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Segmentation, Targeting & Positioning (833 words)

Segmentation

Zara’s segmentation can be described by the principles of demographic segmentation.

The target customer is usually aged 18-40, with a mid-range income. As part of his/her occupation
fashion trends is usually on top.

But not only from a demographic view Zara segments its targets, their products are also designed
based on a psychographic view based on its customers hectic lifestyle which means that they are
usually busy people or with some kind of intense activity which combines with Zara’s tactic, making
the customer to buy by instinct.

There is a list of Zara’s segmentation:



Small sized customers

Plus sizes shaped garments

Demographic segmentation

Aged 18-40

Mid-range income

Interested in fashion trends

Lifestyle segmentation

Hectic lifestyle

Small sized customers

Plus sizes shaped garments
There is a slide where Zara can be seen as a Designer brand in fashion terms and as a dedicated
range in price terms.



Targeting & positioning



When targeting and positioning, Zara’s business model cannot be avoided.

There are the keys for its business model:

Customer – They are the starting point for all Zara’s activities. It has a leading role on the business
model since it’s a customer oriented brand.

They provide excellent customer care and are frequent to see campaigns to collect customer’s
opinion.

Store – It meets the point between the customer and Zara’s fashion offer. Rather than paying
millions on advertising Zara locates its stores in customer oriented venues (e.g. in Manchester Zara is
at the city centre in a area with huge movement, New Market Street).

New products are implemented twice a week and their estimations are that the same customer
comes 17 times a week into the store. This is because the windows are always fashion appellative
and the cheap prices are always shown on that window. Moreover the product block, combining
products that match with each other makes the customer spend more money and buy more items
instead of going to several shops and buy from different ones.

Design & Products – proximity of product facilities and immediate reaction to trends.

Zara also provides quantity and the more than 1000 suppliers and the 200 designers show it. Its
different from their rivals in the same segmentation, which usually has less different products but
more quantity on sizes and less designers so they have the advantage of making sure that Zara’s
trend identification is present despite the large number of designers.

Logistics – More than 600 million garments are distributed every year.

Even the Logistics are customer oriented providing replenishments twice a week grace to a 24h
receiving order office.

Teams – Also the teams are customer oriented and part of the employee’s roles is also provide the
friendly environment “feeling” in the store.




Concentrated Marketing mix

Visualising the impact of a new line, Zara follows its consistent approach, avoiding the plus sizes or
shaping them, which shows a consistent approach of its customer type. Its customer orientation
leads to an increase on customer satisfaction typical of the South European way of living.

Exploring its opportunities and suppressing weaknesses like the lack of plus sizes, Zara has
transformed the customer, now the typical Zara customer wants to fit on the dress and not the
inverse. That shows a continuous growth of Zara as a designer brand.

Having an overview on the economical side of it we need to have a look in what way some actions
make the difference on the Economics of scarcity.

Economics of Scarcity
• Highten the sense of now-or-never
– Supply only handful of dresses at a time
– Rapid design changes (11,000/yr)
– Don’t over-saturate the market
– Change the location of key items
• Stores are not flooded with garments
• A typical Zara customer visits the store
17 times/yr (compared to 4-5 for The
Gap)
• Friends don’t tell friends about Zara

Zara is self-considered a Designer boutique but it contrasts with the prices they practice.
On the other hand their style contrasts with the dedicated ranges brands like H&M or
Marks&Spencer. So it can be a good point saying that Zara has the best of both, the fashion design
from boutiques like Louis Vuitton and Armani with the prices of Dedicated ranges like H&M. It leads
to the thought of a comparative advantage but in fact Zara has disadvantages from both sides like
lack of plus sizes, typical on designer brands and average quality, typical of dedicated ranges.

E-commerce

Zara is a Designer boutique with an extreme difference on the average price so their competitors are
not luxury brands but dedicated ranges like H&M or M&S. So Zara gains on both ways, because is
more trendy than dedicated ranges but less expensive than the most of the Designer boutiques.

On the other hand is less experienced than other designer brands competitors and lacks on e-
commerce where not all the products are available and without the store strategy it does not sell as
much, so the customer has got used to check windows and visit the store more often rather than
checking the new season garments on the internet.

Partners

Magazines like vogue and bazaar are the chosen to show new garments and product blocks

Efficient Product placement in magazines.

Recommended

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Zara segmentation by

  • 1. Segmentation, Targeting & Positioning (833 words) Segmentation Zara’s segmentation can be described by the principles of demographic segmentation. The target customer is usually aged 18-40, with a mid-range income. As part of his/her occupation fashion trends is usually on top. But not only from a demographic view Zara segments its targets, their products are also designed based on a psychographic view based on its customers hectic lifestyle which means that they are usually busy people or with some kind of intense activity which combines with Zara’s tactic, making the customer to buy by instinct. There is a list of Zara’s segmentation: Small sized customers Plus sizes shaped garments Demographic segmentation Aged 18-40 Mid-range income Interested in fashion trends Lifestyle segmentation Hectic lifestyle Small sized customers Plus sizes shaped garments
  • 2. There is a slide where Zara can be seen as a Designer brand in fashion terms and as a dedicated range in price terms. Targeting & positioning When targeting and positioning, Zara’s business model cannot be avoided. There are the keys for its business model: Customer – They are the starting point for all Zara’s activities. It has a leading role on the business model since it’s a customer oriented brand. They provide excellent customer care and are frequent to see campaigns to collect customer’s opinion. Store – It meets the point between the customer and Zara’s fashion offer. Rather than paying millions on advertising Zara locates its stores in customer oriented venues (e.g. in Manchester Zara is at the city centre in a area with huge movement, New Market Street). New products are implemented twice a week and their estimations are that the same customer comes 17 times a week into the store. This is because the windows are always fashion appellative
  • 3. and the cheap prices are always shown on that window. Moreover the product block, combining products that match with each other makes the customer spend more money and buy more items instead of going to several shops and buy from different ones. Design & Products – proximity of product facilities and immediate reaction to trends. Zara also provides quantity and the more than 1000 suppliers and the 200 designers show it. Its different from their rivals in the same segmentation, which usually has less different products but more quantity on sizes and less designers so they have the advantage of making sure that Zara’s trend identification is present despite the large number of designers. Logistics – More than 600 million garments are distributed every year. Even the Logistics are customer oriented providing replenishments twice a week grace to a 24h receiving order office. Teams – Also the teams are customer oriented and part of the employee’s roles is also provide the friendly environment “feeling” in the store. Concentrated Marketing mix Visualising the impact of a new line, Zara follows its consistent approach, avoiding the plus sizes or shaping them, which shows a consistent approach of its customer type. Its customer orientation leads to an increase on customer satisfaction typical of the South European way of living. Exploring its opportunities and suppressing weaknesses like the lack of plus sizes, Zara has transformed the customer, now the typical Zara customer wants to fit on the dress and not the inverse. That shows a continuous growth of Zara as a designer brand. Having an overview on the economical side of it we need to have a look in what way some actions make the difference on the Economics of scarcity. Economics of Scarcity • Highten the sense of now-or-never – Supply only handful of dresses at a time – Rapid design changes (11,000/yr) – Don’t over-saturate the market – Change the location of key items • Stores are not flooded with garments • A typical Zara customer visits the store 17 times/yr (compared to 4-5 for The Gap) • Friends don’t tell friends about Zara Zara is self-considered a Designer boutique but it contrasts with the prices they practice.
  • 4. On the other hand their style contrasts with the dedicated ranges brands like H&M or Marks&Spencer. So it can be a good point saying that Zara has the best of both, the fashion design from boutiques like Louis Vuitton and Armani with the prices of Dedicated ranges like H&M. It leads to the thought of a comparative advantage but in fact Zara has disadvantages from both sides like lack of plus sizes, typical on designer brands and average quality, typical of dedicated ranges. E-commerce Zara is a Designer boutique with an extreme difference on the average price so their competitors are not luxury brands but dedicated ranges like H&M or M&S. So Zara gains on both ways, because is more trendy than dedicated ranges but less expensive than the most of the Designer boutiques. On the other hand is less experienced than other designer brands competitors and lacks on e- commerce where not all the products are available and without the store strategy it does not sell as much, so the customer has got used to check windows and visit the store more often rather than checking the new season garments on the internet. Partners Magazines like vogue and bazaar are the chosen to show new garments and product blocks Efficient Product placement in magazines.