Posted by: | 3rd Oct, 2010

Cheap Prices Steep Returns: Zara’s Marketing mix

Zara is a Spanish clothing store that has an exceptional marketing strategy, which has made them both very successful and popular. Zara has been able to respond to the continuously flickering customer demands very successfully as they do not outsource their manufacturing.  Zara’s Unique selling point is to create the latest fashion trends within a very short time span, which hit the sale floor very quickly and last for a short time span as-well.

Zara is said to have the most unique marketing strategy: its policy of zero advertising, the company prefers to invest the revenues in opening new stores instead.

Personally, i think Zara’s Marketing strategy is very effective because of its:

  • affordable prices
  • its unique response to market demands – because products move so quickly through Zara Stores, customers feel the pressure to buy the product as soon as possible, in order for them not to phase out.

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Very interesting information about Zara , Kinshuk . Personally I am a big fan of Zara and conducted some research on it . I found some pretty interesting information on Zara’s cutting edge low pricing strategy but yet very trendy product lines.

Zara has an extremely efficient supply chain management employees ( specialized in TLog in Sauder terminology) who constantly focuses on keeping ending inventory to a bare minimum yet satisfying a big chunk of the consumer demand if not all. Zara’s supply chain management also concluded that about 70% of Zara’s sales of a particular product takes place within the first 3 weeks of its launch. As the end of the period Zara moves on and launches a new product which explains why we dont get a Zara jacket anymore even if we look for it only after a month it was launched.

http://www.3isite.com/articles/ImagesFashion_Zara_Part_I.pdf

Zara also manges very good relationships with their suppliers so that they can avoid the inventory piling cost of the raw materials of their products.

Raj on November 27th, 2010
at 10:32 pm

No advertising? that is quite interesting. I would have to guess that this made up for it by great PR efforts as the company is frequently in the media for its effective supply management. Also, the fact that they use domestic workers rather than contracting out to cheaper sources of labor likely further polishes the company’s image. I would assume that in the Spanish media, at least, Zara is loved and respected for the domestic jobs it provides. This assumption comes from the stigma that exists in North America, at least, that is attached to contracting out manufacturing work to countries like China or India.

Liam Fast on November 30th, 2010
at 5:22 pm

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