Marketing and Zara
1. Background
According to BusinessWeek,
"Zara was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season's trends via fashion shows and similar channels of influence, which the fashion industry traditionally used." 5
Zara, the fashion retail chain, is a subsidiary of Inditex Group owned and managed by Spanish tycoon Amancio Ortega. Inditex includes several major brands, namely, Zara, Massimo Dutti, Pull and Bear, Oysho, Bershka, and Stradivarius. The group headquarters is located in La Coruna, Spain. It was here where the first Zara store was launched in 1975. Presently, there are about 1,500 Zara stores around the world. Zara employs around 80,000 people. The group recorded revenues of € 9,434.7 million (approximately $13,068.8 million) during FY2008, an increase of 15.1% over 2007. The operating profit increased by 20.1% to € 2,148.8 million in FY2008. The net profit, during FY2008, increased by 24.5% to over FY2007 to€ 1,257.8 million (approximately $1,742.2 million).7
Zara's claim to fame surfaces from the fact that it needs, on an average, two (2) weeks to develop and market a new fashion product compared to the industry average of six (6) month cycle. In addition to this, Zara is committed to showcasing around 10,000 new designs annually, in a fast and scarce manner, which gives it a constant new look and brings back customers to the stores. Owing to its unique supply chain management, use of information technologies and innovative management strategies, which is a must to survive the highly competitive fashion industry it has managed to come out on top year after year. The major competitors include H&M, GAP and Benetton.
Some of the efficient strategies adopted by Zara are broadly the policies of zero inventories, Just in Time systems, contract manufacturing for small orders, decentralizing warehouses to deliver products and above
According to BusinessWeek,
"Zara was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season's trends via fashion shows and similar channels of influence, which the fashion industry traditionally used." 5
Zara, the fashion retail chain, is a subsidiary of Inditex Group owned and managed by Spanish tycoon Amancio Ortega. Inditex includes several major brands, namely, Zara, Massimo Dutti, Pull and Bear, Oysho, Bershka, and Stradivarius. The group headquarters is located in La Coruna, Spain. It was here where the first Zara store was launched in 1975. Presently, there are about 1,500 Zara stores around the world. Zara employs around 80,000 people. The group recorded revenues of € 9,434.7 million (approximately $13,068.8 million) during FY2008, an increase of 15.1% over 2007. The operating profit increased by 20.1% to € 2,148.8 million in FY2008. The net profit, during FY2008, increased by 24.5% to over FY2007 to€ 1,257.8 million (approximately $1,742.2 million).7
Zara's claim to fame surfaces from the fact that it needs, on an average, two (2) weeks to develop and market a new fashion product compared to the industry average of six (6) month cycle. In addition to this, Zara is committed to showcasing around 10,000 new designs annually, in a fast and scarce manner, which gives it a constant new look and brings back customers to the stores. Owing to its unique supply chain management, use of information technologies and innovative management strategies, which is a must to survive the highly competitive fashion industry it has managed to come out on top year after year. The major competitors include H&M, GAP and Benetton.
Some of the efficient strategies adopted by Zara are broadly the policies of zero inventories, Just in Time systems, contract manufacturing for small orders, decentralizing warehouses to deliver products and above