This gives a lot more flexibility and speed however it means higher costs. Production is then increased or decreased in the flexible production facilities. Deliveries typically arrive one to two days after ordering with most deliveries arriving by truck from the Segmentation of zara factories.
This is made possible by controlling almost the whole garment supply chain from design to retail.
Clothes are then put straight onto the sales floor and are available to purchase. Most retailers outsource production to low-cost Asian countries. As production is carried out in Spain where average wages are higher than low-cost Asian countries so factory wage costs will be higher than competitors, which will affect margins.
Scarcity By reducing the manufactured quantity of each style, Zara creates artificial scarcity and lowers the risk of having stock it cannot sell. They can move from identifying a trend to having clothes ready for sale within 30 days where as most retailers take 4—12 months.
Prime locations Zara spends relatively little on advertising 0. Stores place orders twice per week and the supply of finished goods is matched to store demand.
They have an advantage over traditional retailers because they do not define their target by segmenting ages and lifestyles giving them a much broader market.
This high number of styles also means that the commercial teams have more chances to find a winning style. Zara is also vulnerable to financial vulnerabilities in the Euro as most of its cost-base is denominated in Euros.
Finally increased oil prices will affect profits as twice-weekly deliveries means higher transportation costs. Zara started operations in Spain inand now operates in 74 countries worldwide.
Who is the customer? What is the value proposition?
Large choice of styles Zara produces around 12, styles per year compared to the retail average of 3,which means that fresh fashion trends reach the stores quickly. In contrast Zara is vertically integrated with the majority of production carried out in owned or closely controlled facilities in Spain.
Scarcity in fashion increases desirability, which means shoppers need to buy quickly as the item may not be available next week.
Any weather, labour or terrorist disruption to the area will have a serious impact to sales, as there are no alternative supply centres in Europe.Task 1 zara marketing research Zara is a spanish chain store in Inditex group, one of the worlds biggest retail store in the world who are also owners of zara home.
21 Zara geographic market Geographic segmentation plays a big role for Zara It from ENGLISH at American College of International Academics, Lahore%(5). A second important variable in defining segmentation is based on psychographic characteristics such as lifestyle, as one of the most famous and successful European brands Zara in its existing market targeted people who were especially interested in European styles at affordable price levels.
Market Segmentation of Haagen-Dazs. Market Segmentation Market segmentation refers to the process of dividing a market into a smaller group of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or. Zara manufacture PVC-Free Footwear Techno Savvy Behavioral Segmentation Customers of ZARA are occasional buyers since the product is dearer and is considered as a costly brand.
Targeting Zara has targeted a wide gap in the retail market. There are 4 different types of market segmentation and all of them vary in their implementation. A manager can use any one of the four types of segmentation. where customers who want the latest and differential clothing can visit the Zara stores.Download