Zara is a large global fashion retailer owned by the Spanish company Inditex. It operates over 2,000 stores worldwide and is known for its fast fashion business model. The document discusses Zara's business strategies including vertical integration, rapid production cycles, and limited advertising. It also analyzes Zara using various marketing frameworks such as the marketing mix, services marketing, and McDonaldization. A survey was conducted to understand customer perceptions of Zara. While mostly positive, some issues around ethics and lack of communication capabilities were identified.

1. ZARA
-Bee Kanpaibool, Dylan Yong Ziyi, Jonas Chiu, Karan Aryaman Marwaha

2. 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

3. pLEASE SAVE YOUR
QUESTIONS TILL THE END.

4. 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

5. 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 quickly
Opportunities
Expanding into potential new market eg. China, Australia
Constant use of social media marketing strategy
Explored 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

6. analysis map of zara
Adapted from the Survey.

7. •Service processes
•Customer experience
•Service Delivery
•Brand differentiation •Customer perceptions
•Physical appearance
Services Marketing

8. E-Commerce and marketing
• Online Retail: Sales have risen by 17% of the
overall 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 line
adverts when you have this.

9. AIDA
Attention (Zara, 2010)
- Providing mass of products
- Building good will
Interest (Zara, 2010)
- Selling fashionable clothing at reasonable price
Desire (Dailymail, 2011)
- Using celebrities to stimulate consumption.
(Kate Middelton)
Action (Adhiya, 2008)
- “Fast fashion” at affordable price
- Advertising through Internet

10. 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 A
DAY!
Price (Zara, 2012)
•Low prices
•Cutting costs with maximum efficiency
•Online shopping
Promotion
•Below the line advertising (Hoang, 2007)

11. Place (Marketing Mixx, 2011)
Marketing mix
•One of the largest clothing retailers
•Location considering demand and timing
Physical Environment
•The Stores atmosphere sells itself!
People (Phillmore, 2009)
•Very Particular about who they hire.
•Lean organization structure.

12. gREEN MARKETING
Zara 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&M
Ethics in production
(Zara, 2010)
-Cloth: fabrics are bio degradable
-Recycling
-FSC/ PEFP mark

13. Reputation and production
Good 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

14. zARA AND McDonaldization
In what ways are Zara behaving atypical of
Mcdonadlisation and how has it differentiated itself
against it?
Atypical
- Increasing proliferation of its existence
worldwide headed by Inditex
Differentiated
- Less hierarchical and conventional
structure within zara that is otherwise typical of a
mcdonalised company
- Putting customer’s preferences as priority

15. 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.

16. [VIDEO]

17. MCdONALDIZATION
FOUR DIMENSIONS
Efficiency
FOUR DIMENSIONS
- Quick respond
- Time Management
- Efficient supply chain
- Rapid production process and distribution
process
Calculability
- Quantity > Quality
- Production process broken down to
smaller assembly lines
- Specialization

18. MCdONALDIZATION
FOUR DIMENSIONS
FOUR DIMENSIONS
Predictability
- Low predictability
- Short life-cycles of products
- Fast-fashion shifts trend extremely fast
- Difficult to expect and forecast
Control
- Produce in Europe
- Better control of production lines
- Higher costs due to high wages for labour

19. rationality and irrationality
What 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 calculability
is akin to an increase in the ability of man to manipulate
his environment, to adapt, to conquer the chaotic
elements of life so as to obtain a quality of life that can
be considered ‘better’ than previous times. However,
the standard of living’ has come to be defined not in a
qualitative manner, but rather as a quantity: of income
(Reymer,1995).

20. Recommendations and problems
Zara Process
Calculability Problems-
- Emphasis on high efficiency and fast production
processes
- Specialisation
- Demotivation of workers
- Quality drops
- Zara do not keep track of their inventory
- Zara lacks the ability to check inventory within stores
therefore real time counts and scan must be done.
- Time consuming

21. Recommendations and problems
Zara structural flaws
Communication problem:
Absence of email address that allows efficient customer-
corporate relations
Lack of advertisement: Advertising is the bridge between
customers and companies and it is a part of marketing.
The absence of this translates again to the lack of
communication between both agents.
No networking capabilities:
Zara is not able to communicate between its stores and
the home office in a fast and efficient manner due to the
inability of individual POS terminal within Zara stores to
communicate with any other terminals.

22. 1) Why do you shop at ZARA?
Survey
We found that most interviewees shopped at ZARA because of the fashion’s style, the current fashion trend and also
the brand itself. Some respondents had also addressed price and location is one of the key determinant to shop at
ZARA.
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 responses
we received are more than once within the month. This shows our respondents are keen to keep coming into stores
to 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 for
the lowest price)
All Saints, Superdry and Hollister have been rated for the most expensive brand. ZARA has been rated by the
respondents 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 most
fashionable and 8 for the least)
All Saints again was rated the highest in terms of fashionable. ZARA and Hollister have also been highlighted by our
respondents as second or third most fashionable brand. Marks & Spencer and Sports Directs were perceived by our
interviewees as the least fashionable brand.

23. Survey
5) 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 the
current market trend.
7) Are you aware that ZARA is under the Spanish firm inditex and what brand do you think are the biggest fashion
retailer 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 environmental
friendly 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 that
high 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 with
various ideas for improvements. The majority of respondents suggested the service level in ZARA were just above
standard, many of them were dissatisfied with the waiting time of queue and lack of personal care to its customers. There
are also some suggestions to recruit more staff members and increase the number of changing rooms.

24. Conclusion
NOT completely McDonaldized
Main producers are european
HIGH Quality Standards
Survival and Efficiency=McDonaldization

25. reference list
Ritzer, 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.62-65
Philmore, 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 2013
Paxman, L. (2011) A Race on Lace.
Available on: http://www.dailymail.co.uk/femail/article-2071581/Kate-Middletons-Zara-dress-latest-frock-
sell-hours.html
Accessed on: 21st February 2013
Forgaard, 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 2013
Hansen, 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

26. ANY QUESTION?

27. thank you