CONTENT• Introduction• Models• SWOT• Booms and Bitners (1981) Extended Marketing• Social Marketing• Green Marketing• Production Strategy• McDonaldization• Four Dimensions• Survey• Problems and Recommendation• Conclusion+Reference List
Introduction Owned by Inditex ✓Based in La Coruna, Spain ✓Fast fashion strategy ✓30,000 designs per year ✓40% of designs produce in-house ✓Stock updated twice a week✓Vertical Model – Limited Outsourcing ✓Zero Advertisement
SWOT Strengths A top game player in fashion industry Differentiated in High price fashion retailing market Owned more than 1,540 stores worldwide Dedicated supply chain process Fast Fashions Weaknesses Insufficient of advertisements Not many countries have online stores Stocks are running out quicklyOpportunitiesExpanding into potential new market eg. China, AustraliaConstant use of social media marketing strategyExplored the Online marketing strategy Threats Facing rival competition in the industry Cheaper alternatives may be available in economic downturn High head office cost given ZARA based in Spain
E-Commerce and marketing• Online Retail: Sales have risen by 17% of theoverall sales. (BBC, 2012.)• The Zara online stores operate in 32• countries.• Social Networking: • Facebook: 16million LIKES. • Twitter: 175k followers. • Instagram: 168 followers.Why spend a penny on above the lineadverts when you have this.
AIDAAttention (Zara, 2010)- Providing mass of products- Building good willInterest (Zara, 2010)- Selling fashionable clothing at reasonable priceDesire (Dailymail, 2011)- Using celebrities to stimulate consumption. (Kate Middelton)Action (Adhiya, 2008)- “Fast fashion” at affordable price- Advertising through Internet
Product (Fashiongear, n/d)•Affordable and fashionably up-to-date•Opening Zara Home Marketing mix•Ecological fabrics and raw materials•Stalk is updated every two weeks!•10,000 DESIGNS A YEAR. NEARLY 28 NEW DESIGNS ADAY!Price (Zara, 2012)•Low prices•Cutting costs with maximum efficiency•Online shoppingPromotion•Below the line advertising (Hoang, 2007)
Place (Marketing Mixx, 2011) Marketing mix•One of the largest clothing retailers•Location considering demand and timingPhysical Environment•The Stores atmosphere sells itself!People (Phillmore, 2009)•Very Particular about who they hire.•Lean organization structure.
gREEN MARKETINGZara in Rome: 30% less energy 70% less water. 5000 (Indidex) STORES 77 countries all are being converted to eco establishment.Ethics in distribution and place (Zara, 2010)-Biofuel-Packaging: recyclable-Electricity: reduce carbon foot print Is this Green Marketing? ZARA vs. H&MEthics in production(Zara, 2010)-Cloth: fabrics are bio degradable-Recycling-FSC/ PEFP mark
Reputation and productionGood Will-Hire Handicap Workers-Start producing more ECOfabric-They make sure they portray themselves and the good guys.Batch production(Hoang, 2007) -“Fast fashion”Cell production- Batch Production-Producing goods in cells-Along with batch production
zARA AND McDonaldizationIn what ways are Zara behaving atypical ofMcdonadlisation and how has it differentiated itselfagainst it?Atypical- Increasing proliferation of its existenceworldwide headed by InditexDifferentiated- Less hierarchical and conventionalstructure within zara that is otherwise typical of amcdonalised company- Putting customer’s preferences as priority
How can Zara be used as an example of the increasing trend of Mcdonaldisation worldwide?-Fast fashion retailing-What consumers have expected of high street fashion-Benchmark of how future companies keen on this particular segment of the fast fashion retailing industry should base their business models on.
MCdONALDIZATION FOUR DIMENSIONSEfficiency FOUR DIMENSIONS- Quick respond- Time Management- Efficient supply chain- Rapid production process and distributionprocessCalculability- Quantity > Quality- Production process broken down tosmaller assembly lines- Specialization
MCdONALDIZATION FOUR DIMENSIONS FOUR DIMENSIONSPredictability- Low predictability- Short life-cycles of products- Fast-fashion shifts trend extremely fast- Difficult to expect and forecastControl- Produce in Europe- Better control of production lines- Higher costs due to high wages for labour
rationality and irrationalityWhat exactly is the ‘irrationality of rationality’?Rationalization can be seen as essentially paradoxical.The ‘rationale’ for rationalization, its a priori assumption,is that increased efficiency, predictability, and calculabilityis akin to an increase in the ability of man to manipulatehis environment, to adapt, to conquer the chaoticelements of life so as to obtain a quality of life that canbe considered ‘better’ than previous times. However,the standard of living’ has come to be defined not in aqualitative manner, but rather as a quantity: of income(Reymer,1995).
Recommendations and problemsZara ProcessCalculability Problems-- Emphasis on high efficiency and fast productionprocesses- Specialisation- Demotivation of workers- Quality drops- Zara do not keep track of their inventory- Zara lacks the ability to check inventory within storestherefore real time counts and scan must be done.- Time consuming
Recommendations and problemsZara structural flawsCommunication problem:Absence of email address that allows efficient customer-corporate relationsLack of advertisement: Advertising is the bridge betweencustomers and companies and it is a part of marketing.The absence of this translates again to the lack ofcommunication between both agents.No networking capabilities:Zara is not able to communicate between its stores andthe home office in a fast and efficient manner due to theinability of individual POS terminal within Zara stores tocommunicate with any other terminals.
1) Why do you shop at ZARA? SurveyWe found that most interviewees shopped at ZARA because of the fashion’s style, the current fashion trend and alsothe brand itself. Some respondents had also addressed price and location is one of the key determinant to shop atZARA.2) How often do you come to ZARA to shop?Our respondents shopped ZARA at a range from once a week to once in three months’ time. The most responseswe received are more than once within the month. This shows our respondents are keen to keep coming into storesto look for new products.3) Do you feel that ZARA has become too commercialised?Most respondents disagreed. This may suggest ZARA relies on ‘Word of Mouth’ rather than mass advertisements.4a) List the following brands in order of your perception on their price? (1 being the most expensive brand and 8 forthe lowest price)All Saints, Superdry and Hollister have been rated for the most expensive brand. ZARA has been rated by therespondents as middle priced brand, and Sport Directs is perceived as the lowest price amongst these options.4b) List the following brands in order of your perception of them being fashionable brands? (1 for the mostfashionable and 8 for the least)All Saints again was rated the highest in terms of fashionable. ZARA and Hollister have also been highlighted by ourrespondents as second or third most fashionable brand. Marks & Spencer and Sports Directs were perceived by ourinterviewees as the least fashionable brand.
Survey5) Do you prefer to shop online or come to the store?We have received equal responses for both, and these were supported by different reasons to shop in store or online.We discovered that people prefer to shop in store because they wanted to try if it’s fit or not. In other hands,respondents tended to shop online because it is more convenient, more sizes and more choices.6) Do you think ZARA keeps up with the current market trend?Nearly all respondents suggested ZARA as one of the fashion market leaders, so with no doubt it is keeping up with thecurrent market trend.7) Are you aware that ZARA is under the Spanish firm inditex and what brand do you think are the biggest fashionretailer in the world?Just one or two interviewees aware ZARA is a subsidiary of inditex. Many respondents suggested H&M and Marks &Spencer are the biggest fashion retailer in the world.8) Do you think ZARA is ethical in its business practice or environmentally friendly?Most respondents have said ‘NO’ in terms of ethics of the organisation. However, for those who have said ‘YES’explained that ZARA have used paper bags to reduce wastage of plastic bags, which supports ZARA as an environmentalfriendly organisation.9) How would you rate the quality of products of ZARA?Almost all respondents were satisfied with the quality of ZARA’s clothing. Some of the respondents have specified thathigh quality deserves for high price in ZARA.10) What do you think about the level of service that ZARA provides?We have received many different views in regards to service standard, from which our interviewees have come up withvarious ideas for improvements. The majority of respondents suggested the service level in ZARA were just abovestandard, many of them were dissatisfied with the waiting time of queue and lack of personal care to its customers. Thereare also some suggestions to recruit more staff members and increase the number of changing rooms.
Conclusion NOT completely McDonaldized Main producers are european HIGH Quality StandardsSurvival and Efficiency=McDonaldization
reference listRitzer, G. (2010) The Mcdonaldization of Society 6, United States: Sage Publications.Kluyver, C. (2010) Fundamental of Global Strategy, New York: Business Expert Press.Ferdows, K., Lewis, M. and Machuca, J. (2003) ‘ZARA’, An International Journal, vol. 4, no.2, pp.62-65Philmore, K. (2009) Zara’s Organization Structure.Available on: http://tortora.wordpress.com/2009/11/18/zara%E2%80%99s-organizational-structure/Accessed on: 19th February 2013Paxman, L. (2011) A Race on Lace.Available on: http://www.dailymail.co.uk/femail/article-2071581/Kate-Middletons-Zara-dress-latest-frock-sell-hours.htmlAccessed on: 21st February 2013Forgaard, K. (2010) The Strong Organization Culture at Zara.Available on: http://blogs.ubc.ca/kforgaard/2010/01/26/the-strong-organizational-culture-at-zara/Accessed on: 18th February 2013Hansen, S. (2012) How Zara Grew Into the World’s Largest Fashion Retailer.Available on: http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-retailer.html?pagewanted=all&_r=1&Accessed on: 20th February 2013