International Marketing Management

1. LEVEL 7 ASSIGNMENT SPECIFICATION DRAFT
Student name: Student number:
Programme: MBA (November 2016 - March2017)
Module: International Marketing Management Module Level: 7
Module code: SBLC7016
Contribution to Overall
100
Module Assessment (%):
Lecturer: Terry Johnson Internal Verifier: Dr. Paul Reynolds
Assignment Title: Assignment No (x of x):
Hand Out Date: 12/12/2016 Submission deadline: 23/02/2017
Referencing: In the main body of your submission you must give credit to authors on whose research your
work is based. Append to your submission a reference list that indicates the books, articles, etc.
that you have read or quoted in order to complete this assignment (e.g. for books: surname of
author and initials, year of publication, title of book, edition, publisher: place of publication).
Disclosure: I declare that this assignment is all my own work and that I have acknowledged all materials
used from the published or unpublished works of other people. All references have been duly
cited.
Student’s (Only where hard copies required)
Signature: Date:
Turnitin: Lecturer to tick to indicate if an electronic version of the assignment must be submitted to
Turnitin. Note: the Turnitin version is the primary submission and acts as a receipt for the student. All
students MUST submit their assessments by the specified deadline. Late submissions may be subject to
penalties.
YES √
NO
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2. Learning Outcomes tested Assessment Criteria to achieve each outcome a
(from module syllabus)
student must demonstrate the ability to:
Question 1
 Critically analyse, evaluate, define and discuss Covers the strategic management decision of identifying
market research methodologies, applications and internal Critical Success Factors (CSF`s) in the context of
environmental influence and strategic value in International Marketing Development planning.
relation to marketing in International, regional,
national and global marketing contexts Students should demonstrate a critical evaluation of the
importance of these factors in the context of
International Marketing Development planning – with
reference to relevant International Marketing concepts
and models.
Question 2
Students should demonstrate an understanding of the
key principles of planning Relationship Marketing
strategies campaigns, referring to relevant concepts and
International Marketing Communications models.
`How` the organisation needs to strategically plan its
international Relationship Marketing in the context of
its market development planning.
 Critically comprehend, analyse, and evaluate the In Question 1:
strategic and operational factors which impact
upon marketing scenarios; identification and Students are asked to relate the key CSF`s concepts to
resolution; success and failure in relation to the chosen organisation when undertaking Market
international marketing contexts, competitive Development planning– conducting an evaluation of
positioning, market entry and international these concepts and illustrating and justifying their
development conceptual importance in terms of potential success /
failure.
In Question 2
Students must also critically evaluate the importance of
strategically planning and managing this external CSF in
the context of success/failure for the chosen
organisation`s organisation`s Market Development
planning.
`Why` the organisation needs to strategically plan this
external CSF.
 DO NOT put this form into Turnitin or it will match many similarities with other students’ submissions.
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3. TASK DESCRIPTION
ASSIGNMENT
One assignment (2 Component Parts A and B)
One individual assignment of 3,000 words maximum (two parts - 1,500 maximum words each
component)
Credit value: 10
Module Leader (s): Terry Johnson
Individual assignment – TWO COMPONENT PARTS OF 1,500 WORDS EACH (3,000 words in total)
REPORT FORMAT
Description of Assessment Requirements
Role/ Scenario
You are the International Marketing Manager - in an organisation of your own choice.
You are to prepare a report for your Board of Directors, covering the International Marketing tasks
set out below (Component A and Component B):
ASSIGNMENT COMPONENT A:
Undertake a critical evaluation of the internal Critical Success Factors (CSF`s) that can determine
success/failure in your chosen organisation`s Market Development planning. (50 marks)
(To assess Learning Outcomes L1 and L2)
Points to address in Assignment Component A:
 Students should answer in the context of their chosen organisation.
 Students should identify and critically evaluate the importance of the internal CSF`s -
employing relevant international marketing models.
 Students should critically evaluate, illustrate and justify the importance of these internal
CSF`s in the context of the chosen organisation`s Market Development planning.
(Total Marks Assignment Component A = 50 marks).
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4. ASSIGNMENT COMPONENT B
Critically examine and discuss how and why your chosen marketing organisation needs to
strategically plan and manage its Relationship Strategies as a key external Critical Success
Factor in the context of potential success/failure of its future Market Development planning.
(To assess Learning Outcomes L1 and L2)
Points to address in Assignment Component B:
 Students’ should answer in the context of their chosen organisation.
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 Students should critically examine and discuss the strategic planning of Relationship
Marketing strategies in the context of International markets, referring to relevant concepts
and Relationship Marketing models.
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 Students should critically examine and justify the potential benefits for the chosen
organization of undertaking this strategic approach to Relationship Marketing management
in the context of the organization`s International Market Development planning.
(Total Marks Assignment Component B: 50)
TOTAL MARKS FOR ASSIGNMENT COMPONENTS A and B = 100 MARKS
Guidance notes
This is a report and must be presented in report format and style. This is an academic piece of work
therefore you are expected to link theory and practice. You must acknowledge the sources of
information and evidence using the Harvard referencing system. All assignments are subject to the
University’s regulations on plagiarism and must be submitted in electronic form for checking.
Guidelines:
1. All assignments should be presented in the form of a report, NOT an essay.
2. Assignments will be graded on the basis of:
i) research done
ii) analysis of the facts collated
iii) position taken and
iv) the justification of the position
3. All research must be referenced. A Reference List and a Bibliography MUST be attached. Harvard
system of referencing MUST be followed.
4. Students found copying from other students will also be charged with collusion and awarded a Fail
grade.
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5. GUIDANCE FOR STUDENTS IN THE COMPLETION OF TASKS
NOTE: The guidance offered below is linked to the five common assessment criteria overleaf and specifically
aligned to the “exceptional” outcome category to which we anticipate students aspire.
1. Research-informed Literature
Your work must embed and be informed and supported by relevant and credible scholarly material that is accessible
in the learned journals listed on the module schedule. You should refer to at least 10 such sources. Additionally, you
should refer to text books, current news items and benchmark your organisation against other organisations to
ensure your assignment is current and up-to-date. High-level referencing skills using the Harvard Method must be
demonstrated throughout your work and all sources listed alphabetically within your bibliography.
2. Knowledge and Understanding of Subject
Your work must demonstrate the growing extent of your knowledge and understanding of concepts and underlying
principles associated with the subject area. This means that within your work, you should provide evidence of your
growing mastery in critical awareness of current challenges, new insights and the constant need for innovation
within the field. Furthermore, a critical awareness of the ambiguities and limitations of knowledge and even
understanding, should be considered and examples of such, illustrated within your work.
3. Analysis
To be considered masters worthy, your work must contain evidence of analysis, evaluation and synthesis. This
means not just describing “What!” but also justifying: Why? How? When? Who? Where? And at what cost! At all
times, you must provide justification of your arguments and judgements. Evidence that you have reflected upon the
ideas of others on matters occurring in the real world of business is crucial to you providing a reasoned and informed
debate within your work. Your choice of methodologies to gather data and information must be rigorously
defended. Furthermore, you should provide evidence that you are able to make sound judgements and convincing
arguments in the absence of complete data, since within the real world of work, we rarely have access to, or know
all the information! Persuasive conclusions are especially necessary and must be derived from the content of your
work – there should be no new information presented within your conclusion. Your work should aspire to resemble
work which is of journal publishable quality.
4. Practical Application and Deployment
It is essential that you rationalise how you decided upon certain methods, materials, tools and techniques to inform
and complete your work. You must demonstrate what informed your decision(s) to apply certain concepts that
enabled you to formulate innovative and creative solutions to the challenges presented to you or that you identified
for yourself. Plausible, costed and justifiable recommendations are demanded and where these are absent, your
work is undermined. Your work should provide evidence that you are growing in mastery in developing cutting edge
processes and techniques within the subject area.
Skills for Professional Practice
Your work must provide evidence of your attributes in the application of professional practice. This includes
demonstrating that you are highly capable of individual and collaborative working. Regarding the presentation of
your work, you must demonstrate your ability to select and deploy the appropriate media that is “fit for purpose.
Additionally, you must exhibit your ability to: communicate with an exceptionally high level of professionalism; work
professionally, autonomously and within a team; develop leadership skills; and produce/present work that is
coherent, cogent and specifically addresses the challenges set for you or you have set yourself. Importantly, your
work should be easily understood by specialists and non-specialists in the field.
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6. The Marking Criteria detailed below, apply to both of the Assignment Components. Students must
therefore aim to cover the requirements of these marking criteria in the context of the International
Marketing scenarios created in both of the assignment components (the weighting/mark allocation
of these five marking criteria is the same for both of the assignment components):
MARKING CRITERIA AND STUDENT FEEDBACK
This section details the assessment criteria. The extent to which these are demonstrated by you determines your mark. The
marks available for each criterion are shown. Lecturers will use the space provided to comment on the achievement of the
task(s), including those areas in which you have performed well and areas that would benefit from development/improvement.
Common Assessment Criteria (applied to all parts of the project)
1. Research-informed Literature Extent of research and/or own reading, selection of credible
international marketing management sources, application of appropriate referencing conventions.
Marks
available
Marks
awarded
15
Extent of research and/or own reading, selection of credible international marketing management sources in line with
the key academic concepts in both component parts of the assignment. , Application of appropriate referencing
conventions.
2. Knowledge and Understanding of Subject Extent of knowledge and understanding of concepts and underlying 20
principles associated with the discipline. Identifying and justifying the inclusion of key international marketing concepts and models,
in line with the key aspects of the set questions.
Identifying and justifying the inclusion of key international marketing concepts and models, in line with the key aspects
of the two component parts of the assignment. The extent of knowledge and understanding of these identified
international marketing management concepts and the underlying principles associated with these disciplines.
3. Analysis: Analysis: Analysis, evaluation and synthesis; logic, argument and judgement; analytical reflection; organisation of 25
ideas and evidence. Employing the academic insights to address the conceptual aspects of the questions in the assignment.
Evaluation and synthesis; logic, argument and judgement; analytical reflection; organisation of ideas and evidence.
Employing the above academic knowledge and understandings to gain theoretical insights, in line with the
international marketing management concepts in both of the assignment component parts.
4. Practical Application and Deployment: Deployment of methods, materials, tools and techniques; application of 30
concepts; formulation of innovative and creative solutions to solve problems, Applying the above academic concepts, and
demonstrating the value of doing so, in the context of the chosen organisation and its International Development Planning.
Applying the above international marketing management concepts, and demonstrating the value of doing so in the
context of the chosen organisation and its International Development Planning.
5. Skills for Professional Practice: Attributes in professional practice: individual and collaborative working; deployment of 10
appropriate media; presentation and organisation. Construction of the assignment (Parts one and two) in report format.
Construction of the assignment components A and B in report format, written in the context of the reporting setting
created in the assignment.
TOTAL 100
Late Submission Penalties (tick if appropriate)
Assignment Mark (Assessment marks are subject to ratification at the Exam
%Board. These comments and marks are to give feedback on module work and are for
guidance only until they are confirmed. ) Up to one week late
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7. COMMON ASSESSMENT CRITERIA
OUTRIGHT FAIL FAIL UNSATISFACTORY SATISFACTORY GOOD EXCELLENT EXCEPTIONAL
Assessment Criteria
0-29% 30-39%* 40-49% 50-59% 60-69% 70-79% 80-100%
1. Research-informed Little or no evidence Poor evidence of References to a Inclusion of Inclusion of a wide A comprehensive Outstanding
Literature
of reading. reading and/or of limited range of research-informed range of research- range of research knowledge of
reliance on mostly relevant literature, including informed literature, informed literature research-informed
Views and findings inappropriate sources. Referencing sources retrieved including sources embedded in the literature embedded
Extent of research and/or unsupported and sources, and/or conventions not independently. retrieved work. Excellent in the work.
own reading, selection of non-authoritative. indiscriminate use of always applied Some omissions and independently. selection of relevant Outstanding
credible sources, sources. consistently. minor errors. and credible selection of relevant
sources. High-level and credible
application of appropriate Referencing Selection of relevant
referencing skills, sources. High-level
referencing conventions conventions largely
Referencing Referencing and credible
conventions used conventions mostly sources. Very good consistently applied. referencing skills
ignored.
consistently andinconsistently. consistently applied. use of referencing
conventions, professionally
consistently applied. applied
2. Knowledge and Major gaps in Gaps in knowledge, Some evidence of Knowledge is Knowledge is Excellent mastery of Exceptional mastery
Understanding of
knowledge and with only superficial knowledge and generally accurate extensive. Exhibits a complex and of a complex and
understanding of understanding. understanding of with a satisfactory understanding of specialised area of specialised area of
Subject material at this Some significant current and relevant understanding of the breadth and knowledge and knowledge and
level. Substantial inaccuracies. concepts and the field of study. depth of established skills, with an skills, with an
Extent of systematic inaccuracies. underlying principles and contemporary excellent critical exceptional critical
but with gaps or views. awareness of awareness of
knowledge,
errors. current problems current problems
understanding and critical
and/or new insights and/or new insights
awareness of concepts at the forefront of at the forefront of
and underlying principles the field. Clear the field. A critical
associated with the awareness of awareness of the
discipline. challenges to ambiguities and
established views limitations of
and the limitations knowledge.
of the knowledge
base.
3. Analysis Unsubstantiated Some evidence of Evidence of some Evidence of some Evaluates Excellent critical Exceptional critical
generalisations, analytical logical, critical logical, analytical, methodologies, evaluation of evaluation of
Analysis, evaluation and
made without use of intellectual skills, thinking and some critical thinking and current research and methodologies, methodologies,
any credible but for the most attempts to synthesis. Can ideas critically and, current research and current research and
synthesis; logic, argument evidence. Lack of part descriptive. synthesise, albeit analyse new and/or where appropriate, ideas and, where ideas and, where
and judgement; analytical logic, leading to Ideas/findings with weaknesses. complex data and proposes new appropriate, appropriate,
reflection; organisation unsupportable/ sometimes illogical situations without hypotheses/ideas. proposes new proposes new
of ideas and evidence missing conclusions. and contradictory. Some evidence to guidance. Evaluates and hypotheses/ ideas. hypotheses/ ideas.
Lack of any attempt Generalised synthesises complex Evaluates and Evaluates andsupport findings/
to analyse, statements made views, but evidence An emerging issues both synthesises complex synthesises complex
synthesise or with scant evidence. not consistently awareness of systematically and issues systematically issues at a high level
evaluate. Conclusions lack interpreted. different stances creatively. Makes and creatively. of mastery. Makes
relevance. and ability to use sound judgements Makes excellent outstanding
Some relevant evidence to support and proposes judgements and judgements and
convincing proposes convincing proposes highlyconclusions and the argument.
arguments in the arguments in the convincingrecommendations,
absence of complete absence of complete arguments in the
But not always well Some conclusions
data. Sound, data. Strong, absence of complete
linked to other and
convincing persuasive, data. Highly
material. recommendations,
conclusions / conclusions, persuasive
where relevant
recommendations. justifiable conclusions. Work is
recommendations. of journal
Work is of publishable quality.
conference
publishable quality.
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8. 4. Practical Limited or no use of Rudimentary Some awareness A satisfactory and A very good An advanced Outstanding levels
Application and
methods, materials, application of and mostly appropriate application of a application of a of application and
tools and/or methods, materials, appropriate application of range of methods, range of methods, deployment skills.
Deployment techniques. tools and/or application of well- standard methods, materials, tools materials, tools Assimilation and
techniques but established materials, tools and/or techniques. and/or techniques. development of
Effective deployment of Little or no without methods, materials, and/or techniques. cutting edge
consideration and tools and/or processes and
appropriate methods, appreciation of the Very good The context of the
competence. Flawed techniques. techniques.
materials, tools and context of the Satisfactory consideration of the application is well
application. appreciation of the appreciation of the context of the considered, with
techniques; extent of skill context of the Some appreciation context of the application, with extensive use of
demonstrated in the application. of the context of the application, with perceptive use of relevant examples.
application of concepts to application. some use of examples, where
a variety of processes examples, where relevant. Application and
and/or contexts; relevant. deployment extend
formulation of Evidence of some beyond established
innovative, original and originality, conventions.
innovation and Originality,
creative solutions to solve
creativity. innovation and/or
problems. creativity evident
throughout.
5. Skills for Communication Media is poorly Communication is Can communicate Can communicate Can communicate Can communicate
Professional Practice
media is designed and/or not not clear. effectively in a well, confidently and professionally and, with an
inappropriate or suitable for the suitable format, but consistently in a confidently in a exceptionally high
misapplied. audience. Limited independent may have minor suitable format. suitable format. level of
Demonstrates attributes work and limited errors. professionalism.
expected in professional Little or no evidence Poor independent or involvement in Can work very well Can work
practice including: of autonomy in the collaborative group activities. Can work effectively autonomously and professionally Can work
individual initiative and completion of tasks. initiative. autonomously and as part of a team, autonomously and exceptionally well
collaborative working; Work lacks
as part of a team, with very good within a team, and professionally
with some contribution to showing leadership autonomously and
deployment of Work is poorly Work lacks coherence in places
structured and/or structure, and is in need of involvement in group activities. skills as appropriate, within a team,
appropriate media to
largely incoherent. organisation, and/or amendments to the group activities. managing conflict showing advanced
communicate (including coherence structure. Work is coherent and meeting leadership skills.
written and oral); clarity Mostly coherent and fluent and is obligations.
and effectiveness in work and is in a well structured and Work is
presentation and suitable structure. organised. Work is coherent, exceptionally
organisation. very fluent and is coherent, very
presented fluent and is
professionally. presented
professionally.
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9. Table of Content
1. INTRODUCTION ......................................................................................................1
2. PART A: EVALUATING INTERNAL CRICAL SUCCESS FACTORS (CSFs) OF
ZARA ONLINE DISTRIBUTION STRATEGY .................................................................. 2
2.1. Theoretical framework of Critical Success Factors (CSF) .................................. 2
2.2. CSFs for the success of Market Development Plan – online distribution plan of
ZARA ...........................................................................................................................3
2.2.1. The shopping website with good design and high usability .........................4
2.2.2. The diversified assortment of products and services for online shopping ....6
2.2.3. Diversified, efficient and good-service logistic .............................................8
3. PART B - RELATIONSHIP STRATEGIES FOR THE SUCCESS OF MARKET
DEVELOPMENT PLAN – H&M ONLINE SHOPPING.......................................................................8
3.1. ZARA’s online shopping service..................................................................................................8
3.2. Relationship marketing and its benefits...................................................................................8
3.3. Relationship strategies for ZARA’s future online shopping.........................................10
3.3.1. Customer Relation Management.....................................................................................11
3.3.2. Improving ZARA’s expertise for online shopping services..................................12
4. CONCLUSION..........................................................................................................................................12
REFERENCES ..................................................................................................................................................13

10. 1. INTRODUCTION
ZARA is the leading fast fashion brand all over the world 2016. Even though facing
some challenges from economic crisis, ZARA achieved positive growth rate of 15% at
USD 23 billion in 2016 (Table 1). Since its establishment in 1975, Zara has put its
presence in over 85 countries with over 2,000 stores in the globe. To leverage online
business opportunities, influenced by the information technology development and
online shopping demand of customers, ZARA has developed online websites in 25
countries. Even online shopping service is new business to ZARA, it is considered main
aspect which ZARA has emphasized to develop recently and in future because online
service is with high growth rate of 8%.
This report aims to understand internal Critical Success Factors to support the growth of
online shopping service and to identify external Critical Success Factor – relationship
marketing to generate more improvement for online shopping.
The outline of this report is below:
Part A: Evaluating Internal Critical Success Factors for ZARA online distribution strategy
- Theoretical framework of CSF (Critical Success Factors)
- CSFs for the success of Market Development Plan – online distribution plan of
ZARA
Part B: Relationship strategies for the success of online distribution strategy in ZARA
- ZARA’s online shopping services
- Relationship marketing and its benefits
- Relationship strategies for ZARA’s future online shopping strategy
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11. Table 1: Fast fashion brands
Company Name End of
Sales Sales
Change (%)
Country (Trillion of (Billions
(Flagship Brand) Fiscal Year (local base)
yen) of dollar)
INDITEX (ZARA) Spain Jan. 2016 2.40 23.27 +15.4
Hennes & Mauritz Sweden Nov. 2015 2.18 21.17 +19.4
FAST RETAILING(UNIQLO) Japan Aug. 2016 1.79 17.31 +6.2
Gap USA Jan. 2016 1.63 15.80 -3.9
L Brands USA Jan. 2016 1.25 12.15 +6.1
PVH (Calvin Klein,Tommy Hilfiger) USA Jan. 2016 0.83 8.02 -2.7
Ralph Lauren USA Apr. 2016 0.76 7.41 -2.8
NEXT UK Jan. 2016 0.56 5.46 +4.4
AMERICAN EAGLE OUTFITTERS USA Jan. 2016 0.36 3.52 +7.3
Abercrombie & Fitch USA Jan. 2016 0.36 3.52 -6.0
Esprit Hong Kong Jun. 2016 0.24 2.29 -8.4
Source: Fast Retailing (2016)
2. PART A: EVALUATING INTERNAL CRICAL SUCCESS FACTORS
(CSFs) OF ZARA ONLINE DISTRIBUTION STRATEGY
2.1. Theoretical framework of Critical Success Factors (CSF)
Introduced by Rockart and MIT Sloan of Management (1981), critical success factors
are defined as strategic factors which management has influenced and excelled to
improve their company’s competitive position (Johnson and Scholes, 2012; Colla and
Lapoule, 2012). These CSFs play an important role through improving competitiveness,
thus being studied by many scholars and introduced with five types, which reflect the
way managers can adopt to achieve their company’s mission. They are (1) structure of
particular industry, (2) competitive strategy, industry position, (3) macro environment,
(4) challenges to the organization, and (5) management perspective. These types can
be divided into groups such as (1) internal CSFs (competitive strategy, industrial
position and management) and (2) external CSFs (macro environment and particular
industry). However, there is no fixed CSF for all project or strategy because each
strategy varies by types, life cycle phase, organizations and their employees (Khang
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12. and Moe, 2008). Hence, for each strategy, the identification on CSFs is very important,
to ensure that managers can base on such factors to achieve the success of the project
or strategy (Yalegama et al, 2016)
2.2. CSFs for the success of Market Development Plan – online
distribution plan of ZARA
ZARA is seriously late players in fashion online distribution because it has developed its
website on 2010 and started to sell online through its website one year after its website
building. The purpose of e-commerce industry by ZARA is to adopt business
opportunities because customers spend online more to save time and cost and to boost
sales performance from new distribution channel (Orihuela, 2016). An e-commerce
strategy of ZARA is successful with its sales growth of over 40% in 2016 and becomes
the main development strategy of ZARA in future. Instead of expanding retail stores
dramatically, ZARA has focused on online distribution and just open some large retail
stores annually (Annual report, 2016; Burgen, 2016).
This part aims to analyse internal Critical Success Factors for the success of Market
Development through developing online distribution or e-commerce in ZARA.
To know CSFs for e-commerce, understanding motivations and obstacles of e-buyers
supports firms to identity ways to reach more and more customers (Colla and Lapoule,
2012). Reviewing many studies, the writer has summarized two reasons or motivations
for e-buyers. First, convenience and time saving is one of the main reasons for
customers, especially those who are pressed for time, to demand online shopping.
Second, e-commerce support consumers to shop without physical efforts in visiting
stores and purchasing. Hence, the quality of direct marketing and the effectiveness of
interactivity which are provided by shopping website, offered merchandise, brand
power, price moderation and the efficiency of delivery and logistics lead to enhance
customer satisfaction on their online shopping.
Moreover, identifying obstacles of online shopping also support to identify what e-
buyers demand and isolate critical success factors for e-commerce business. Obstacles
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13. of online shopping can be the complication in using website (Lim et al, 2009), the
difficulty in judging product quality (Rajish, 2004), the incomplete delivery (Fernie et al,
2010), the lack of pleasant shopping experience (Lim et al, 2009). Therefore, factors
which impact quality of direct marketing and interactivity effectiveness and which
remove obstacles of online shopping are CSFs (Critical Success Factors) of e-co
commerce in ZARA.
2.2.1. The shopping website with good design and high usability
The first CSF is to provide a shopping website with good design to make customers
excited and interactive during shopping time. Theoretically, effective website design is
one of the most important success factors for e-commerce because website
functionality, ease of navigation and usability will support to build sustainable e-
commerce business (Colla and Lapoule 2012). Powell (2000) stated that website
accessibility and efficiency is considered website usability which is concerned by
consumers when they intend to make their purchase because customers do online
shopping due to time saving and convenience (Lee et al, 2002). The website usability
can indicate how well customers can finish what they intended to do, the level of
efficiency of task completion and the level of customer satisfaction after their website
use (Venkatesh & Agarwal, 2006). Summarizing from many study, the writer
understands that there are three main factors improving website usability, such as
Interactivity, Speed and Ease of Navigation (Yen et al, 2007).
ZARA’s website design and usability is defined one of CSFs of ZARA because the
website has generated high interaction and maximize ease of navigation. Website
interaction supports to increase customer expectations through fundamental elements
such as speed of feedback, follow-up tasks, etc. (Colla and Lapoule, 2012)
Website interaction aims to increase mutual controllability and communication with
customers. ZARA’s high website interaction is improved by some functions such as
contact information in ZARA website, chat applications and social media platforms
which are leveraged to connect with customers closely. The Contact function is in the
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14. right bottom corner of ZARA website and includes contract information which customers
can use to communicate with ZARA’s administration (Figure 1). Moreover, ZARA has
launched ZARA+Connect app for Ipad, which links to Facebook and Skype and is used
to invite friends to navigate through video chat and interact more and more people
(Figure). Rather, ZARA aims to increase interaction with customers through social
media such as Facebook, Twitter, Pinterest, Instagram, etc. Main interaction between
ZARA and customers is from Instagram with 15.9 million followers and over 1,200
posts. Its Instagram is with posts of new collections, which customers can look over and
order through the link, which links with ZARA website (Figure 1).
Figure 1: Contact information in ZARA website
The ease of navigation has linked with the time and effort which consumers spend until
they finish their shopping (Venkatesh, 2000). Hence, ease of navigation helps
consumers find information through the simplicity of website content and website menu
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15. ZARA’s website is with high ease of navigation due to its simple and clear content and
its menu design. In ZARA website, website content comprises of company content
promotion content and supporting content, which are classified into different categories,
thus making customers not confused and overloaded with much information. As shown
in Figure, company content is highlighted to build customers’ trust, thus handling online
shopping. ZARA promotion content includes offer, discounts and sales off for each
department, thus attracting customers who are waiting for sales promotion and demand
on special department. Other contents such as help content and personalization content
– info and weekly trends are also shown in ZARA website, in which customers can
request more information and update their knowledge on fashion trends as well (Figure
1). ZARA’s website menu design is clear – when customers visit the website, they easily
see clear categories – Woman, Man and Children, in which ZARA has updated look
books, thus leading customers to update new trends and generate their purchase
(Figure 1).
2.2.2. The diversified assortment of products and services for online shopping
There are not a few studies which have highlighted the importance of diversified
assortment of products in terms of generating more value for customers and of
differentiating from competitors. Not only website design and usability but also the range
of items for online shopping is considered the most important factor for online retailers
like ZARA (Hackney et al, 2006). According to Pantano et al (2016), successful
retailers, both offline and online, need to continuously innovate their range of products
and services to satisfy the increasing demand of customers nowadays. The example of
AMAZON business is the evidence for the importance of product development or
diversified range of products or services in term of remaining competitive and reducing
risks from competition. AMAZON is still much competitive with its specials such as
compelling promotions, limited time offers, etc. (Internet Retailing, 2016).
The diversified range of products in ZARA online shopping website is one of CSFs of
ZARA. Look books and new collections in retail stores are also available in ZARA
website for shopping. The diversified range and collections of ZARA is the competitive
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16. advantage for ZARA to stand competitively. Agility, Adaptability and Alignment are
characteristics which increase the speed of new collection launch in ZARA. First,
ZARA’s latest design has been brought with limited quality twice a week, thus
introducing about 1,000 designs per month or 12,000 designs per year. Second, ZARA
has spent 15 days as totally for its whole supply chain – from design to store (both
offline and online). Quick response to new design and delivery of ZARA is shown in
Figure, which is also applied for online site.
Diversified range of products in ZARA website are with the full fashion categories –
Men, Women and Kids, which is divided into different classes – Top, Bottom, Shoes,
Accessories, etc. or even Sales (Figure 2).
Figure 2: Quick response in ZARA’s supply chain
Source: Dutta et al (2002, p. 6).
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17. 2.2.3. Diversified, efficient and good-service logistic
Customers decide to spend their money for online shopping because online shopping is
time saving and cost saving. However, one of the most popular concerns of consumers
is logistic fulfilment, which makes sure that firms get the right item to right consumer in
right time. Hence, diversified, efficient and good service logistic is one of CSFs for
online shopping website (Urban et al, 2000). In ZARA, the efficiency of logistic is
leveraged to generate excellent and integrated supply chain, which is the sustainable
competitive advantage of ZARA.
3. PART B - RELATIONSHIP STRATEGIES FOR THE SUCCESS OF
MARKET DEVELOPMENT PLAN – H&M ONLINE SHOPPING
3.1. ZARA’s online shopping service
ZARA has launched its online shopping service in 2011 to leverage benefits from online
shopping opportunities and benefits of adopting IT development and to adopt customer
demand on online shopping. So far, ZARA has developed its online shopping websites
in nearly 30 countries. However, operating in competitive global market with many
competitors who also have online shopping services, ZARA should adopt relationship
strategies to adopt future success or avoid future failure of market development plan
through online website because as stated by Inditext, online shopping is the main focus
for development recently and in future (Annual report, 2015).
3.2. Relationship marketing and its benefits
Sorce (2002) summarized that marketing strategies have three main objectives. First,
marketing strategies can generate and improve customer satisfaction through offering
products or services which reach customers’ requirements. Second, marketing
strategies aim to build brand equity such as brand awareness, brand loyalty, etc. And
third, marketing strategies also try to create and maintain relationship with partners.
These achieved objectives will lead to increase customer retention and then, increase
customer responsiveness to communications. In the global market with challenges from
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18. high competition, one more objective of marketing strategies is to increase customer
commitment, which can be achieved by two ways such as building brand equity and to
build relationship, thus making relationship marketing emerge in modern business
context. Relationship marketing is defined as the process of building interdependence
between partners and based on one to one communications (Sorce, 2002). In online
shopping, relationship marketing has been leveraged to generate commitment, trust,
relationship satisfaction and relationship quality, thus resulting in increasing customer
loyalty and increase the effectiveness of Word of Mouth (Figure 3) (Verma et al, 2016).
This Figure also recommends that relationship strategies must be customer-focused in
term of improving relationship benefits for customers, be seller-focused in term of
investing into building relationship between seller and buyer and improving seller
expertise. Relationship strategies are considered external CSF (Critical Success Factor)
because they aim to build relationship with external partners and this relationship will
positively impact on firm performance in return.
Relationship Marketing can bring some benefits. First, RM can improve profitability
because RM aims to improve good external quality with customers, then increasing
customer satisfaction and retention and as the result, generating high profitability
(Gummersson, 1999) and improve customer loyalty (Aggarwal and Arora, 2013).
Second, RM can build partnership, thus improving supply chain process. RM can foster
the relationship with customers and with employees and suppliers through
collaborations through personal selling skill. Third, RM can lead to deeply understanding
about customer’s behaviours, which are useful to formulate effective marketing strategy
(Kanagal, 2010)
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19. Figure 3: Relationship marketing in online shopping
Source: Verma et al (2016, p. 207).
3.3. Relationship strategies for ZARA’s future online shopping
International market development plan of ZARA is to open more online shopping
websites, which bring high growth rate for ZARA. This part will analyse relationship
strategies which are necessary for future success of ZARA’s international market
development.
As analysed above, relationship strategies are customer-focused and seller-focused
(Figure 3).
From customer-focused perspective, relationship strategies are those which generate
relationship benefits and dependence on seller. Relationship benefits in customer-
focused factors are those received by customers in their online shopping process, such
as price, information quality, accessibility and usability of website, etc. In ZARA, these
benefits are also offered to consumers through its shopping website with good design
and high usability, the diversified range of products and efficient logistics as internal
CSFs analysed above parts. Rather, dependence on seller is the evaluation of buyers
on values which are provided by sellers but are not available in other competitors, thus
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20. making customers loyal to seller to avoid high switching cost (Mukherrjee and Nath,
2003).
From seller-focused perspective, relationship marketing is built based on relationship
investment through loyalty program and seller expertise, with the aim of improving
relationship with customers by sellers. Hence, relationship strategies as external CSFs
can be CRM (Customer relation management for customer loyalty) and strategy for
improving seller’s capacity. In ZARA, these relationship strategies should be applied to
adopt future success and to avoid the failure on online shopping model.
3.3.1. Customer Relation Management
Customer Relation Management (CRM) is the tool which looks for the understanding
organizational customers by emphasizing on managing and developing relationship with
customers (Saranya et al, 2014). Data mining and Decision support system are
proposed to be adopted by ZARA to handle CRM.
ZARA online shopping will collect and store the enormous amount of data, and then,
ZARA has adopted Data Mining to explore and analyse such data and then identify
some patterns, which are necessary for decisions adopted for improving relationship
with customers. The main objectives of data mining are to extract information from data
and to make such information understandable through analysing different customer
types and segmenting them into different groups to build solid marketing strategy to
satisfy such groups of customers (Ahmed et al, 2014). Then, using Decision Support
System is leveraged to make decisions on marketing strategies.
Nowadays, RFM model is popularly leveraged by online shopping players and analyses
customer behaviour and then, classify them through analysing R (the time between their
last purchase and current, F (Frequency – the number of transactions in specific period
of time), and M (Monetary Value – the amount of money spent within specific period of
time) (Wu et al, 2005). This tool supports ZARA to segment their customers who do
online shopping into different target markets, which ZARA satisfy with different
strategies (Shim et al, 2012).
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21. 3.3.2. Improving ZARA’s expertise for online shopping services
Online shopping services include services provided by ZARA’s suppliers such as
logistics players and website agents in each country. Hence, relationship marketing with
such suppliers is one of important components for good online service. It is suggested
that ZARA’s team for online shopping services need to improve their expertise on
building good relationship with external suppliers.
4. CONCLUSION
This report analyses internal Critical Success Factors (CSFs) for ZARA online
distribution strategy, such as the online shopping website with good design and high
usability, the diversified assortment of products and services for online shopping, and
the diversified, efficient and good service logistics. Rather, this report identifies benefits
of relationship strategies and suggests some relationship strategies for ZARA’s online
distribution in future, such as CRM (Customer Relation Management) and improving
ZARA’s expertise for online shopping services.
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