General introduction (including a concise consumers and category market/ trend overview) Entry mode
-The suitable mode of entry for Zara to enter the clothing industry in Vietnam is franchising. -As Vietnam’s joint venture regulations are strict; the Vietnamese investors must own at least 51% of the enterprise’s capital. This will create some difficulties to Zara in term of controlling the business. -Therefore, franchising is more suitable because the mode of entry is suitable for entering a small country and subject to significant cultural differences from Zara’s home base (Spain) as Vietnam. -In term of financial, franchising creates another source of income for Zara, through payment of franchise fees, royalty and levies in addition to the possibility of sourcing private label products to franchisees. -In term of strategic, franchising can be Zara’s mean of spreading risk by multiplying the number of locations through the franchisees’ investment. SWOT analysis
Market segmentation and targeting
- Segmenting and Targeting the market*
-Zara’s target customers are paying attention in high trends and want to have the latest fashion trends.
-Geography, demographic, psychographic, benefits, and usage rate are the main bases for segmenting consumer markets.
-Demographic segmentation plays a big role for Zara.
-It includes gender, age, ethical norms, and family life cycle.
-Zara's target market is mostly women and fewer men. Zara designs more clothing for women.
-It is focused on people of different age, including generation X and Y. Those who earn enough money and are able to buy clothes from Zara shops. - Positioning the company*
-INDITEX currently runs 5154 stores segmented into eight branded chains: its flagship brand Zara5, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. -Zara has positioned its brand to deliver the latest fashion, well made, at a price that makes it attainable by millions of people. -ZARA is positioned more fashionable compare to its competitors but surprisingly with a relatively low price behaviour. - Estimate market share
- Set marketing objectives*
* · Fast lead time – differentiating the design, manufacturing and distribution progression - keep costs down by keeping stocks low
- products are available on the shopping floor and regularly replaced, given the short life of items * · Fast fashion – used information technologies and groups of designers - through point of sale system into what the shops sell as their feedback is sent back to the head office * · Brand name more well-known – international expansion (stores, distribution centres) * · To deliver the right product, so that make sure meet the needs and expectations of specific target customer segment * · Provide quality clothing and customer service at a reasonable price
Marketing mix strategies
According to Kotler, Keller and Burton (2009), marketing mix strategy is required to expand the segment positioning strategy, which includes all aspects such as product, price, promotion and place. Zara sells a largely homogeneous product for a global market (Flavian and Polo, 2000). Nevertheless, there are some adjustments in its marketing mix because of the customer’s size differences in Asian countries (Monllor, 2001). What differentiates Zara’s business model from that of its competitors is the turnaround time, and the store as a source of information. 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 (Castellano, 1993, 2002) Product and Brand Strategy
- raised its brand awareness by adopting several new brand strategies, for...
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