By: Xavier Devlin

ZARA The Zara mission statement/ environmental policy states, “Through Zara’s business

model, we aim to contribute to the sustainable development of society and that of the environment which we interact. The company’s commitment to the environment is included in Inditex Group’s Corporate Responsibility Statement, published on our website: www.inditex.com.”

The Zara companies vision on the website states, “Zara is committed to satisfy the desires of our customers. As a result we pledge to continuously innovate our business to improve your experience. We promise to provide new designs made from quality materials that are affordable.”

The History of ZARA

The company Zara was founded by Amanico Ortega and Rosalia Mers. It was based in Arteixo, Spain. The Spanish fashion business man Amanico Ortega opened the very first Zara store in the year of 1975. The store was located in downtown Galicia, Spain. The first name of the store was Zorba, which was named after the film Zorba the Greek. There initially was a conflict between Zorba the store and Zorba the bar. The bar was located two blocks away from Ortega’s store but, being that both of the places had the same name there was much confusion between the two. By simply rearranging the molded signs the owner of the bar and Ortega came to the result of ZARA. The store Zara offered lower-priced products that resembled trendy, high end clothing. Many more stores began to open across the country of Spain. By the want of always wanting to resemble high end fashion, Ortega started developing new designs for the stores. He also changed the distribution process and the manufacturing process to easily react to the latest trends in the fastest way he could to make sure they were made and available for purchase in his stores. Zara improved themselves by using groups of designers and improving their technology. Zara expanded internationally through Portugal in the year of 1988, and started in the United States in the year of 1989 which it later had spread over to France in the year 1990. Zara is one of the 8 brands that has been added to the textile design industry Inditex SA. Inditex SA is a multinational Spanish retail organization that is made up of many that are related to the production, textile design, and the distribution. Zara’s own founder Amanico Ortega is not only the founder but he’s also the current largest shareholder. Inditex is better known as the largest fashion group of the entire world and it owns brands such as Lefties, Benshka, Oysho, Zara, Pull and Bear, Massin, Tempe, Uterque, and Stradivarius. Most of the stores are corporately owned, the franchises are only there because of the restrictions of them being foreign owned.

ZARA Today

Zara has a vertical integration to achieving a fast turnaround time. Zara uses franchising and joint ventures for rapid expansion. They also uses the store as the main tool for promotion with very little spending on advertising. The branding strategy Zara uses is simply offering unlimited fashion at a low costs. The company attracts consumers daily through product rotation, which is the frequently changing style in its products. Zara also introduces new products in the market on a daily basis or as soon as a new trend drops. There is an average of 17 visits per customer all in only one year to any of Zara’s 2,000 stores around the globe. Zara only spends 0.28% on their advertising. The Headquarters of Zara is located in Arteixo, Spain. The leading officers of Zara and Inditex are Pablo Isla who is chairman and CEO and Ignacio Fernandez who is CFO. The annual sales and revenue of Zara is 83.26 million. The costs of goods sold are estimated to be 76.15 million. The gross income is estimated as 7.11 million. Zara is an environmental-friendly company.

ZARA’s Target Market

The demographics segmentation of Zara is labeled by gender, ethical norms, age, and the family lifecycle. Zara’s market is mostly targeted to women way more than men. In most Zara stores, at least 2 floors located in the stores are dedicated to women. The market generally focuses on consumers the ages of 15 - 45. The company focuses on the consumers such as young families, students, and young professionals. The psychographics is more geared to the young trendy customer who’s always on the move and is constantly on the lookout for new fresh trendy fashions that can be convenient for any type of lifestyle.

ZARA’s Merchandise

The retailer Zara sales merchandise such as men’s and women’s clothing. Also they have lower/upper garments, cosmetics, shoes, complements, and kids clothing better known as ZARA KIDS. They also have home and bedding set collection. Zara only caries its own brand and they’re also vertically integrated. Zara mainly controls the steps of the supply-chain, manufacturing, designing, and distributing of its products. They have absolutely no private labels.

ZARA’s pricing strategies

WOMENS ZARA’s pricing is very competitive with its competitors for example, H&M. The prices

are in order from women’s, women’s maternity, TRF, men’s, and kids. The women’s collection of ZARA is priced in many different sections in order from women’s outerwear to women’s premium. The prices of the women’s outerwear ranges between $279.00 - $49.00. The dresses range from $169.00 - $25.00. The women’s tops are priced at $69.90 – $22.90. Jeans and Trousers are priced at $69.90 - $25.99. Skirts are a favorite to each female that shops at ZARA and the skirts ZARA offers are priced at $99.90 – $29.90. Women’s T-shirts are priced at $49.90 - $15.90. Maternity Wear is offered at the store ZARA and the prices of the maternity wear ranges from $119.90 - $25.99. Shoes and Bags go hand and hand at ZARA and they are priced at $269.00 - $49.90 for shoes and $179.00 - $25.90 for bags. Women’s accessories are priced at $169.00 - $15.90. A new collection just added to the ZARA stores is the Evening collection with prices such as $169.00 - $29.90. The Premium collection of ZARA has the prices of $399.90 - $99.00. The Premium collection of ZARA is one of the most expensive.

TRFThe TRF collection offered at every ZARA store is the junior’s collection for the store.

The TRF stands for Trafaluc. This collection gear’s more towards the teen audience. This collection is a bit cheaper only because it’s been made in countries such as India and Brazil unlike most of ZARA’s collections which are made in the countries of the United Kingdom and London. The prices are also still very competitive. The prices of the ZARA’s TRF’s coats are priced at $169.00 - $39.90. Dresses are $99.90 - $19.90. Tops are priced at $39.90 - $22.90, and Jeans are priced at $54.00 - $25.90. The Skirts are offered at $129.00 - $15.90. T-Shirts are priced at $29.90 - $7.90. Shoes and Bags are offered at $119.00 - $25.90 for shoes and $119.00 - $22.90 for bags.

MENSThe Men’s collection of ZARA is very popular. ZARA is known for its trendy male

clothing which is a hassle for its competition. In similarity to the women’s ZARA collection, the

men’s collection is broken up into many different sections. The collections start with Outerwear which is priced at $499.00 – 119.00. Then they offer male jackets which are priced at $149.00 - $29.90. Blazers for ZARA men are priced at $199.00 - $79.90. ZARA’s Suits have a price range of $199.00 - $119.00. ZARA male Trousers and Jeans are offered at ZARA for the prices of $79.90 - $35.90. Shirts are priced at $59.99 - $29.90. T-Shirts and Polo’s are $29.90 - $7.90. ZARA’s Cashmere collection offered only to men has been priced at $169.00 - $99.90. ZARA Men’s shoes and bags are priced at $189.00 - $79.90. Men accessories are offered at the prices of $49.90 – 19.90. The Soft Wear collection that ZARA offers to men are $119.90 - $25.90. ZARA’s Dark Collection only offered to men is priced at $199.00 - $15.99. ZARA’s Studio collection also offered only towards men is priced at $299.00 - $79.90. ZARA’s male collection also has an Evening collection as well priced at $119.00 - $25.90.

ZARA KIDS The ZARA KIDS collection is priced very different from the other ZARA collections that

are offered to the older crowed such as men and women. The kid’s collection is priced by size and it is also sorted by size as well. The collection offers outerwear for Boys & Girls ages 4-14 with the prices of $75.90 - $29.90 for little girls and the same price range for little boys. The shirts for little guys and gals are priced at $29.90 - $12.99 for boys and the exact same for girls. Most of the prices of ZARA kids are the same through age including collections like Baby Girl, Baby Boy, Mini, Little Prices Girl & Boy, Sporty, and Ready to Party.

ZARA’S DISCOUNTS

ZARA offers free shipping to all their online customers for online orders over $50. They also offer free returns. ZARA also has the annual sales. ZARA just had a Black Friday/ Thanksgiving sale named zarafriday27. ZARA also offers gift cards and E- gift cards that can be sent to your email.

ZARA’S ADVERTISING/WEBSITE

ZARA advertises its products through its parent company Inditex. While many other companies spend a 3.5 percentage on ads, ZARA spends 0.3 percent because the company uses Inditex for their advertising which is a much cheaper way to advertise and still be able to focus on the goal of the company which is to meet the wants and needs of the consumers and provide the latest trendy fashion before any other retailer. ZARA shows that you don’t need huge amounts of advertising in order to remain one of the best retailers in the world. They advertise through Social Media, Magazines, Billboards, and also email’s once a consumer has subscribed. ZARA also has a website which is http://www.zara.com/us/. The website is very easy to function and it isn’t very busy. The website really focuses on the merchandise and how a consumer could get help with any problem they have with purchasing or after purchasing a product. The website breaks down the different collections ZARA offers down in order from Women’s to Men’s. After clicking on the choice of gender/size, everything ZARA offers for that gender is laid out in an easy format from outerwear to accessories. They also have editorials on an automatic slide show showing you all of the looks and inspiration behind this season and last season’s collections. The website gives you easy to access info on the company, press, gift cards, apps, and it even gives customers a buying guide which is a rundown or a direction manual on how to function the website in order to make an online purchase from ZARA. The website gives you contact information as well that can be used for when there’s a problem with your purchase.

ZARA’S CUSTOMER SERVICE

ZARA offers a customer service number to both the online stores and the brick and mortars. They have placed the numbers under the contact link on the ZARA website. You can go about contacting ZARA intangibly by telephone which is available Monday – Friday from the hours of 8:30 am through 7:30 pm. On Saturdays, you are able to call through 10:00am through 4:00pm, this is only for the online stores. For the Physical stores, you can call Monday – Friday from 10:00 am though 7:30 pm and on Saturday’s they are also available from 10:00 am through 4:00 pm. There is usually tangible help provided in every store from the ZARA sales manager or associate. ZARA also has a Facebook page they use to give customers easy access in asking questions or expressing their problems with the clothing that they purchased.

ZARA’S COMPETITORS

ZARA’s main competitors are the well-known retailers “H&M” and “Mango.” They all are competitors to one another because they have the same target market. They also cater to the same type of customer which is trendy and urban. Each of these retailers offer good fast fashions at lower than designer prices offered mainly to the middle class. There distribution sets them apart while there prices are very similar. Each of these three retailers all promote they’re company differently which makes them competitive with one another.

ZARA’S STRENGTHS & WEAKNESSES

WEAKNESSES

Counterfeit Goods – Effect the sales of the product and the quality. It ensures that the customer will more than likely be dissatisfied.

No Advertising – ZARA’s policy offers very little advertising to keep expenses at an all-time low.

STRENGTHS

Expansion – ZARA has planned to expand and reach consumers in Egypt and Korea.

Growing – ZARA has grown its online sales more than $14 billion. Also, ZARA has grown its retail market in India, China, and Malaysia.

Strong – ZARA has a strong product diversity being that it is part of the Indetix Group that gives ZARA the opportunity to get involved with the foreign markets.

ZARA also has its own centralized ware houses which are located in Asia, Africa, and Europe that makes distribution very quick and easy. This is how ZARA is always the first to have the newest trend in their stores worldwide.

ZARA QUESTIONS

1. What is the percentage ZARA spends on advertisements? ( 0.3 percent )

2. Who are ZARA’s main competitors? (H&M & Mango)3. What is the age range of the ZARA customer? (15 – 45)4. Who is ZARA’s parent company? (Inditex)

REFERENCES

http://www.inditex.com/en/brands/zara http://www.zara.com/us/en/company-c11112.html https://en.wikipedia.org/wiki/Amancio_Ortega_Gaona http://www.inditex.com/home/us;jsessionid=n7l8iDPNyG4BwQb0rH3xQRl?p_auth=zZEfM3eU&p_p_auth=mnMfFfy3&p_p_id=49&p_p_lifecycle=1&p_p_state=normal&p_p_mode=view&p_p_col_pos=1&p_p_col_count=6&_49_struts_action=%2Fmy_sites%2Fview&_49_groupId=10279&_49_privateLayout=false https://en.wikipedia.org/wiki/Inditex http://www.researchomatic.com/Zaras-4329.html http://finance.mapsofworld.com/brand/value/zara.html http://www.marketwatch.com/investing/stock/zara/financials https://en.wikipedia.org/wiki/Zara_(retailer) http://zarafashion2013.wix.com/zara#!competitor-analysis/c14m9 http://www.academia.edu/5492552/The_Strategic_Management_Analysis_of_ZARA_Relative_to_the_Case_in_Developing_Countries_ https://edited.com/blog/wp-content/uploads/2014/04/EDITD-Zara-HM-segmentation-analysis1.jpg