marketing management report in fashion industry marketing plan for zara

With ZARA already present in many different countries,stabilizing politics in each market will be very difficult, so businesses need todo this well to help ZARA thrive everywhere.2.3 Soc

THE MINISTRY OF FINANCE

THE UNIVERSITY OF FINANCE MARKETING

MARKETING DEPARTMENT

GROUP 5 CLASS: CLC_20DMA04

MARKETING MANAGEMENT

REPORT IN FASHION INDUSTRY

MARKETING PLAN FOR ZARA

Professor: Mrs Ngo Minh Trang

HO CHI MINH CITY- 2021

THE MINISTRY OF FINANCE THE UNIVERSITY OF FINANCE MARKETING

MARKETING DEPARTMENT

GROUP 4 CLASS: CLC_19DMA07

MARKETING MANAGEMENT

REPORT IN FASHION INDUSTRY MARKETING PLAN

FOR ZARA

Professor : NGO MINH TRANG

Captain: BUI THI BICH NGOCPhone number: 0979.557.653

HO CHI MINH CITY- 2021

ASSIGNING TASKS TO TEAM MEMBERS

COMMENT OF THE PRACTICE GUILINES TRAINER

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Professor

NGO MINH TRANG

Table of Content

1 Executive Summary 6

2 Situation Analysis 7

2.1 Market summary 7

2.1.1 Market Demographics 7

2.1.2 Market Needs 8

2.1.3 Market Trends 9

2.1.4 Market Growth 10

2.2 SWOT Analysis 11

2.2.1 Strengths 11

2.2.2 Weakness 11

2.2.3 Opportunities 12

2.2.4 Threats 12

2.3 Competition 12

2.4 Product Offering 13

2.5 Keys to success 14

2.6 Critical Issues 14

3 Marketing Strategy 15

3.1 Mission 15

3.2 Marketing Objectives 16

3.3 Financial Objectives 16

3.4 Segmentation: 16

3.5 Target Markets 17

3.6 Positioning 19

3.7 Strategies 19

3.7.1 Product 19

3.7.2 Place 21

3.7.3 Pricing 22

3.7.4 Promotion 22

3.7.5 People and physical evidence 24

3.8 Marketing Mix: 25

4 Financials: 26

4.1 Break-Even Analysis 26

4.2 Sales Forecast: 27

4.3 Expense forecast 29

5 Controls 30

5.1 Implementation 30

5.2 Marketing Organization 33

5.3 Contingency Planning 33

 HO CHI MINH CITY :

Address: VINCOM CENTER, L1-2B & M06, 72 Lê Thánh Tôn, BếnNghé, Quận 1, Thành phố Hồ Chí Minh

- Zara's unique business approach revolves around its customers, whichincludes design, production, distribution and sales through an extensive retailnetwork

 Zara's development and expansion:

- Zara began as a family business, formed in 1975 in the heart of Galicia,northern Spain, by Amancio Ortega and Rosala Mera Zara's first store, whichsells high-end, casual, and fashion apparel

- Zara began a rapid global expansion throughout the next decade, withstores opening in Portugal, New York (USA), Paris (France), Mexico, Greece,Belgium, Sweden, Malta, Cyprus, Norway, and Israel Zara stores can currently

be found in only a few wealthy countries

- Zara currently has 2,251 stores strategically located in top cities across 96countries

 Core values:

function, and long-term sustainability

2 MACRO-ENVIRONMENT ANALYSIS (PESTLE)

2.1 Political and Legal

Vietnam is currently a socialist country, with the Communist Party ofVietnam as the sole Party leading the country The Party and government havepromulgated many economic and political policies that closely follow thesocialist-oriented market economy model With the goal of stronginternational integration, Vietnam has joined and signed many free tradeagreements, and joined many worlds free trade organizations This helpsproducts of foreign companies, typically ZARA, easily develop businessactivities in the Vietnamese market In addition, the Vietnamese Governmenthas also proposed many preferential policies for foreign businesses,encouraging them to do business in Vietnam, opening great opportunities forZARA to approach and develop in the Vietnamese market South with apopulation of nearly 100 million

2.2 Environment

Currently, the issue of the natural environment is concerned because thelevel set by the boom of science and technology in advanced countries iscausing serious damage to the environment So, in every market, differentindustries will have rules or standards of environmental protection jointlyown the earth For example, in the United States increased the import tax ongoods apparel and textiles or set limits for annual weight or quantity ofimports from countries with low and moderate incomes LMIC At the end ofthe life cycle of clothes, some LMIC have begun to adjust the import of usedclothing Or many countries in Europe have strong policies to reduce taxes forcompanies operating in the renewable sector With its widespread presencelike ZARA also need to scrutinize the different elements to avoid unwantederrors From that needs the environmental analysis in many different aspects

to take into a new market or new product lines Here are some environmentalfactors ZARA need to know:

● Products are recycled: due to heavy environmental pollution,organizations need an optimal solution to reuse products Although recyclingcan be expensive, it will be supported by the government and by customerswho love the product and are willing to spend more money

● Waste management: if it is not possible to recycle the product into anew product, there should be a process to treat the waste in the best waybefore discharging it into the environment

● Customer's attitude towards environmentally friendly products:nowadays people tend to live green and care a lot about the environment, soZARA needs to change the criteria to give priority to the launch of eco-friendly products environmentally friendly

● Natural resources are exhausted: ZARA needs to research alternativesources of nature so that customers can have a good view of the brand, clearlysee the risk of exhaustion in the future if they don't act show up now

● Weather and climate conditions: each place will have differentweather, some places are stable but there are places that change quickly, topromptly meet the needs of customers, ZARA modified its strategy.appropriate business strategy For example, the often-cold winter will attractmany customers to buy thick and warm clothes, but as the Earth is warming,

it has to react promptly to launch thinner products to match the weather

● Political stability: this factor is also quite important because politicalstability will help stabilize the business environment and predict trends formarket growth With ZARA already present in many different countries,stabilizing politics in each market will be very difficult, so businesses need to

do this well to help ZARA thrive everywhere

2.3 Social

Sociocultural factors include value systems, beliefs, attitudes, and socialtrends This is an important factor not only for the operational side but alsofor the marketing side ZARA need to understand the general trends andbeliefs of consumers, and businesses need to design and research socialfactors to successfully accomplish their goals Because understanding thebeliefs and attitudes of the community plays a huge role in ZARA marketing,businesses need to analyze social factors in the macro- environment:

● Demographics: the age and gender study of customers greatly affects acertain product, so it should be clearly marketed Besides, the trend ofmigrants also makes it difficult for international business organizations such

as ZARA Therefore, for this group of customers, it is necessary to come upwith an appropriate business and marketing strategy so as not to affect themigrant group Demographic research helps to select the right customersegments with high potential to bring high revenue

to ZARA

● Equality caste and gender: from the market gap in income should offersuitable products for each different class and marketing strategies suitable for

them can receive and look at ZARA select shopping Catching the maincustomers will give appropriate media strategy to promote to customers Forexample, makeup is mainly for women, so it is necessary to target a group ofwomen to promote it widely.

● Social standards: ZARA is present in many different countries aroundthe world, so there will be many different standards and values, so it isnecessary to research in each country to have an appropriate policy The study

of social standards will take a long time to find a standard, but this will bringgreat results to ZARA later

● Online shopping: nowadays, along with modern technology, peoplealso often choose to buy online, but it is still mainly a group of youngcustomers, so advertising on social networks will quickly attract customers.Most customers come to ZARA

● Spending behavior: the study of consumer buying behavior helpsbusinesses forecast purchasing power and develop products based oneconomic indicators related to customers' preferences and spending patterns

2.4 Technological

With the strong development of today's digital technology platforms, it isrequired that all businesses of all industries have appropriate adaptationstrategies Catching that trend, ZARA has launched advanced technologies,helping to improve efficiency from production to supply chain management,thereby improving the quality of products and services before reachingconsumers consumption ZARA outstanding technologies include:

● Classification planning system and PLM:

ZARA uses a web-based product planning, sorting, and managementsystem for the entire supply chain, providing product visibility over timewhile minimizing the supply needed to make a product Is that This ZARAhelps leaders make decisions without any excess supply, the maximum budget

savings while helping the system of ZARA production run smoothly andmore flexibly.

● Distribution and Implementation:

ZARA Fulfillment centers use automated packaging technology, makingthe packing process faster and reducing wait times for ZARA customers Inaddition, ZARA also uses Cubiscan technology to reduce excess space onpackages, reduce capacity, help shipments receive more orders, therebyreducing emissions during package transportation

2.5 Economic

Economic factors such as inflation rate, exchange rate, interest rate,gross domestic product are all factors related to a country's economy Thesefactors affect the business environment ingeneral or related to the profitability

of a company, it evaluates business activities profit or loss Here are theeconomic factors that ZARA need to consider making an informed businessdecision:

Economic structure: ZARA operates under the influence of theprevailing economic structure The economic and regulatory environment in amonopoly or authoritarian structure will be different from that ofmonopolistic and perfect competition

Business cycle: in each country, there will be different growth rates,leading to differences in economic development So business performance isalso affected by how much each country's government spends on coreinfrastructure With mature industries, it will be more difficult for businessesbecause at this time the market is in a more saturated stage than industries thatare in the growth stage Therefore, when setting up a store in a certaincountry, the well-invested infrastructure will facilitate the business of ZARA.GDP growth rate: this is the factor that helps determine the ability ofconsumers to spend on shopping at ZARA In a country with a high GDP,customers will spend more on the company's products

Interest rates: when rising will make the level of borrowing andinvestment of individuals increase, leading to higher rates.

Unemployment rate: this is a signal of low consumer income, whichmeans lower spending reduces ZARA revenue

Exchange rate: this factor will affect the profits and international trade ofbusinesses, especially when the domestic currency fluctuates, which will limitinvestment activities

Effective financial markets: the campaign to expand globally as ZARAfactors will help improve the liquidity position and increase the possibilities

of entering new markets This will help increase efficiency in mobilizingZARA capital partners

3 MICRO - ENVIRONMENT FACTORS:

Zara understands the importance of a strong brand community and takesadvantage of tools like social media to encourage customers to participate,interact and share their brand

With a following of more than 50 million people on Instagram,Facebook, Pinterest, Twitter, and Snapchat, Zara is no stranger to onlineengagement They use each of these channels to facilitate two-waycommunication, helping them build an emotional bond even from behind ascreen

Zara not only builds relationships by maintaining an accessible and to-contact online voice, they also help customers engage with their

easy-community in a worthy way By using hashtags like #zaraman, #zarawomen,

#zarasrpls, #zarakids or #zarastudio

 Disadvantages

Vietnam is a developing country, integrating with world trends, so thegarment market in Vietnam is fiercely competitive in terms of product sales as

well as market domination On the other hand, people always tend to buy

foreign products in consumption, which has facilitated a series of foreign

fashion brands such as Topshop, H&M, Mango, Pull&Bear, Massimo Dutti

and soon Uniqlo and Forever21 entered Vietnam, then cheap fashion from

China and Thailand "landed", many people are concerned that Vietnamese

fashion is difficult to develop

VND-249,000VND -3,499,000VND

Clothing style -Dynamic

-Sport -Everyday -Keeping up with the trends and tastes of young people

-Offices -Everyday -Sport -Follow fashion trends,constantly updated

-UNIQLO:

Simple, everyday things for

everyone -UT:

The collections associated with other brands, designerS

-Combined with famous designers to produce limited collections, bold fashion but still retain practical applicability.

-Variety of styles

- Seasonal collections: Collection+J, uu/ Uniqo

- Office

- Everyday

- Sport -Classic minimalism

Targeted

customer

Millennials (18- 30 years old)

15-40 years old Pay special attention to the female segment

Millennials (18- 30 years old) Pay special attention to the male segment

Brand

awareness

-Range:14 countries -Range: 74 countries

-Ranked 12th in the top

75 retail brands globally

-Range: 23 countries -Ranked 22nd in the top 75 retail brands globally

Product quality Well Good Well Developing typical

fabrics in Japan such as HEATTECH, AIRism,etc.

 H&M

H&M is one of the largest, most widely recognized companies in clothing retail Founded in 1947, H&M devotes all its efforts to developing

genuine, durable women's clothing Erling Persson, the founder, initially

named his business Hennes, then changed it to Hennes & Mauritz after his

partner, eventually shortening it to H&M.

Industry - Retail Fashion H&M is known for its fast-fashion clothing for men, women, teens, and children It

penetrates almost every area of human clothing, with more obvious growth potential Today, H&M has more than 5000 locations around the world In addition, the business has more than 120,000 employees and will continue to expand in the future

 UNIQLO

Uniqlo is a Japanese company that is currently one of the leading clothing manufacturers in the world Its first store was established in 1949

in Ube, Yamaguchi (Japan)

Industry - Fast fashion

Initially starting out as a clothing retailer, Uniqlo later jumped into the fast-fashion group Holding a leading position in the Japanese haute couture sector, it also deals in trendy apparel items from the parts of the world where it is present.

Uniqlo's revenue is in the $200 million range, probably not much compared to ZARA's $13 billion But Uniqlo mainly operates in Asia

 External environment: PESTLE

 Political and Legal:

Goverment Intervention: Vietnam is currently a socialist country, with the Communist Party of Vietnam as the sole Party leading the country The Party and government have promulgated many economic and political policies that closely follow the socialist-oriented market economy model With the goal of strong international integration, Vietnam has joined and signed many free trade agreements, and joined many worlds free trade organizations This helps products of foreign companies, typically Zara, easily develop business activities in the Vietnamese market In addition, the Vietnamese Government has also proposed many preferential policies for foreign businesses, encouraging them to do business in Vietnam, opening

great opportunities for Zara to approach and develop in the Vietnamese market South with a population of nearly 100 million.

 Economic:

GDP growth rate: this is the factor that helps determine the ability of consumers to spend on shopping at Zara In a country with a high GDP, customers will spend more on the company's products.

GDP reached USD 2,700 in 2019 Due to extensive economic integration, Vietnam's economy was heavily affected by the COVID-19 pandemic, but also showed considerable resilience GDP growth will reach 2.9% in 2020.

Interest rates: when rising will make the level of borrowing and investment of individuals increase, leading to higher rates.

Unemployment rate: this is a signal of low consumer income, which means lower spending reduces Zara' revenue.

Exchange rate: this factor will affect the profits and international trade of businesses, especially when the domestic currency fluctuates, which will limit investment activities.

Effective financial markets: the campaign to expand globally as Zara factors will help improve the liquidity position and increase the possibilities

of entering new markets This will help increase efficiency in mobilizing Zara capital partners.

 Social:

Sociocultural factors include value systems, beliefs, attitudes, and social trends This is an important factor not only for the operational side but also for the marketing side Zara needs to understand the general trends and beliefs of consumers, and businesses need to design and research social factors to successfully accomplish their goals Because understanding the beliefs and attitudes of the community plays a huge role in Zara

marketing, businesses need to analyze social factors in the environment:

macro- Demographics: the age and gender study of customers greatly affects a certain product, so it should be clearly marketed Demographic research helps to select the right customer segments with high potential to bring high revenue to Zara

 Online shopping: nowadays, along with modern technology, people also often choose to buy online, but it is still mainly a group of young customers, so advertising on social networks will quickly attract customers

 Spending behavior: the study of consumer buying behavior helps businesses forecast purchasing power and develop products based on economic indicators related to customers' preferences and spending patterns.

 Technology:

Launching apps: Zara uses technology to help manage its overseas stores as well as the sales website where Zara's buying and selling activities take place.

 Environmental:

Vietnam require quick fashion change: The weather in Vietnam is very different and almost does not follow certain rules like in countries in Europe Therefore, fashion trends change constantly, forcing Zara to always adapt to meet the needs.

3.2 SWOT ANALYSIS OF ZARA

3.2.1 Strengths:

Pioneer Advantage: Fast-fashion focuses on designing, producing, and selling clothes as soon as they identify a trend In traditional fashion, the process takes months; Zara does this in 3 weeks As pioneers, Zara has the

most evolved strategy and management practices in running the supply chain.

Stores: Zara is selling in 202 markets and has stores in 96 of them Totaling 2249 stores, Zara has the most number of fashion retail stores in the world The number is almost twice the number of retail stores than Nike has, which has the second-highest number of retail stores.

Supply Chain: Zara refreshes its online and retail collection two times

a week Zara’s 10 logistic centers deliver to any location in the world within

48 hours Inditex also has an in-house team who design software to double the speed at which the company dispatches orders.

Design Team: Inditex has a team of 700 trained designers who transform the customer’s desires to designs The team of designers outputs 50,000 creatives a year And, it takes them just 3 weeks to get the designs from the drawing board to the stores.

Switch to Online: Inditex is investing $3 billion in bolstering its online sales The investment focuses on developing an engaging online buying experience and integrating existing physical infrastructure The company aims to generate a quarter of its revenue through online sales by 2022.

3.2.2 Weakness

Fast-Fashion: Interestingly, the trend that helped propel Zara to the top is the cause of its most pressing weakness With the focus on sustainability increasing among customers and policymakers Zara’s weakness is balancing sustainability with fast-fashion.

Reliance on Physical Stores: The pandemic accelerated Zara’s plans to limit the number of physical stores Online sales helped Zara climb out of a massive drop in sales because of COVID-19-related causes However, even with online sales picking up, the sales are only at 89% of what it was in 2019.