ZARA Case Study Solution- Consumer Behavior Research for ZARA

Chapter 2 Literature Review 

Garments, clothing items, accessories can be replicated easily but the choice of fabrics, cut, range, sizes, pricing and ease of availability vary from one company to another depending on their ability to manage the linkages beyond the environs of their immediate business and expanding to their suppliers and the distributors at the two ends. The success of a company and especially a brand like Zara depends on their key product offering, the customer centric approach to market them while differentiating with others who are competing in the same space.

Zara is a well known brand and has been able to create an extremely huge space for itself in the market. There are number of reasons due to which the company is able to create such an impact on the world. The first and the most important factor that they kept in their minds was the behavior of the buyers. To create a good and effective business strategy, it is important for the different business enterprises to study and analyse the behavior of their buyers and consumers properly. However, at the same time, it becomes extremely difficult for the management and the firms to ascertain the exact needs and wants of their consumers. This is because the choices of the consumers are based on different factors, like, cultural factors, personal preferences, social factors etc. Due to these reasons it becomes impossible for the vendors to identify as to why a particular customer chooses one brand over the other and what is it that the marketing team and the management of the enterprise needs to do so that the they are able to attract the maximum customers, because if they fail to do so it will result into them failing in the marketing which would eventually impact its growth. Lin & Wang (2006) states that the marketers today try to manipulate the different marketing strategies so that they can easily identify what their target consumers want and what is that they do not want (Lin & Wang 2006). Koubaa (2008) identified that the name of the brand plays and extremely important role for customers in ascertaining their choices (Koubaa 2008). It has been seen in a lot of studies that there are certain firms which do not give much importance to the brand name; rather they put more focus on providing the people with goods at low prices and other times on making their own profits. What these firms don’t understand is that the consumers and buyers depend on the name of the brand to evaluate the products that the organization has to offer.  According to Lee (2014), consumers make decisions while keeping in mind an expected result for their decisions (Lee 2014). Agreeing to this Ling, Hwang & Salvendy (2007) stated that the consumers have the ability to ascertain the results of decisions that are uncertain and hence they select that decision which provides them with the best outcome (Ling, Hwang & Salvendy 2007). Therefore, according to this statement the consumer will look for those brands which will give them the most satisfaction and will help in maximizing their utility. In a research conducted by Thaler (1985) it was found that brand name influences the behavior of the consumer adversely (Thaler 1985). For example if the consumers wanted to buy a car then they would go in for cars which were associated with popular brand names. The cars with brand names which are not known to the people did not have too much of demand. This is because they do not want to take the risk of trying new brands. Therefore, it is clear from the study that brand names held a very important place in the minds of the consumers. When we talk about Zara in terms of brand name, it indeed has a very high position solely because of its name. The buyers in general have a lot of trust in them and they have been able to capture a huge market share as well.

Brand name is just one single factor that has made Zara a huge success. There are a number of other factors as well that contribute to its success. The next extremely important aspect which has led to their success is the choice of their markets and the efficient use of the marketing mix. A marketing mix refers to a combination of certain marketing decisions that are used by the firm to market their goods and services in an effective and efficient manner. According to Abrams (2000) the four essential elements that make up the marketing mix are the product, price, place and promotion (Abrams 2000).  A marketing mix will become efficient for a particular firm only when it changes according to the different marketing conditions and also the changing environmental conditions. In a nutshell, the marketing mix is a set of those variables which can be used to influence the responses of the different consumers. Arthur (1998) state that there are a set of different attributes which have a direct influence on the development of customer relationships that are extremely strong (Anderson 1998). These factors or attributes are, product, price, place, promotion.  The product aspect focuses on the tangible goods and the intangible services that a particular firm has to offer and for which a consumer is ready to pay a particular amount. This aspect is considered to be and extremely important aspect for the marketing mix. According to Borden &Neil (1942) a product has a number of stages in the market. As per the first stage a products is introduced in the market and then slowly and gradually it gains a lot of customers as it grows. Then when the product matures in the market it reaches its declining stage very quickly (Borden 1942). The products in Zara are created internally and hence it becomes their duty to examine the market and identify the needs of the consumers. Zara has a wide product range and these products are all up to date and are designed keeping in mind the latest fashion that is trending in the market. Their product development happens continuously and hence when any product goes out have fashion or is no longer wanted by the consumer they are in a shape to replace the product quickly without giving it any second thought.  Then comes the price aspect, Borden et al, (1959) state that price is a particular amount of money that a consumer must has to pay to acquire a particular good or service (Borden & Marshal 1959). The most important point there is to remember in this aspect is that the price of a particular product must be declared by keeping in mind all the costs that have been incurred to produce the particular product. The products of Zara are priced keeping in mind the consumers. Every consumer desires good quality products at a reasonable price and this is exactly what Zara offers to its customers. The prices of their products are reasonable and therefore many customers are able to buy form them and it also helps them to widen their range of target customers.  The next aspect of the marketing mix is that of promotions. According to Cuilliton and James (1948) promotions is considered to be the most powerful aspects of the marketing mix (Culliton 1948). It involves different aspects like public relations, demonstrations etc. The promotion aspect of the marketing mix helps the producer to make the consumers aware about the product in an efficient manner so that they can persuade the target consumers to buy the product. The most common method of promotion is advertising and it helps in creating a positive image in the market and in the minds of the consumers. Advertising is considered to be an expense that is incurred by the organization and hence is added to the cost of the product. Zara is an extremely big brand in itself and it does not aggressive promotion because of the reputation that it has earned in the market and with the consumers. However, despite of its name and reputation it introduces a number of deals that would attract a number of consumers and this would eventually increase their position in the market and their profit earning capacity as they are pursuing two things at one time. The first being that they are continuously brining out new deals for their consumers which indicates that they are considerate about their consumers and are taking good care of them and the second  that they are able to gain more and more profits because of the consumers that are attracted to their brand because of these deals. The place aspect of the marketing mix involves a mechanism through which the goods and services that are present with the vendor are and moved to the consumer. In order to be able to sell more products and services and also to be able to attract more and more consumers, it is important for a firm to choose such a place for their business activities where they are able to acquire different resources easily and also where there are customers present who would want to purchase the goods and services which are provided by that particular firm or organization. Zara has made the perfect choices as far as their locations were concerned. It chose the best of locations for its stores and carefully examined and analyzed the consumers of those areas before doing so. This is because if the consumers of a particular location are not favorable for an organization then they may not be able to grow much in that particular area. The brand may be a popular one like Zara but unless they are able to satisfy and attract customers of the area where they are situated they may not be able to grow and survive in the market for long. Therefore, on the basis of these points it can be said that Zara has done a tremendous job in choosing their locations and analyzing the needs and wants of their different consumers.

Looking at all these different aspects of the marketing mix it can be said that all these aspects are interconnected and even a slight defect in any one of these factors will also affect all the other factors. Also, since the marketing mix comprises of four different components, hence these components can be altered by different business firms to get the best results out of this concept of marketing mix. In addition to all these components it is essential for an organization to have the full support of their top management to carry out the marketing mix in an efficient manner.

The next aspect that is important for the success of Zara is that of Branding. According to Kotler (2001) branding is a term that has existed since centuries and is commonly used to compare the products of one seller with that of the other sellers. It has become one of the most extremely valuable aspects of the business strategies that are being used by the different firms and businesses (Kotler 2001). According to Kim et al. (2008) branding is important because it will help the producers to enable the different consumers to analyze and understand the different products that are being offered by them which would eventually reduce the risks of the consumers in buying the products. This method will also help the brand to maintain a superior level of performance (KH et al. 2008). Keller (2003) has been able to identify the element that helps in making a particular brand different from that of the other brands. That element is the relationship of the management of a company with their consumers. Every brand whether good or bad, big or small relies solely on their current and target consumers for its continuous growth and well being. If these brands are unable to satisfy their consumers then there is a good chance for them of failing. This is because consumer satisfaction is the ultimate goal of every organization and the profits of these organizations directly depend upon the consumers. Therefore, it is important for every brand to maintain a good reputation in front of their consumers so that they can create good relations with them at the same time. Moreover, how much a brand can market itself is becoming an extremely important aspect for determining the level of success of an organization. Since the word brand is so extensively, therefore, it is important to understand what it actually means and also the other factors that are necessary for strengthening the brand name.

Brand image refers to the different views and opinions that different people have about a particular brand. This opinion that has been formed does not solely depend upon the quality of the goods and services that a consumer has to offer. In the words of Porter (1985) brand image is the mental image that people have of a brand due to all the different elements of the company created in their minds (M 1985). It can also be referred to as a set of perceptions that the target consumers have in their minds. According to Keller (2003) brand image is nothing but the perception of a consumer about a particular brand which is based on their memory of that brand (Keller & L 1993). Different people have described it in different ways but it is nothing but how a consumer perceives a particular product, service or brand. Since the image of a particular brand is based on the perception of different consumers hence, the different firms and organizations should work on building a positive image of their brands so that they can attract more and more consumers and can henceforth earn good profits. To improve their brand image they should make use of the required marketing strategies which will provide a lot of help to their brand. All this should be kept in mind because a favorable image of the brand in the mind of the consumer will help it strengthen the choice of the consumer regarding a particular brand. Zara has been able to create for themselves a huge brand name through their consistent efforts and hard work. They have been offering such products and services which are helping them to improve and strengthen their brand name continuously and therefore they have been able to create a positive perception of their brand in the minds of their consumers.

The next aspect that is important for strengthening a brand is that of customer satisfaction. Andreassen and Lindestad (1998) state that the term customer satisfaction, refers to the sum of experiences of the customers which they have while purchasing a particular good or service (Andreassen, Wallin & Lindestad 1997). Yi (1990) stated that the satisfaction of the consumers is primarily based on two factors, which are first expectations and second experiences (Yi 1990). Expectations refer to the feeling that a consumer would want to have after purchasing a good or service. Experience refers to the feeling that a consumer has while going through the task of purchasing a good and service. The consumer satisfaction is highly dependent on both these factors. The markets and the industries are becoming highly competitive and the basis on which their success is measured is consumer satisfaction and hence it has become a very important element for the different business organizations and these organizations are continuously working towards providing the best of services and goods to their customers which will in turn ensure highly satisfied consumers. The different brands to ensure consumer satisfaction keep introducing new deals, new offers and number of good quality goods and services for their customers. This helps them in two ways, first the consumers remain satisfied and second these brands are able to earn more profit because they are able to attract more and more people through these deals and offers. Zara is a brand that puts its customers first. They keep putting in a lot of effort for the satisfaction of the needs of these consumers and hence they enjoy customer loyalty because of the sole reason that they are able to keep their consumers satisfied.

The next aspect that is important for the success of any brand is loyalty. According to Da Silca and Alwi (2006) loyalty simply refers to the positive feedbacks, repurchases of goods and services or anything that introduces new customers or makes the current customer return to the brand (Da Silva & Syed Alwi 2006). Burton (2002) states that, loyalty is more of an attitude than a behavior. However, customer loyalty is the commitment that people have towards a particular brand (J 2002). Customer loyalty is an extremely important aspect for the growth and success of an organization and it is important for the different brands to make sure that they provide their consumer with the best of services and also that they create an emotional bond with them through these products and services only so that they are able to retain all their best customers and also attract new customers for their brand or organization. However, it is to be kept in mind that attracting new customers is a tedious task and it will be beneficial for the brand if they are able to retain and satisfy their existing consumers because it will prove to be more profitable for them than attracting new customers to the brand.

Zara is not a brand that has come up in the recent years and also it is definitely not the brand which delivers bad products or services. Zara is a world class brand and has all the qualities that are required for attracting new customers and retaining the existing ones. Their behavior towards their customers has ensured that they return to the brand and continue to purchase from them only. The customer loyalty that they have built over the years has proved to extremely beneficial for them because their existing consumers were able to give a positive feedback about the products and services of Zara and this led to more and more people shopping from Zara. Since, they always gave the top priority to their customers so it paid them well and they have been growing and growing without carrying the baggage of disappointed consumers.

All these aspects that have been talked above are connected to each other in a number of ways. Fry (2002) found at that the image of a particular brand has a direct effect on the loyalty of the consumers. In fact the image of a brand has a direct or indirect effect on almost every aspect. This is because everything begins with the perception that people have about a brand. If the brand has worked hard enough and is able to create a good perception in the minds of the consumers then everything will follow and if they are unable to do so then the vise- versa would happen (B & M 2002).

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