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

HO CHI MINH CITY- 2021

THE MINISTRY OF FINANCE

THE UNIVERSITY OF FINANCE MARKETING

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

1 INTRODUCTION Website: zara.com/vn

 Facebook: facebook.com/ZaraVietNamOfficial  Twitter: twitter.com/ZARA_Care

 Hotline: 028 44581117

 Operating date: 8/9/2016 ( Has been in operation 5 years) Status: Active

 Address:

 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 currentlybe 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 aspectsto 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 todo 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 suchas 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 studyof 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 profitabilityof 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 possibilitiesof entering new markets This will help increase efficiency in mobilizingZARA capital partners.

3 MICRO - ENVIRONMENT FACTORS:

3.1 Marketing Environment:  Internal environment:

Choosing for themselves a potential customer segment from 16-45 yearsold), Zara has completely dominated and conquered its customer segmentwhen meeting the constantly changing fashion needs.

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 theircommunity in a worthy way By using hashtags like #zaraman, #zarawomen,#zarasrpls, #zarakids or #zarastudio

easy- Disadvantages

Vietnam is a developing country, integrating with world trends, so thegarment market in Vietnam is fiercely competitive in terms of product sales aswell as market domination On the other hand, people always tend to buyforeign products in consumption, which has facilitated a series of foreignfashion brands such as Topshop, H&M, Mango, Pull&Bear, Massimo Dutti and soon Uniqlo and Forever21 entered Vietnam, then cheap fashion fromChina and Thailand "landed", many people are concerned that Vietnamesefashion is difficult to develop.

 Competitors:

Brand name/Comparativecharacteristics

Urban OutfittersH&MUniqlo

Price ~400,000 21,000,000 VND

249,000 8,000,000VND

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

Clothing style -Dynamic-Sport-Everyday-Keeping up with the

trends and tastes ofyoung people

-Sport-Follow fashiontrends,constantly

-Combined with famousdesigners to producelimited collections, bold

fashion but still retainpractical applicability.

-Variety of styles

- Seasonal collections:Collection+J, uu/ Uniqo

- Office- Everyday

- Sport

-Classic minimalism

Targeted customer

Millennials (18- 30years old)

15-40 years old Payspecial attention to the

female segment

Millennials (18- 30 yearsold) Pay special attention to

the male segment

-Range:14 countries-Range: 74 countries-Ranked 12th in the top

75 retail brandsglobally

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

retail brands globally

Product quality WellGoodWell Developing typicalfabrics in Japan such asHEATTECH, AIRism,etc.

 H&M

H&M is one of the largest, most widely recognized companies inclothing retail Founded in 1947, H&M devotes all its efforts to developinggenuine, durable women's clothing Erling Persson, the founder, initiallynamed his business Hennes, then changed it to Hennes & Mauritz after hispartner, eventually shortening it to H&M.

Industry - Retail Fashion

H&M is known for its fast-fashion clothing for men, women, teens, andchildren It

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

 UNIQLO

Uniqlo is a Japanese company that is currently one of the leadingclothing manufacturers in the world Its first store was established in 1949in Ube, Yamaguchi (Japan)

Industry - Fast fashion

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

Uniqlo's revenue is in the $200 million range, probably not muchcompared 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, withthe Communist Party of Vietnam as the sole Party leading the country TheParty and government have promulgated many economic and politicalpolicies that closely follow the socialist-oriented market economy model.With the goal of strong international integration, Vietnam has joined andsigned many free trade agreements, and joined many worlds free tradeorganizations This helps products of foreign companies, typically Zara,easily develop business activities in the Vietnamese market In addition, theVietnamese Government has also proposed many preferential policies forforeign businesses, encouraging them to do business in Vietnam, opening

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

 Economic:

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.

GDP reached USD 2,700 in 2019 Due to extensive economicintegration, Vietnam's economy was heavily affected by the COVID-19pandemic, but also showed considerable resilience GDP growth will reach2.9% in 2020.

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 internationaltrade of businesses, especially when the domestic currency fluctuates, whichwill limit investment activities.

Effective financial markets: the campaign to expand globally as Zarafactors will help improve the liquidity position and increase the possibilitiesof entering new markets This will help increase efficiency in mobilizingZara capital partners.

 Social:

Sociocultural factors include value systems, beliefs, attitudes, andsocial trends This is an important factor not only for the operational sidebut also for the marketing side Zara needs to understand the generaltrends and beliefs of consumers, and businesses need to design and researchsocial factors to successfully accomplish their goals Because understandingthe 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 greatlyaffects a certain product, so it should be clearly marketed Demographicresearch helps to select the right customer segments with high potential tobring high revenue to Zara

 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 attractcustomers

 Spending behavior: the study of consumer buying behavior helpsbusinesses forecast purchasing power and develop products based oneconomic indicators related to customers' preferences and spendingpatterns.

 Technology:

Launching apps: Zara uses technology to help manage its overseasstores as well as the sales website where Zara's buying and selling activitiestake place.

 Environmental:

Vietnam require quick fashion change: The weather in Vietnam is verydifferent and almost does not follow certain rules like in countries inEurope Therefore, fashion trends change constantly, forcing Zara to alwaysadapt to meet the needs.

3.2 SWOT ANALYSIS OF ZARA3.2.1 Strengths:

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

most evolved strategy and management practices in running the supplychain.

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 inthe world The number is almost twice the number of retail stores than Nikehas, which has the second-highest number of retail stores.

Supply Chain: Zara refreshes its online and retail collection two timesa week Zara’s 10 logistic centers deliver to any location in the world within48 hours Inditex also has an in-house team who design software to doublethe speed at which the company dispatches orders.

Design Team: Inditex has a team of 700 trained designers whotransform the customer’s desires to designs The team of designers outputs50,000 creatives a year And, it takes them just 3 weeks to get the designsfrom the drawing board to the stores.

Switch to Online: Inditex is investing $3 billion in bolstering its onlinesales The investment focuses on developing an engaging online buyingexperience and integrating existing physical infrastructure The companyaims 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 thetop is the cause of its most pressing weakness With the focus onsustainability increasing among customers and policymakers Zara’sweakness is balancing sustainability with fast-fashion.

Reliance on Physical Stores: The pandemic accelerated Zara’s plans tolimit the number of physical stores Online sales helped Zara climb out of amassive drop in sales because of COVID-19-related causes However, evenwith online sales picking up, the sales are only at 89% of what it was in2019.