zaras marketing plan to expand to vietnam

When targeting Vietnam''''s fashion market, Zara Vietnam belongs to the franchise chain of Mitra Adiperkasa Indonesia in Vietnam.. Besides Mitra Adiperkasa Vietnam to do business in Zara, M

Principles of Marketing Semester 01-2020

ZARA’s Marketing Plan to Expand to Vietnam

Submitted by:

Thân Vũ Quỳnh Hương - BAFNIU19091 Nguyễn Hồng Phương Uyên - BABAIU19370

Đặng Ngô Lam Thanh - BABAIU19316

Trần Ngọc Dan Tuyên - BABAUH19050

Lecture: Trần Tiên Khoa

Vietnam Market analysis

© Demographics and Other Economic Indicators (e.g Population, GDP, Competitors, etc.)

© Market Overview e Market Segments © Competitive Landscape

TDP analysi @ Segmentation ® Targeting ® Differentiation

Marketing Mix ® Products @ Price @ Place

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Galicia city, Spain With the starting point as a small boutique, Zara today has a presence in every country and becomes the world's fastest development fashion brand In 2018, Zara was ranked 25th in the Best Global Brands ranking developed by the marketing consultancy firm Interbrand And in 2020, it was ranked 35th in the Best Global Brands ranking and reached 14,862 million dollar of the brand value When targeting Vietnam's fashion market, Zara Vietnam belongs to the franchise chain of Mitra Adiperkasa (Indonesia) in Vietnam The Zara stores in Vietnam are operated by Mitra Adiperkasa (MAP), a partner of Inditex in Indonesia Besides Mitra Adiperkasa Vietnam to do business in Zara, MAP also established three other legal entities to trade brands such as Pull & Bear, Stradivarius, Massimo Dutti in Vietnam Zara's Vision Statement

"To attain market leadership through unmatched quality, a diverse and unique product mix, empowered employees, world-class systems, and the highest ethical and professional standards."

Zara's Mission Statement

"ZARA Textile is devoted to achieve consistent improvement in the system of providing products & services to the customers through On Time Delivery & Enhancing Customers Satisfaction by means of Quality and Value." Zara's objectives

To be an eco-friendly brand Entirely abolishing the use of plastic in production " [We] are highly focused on making clothes in a responsible, sustainable way, that limits the impact on the environment and [which] challenges ourselves to continually work as hard as we can to improve how we manufacture,” said Marta Ortega With the advantage of the speed of product creation is very fast, making its products always "on trend" (fast catching fashion trends) Customers who come to Zara always have the mentality to experience the latest trends, the latest collections with the latest designs This is one of the reasons why, although only appearing in Vietnam, Zara quickly proved its attractiveness to Vietnamese consumers when the 3-year revenue reached more than 3,000 billion VND According to Zara Vietnam's financial statements, In 2017, the revenue of the entire Mitra Adiperkasa system in Vietnam has hit the roof to more than 1,100 billion VND (data published by this group) Before that, at the end of 2016 with a business period of less than 4 months, Zara Vietnam recorded revenue of 321 billion VND, equivalent to average daily revenue of 2.8 billion VND and profit before tax of 38 billion VND according to the Vietnam

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Industry Research and Consulting JSC (VIRAC) In total 3 years on the Vietnamese market, Zara earned nearly 3,100 billion VND, with an average annual gross profit margin of about 40%, nearly equal corresponding to the brand name IPP Group of Mr Jonathan Hanh Nguyen and other large luxury retailers such as Tam Son Fashion (Hermes, Bottega Veneta, Boss .) of OpenAsia Group or MaiSon International Retail (Mango, Topshop Topman, Charles & Keith .)

SWOT Analysis:

® Stylish and high quality designs are @ Unavailable stock product

available at a feasible price @ Weak presence in USA and Asia There are @ Able to control distribution channels to few stores in Malaysia, Thailand and India

capture added value instead of giving to whereas this area makes up 38% of the

@ Actively diversify and promote ZARA stores in India is just 20 (Jan,

@ Zara has a dense coverage with thousands Newzealand has just one store of stores covering internationally ® Diluted brands because of lacking ® Quick product refreshment While rival specialties and highlights in products

brands produced 2000-4000 models per @® Minimum spending in marketing and year, Zara produces approximately 11000 promotion Zara is largely dependent on models in a year It just takes about 2-3 the word-of-mouth marketing (WOM) or weeks for a new design to be ready on social media However, social media is

@ Spend a large amount of budget in prime interaction between the brand and locations in luxurious shopping malls consumers

With the evident of two prime locations @ Inefficient in management In Vietnam, and large scale of Zara in two Vincom some customers said that they feel Shopping Centre in Vietnam uncomfortable when the process of fitting @® With the vertically integrated supply and payment takes too much time

chain, Zara can export 24/24 This vertical | @ Unprofessional employees The lack of integration allows Zara to retain control of employee's flexibility makes it difficult for stitches such as fabric dyeing and the customers to find the outfits they want ability to process fabric on demand to ® Distributing clothing inappropriate to the

deliver precise fabrics for new styles according to customer preferences

weather and climax in Vietnam Zara displays lots of outfits for autumn and winter while the store is in Saigon

markets

@ Increasingly invest in AJ, virtual reality to bring better benefits and experiences to customers

@ Focus more on marketing strategy in order to increase sales and create more value for customers

@ Attach special importance to E- commerce Opening the online shop, Vietnamese followers can shorten their buying time through ordering online

* Threat:

@® Competition among the mid-range international brands such as H&M, GAP, Uniqlo, Prada as well as Vietnam-grown labels like Nem, Blue or Mango @ Rise in raw materials and labor cost

adversely impact Zara's revenue and long term profits

@ Difficult in accessing diverse consumer classes People who live in mountainous areas may find it difficult to buy Zara outfits due to geographic obstacles

Vietnam Market I Market over view

Vietnam’s middle class population — currently at 10% — is believed to be the fastest growing in Southeast Asia The middle class earning USD 714 a month or more in Vietnam will double to 33 million people, about a third of the population, between 2014 and 2020, according to Boston Consulting Group Meanwhile, market research firm Nielsen has estimated that the number of middle class Vietnamese will reach 44 million by 2020 and 95 million by 2030 As a result of this growth, consumers in Saigon and Hanoi have witnessed the entrance of a plethora of foreign brands in just the last few years

Shopping customers by income

Vietnam has a young population, and it’s the young professionals who are the major target for fashion brands Statista Global Consumer Survey stated that in 2020, over 70 percent of fashion consumers were between 18 and 45 years old Meanwhile, almost 50 percent of Vietnam’s population is under 35 years old

@ 15-24 years -34 years 35-44 years 45-54 year @ 55-64 years

into

Shopping customers by age

In Vietnam, there are increasing number of people who are keen on spending on fashion 7% of survey respondents spend more than 1,000,000 VND per month for fashion item and how they buy clothes are quite different from the average They care “design (23%)”, “quality (18%)’ and “brand (17%)” more than “‘cost (16%)” They also tend to buy at shopping mall or department store much more frequently than the average respondents The online shopping usage is different While only 41% have used online for buying fashion items (which are still high), the

ratio of these top fashion spenders who use online goes up to 76% They also tend to buy items overseas

Shopping malls are at the forefront of the modern retail battle Currently, there are approximately 160 shopping malls in Vietnam, mostly located in major cities like Ho Chi Minh City, Hanoi, and Danang—cities which account for 22% of total nationwide retail sales In order to ensure the desired target market is reached, we need carefully select our locations in malls that pursue a similar demographic

In Vietnam, international brands account for 60% of the total fashion retail market, leaving Vietnamese fashion brands to fill the remaining 40% Retailers like Aeon and Lotte Mart are better locations for those other international and local brands as they cater to the middle class through affordably-priced clothing lines

Price: High quality with reasonable price Place: Over 70 branches across the country

Promotion:

clothes and accessories for every person who has a knack of wearing fashionable stuffs and look trendy They have all sorts of categories for Men, women, kids and infants

Price: their main focus is on the higher earning and upper-middle earning category of people

Place: Mango sells its products through its (Aeon,

Crescent Mall, ), and online stores

Promotion: Sale promotions seasonally

Price: H&M offers high quality clothes at a premium price

Place: H&M sells its products through its franchising partners (Aeon, Vincom, ), and online stores

Promotion:

TV advertisements; H&M comes with creative ads which focus on its latest innovative designs

+ YouTube: H&M has its own YouTube channel where it comes up with unique ad campaigns to engage with the customers

BÀI VIẾT & THẢO LUẬN Ï NGƯỜI THAM GIA THẢO LUẬN

Despite that, these statistics is the overview of the discussion from users in the Internet about this brand, but it also reflect the potential customers for ZARA in the future

b/ Psychographic Segmentation

Fashion is developing in Vietnam, therefore, the awareness of Vietnamese about fashion brand is also higher The appearances of fashion enthusiasts who willing to pay for a reasonable and unique design product

Image of larger customers came to ZARA in the Ist day its opening Also that, Vietnamese customers tend to prefer minimalist and not picky clothes but still have their own characteristics, they also value their own individuality and the fact that the way ZARA produced products hot combined the brand logo in is the advantage

Being good company in keep up with trends, ready to update and in accordance with surrounding circumstances

——

| SEND YOU BLESSINGS FOR THE

NEW YEAR!

The design product for kids in New Year 2021 collection

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c/ Geographic Segmentation

All of ZARA stores have branches in two locations in Vietnam are Ha Noi and Ho Chi Minh City , located in the oldest and largest commercial center, Vincom Center These of two places have large number of customers suitable for the targer customer ZARA segmented

From the aged of 18-25 is students in universities and young employees From the 35-45 is the people with stable careers and salaries W/ Behavioral

ZARA's customers are also very fastidious customers in terms of product quality, ZARA has always grasped and ensures that all products are completely up to the standards for sale, in addition, on the website or at every store of ZARA, there is an exchange service and warranty

2/ Targeting

Ever since the intention of entering the fashion market in the other countries, ZARA has always wanted to open as many stores as possible The more stores that line in the pedestrian walkways, the more brand awamess increase (ZARA has more than 2000 stores in 80 different countries)

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4/ Positioning ( Differentiation)

The clothing market with the mid-range price segment is a quite tough market with challenges from other competitors When came in Vietnam, ZARA also “encounters” with strong competitors: H&M, Uniqlo- whose they met in other countries market To maintain and develop the brand’s position, ZARA firstly determined their

segmentation and all goals must be towards to demographic segmentation

Because of the competition of many products with similar characteristics, ZARA must to enhance the fashionable and uniqueness side of each product, but not lose the mass production-featured clothing brands at mid-range price

Positioning map to compare the position of ZARA with two main competitors are

UNIOLO and H&M

Marketing Mix (4P Analysis) a Products

Clothes are being become one of the customer’s expectations such as updating trending speed, style, design, ZARA have different in a service provider of product in markets by:

1 Manufacturing products link clothes, shoes, accessories, cosmetics for men, women, and children

2 Rapidly changing in fashion trends and the fashion seems to suit local culture and personable price of personal tastes

3 The special service quality in-store as well as an online platform in two languages: English and Vietnamese However, the products may differ from the market, because Zara does its research before releasing any specific product in a specific market worldwide

4, Customers feedback receive from the store managers on the trends and make a design responded to customers and ZARA will consider creating a sense of scarcity and exclusiveness which is calling the customers back to the stores

5, Zara’s strategies like just-in-time manufacturing, delivery and sales, flexible structure, low inventory rule, quick response policy, and advanced information technology enable a quick response to customer’s changing demands

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