Zara marketing plan assignment

Pricing Strategy 200 150 100 170 140 100 110 200 50 0 Spain Rest of Europe Northern Europe Americas Japan Zara’s Strategy ??? A Passion for Fashion ??? Global Reach ??? Vertical Integration ??? Backward Integration ??? Design, Fabric, Coloring ??? Flexibility ??? Forward Integration ??? Retailing, market research ??? Supply Chain at the core of their strategy ??? Economics of Scarcity ??? Efficient Knowledge Management ??? No advertising ??? Uniformity of Store Format ??? Two-pronged manufacturing strategy ??? Volume, design, fabric, color, manufacturing Lessons from Zara ??? Rethink the entire supply chain ??? Reduction in mark-down can more than make up for the increase in labor cost ??? Planned shortages can induce more future demand ??? Good store location, layout and product display can be a substitute for advertising ??? Faster response eliminates inventory risks ??? Excess capacity pays for itself by faster response Inventory, Information and Speed , , n ing ” tio ast ime ma rec al-t or e nf r fo n “ r i r I fo fo d nd te nee spo itu no re st n ca ub n s io n ca ct d ea ee r r Sp ste Fa

Sp Fa eed st er ca n re s u ac bs t io t it n ut e lit for no tle inv no ove fini ent sp rs she ory ira to d llin cks goo ds gv , ar i nv iet en y to ry Speed Inventory Information Information can substitute for inventory Better forecasting less safety stock, Faster information updates reduced overreaction 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 Typical shelf life??? couple of weeks 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 JIT, really ??? Most JIT system (even Toyota’s) focus on manufacturing ??? Zara has a true just-in-time system ??? From customer to design, production, and fabric manufacturing ??? Customer’s pull not designer’s push drives the system Inventory to Sales Ratio Zara Matalan H&M Gap 6 8 10 12 14 Working Capital as a percentage of sales 40% 30% 20% 10% 0% -10% Benetton Hennes & Mauritz Gap -7% Inditex 7% 38% 4%