Europe, which means it has relatively low labor costs — especially compared to other Western European countries, such as France, Germany and the UK Zara manufactures a large part of its products in Spain, so this low labor cost allows them to reduce costs and thereby improve profits - Global economy: Zara is one of the brands that operate worldwide Therefore, the global economy plays a significant role in its growth The global economic slowdowns can harm business The whole world is presently experiencing financial distress Thus, it is affecting Zara's functioning A high inflation rate and less money at the hand of customers can show a negative impact on the business of Zara This economic condition can limit the financial growth of the brand too - Relative affordability:  Zara is a well-recognized brand, so those less familiar with its products might think they’re quite expensive On the contrary, Zara is considered a relatively affordable brand in comparison to other European highstreet fashion names This allows the company to thrive even in poorer countries; for example, despite Spain’s slow economy, Zara is still one of the most popular clothing brands in the country  In Vietnam, with an average price of to 100 USD (about 180,000 to 2,200,000 VND), it can be said that Zara's products are quite reasonable with the average income of Vietnamese people  In addition, the price level of Zara is also "easier to breathe" than other foreign brands in Vietnam such as Mango, Topshop Even this price is much cheaper than Vietnamese brands Typically, Zara men's shirts are only sold for 30 to 50 USD (about 669,000 VND to 1.1 million VND), cheaper than Vietnamese brands such as Viet Tien, An Phuoc or Mattana (with average price from 600,000 VND to 1.6 million VND) 1.2.2 T echnology - Use of big data:  Zara is one of many brands looking to use technology to expand its reach As one of the world’s most popular fashion retailers, the company has both the money and the audience needed to get the most out of data As a result, Zara is looking to big data — the study of analyzing huge data sets — to find better ways to reach and appeal to consumers With both online and in-person customer touchpoints, this isn’t a straightforward task  They have a well-designed website that can help create a robust online presence to grab the attention of potential customers They can target the communities for online marketing, eventually increasing their sales  Using advanced technology and worldwide reach, Zara does thorough market research to learn the demand of their customers It gives them ideas about the sectors they need to improve 1.2.3 ompetition C Zara's biggest competitors include HM and Uniqlo Zara makes a difference from the other two brands thanks to the policy of "taking meat over people", in short, this popular fashion brand launches more fashion products than any other competitor For example, each brand only puts on shelves from 2,000 to 4,000 products, with Zara it is 10,000! Thanks to the development of a huge quantity but still ensuring quality, Zara can attract a diverse customer base, with an extremely diverse aesthetic 1.2.4 cial-culture So - Fashionable Brand: Despite its affordability, Zara is a fashionable name for most shoppers This is where you can only praise the company for its hard work Zara delivers a goodquality product for not a lot of money And thanks to the brand’s clever marketing efforts, it feels rather exclusive for buyers Overall, this strong, positive brand presence allows Zara to collect healthy profit margins for its shareholders, while buyers still feel like they’re getting a great deal - Online Shopping Trend: There’s no doubt that online shopping is a major trend in the 21st century Although clothes shopping might not be the best fit for the web, consumers now want to order their garments with the tap of a button, and from the comfort of their own homes This isn’t necessarily a bad thing for Zara, since they already have a popular webshop However, Zara will have to pay close attention to the performance of its online store, since consumer’s preferred channels are definitely changing - Thinking "foreign goods are better quality" of Vietnamese people: ... RECOMMENDATIONS FOR OPTIMIZING THE MARKETING CHANNELS SYSTEM 27 5.1 Channel structure [Channel strategy] 27 5.2 Optimal marketing / distribution channel [Channel motivation] .28... income of Vietnamese people  In addition, the price level of Zara is also "easier to breathe" than other foreign brands in Vietnam such as Mango, Topshop Even this price is much cheaper than Vietnamese... - European Trade Agreements: Zara is a Spanish brand, so it enjoys all of the benefits of operating a business out of the European Union In a political context, one of the biggest pros of running