{"id":1027,"date":"2018-12-28T09:19:42","date_gmt":"2018-12-28T09:19:42","guid":{"rendered":"https:\/\/www.makemyassignments.com\/sample\/?p=1027"},"modified":"2018-12-28T11:01:47","modified_gmt":"2018-12-28T11:01:47","slug":"zara-case-study-solution-consumer-behavior-research-for-zara","status":"publish","type":"post","link":"https:\/\/www.makemyassignments.com\/sample\/zara-case-study-solution-consumer-behavior-research-for-zara\/","title":{"rendered":"ZARA Case Study Solution- Consumer Behavior Research for ZARA"},"content":{"rendered":"

ABSTRACT <\/strong><\/p>\n

Background<\/strong><\/p>\n

The brand name of Zara is strong in the market and the company has a strong new product pipeline which presents more than 10000 new designs every year that amounts to approximately 30 new designs a day. With such an enviable catalogue and the distinction of owning the entire manufacturing setup and controlling it in \u2013 house, Zara is leagues apart from other traditional retail houses. The researchers have identified some issues in Zara\u2019s sales in their Melbourne store. They believe that lower sales are affecting the finances and hence the underlying causes need to be studied.<\/p>\n

Research Methodology<\/strong><\/p>\n

This study is conducted using the survey methodology with a simple five point Likert-scale based questionnaire to gauge customer responses about the brand, its quality, pricing and promotion. Random sample of 30 customers were chosen. Another brief survey of 20 employees involved in three different functions in the Zara store was also conducted to reinforce the customer survey findings.<\/p>\n

The responses are tabulated and descriptive statistics generated to analyse the responses.<\/p>\n

Findings<\/strong><\/p>\n

    \n
  1. The promotional mix of Zara is not effective as perceived by the customers.<\/li>\n
  2. Product pricing is felt unsuitable as customers are unable to get a justification for the same.<\/li>\n
  3. New product launch is not percolating to the paying customers to frequently visit the stores and bolster the sales.<\/li>\n<\/ol>\n

    Recommendations<\/strong><\/p>\n

    The Inditex management should provide individual brand-wise performance to truly analyse Zara\u2019s contribution in the group. A detailed survey of larger sample size and wider number of stores and geographies is required to validate the findings of this research and deduce the problems.<\/p>\n

    Click on page 2 below to read further<\/strong><\/em><\/p>\n

    <\/p>\n

    Chapter 1 Introduction <\/strong><\/p>\n

    Zara was founded 43 years earlier in Spain. It was originally a clothing company which diversified into other retail items catering to men and women. The company now manufactures and retails clothing and accessories for women, men and children with the distinction of managing the entire operations in house there by exerting greater control over costs and quality. The company swiftly responds to changing market trends and innovates rapidly to keep their customers engaged. Unlike most retail companies, Zara does not promote their brand by employing the traditional methods of advertisement through outdoor media, advertisements in the newspapers, magazines, radio or television. The company rather focuses on the product and the place \u2013 \u201cstores\u201d. The philosophy is to make the products affordable to a larger section of the population and thus differentiate from others. The product pricing is one of the key ways Zara seeks to attain and sustain customer satisfaction. Keeping the manufacturing facility in-house is how the company can lower its costs and reduce wastage in the process while optimizing it for better outcomes. Zara now has presence in more than 30 countries with majority of the stores directly owned by them.<\/p>\n

    The company is part of the Inditex group. The entire design, manufacturing and distribution of Zara and other retail concepts of this group is managed through the main logistics center in Spain. The company ceaselessly manages to deliver new products to their world \u2013 wide stores twice a week.<\/p>\n

    This company is a leading entity in the retail business and have specifically chosen to target customers in the middle-income group who seek fashionable outfits but within a reasonable price range. They are globally competing with Top Shop and H & M. The company spread its global presence since 1988 in a slow organic manner capturing a market at a time and gaining traction. The company has managed to build a strong brand image and centralized their logistics hub to ensure timely order fulfilment at their stores as a continuous flow. This helps them to maintain control over their quality, pricing and costs which is otherwise difficult when manufacturing is outsourced. The higher revenues through selective choice of markets has ensured a stable financial performance. On the flip side centralization of manufacturing increases the risks of the business and increases the cost pressures too on cashflow. There is also the regional impact of online sales to contend with where multiple smaller players within a country who can achieve better efficiency. The need to update their designs regularly and liquidating unsold stocks is a continuous challenge in the garment retail business.<\/p>\n

    Technology has proved to be a boon for Zara. The option to sell online reduces much of the overhead costs while reaching out to a wider audience. It also helps Zara to gather some actionable input about their products and helps in their continuous zeal to innovate and engage their clientele. The most significant challenge for Zara in the future will be from regulatory compliance in emerging countries and the impact on earnings due to currency fluctuation in this globally unified economy. Zara has a well-planned strategy to diversify their risks by operating in more than 30 countries thereby countering any adverse conditions in one country with growth opportunities in many others. Competing in the fashion world calls for regular changes in design while tapping onto customer needs and demands. This is possible through greater control over their business which differentiates Zara from its competitors like GAP and H&M. One of Zara\u2019s prime competitive edge has been their ability to design and launch new products in the shortest possible time thus, maintaining the customer\u2019s interest in the company and the brand. The company is said to launch more than ten thousand new designs in a year which is more than 30 designs per day. Bulk of the promotions of Zara is through the online media and social media channels instead of spending huge amount on television and radio spots which are useful only to the point of creating awareness about the brand but focuses very little on the product range or depth of offerings.<\/p>\n

    Today, Zara is available through retail outlets in many countries around the world. Its entry into Melbourne has been a strategic move to gain foothold in the Pacific region with a burgeoning market.<\/p>\n

    Business research topic <\/strong><\/p>\n

    The researchers have chosen to undertake a survey based research to evaluate Zara\u2019s performance in Melbourne city and the issues that are impacting the sales figures and therefore the financial performance of the store.<\/p>\n

    Brand success in the retail world largely depends on the accuracy of the marketing strategy. It manifests from the precision of differentiation the market into various segments, targeting a particularly lucrative segment which has synergy with the brand and positioning in the most beneficial manner with least points of competition or a specific differentiation which helps the brand stand apart. It can be either based on cost or features or a combination of both which cannot be easily replicated by the competitors.<\/p>\n

    The next level is to design a marketing strategy to communicate with the right customers and prospects in this competitive market. The company should also create harmony among the product, price, place and promotion to voice a singular idea and promise. Research has established that the best of the products has failed due to poorly designed marketing strategy and execution of the plan especially due to inadequate primary market research to tap the pulse of the target audience.<\/p>\n

    The purpose of this research is to gather primary information about the brand and company from the customers. The research intends to highlight the key issues and suggest measures to counteract them and gain larger market share which will lead to additional revenue (Stipp, 2016).<\/p>\n

    The main reasons for a brands approval or disapproval by their customers could be one, some or all of the reasons like product range and design, price of the product depending on the quality as perceived by the buyer, the layout and d\u00e9cor of the stores, information about new designs, changes in return policy or the behaviour of customer service executives in the stores who are often instrumental in helping clients choose a particular outfit based on their body type, personality or colour preference in specific markets. Secondary factors which affect sales are perceived quality, packaging of the product, and the mode of distribution.<\/p>\n

    <\/a>Aim of research<\/h1>\n

    The aim of the research is to find the areas in the strategy that fails to meet the requirements of the customers thereby affecting the sales volumes of the company.<\/p>\n

    Objectives of research <\/strong><\/p>\n

    The objectives of the research are as follows:<\/p>\n