Case Study Of Zara

A Case Study of “Success Story of Zara in India: Pune City”

Authors: Dr. Mallika Srivastava (Assistant Professor)

Mr. Atul Paul (MBA I Marketing Student)

Mr. Mohammed Saadulla (MBA I Marketing Student)

Institute and address for communication:

Symbiosis Institute of Business Management,

Symbiosis Knowledge Village,

Gram: Lavale via Sus Road,

Tal: Mulshi,

Dist- Pune - 412115

Email Id: [e-mail]

Zara’s Vision

“Zara is committed to satisfying the desires of its customers. As a result we promise to continuously innovate our business and to provide new designs made form quality materials that are affordable.”

Zara’s Mission Statement

“Through its business model, Zara aims to contribute to the sustainable development

The following principles which are closely followed are the pulse of Zara and makes it a fashion forward yet affordable brand.

• Prompt response to Demand – Zara follows a pull model in their inventory and supply chain management. This means that the current market trends are continuously analyzed and accordingly 900-1000 designs are created. Zara closely monitors its customer spending in stores, trending fashion and also takes in customer feedback and preferences on design changes. The store manager directly provides these inputs to the main design team and thus the altered designs roll in.

• Small Batch Productions – Zara follows a minimum inventory model thus translating to low inventory costs. This also means fast turnover i.e. quick replenishment of stocks with new fashion. The ordering cost and logistics may shoot up but the advantages that Zara enjoys with this model are many. First, it understands the fashion trends and quickly caters to those demands. Second, it customizes to create new designs and analyzes the acceptance rate in the market. Third, it creates an artificial scarcity with low stock and thus gives a feeling of exclusive fashion amongst customers. Fourth, it increases the number of store visits because of periodic “new arrivals”. Fifth, the probability of suffering losses from slow sales

Zara focuses heavily on the 3P’s of marketing namely product, place and pricing and not so much on the 4th P of promotion. Unlike other retailers, Zara doesn’t believe in advertising and they don’t even advertise any store sales or sales promotions, other than sale items. Even the clothes don’t have any brand or logo on them. Their products seemingly advertise themselves.

Zara claims that it produces new products every week. Zara is famous for its fast fashion, due to which popular and trendy products may disappear off the shelf within days, which constantly pulls customers to stores to check for new items. (Refer Fig. 5, Annexure I)

One of the marketing strategies that Zara has adopted is of expanding at a rapid pace; it opens close to 150 new stores every year, thus expanding its footprint to around 1,500 stores in over 70 countries. As Zara is a world renowned brand, the company is now also shifting its focus on sustainable marketing. For this they are now opening stores which consume 30% less energy as compared to the average conventional stores in the world. Additionally, the new stores also save 50% of water consumption and maintain their CO2 emissions below 150 tons