Market Orientation as a Branding Strategy

Charina Montemar Hägglund

Supervisor: Olivia Kang

Bachelor�s Thesis � Företagsekonomi C Autumn Semester 2007

Department of Business Studies

2

ABSTRACT This paper studied the impact of market orientation strategy on brand awareness. Zara, a

Spanish leading fashion retailer and an example of a brand using the above mentioned strat-

egy, is being compared with three other multinational brands operating in Stockholm, Swe-

den, namely; Topshop, Mango and United Colours of Benetton. The latter brands are known

to be using advertisement to create brand awareness.

Fashion magazine�s attention were used as a measure of brand awareness. Data on the brand

awareness were gathered by browsing three leading Swedish fashion magazines - Elle, Glam-

our and Damernas Värld - and the fashion section of the biggest Swedish tabloid, Aftonbladet.

It was found out that market orientation can compete with advertising as a marketing strategy

to create brand awareness, but only in some parts of the market segment. This was concluded

from the fact that Zara was featured in some of the magazines, but not all of them.

3

ACKNOWLEDGEMENTS

First, I would like to thank our thesis adviser, Ms. Olivia Kang, who gave me unconditional

support and understanding to complete this paper. Second, I would like to thank my loving

family and friends for continuous trust and support in my capacity. Lastly, I would like to

thank my classmates for sharing to me their constructive criticisms and comments to improve

more this paper.

CHARINA MONTEMAR HÄGGLUND

4

TABLE OF CONTENTS INTRODUCTION .......................................................................................................................................... 5 THEORETICAL FRAMEWORK ................................................................................................................. 7

BRAND AWARENESS ........................................................................................................................... 7 FASHION JOURNALISM / MEDIA........................................................................................................ 8 ADVERTISING ....................................................................................................................................... 9 MARKET ORIENTATION STRATEGY ............................................................................................... 11 CUSTOMER FOCUS ....................................................................................................................................... 12 COMPETITOR FOCUS .................................................................................................................................... 13 INTERFUNCTIONAL COORDINATION ................................................................................................................. 14 MARKET ORIENTATION AND BRANDING ............................................................................................................. 15 MODEL ................................................................................................................................................. 15

METHODOLOGY ....................................................................................................................................... 16 MARKET ORIENTATION STRATEGY ............................................................................................... 16 ZARA ........................................................................................................................................................ 16 ADVERTISING STRATEGY ................................................................................................................ 19 BENETTON ................................................................................................................................................. 19 MANGO .................................................................................................................................................... 19 TOPSHOP ................................................................................................................................................... 20 METHOD .............................................................................................................................................. 21 FASHION MEDIA ......................................................................................................................................... 21 DATA GATHERING ........................................................................................................................................ 22

ANALYSIS OF DATA.................................................................................................................................. 22 DIFFERENT TYPES OF MEDIA........................................................................................................... 23 DIFFERENT TYPES OF EXPOSURE ................................................................................................... 25 ADVERTISEMENTS............................................................................................................................. 27

CONCLUSIONS........................................................................................................................................... 29 SUGGESTIONS FOR FURTHER RESEARCH ......................................................................................... 30 LIST OF REFERENCES ............................................................................................................................. 31 APPENDICES............................................................................................................................................... 33

5

INTRODUCTION The fashion industry has evolved noticeably over the past few decades. Fashion products that

used to be luxury items are now considered as basic commodity products and bought by al-

most all segments of the society.1 Factors that may contribute to this growing demand for

fashion products is the continuous low prices that may be brought about by an increasing

number of target markets2 and transferring the production sites to developing countries.

Due to the booming numbers of customers, more and more stores sell fashion items, leading

to stiffer competition. Consumers are also more conscious of fashion trends. Furthermore,

they are not only conscious of the style but also the quality and the price attached to it. Be-

cause of these factors, it is getting harder and more difficult for the sectors involved in fash-

ion to stand out in the industry. Nowadays, it is very vital to create value for a product by

using successfully proven marketing tools.

Moreover, it is now also equally important for the customer to recognize the existence and

availability of a company�s product or service. This is called brand awareness. Creating brand

awareness is one of the key steps in promoting a product. The product that promotes the high-

est brand awareness compared to its competitors usually get the highest sales.3

Advertising is one of the basic ways of promoting a brand. Many companies spend millions in

advertisement just to introduce a new product or even to remain competitive in the business

industry. In fact, it is the primary way of communicating a new product/brand/concept in the

market. United Colours of Benetton, MANGO & Topshop are the few examples of fashion

retailers which focus a lot on advertising.

This paper will also cite one marketing strategy that can be an alternative to advertising. It is

the market orientation strategy, popularly used by leading fashion retailer Zara (Inditex).

1 Mazaira, González & Avendaño (2003) 2 Ibid. 3 Brand Awareness n.d.

6

Zara is one of the world�s top leading clothing companies in terms of sales, profits and lead

time. Despite this success, Zara claims not to have a formal marketing department, and does

not use advertising to promote its products. To maintain its sustainable competitive advantage

in the retail clothing industry, Zara uses the �market orientation� strategy instead.4

Market orientation refers to �the organization-wide generation of market intelligence, dis-

semination of intelligence across the departments and organization-wide responsiveness to it�

according to Jaworski and Kohli (1993, p. 2). It is also when the aim of the organization is

focused to the continuous creation of superior customer value.5 The strategy is not just a mar-

keting strategy but it involves the organization of both the company and its customers.6

In the Zara case, market orientation is not only used as the most important strategy to gain

competitive advantage, but also as a branding strategy. We want to investigate whether mar-

ket orientation as a branding strategy works as well as advertising in creating awareness of the

brand. Our research question will be: �Can market orientation as a marketing strategy evoke

the same amount of brand awareness as advertising?�.

Media attention will be gathered from three Swedish fashion magazines, Elle, Damernas

Värld and Glamour, and the fashion division of the leading Swedish tabloid, Aftonbladet, as a

measure of brand awareness. Then as a reference, Zara will be compared to three other multi-

national clothes retailers which have few stores in Sweden and which use advertising to create

brand awareness, namely; United Colours of Benetton, MANGO and Topshop.

To get a better understanding of the whole paper, the following concepts will be clearly de-

fined: brand awareness, fashion media, advertising and market orientation. Then the model

used in this study will be featured.

4 Mazaira, González & Avendaño (2003) 5 Slater & Narver (1994, p. 22) 6 Mazaira, González & Avendaño ( 2003)

7

THEORETICAL FRAMEWORK

BRAND AWARENESS

“A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless.”7

There are so many definitions of a successful brand. According to the book �Brands Tailored

for Retailers�, a successful brand is �an identifiable product, service, place or relationship,

augmented through brand processes in such a way that the brand buyer or user perceives rele-

vant, unique, sustainable added values from or together with the brand supplier and seller that

match their needs most closely�.

All the above mentioned concepts emphasize on the uniqueness of the brand. This is very

important in able to build a brand different from all the others, a brand that can be an asset of

the company. A strong unique brand is an asset that needs to be taken cared of otherwise it

will depreciate or totally decline. This constant brand evaluation should be done by the com-

pany to maintain the status of the brand in the market. To understand more, a company should

know the four levels connected to the brand.

The above book mentioned the four levels of the brand, connected to the needs of the cus-

tomer, namely; the generic, expected, augmented and potential levels. The generic level is the

part of the brand that meets the customer�s basic needs and the expected level consists of the

minimum level of product and service conditions customers expect when they buy that spe-

cific brand. The augmented level of a brand is a further development of value added that aims

to satisfy both the non-functional (can be emotional) and functional needs. The functional part

of the brand is what the product or service actually does (features, performance and quality)

and the emotional value is the psychological component in relation to the brand user�s mo-

tives, situation, role needs met by the product or service (e.g. reliability, empathy and respon-

7 Ossiansson (2004, pp. 67-68)

8

siveness from employees). This level can be expanded further by the potential level by also

focusing on innovation.8

Then, it is also equally important that the brand will be known by its target market. Branding

a product is useless unless the prospect customer recognizes it. The mass public should be

aware that a certain brand exists offering certain type of products. This is called brand aware-

ness.

What is brand awareness? Brand awareness can be defined in the following ways:9

• Getting the brand�s name into the target audiences' minds (building momentum)

• Remaining in one�s target audiences' minds (sustaining momentum)

• Getting people to talk about the brand, consistently (and in a positive light)

• Building brand�s credibility... through positioning the brand itself as one of the bests in the

industry

• Creating an automatic association between a brand and its services/products

• Creating an image that the target audience will find appealing and engaging

Building brand awareness in the minds of the public is not an easy task to do. Some compa-

nies have to stay in the business for quite awhile just to establish its brand name, while others

use the marketing communications� tools such as advertising and public relations to introduce

its brand to the target market. Brand communication can also be projected via mass media

attention. Media attention can be exposure in magazines or newspaper, which will be the fo-

cus of this study. It is also vital to understand why we choose exposure of fashion

brands/products in fashion magazines/tabloid in order to measure brand awareness.

FASHION JOURNALISM / MEDIA

Media as expressed through fashion journalism is not new these days. People of different ages

buy fashion magazines / gazettes just to be up to date of the latest trends or just for pure enter-

tainment. Lately, it�s not only the women who read fashion segments in a magazine or tabloid

/ newspaper, but men do too. As Susanne Janssen has stated in her paper �Fashion Reporting

8 Ossiansson (2004, p. 69) 9 The New Age of Brand Awareness ( 2005, § 1)

9

in cross- national perspective 1955-2005� (2006, p. 384) , �Experts in the field of fashion and

media claim that in the twentieth century, fashion has become one of the cultural forms- like

film, photography, jazz and pop music � that have gained substantially in editorial promi-

nence in the serious press�.

Janssen (2006, p. 384) further added that �fashion gets more coverage in the media than any

comparable area of human interest or endeavour. There are more articles written about fash-

ion compared than those about art, education, theater, literature, environment or technology.

Newspapers also give fashion stories a higher profile than they did two decades ago.� An eye-

catching catwalk can be noticed nowadays to be featured in the front page of an ordinary daily

newspaper, than any ordinary event. Due to the above, fashion journalism is also a booming

industry now a days.

Fashion journalism is a composite term used to describe all aspects of published fashion me-

dia. It is a way of communicating the aspects of fashion industry to the mass public. People

working on this area are sometimes called as fashion writers, fashion critics or fashion report-

ers. Good examples of fashion journalism are not only the fashion features in magazines and

newspapers, but the term includes books about fashion, fashion related reports on television as

well as online fashion magazines, websites and blogs.10

Fashion write-ups is a form of publicity and will help the fashion retailer in exposing their

products to the concerned public, and thus in the end, promote brand awareness. However, it

is very important that the brand should first get the attention of fashion analysts as primary

promoters or customers of the product. Thus, fashion media exposure is not only a valuable

way of branding strategy, but can be also an expression of the success of a marketing strat-

egy. This study will use the latter function of fashion media to measure the effect of two dif-

ferent branding strategies; advertising and market orientation.

ADVERTISING Why do many companies spend millions in advertising? What benefits can advertisement give

to retailers especially in fashion? Does a fashion retailer really need to advertise to increase

sales? 10 Wikipedia 2008, Fashion Journalism, § 1

10

Advertising is a message paid by a specific sponsor and released through some medium of

mass communication. It is a persuasive way of communication, not neutral, not unbiased and

says; �I am going to sell you a product or an idea�.11 Advertising is only one of several mar-

keting communication options available to the company.

J. T. Russel et al. (1996) mentioned it is often is difficult to determine why a company

chooses to advertise at a particular level. However, there are a number of situations that usu-

ally dictate a higher proportion of advertising to sales than might otherwise be the case:

1. To introduce or promote a new product or service.

2. To be always competitive.

3. To maintain a top position in the industry.

4. To put emphasis on a new price.

5. To keep up with a fast-growing industry.

Moreover, advertising�s primary role is concerned with building brand awareness and prefer-

ence � both of which are communication functions.12 As noticed from the above enumera-

tions, advertising is a basic tool to promote a product holding a certain brand name, carrying a

certain price in order to compete with other products available in the market. Russel Colley

(as stated in De Fleur & Dennis 1998) claims in another book that if advertising is successful,

it results to closed sales, and to do that it must carry consumers through the four levels of un-

derstanding: (1) awareness of a brand or company, (2) comprehension of the product and what

it will do for them, (3) a conviction that they should buy the product, and (4) action - that is,

buying the product.13

Furthermore, one of the vital things that advertising does is offering high and better quality

products to the consumers. Here, branding comes in. Branding is very important in order that

the customer can identify the product�s manufacturer and thereby, buyers tend to associate

the quality of the product with a certain brand. On the other hand, advertising helps the con-

11 Russel & Lane (1996, p. 32) 12 Russel & Lane (1996, pp. 31-32) 13 DeFleur & Dennis (1998, p.326)

11

sumers in the decision to choose from the wide array of brands / products available in the

market. �Without advertising, businesses would not be able to bring new products to the at-

tention of enough consumers fast enough to make the enormous cost of creating, developing,

manufacturing and distributing these products a rational business decision�.14 And without

branding, it�s is difficult to choose from many same and analogous products available in the

market. This study will measure the ability of a branding strategy based on advertising to

make fashion journalists recognize and choose the advertised brand.

MARKET ORIENTATION STRATEGY

The main interest in this thesis is to know if market orientation succeeds in getting brand

awareness without using advertising. According to articles about one of our subjects, Zara,

this strategy is widely used by the said brand, and the brand owner Inditex proudly declared

that it hardly used advertising to sustain competitive advantage in the fashion industry.15

Satisfying a customer has been one of the basic objectives of a business. According to A. Ma-

zaira et al (2003) quoting Drucker (1954) in his paper, this market orientation strategy which

originated in marketing orientation (developed in the 1950�s), has also the same basic aim.

The customers are the main focus of the business in order to attain competitive advantage and

projected profitability.

But market orientation is broader than marketing orientation because the former is inter-

functional and requires coordination of the culture and behaviour of the whole organization.16

In market orientation, it is not the sole responsibility of the marketing department to accom-

plish a marketing goal, but the company as a whole. Every part of the unit has its role in the

fulfilment of the organization�s main objective which is the satisfaction of the customer.

Kohli and Jaworski (1990, p. 3) further discussed that market orientation entails (1) one or

more departments engaged in activities geared toward developing of understanding of cus-

tomers� current and future needs and the factors affecting them (2) sharing of this understand-

14 Rusell & Lane (1996, pp. 37-38) 15 Mazaira, Gonzalez & Avendaño (2003) 16 Ibid.

12

ing across the departments, and (3) the various departments engaging in activities designed to

meet selected customer needs. In other words, market orientation refers to the organization

wide generation, dissemination and responsiveness to market intelligence�.17

A business is then considered market-oriented when the organizational culture is focused and

has one primary aim, which is the continuous creation of superior customer value18, which we

can conclude is one of the important components of a good brand. This includes collection

and coordination of information on customers, competitors and other significant market influ-

ence like suppliers and regulators.19 A continuous study of a company brand�s valuation is

also one of the important aspects of market orientation.

Furthermore, the three main components of a good market orientation strategy are customer

orientation, competitor focus and inter-functional coordination and two decision criteria long

term focus and profitability.20 Customer orientation and competitor focus includes all the ac-

tivities involved in gathering information about the buyers and competitors in the target mar-

ket and disseminating them to the businesses. Inter-functional coordination is the business

coordinated efforts which resulted after getting all necessary customers� and competitors�

information, typically involving all the departments in order to create superior value for cus-

tomers.21

Customer Focus Customer focus is often on the top of the list of an enterprise primary�s objective. As the say-

ing goes, �Customers are always right!�. This saying seems to be the simplest guideline for all

businesses, regardless of its size. But customer focus goes far beyond than traditional cus-

tomer research according to Kohli and Jowarski (1990, p. 4). Being customer oriented in-

volves taking into consideration also market intelligence and what customers say or dictate.

Market intelligence is a broader concept that includes consideration of (1) exogenous market

17 Jaworski and Kohli, (1993, p. 2) 18 Slater & Narver (1994) 19 Ibid, (1994, p. 22) 20 Narver & Slater (1990, p. 4) 21 Narver & Slater (1990)

13

factors (e.g. competition and regulation) that affect customers� needs and preferences and (2)

current as well future needs of the customers.22 The said concept only means that market-

oriented business should understand not only its direct customers, but also the chain involved

in the customers� business. In short, it should know the cost and revenue dynamics not only of

its immediate target buyers but also of all markets beyond, for demand in the immediate and

�upstream� markets is derived from the demand in the original �downstream� markets.23

Businesses that have implemented this kind of strategy are always on the endless studies for

upcoming ways to satisfy their customer�s wants and needs and this can include the service

that they can offer before and after sales. Because of this reason, collaboration between the

top management and its subordinates is very important. Managers and employees should

work as a team in order to maintain superior customer value. Employees play a vital role in

this concept, so the company should be paying more attention when they hire their staffs.

Regular training is also important to retain the best people in the company.24

Competitor Focus

Focusing on competitors might not be equally important as customer focus, but as mentioned

above, to understand more the behaviour of a customer, one should look through the other

factors surrounding the latter. It is vital to consider who are the competitors, what marketing

approaches they use, how effective are their products and services and at what prices they are

offered. Competitors should be studied upon whether they can be perceived as alternate sup-

pliers by the customers. Using target rivals as a frame of reference, competitor-focused firms

try to identify their strengths and weaknesses to keep pace or stay ahead of them. 25Constant

variations of the competitors� strategic policies may occur so close monitoring of the latter is

important in order to understand more their capabilities.26 In this way, the company is always

22 Kohli and Jowarski (1990, p. 4) 23 (Slater & Narver, 1994, p. 22).

24 Slater & Narver (1994) 25 Ibid. 26 Heiens 2000

14

ready and flexible to respond for further improvements of its products and thus maintaining

its brand�s position in the market.

Heiens (2000, p. 2) also stated in his article that �when market demand is predictable, the

competitive structure is concentrated and stable and there are few powerful customers, the

emphasis on competitors is more important. Moreover, the lesser the degree of competitive

hostility, the greater the positive impact of competitor emphasis on performance�.

To add, in market-driven businesses, continuous meetings among employees and management

discussing about their competitors are needed. Supervisors should frequently discuss competi-

tor�s strengths and weaknesses as a guide for future actions. The competitor�s weaknesses are

often used to obtain more competitive advantage. In some cases, they keep competitors from

developing an advantage by responding rapidly or anticipating their actions.27 An example of

this is the launching of �online Zara Home� in many countries including Sweden this October,

before H&M has launched its H&M Home division.

Interfunctional Coordination Being the last component of market orientation strategy, this involves �the coordination of the

personnel and other resources from throughout the company to create value for the buyers�

according to Slater and Narver (1994, p. 23). The role of every unit in the organization must

be clearly defined and every employee, regardless of its position must recognize his role in

order to help the company achieve its objective. 28

Due to the above, market orientation simplifies the focus and vision of an organisation�s strat-

egy.29 It provides a unifying focus for the efforts and projects of individuals and departments

within the organisation. It also provides psychological and social benefits to the employees.

The latter can then develop a sense of pride in belonging to an organisation in which all de-

partments and individuals work toward the common goal of serving customers. The latter

authors further add; that responsiveness is important to make this market orientation concept

to work out.

27 Slater & Narver (1994, p. 23) 28 Ibid. 29 Kohli & Jaworski (1990)

15

Market orientation and branding

The connection between market orientation and brand awareness is quite not so obvious with

the above discussions. But I think that brand awareness is so related to the ultimate goal of

market orientation which is � the creation of superior customer value�. By proper combination

of the above three components (customer focus, competitor focus and interfunctional coordi-

nation), the end result is that business can be able to establish a brand that can be noticed by

the target market. This way, brand awareness can be a result of the coordination and combina-

tion of the above three components. This paper will investigate whether this market orienta-

tion way of communicating to its target customers works as well as advertising in creating

brand awareness.

MODEL It has been stated above that brand awareness is one of the aims of a company�s marketing

strategy, as it increases the brand�s value and could result to closed sales. Creating brand

awareness is clearly one of the primary purposes of advertising. Some companies, such as

Zara in this case, use market orientation instead as an alternative to the specific marketing

tool, advertising.

The question that will be posed is: �Can a company using market orientation as a marketing

strategy create the same level of brand awareness as those companies using advertisements?�

On an industry, where competition of customer attention is high, such as in clothes retailing,

brand awareness is a vital competitive advantage. Hence, we hypothesize that equally suc-

cessful companies, of approximately the same size, and which target the same customers,

should aim to get the same level of brand awareness.

Media attention is quite related to brand awareness. They both draw more attention to the

brand and as an indicator of brand awareness, the media people needs to notice the brand in

order to feature it. The hypothesis will be then, that market orientation as a branding strategy

can attract same level of media attention compared to advertising, as the media attention is

used as an expression and a way to measure their respective brand awareness. The main struc-

ture of our model is as follows:

16

This model shows how the effects of advertising and market orientation strategy can be com-

pared in relation to the level of media attention that the brand gets, which impliedly connotes

brand awareness. The representatives of brands using market orientation or advertising that

we have chosen are approximately equally big and successful, and targeting the same group of

customers. According to our hypotheses, these brands should get the same levels of media

attention.

METHODOLOGY In order to investigate the branding aspects of market orientation, we will use Zara as case

object and United Colours of Benetton, Mango and Topshop as objects for advertised brands.

MARKET ORIENTATION STRATEGY

Zara

Inditex, or Industria de Diseño Textil, and its eight subsidiaries is an international fashion line

that focuses on the design, manufacture and sale of clothes, footwear and accessories for both

men, women and children including cosmetics and leather goods. The flagship brand of In-

ditex is Zara, and the remaining seven brands are Pull and Bear, Massimo Dutti, Bershka,

Stradivarius, Oysho, Zara Home and Kiddy's Class / Skhuaban. Zara Home which is the latest

wing included in the Inditex group which caters to home furnishings specializing in textiles,

glassware, cutlery, tableware and decorative items. 30

30 Inditex n.d., Concepts

Advertising

Market orientation

Level of media attention

Level of brand awareness

17

The primary brand, Zara, offers the latest trends in international fashion and distributes men�s,

women�s and children�s clothes tagged at medium to low prices, with quality being medium

to high. At present, Inditex has a total of 3.674 stores located in 68 countries.31 Out of these,

Zara is present in 1129 stores including Sweden.32 They opened their first store in Stock-

holm in 2003.33 There are eight Zara branches located in Sweden; four in Stockholm, two in

Gothenburg, one in Sundsvall and one in Malmö.

Zara has gained attention in business academia for its successful implementation of market

orientation. The market orientation is the strategy of creating customer value by a focusing on

the customer throughout the vertical organization of the company. The whole business model

of Inditex is characterised by a high degree of vertical integration and very short lead times.

The company states that it hardly uses advertising. It just spends 0.3% of its revenues to ad-

vertising and marketing. This is significantly less compared to the industry�s average of 3-4%.

Instead of spending on advertising, Zara positions itself in primary locations, invests more on

store layouts and shortens its lead time. All its stores are also located in prime locations in big

city districts.34 The average store size is 1,376 square meters and make-over of old stores are

done every 3-4 years.35

Moreover, Zara�s drawing power focuses on creating artificial scarcity of its products and fast

response to fashion trends. The company produces fewer quantities for a certain design.36

They manufacture instead clothes of different designs, the latter average 12,000 pieces annu-

ally37. Products� lead time is the shortest in the industry which averages only to 15 days.38

The stores are also replenished two times a week to create constant freshness of its ambiance.

Customers will be forced to buy the product directly when they visit the store and not delay it

31 Inditex. n.d., Our Group 32 Inditex, n.d., Stores Around the World 33 Nilsson & Carlsvi (2004) 34 Zara�s Business Model, Information and Communication Technologies, and Competitive Analysis:, n.d. 35 Ghemawat, & Nueno (2003) 36 Dutta (2003) 37 Zara�s Business Model, Information and Communication Technologies, and Competitive Analysis:, n.d 38 Dutta (2003)

18

in the future otherwise the product is not there anymore. 39In this way, it is relatively easy for

Zara to know the slow moving items, cancel future planned production of a certain design

thereby reducing probable product write offs.

Zara is continuously monitoring how its individual stores are doing. Frequent conversations

with store managers are important with regards to communicating sales� and orders� data to

the headquarters. To be also more flexible to the fashion trends, the store managers are given

autonomy on its area, and feedback system is properly acted upon by the people in the head-

quarters for the coming designs. 40The company is also on a close watch of the current trends.

Sources of new information include industry publications, TV, Internet, and films. Further-

more, Zara�s trend-spotters focus their attention on venues like university campuses and dis-

cotheques. To add, Zara's young and fashion-conscious staffs also have great inputs of new

ideas.41

Furthermore, Zara's designers even attended trade fairs and ready-to-wear fashion shows in

Paris, New York, London, and Milan, browsed through catalogs of luxury brand collections,

and worked with store managers to begin to develop the initial sketches for a collection .42

This vertical integration allows Inditex to a supremely quick response to market fluctua-

tions.43

For Inditex, this is the key method of gaining competitive advantage. Zara even claims not to

have a formal marketing department, as they use market orientation as a marketing strategy.44

Given the hard climate on today�s fashion market, this is a remarkable statement from a very

successful business.

39 Ferdows, Lewis & Machuca (2005) 40 Zara�s Business Model, Information and Communication Technologies, and Competitive Analysis:, n.d 41 Ghemawat, & Nueno (2003) 42 Ibid. 43 Inditex n.d, .Press Releases 44 Mazaira, González & Avendaño (2003)

19

ADVERTISING STRATEGY

The brands to be compared to Zara to are United Colours of Benetton, MANGO and Topshop.

These were chosen for being comparable to Zara in various ways, and using a marketing

strategy different to Zara�s. These brands focus more on advertising among others to get

brand awareness.

Benetton First, United Colours of Benetton was chosen because it has a relative small number of stores

in Stockholm � three, comparable to Zara�s four � while being a large multinational brand.45

Benetton is also well-known for its lavish advertisements, which on occasion has been inten-

tionally shocking to draw attention to the brand.46 Finally, Benetton produces garments for a

target group similar to Zara�s, so that they can compete for the same slot in the fashion re-

portages.

Today, the Benetton Group is present in 120 countries around the world, quite more expanded

than that of Zara�s. Its garments usually cater to kids and adults who just love to experiment

the different shades of fashion. Its core business is being represented with a group whose

strong Italian character in style, quality and passion are clearly seen in its brands, the casual

United Colors of Benetton, fashion oriented Sisley, Playlife leisurewear and Killer Loop

streetwear. To add, the Group produces around 150 million garments every year. Its retail

network of 5,000 contemporary stores around the world, offers high quality customer services

and generates a total turnover of over � 1.9 billion.47

MANGO MANGO has a history comparable to Zara�s, being a Spanish company with approximately

the same number of stores in the same number of countries worldwide, and a recent history of

great success � the first MANGO store opened in 1984.48

45 United Colours of Benetton n.d., Overview, §1 46 Website of Marknadsetiska Rådet n.d. 47 United Colours of Benetton�s n.d., Overview,§1 48 MANGO n.d., Economic dossier

20

It is a prestigious multinational company dedicated to the design, manufacturing and market-

ing of garments and accessories for women. It has over 6,500 employees, and have more than

1,000 stores in 89 countries located on the five continents.49

Like Zara, all the MANGO stores are located in prime locations, whether in the main shop-

ping centers or in premises located in city squares. Stores are of a sufficient size to display its

collections. The products of MANGO are quite similar to Zara�s in style, pricing and quality.

However, MANGO is very different from Zara in organisational strategy as MANGO is based

on a franchising system, and in marketing strategy, relying heavily on advertising campaigns;

one example is the autumn/winter 2007 collection with international movie star Penélope

Cruz as the model. There is only one MANGO store in Stockholm.

Topshop Topshop is also comparable to Zara because of its size in Stockholm and its target market.

Although not of same international magnitude as Benetton and MANGO, Topshop operates in

28 countries. There are two Topshop stores in Stockholm, of which one is notable for being

the biggest Topshop flagship store outside UK.50

On the British high street, Topshop is known to be the fashion destination . It sells an average

of 30 pairs of knickers a minute, 6,000 pairs of jeans a day and 35,000 pairs of shoes every

week; thereby it is considered as one of the promising brands of today. Offering purse-

friendly prices with its trendy style, Topshop attracts women from teens to the 40s who are

fashion conscious . 51

Topshop showed its in-house design collection Unique (created in 2001) as part of the official

London Fashion Week schedule in September 2005 and subsequently forged exclusive part-

nerships with international boutiques Opening Ceremony in New York, Colette in Paris and

Tokyo's 10 Corso Como Comme des Garcons. Last summer 2006, Barneys in the US started

49 MANGO n.d., Behind the brand, §1,2,4 50 SO UK n.d., Topshop 51 Topshop n.d., About Topshop, §1.

21

selling Topshop's best selling Baxter jean in its flagship stores. It has also plans to expand

internationally with stores in Moscow and St. Petersburg due to open in 2008.52

Furthermore, the promotion of Topshop is based on advertising and sponsoring of events.

Topshop also gained much media attention in 2007 when they released a collection designed

in collaboration with international top model Kate Moss.

METHOD

In the analysis, market orientation will be compared to advertising in getting brand awareness

using a quantitative method. The exposure of each of the chosen brands in the fashion media

will be tallied as a measure of public awareness of the sampled brand. Year 2007 is the pe-

riod chosen because it is easier to explore the current situation, and the time constraints of the

study did not allow us to cover a bigger scope. The exposure of the group of brands using

advertising (Benetton, MANGO and Topshop) will be compared to the brand using market

orientation (Zara).

The fashion media attention is not only a measure of the brand awareness that marketing is

creating, but also important for the company�s sales through the journalists� impact on the

consumers. This study will use the fashion division of one of Sweden�s biggest tabloids,

Aftonbladet, and the three most significant Swedish fashion magazines; Elle, Damernas Värld

and Glamour. The question, whether Zara�s marketing strategy can attract the attention of

fashion journalists in Sweden, in competition with advertised brands, can then be answered.

Fashion Media Aftonbladet was chosen because it has very popular fashion divisions that reach great numbers

of readers - Aftonbladet�s fashion website has 176,000 unique visitors per week. Furthermore,

813,000 people also have access to the fashion articles in the paper editions of the said news-

paper.53 What makes the newspaper interesting, is that the fashion brands seldom have spe-

cific advertisements in the fashion divisions directed toward fashion consumers. In the analy-

sis, all exposures from 2007-01-01 to 2007-12-07 are included. 52 Topshop, About Topshop, §3 of Brief History 53 Aftonbladet�s advertising website n.d.

22

The fashion magazines, on the other hand, are full of advertisements from various fashion

brands. Even though the journalists most likely do not sell the advertising space themselves,

there is a risk that they are being influenced to give more attention to those brands. We are

therefore going to give notice to any advertisements of the brands in the magazines, even

though we lack knowledge of their advertising histories. The three magazines Elle, Damernas

Värld and Glamour were chosen because all three of them have a pronounced fashion profile

and are likely to attract readers with a fashion interests, and because they are popular maga-

zines with monthly editions of about 85,000, 112,000 and 65,000, respectively.54, 55, 56 Every

2007 issue from all three magazines is included in the analysis.

Data gathering

The research will be conducted by browsing the said magazines and newspaper and counting

the number of times these four brands are mentioned during the year of 2007, and in what

form or context they are being featured. Only women�s fashion will be included in the analy-

sis, because of primary reason that our knowledge of fashion is more restricted to the said

segment. Secondarily, women still hold the crown as the top readers of these fashion maga-

zines or fashion segments of a tabloid so most of these fashion magazines are inclined to

women�s fashion. Thirdly, one of our subjects, MANGO, only offers ladies� wear fashion.

ANALYSIS OF DATA

The data exposed major differences between the different magazines as well as the different

brands. When considering only the total number of exposures for the different brands, one

may get the impression that Zara is doing well in the competition. Topshop is the clear winner

with 58% of total media attention. Note that �total exposure� in this case means only the total

exposure of these four brands.

54 Elle n.d. 55 Bonnier Tidskrifter n.d, Damernas Värld 56 Bonnier Tidskrifter n.d., Glamour

23

Zara and Benetton seem to be equally successful with 17% and 19% respectively, and

MANGO gets the least media attention with only 6% of total exposures. The mean exposure

of the advertised brands is 28% of the total exposure, somewhat higher than Zara�s 17%, but

still a comparable level. However, when looking at the numbers from each of the four fashion

media, the ambiguousness of the results is obvious.

Zara gets half of its total exposures from the tabloid section Aftonbladet Mode, while Benet-

ton gets more attention from the magazines. It was also so striking why during 2007 Zara was

never featured with a picture in the magazine Damernas Värld! The only attention Zara got in

this magazine during the whole year was a mention in text, and only once.

DIFFERENT TYPES OF MEDIA The three magazines and the tabloid fashion section are likely to have slightly different target

groups, which should be reflected in the collection of brands that they choose to feature. Nev-

24

ertheless, as the four brands in this investigation have approximately the same target custom-

ers, we did not expect such big differences between the magazines.

Topshop is the most popular brand in all four papers, albeit tying with Benetton in Damernas

Värld at 28 exposures. Topshop is clearly one of the �trendiest� brands for the moment. The

successful brand positioning is not only due to superiour advertising, but also to how Topshop

has affiliated successful designers and celebrities. One of those is Swedish designer Ann-

Sofie Back, who was awarded with �Guldknappen�, Damernas Värld�s prize for best Swedish

designer in 2007, and has designed her own collection for Topshop. Topshop has succeeded

in creating an image of the brand being trendy and fashionable.

Aftonbladet Mode differentiates from the others by giving Zara many exposures, and

featuring Benetton and MANGO quite seldom. Damernas Värld is different from the others

for giving Benetton the same amount of attention as Topshop. Mango is the third brand with

only 8%, as Zara is hardly featured at all. But for Glamour and Elle, the distribution of

exposure between brands is very similar.

25

To explain those differences is difficult. There are most likely many explanatory factors

involved. Differences in price or style cannot explain Aftonbladet�s heavy focus on Topshop

and Zara, as they are comparable in the said criteria to MANGO and Benetton.

Aftonbladet Mode does not display any fashion-specific advertisements, neither in the paper

issue nor at the website. Perhaps this is favourable for Zara! In an environment with there is

very less advertisements, it is reasonable to think that the marketing strategy not based on

advertising can succeed. This would imply that Zara�s marketing strategy is sufficient for

building momentum in the target group, but not sustaining same momentum in competition

with advertised brands.

Even more remarkable is why Damernas Värld did not feature Zara at all in 2007. There was

not even one picture of a Zara garment during the whole year � the only exposure of Zara was

a mention in text. This cannot be due to the lack of advertising only, as Damernas Värld

feature many new and unheard-of designers. The only reasonable explanation one can think of

is that, Zara has failed enormously in creating an image that is trendy and classy enough for

Damernas Värld. This magazine has a strong focus on design and may dislike the fact that the

design of Zara�s garments are not original, but they still feature other budget alternatives with

unoriginal designs. The target group of Damernas Värld is also older than those of the three

other papers, and the editorial staffs on Damernas Värld seem to think that, they are

incompatible with Zara�s image. The branding strategy of Zara must have failed here, not

only, by not having advertising, but also in doing the proper marketing actions.

DIFFERENT TYPES OF EXPOSURE

All kinds of media attention in magazines and newspapers cannot be assessed in the same

way. Different costs for the media must be considered, as well as different probabilities that

the reader will notice the mentioning of the brand. In the analysis, three different types of me-

dia exposure are recognised:

1. Photo shoots with model. These pictures usually cover a whole page. They are the type

of exposure which is the most expensive for the papers. The featured garments get

26

much space and attention, but the text that lists the featured brands is usually small.

This kind of exposure is probably highly desired by the retailers.

2. �What to buy�. This is the name we have given to pages where those garments that are

chosen by the editorial staffs, are being exposed. No model is also being used. Com-

pared to the photo shoot, more articles are shown in this page. We expect this to be the

second most desired type of exposure.

3. Others. The remaining types of exposure may or may not include a picture of a gar-

ment. In most cases they represent a simple mentioning of brand in some kind of text.

There were many interesting similarities, between both brands and media, in the ratios of the

three types of exposures.

We consider here only the cases were we have enough information for percentages to be

meaningful. We estimate > 15 exposures to be a good threshold. This is motivated by the fact

that the smallest of the three groups of exposures typically range from about 7%. With less

than 15 exposures, the expected number of this type of exposure would be less than one. With

a statistical security buffer of one exposure, we demand more than 15 exposures to calculate

the percentages.

27

Unfortunately, this means that Topshop is the only brand from Elle that we can use for com-

parison, and that MANGO cannot be compared to Zara in any of the papers. However, Top-

shop in Elle is still in line with the ratios in the other magazines. Photo shoots are typically

10%-30% of the total exposure, what-to-buy between 45% and 75% and the other types of

exposure make up 7%-25%. This is true for all four brands with more than 15 exposures in

Glamour and Elle (Benetton, Topshop and Zara in Glamour and Topshop in Elle).

Aftonbladet, with less advertisement than the magazines, can as expected not to afford those

expensive photo shoots. The exposure type ratios of Topshop and Zara in Aftonbladet Mode

are close to the typical ratios, but with fewer photo shoots and more of the two other catego-

ries. Damernas Värld, the magazine with most advertisements, has more photo shoots than the

other magazines. Benetton in Damernas Värld is particularly noticeable with more than 70%

photo shoots, but this is only a single observation. In other words, the distribution of expo-

sures of the various kinds does not differ notably between the advertised brands and Zara.

ADVERTISEMENTS

The advertisements of the four brands in the three studied magazines are not being counted as

media exposure, but are noted for comparison to exposure data. It seems that the spring and

the autumn are the right periods for campaigns, as all advertisements were in the period

March to May or September to November. All advertisements are a whole page or spread.

Total number of advertisements in spring and autumn

MANGO Topshop Benetton

Magazine Elle Elle Elle Damernas Värld Glamour

Spring 1 11 2 2 1

Autumn 1 10 2 2 1

As can be seen in the above figure, Benetton seems to be the brand that aims for advertise-

ments with a broad impact, as it is promoted in all three magazines. MANGO is more modest

with only one advertisement in Elle in the spring and one in the autumn. Topshop, on the

28

other hand, seems to aim for a big impact in a focused target group, as they put up 11 adver-

tisements in the spring and 10 in the autumn.

To see if there was any relation in time between advertisements and exposures, we looked at

the distribution of exposure over time.

None of the advertised brands had exposure patterns that exactly corresponded to their periods

of advertising, or that differed remarkably from the exposure pattern of Zara. Considering the

periods of advertising, there were no conclusive evidence for a direct response in media

attention to advertising.

The main results from advertising are probably seen from a bigger perspective. It has already

been stated that Topshop has a very successful branding strategy, and the intense advertising

is of no doubt part of it. It would be easy to blame MANGO�s failure in getting media

attention on the parsimonious advertising (for a marketing strategy based on advertising), but

there are likely other factors involved as well.

29

CONCLUSIONS

When looking at the figures, it looks like market orientation strategy as represented by Zara

(17%) is doing okay in the competition with the three other advertised brands; Benetton

(19%), MANGO (6%) and Topshop (58%). However, when looking more into details, it is

obvious that Zara reaches only some target markets as represented by magazines and not all.

The two brands Topshop and Benetton which has the most advertisements� exposures in the

three investigated magazines are also the ones that get the most media attention in the maga-

zines. All three advertised brands are furthermore rather constant in their share of total expo-

sures in the magazines. This continuity is something that Zara lacks.

The answer to the research question: � Can market orientation as a marketing strategy evoke

the same amount of brand awareness as advertising?� is:

... that a company using market orientation as a marketing strategy can in general create the

same level of brand awareness as those companies using advertisements in some target groups

as represented by magazines, however, advertisement seems to be a more effective tool to get

more control over the brand and of course to promote the image of the brand.

Advertising

(Benetton, MANGO and

Topshop)

Market orientation

(Zara)

Level of media attention

Level of brand awarenesss

Topshop - 58 %

Benetton - 19%

Zara - 17%

MANGO 6%

30

The hypothesis which is: that the four brands would get approximately the same amount of

media exposure, because they are approximately equally successful and target the same

group of customers, is not supported by the data.

SUGGESTIONS FOR FURTHER RESEARCH

This study has so many limitations. First, we do not know exactly how the magazines work

with the different brands. We don�t have any idea how they choose what brands to feature and

whether there are any contacts between the magazines and the featured brands and if there is

monetary compensation involved. Second, we only limit our scope of study for a year and

only for women�s segment of fashion. We also only base our data from secondary data.

Furthermore, we cannot conclude that fashion magazine exposure is a good representation of

brand awareness of the target market. Further research should look more into the relationships

between fashion magazines and fashion retailers, and the connection between fashion maga-

zines� exposures and customer�s brand awareness. It would also be more useful to conduct

interviews of the concerned personnel of the sampled brands on how they are using advertis-

ing strategy and marketing orientation. Moreover, an interview too of the fashion magazines

personnel will of great help to understand more, the reason behind the exposures of certain

brands / products. Lastly, it will always be more interesting to have a deeper study on this

topic, expanding the market segment group.

31

LIST OF REFERENCES Aftonbladet�s advertising website n.d. Retrieved December 3, 2007, from

http://annonswebb.aftonbladet.se/ Bonnier Tidskrifter n.d, Damernas Värld. Retrieved December 3, 2007, from

http://www.bonniertidskrifter.se/tidningar/damernas_varld/ Brand Awareness n.d. Retrieved December 13, 2007, from

http://www.investopedia.com/terms/b/brandawareness.asp Bonnier Tidskrifter n.d, Damernas Värld. Retrieved December 3, 2007, from

http://www.bonniertidskrifter.se/tidningar/damernas_varld/ Bonnier Tidskrifter n.d., Glamour. Retrieved December 3, 2007, from

http://www.bonniertidskrifter.se/tidningar/glamour/ DeFleur, M & Dennis, E 1998, Understanding Mass Communication, Houghton Mifflin

Company, Boston. Dutta, D 2002, Retail and the Speed of Fashion. Retrieved November 15, 2007, from

http://www.3isite.com/articles/ImagesFashion_Zara_Part_I.pdf Elle n.d. Retrieved December 3, 2007, from http://www.elle.se/?id=2097

Ferdows, K, Lewis, M & Machuca, J 2005, Zara's Secret for Fast Fashion. Retrieved January 16, 2008, from http://hbswk.hbs.edu/archive/4652.html

Ghemawat P& Nueno, J L (2003) in Zara: Fast Fashion, CD-ROM, Harvard Business School Publishing, Boston, MA

Heiens, R 2000, �Market Orientation: Toward an Integrated Framework�, Academy of Mar-keting Science Review, vol. 2000, no. 1, pp. 1-5.

Inditex, n.d. ,Concepts . Retrieved January 16, 2007 from http://www.inditex.com/en/who_we_are/concepts/zara Inditex, n.d., Our Group. Retrieved January 16, 2008, from http://www.inditex.com/en/who_we_are/our_group# Inditex, n.d., Press Releases. Retrieved December 3, 2007, from

http://www.inditex.com/en/press/press_releases Inditex, n.d., Stores around the world. Retrieved January 16, 2008 from http://www.inditex.com/en/who_we_are/stores.

32

Janssen, S 2006, �Fashion reporting in cross-national perspective 1955-2005�, Poetics, vol. 34, no. 6, pp. 383-406.

Jaworski, B J & Kohli, A K 1993, �Market Orientation: Antecedents and Consequences�,

Journal of Marketing, vol. 57, no. 3, pp. 53-70. Kohli, A K & Jawoski, B J 1990, �The Construct, Research Propositions and Managerial Im-

plications�, Journal of Marketing, vol. 54, no. 2, pp. 1-18. MANGO n.d., Behind the brand. Retrieved January 10, 2008 from http://www.company.mango.com/e/index.htm MANGO n.d., Economic dossier. Retrieved December 3, 2007, from

http://www.company.mango.com/e/comunicacion/dossiereconomico.htm. Mazaira, A, González, E & Avendaño, R 2003, �The role of market orientation on company

performance through the development of sustainable competitive advantage: the Inditex-Zara case�, Marketing Intelligence & Planning, vol. 21, no. 4, pp. 220-229.

Narver, J & Slater, S 1990, �The Effect of a Market Orientation on Business Profitability�,

Journal of Marketing, vol. 54, no. 4, pp 20-35. NetLine Corporation, The New Age of Brand Awareness 2005. Retrieved December 13, 2007,

from http://www.netline.com/Library/article0305.html. Nilsson, M, Forén, P & Carlsvi, S 2004, �Kulturinverkan på modekonsumenter - en studie av

Zara och H&M�s: image i Sverige och Spanien�, BA Thesis, Lund University. Retrieved January 4, 2008, from Lund University Undergraduate theses.

Ossiansson, E 2004, Brands, Tailored for Retailers , Studentliteratur Lund, Sweden. Russel, J T & Lane, R W 1996, Advertising Procedure, Prentice-Hall, Inc., New Jersey. Slater, S F & Narver, J C 1994, �Market orientation, customer value, and superior perform-

ance�, Business Horizons, vol. 37, no. 2, pp. 22-28. SO UK n.d., Topshop. Retrieved December 3, 2007, from

http://www.souk.se/brands.aspx?brand=i15. Topshop, n.d., About Topshop. Retrieved January 10, 2008 from http://www.topshop.com/webapp/wcs/stores/servlet/StaticPageDisplay?storeId=1

2556&catalogId=19551&identifier=ts1%20about%20topshop#para1. United Colours of Benetton n.d. Retrieved December 3, 2007, from

http://www.benetton.com/storelocator/storelocator.jsp United Colours of Benetton n.d., Overview. Retrieved January 10, 2008, from http://www.benettongroup.com/en/whoweare/overview.htm

33

Website of Marknadsetiska Rådet 1994. Retrieved December 3, 2007, from http://www.marknadsetiskaradet.org/united-colors-of-benetton.

Wikipedia 2008, Fashion Journalism n.d. Retrieved January 16, 2008, from

http://en.wikipedia.org/wiki/Fashion_journalism Zara�s Business Model, Information and Communication Technologies, and Competitive

Analysis: n.d. Retrieved January 16, 2008, from http://www.123helpme.com/view.asp?id=97642.

APPENDICES

Below follows graphics of all individual exposures for each brand and magazine.

34

35

36