Thanks to cheaper raw materials such as fabrics, Zara is able to offer models based on collections of top designers at a cost which is up to 10 times lower than those of designers such as Armani and Prada. The products offered, are thus, accessible to many people at very attractive rates, and hint at the philosophy that fashion should be accessible by all. It can be seen that some models of Zara are more oriented towards the high end range, and even though most prices are "low", the prices of some collections may be much higher than others.
Zara offers collections for everybody: men, women and children. This availability for all age groups in different sizes allows the customers to shop for the entire family, though women's collections represent 70% of sales.There are models called "basic models" for a customer who are more attracted by the criterion of "price", as well as models inspired by haute couture for customers whose purchases are more oriented toward "fashion" than price.
Thus the prices of some models are higher than those of others.The brand attracts a lot of attention due to the regular renewal of its collections, and the fact that it is very reactive to trends, and updates its collection constantly. This allows it to attract clients to its stores 17 times a year in Spain, as compared to 5 times a year for its competitors.
It is also important to note that it launches about 11,000 new items per year.Zara also creates an effect of "scarcity" with respect to its products by producing them in small amounts (10000 pieces for the world with a possible restocking of 6000 pieces). The client will therefore seek to purchase an item when it is available; rather wait for the "next time".The offer includes clothing as well as accessories, to meet the requirement of the customer to purchase an additional product.
Tags: Zara, Armani, Prada, men, women and children, additional products
[...] Distribution - The branded products of Zara are only sold in their stores (646 in 44 countries in 2004).They usually enjoy a location advantage, in the city center, shopping streets and malls. The visual impact of the brand is reinforced and displayed through their windows and storefronts. - Zara is a dynamic company seeking to expand rapidly. It spends 70% of its investments for opening new stores (300 openings in 2004). The strategic location downtown and in areas with large attendance is also noteworthy. [...]
[...] This technique where the information comes from each store to headquarters of the group, allows Arteixa to anticipate demand and the consumer tastes of the 44 countries where Zara is located. The headquarters of the company is surrounded by the Arteixa factories belonging to the Inditex Group, for an impressive response. Its distribution channel is short and compact. Indeed, there is no intermediary in the delivery of a product. Everything is managed by the group. It takes about 48 hours to deliver a truck of supplies to a shop in Europe, and 36 hours to deliver products to a store in America by plane. [...]
[...] Associating with subcontractors located near its plants and headquarters helps save time in terms of logistics. These subcontractors perform minor tasks such as assembly, and then return the products to Inditex to finish. Thus the company is in control. For fashionable products it depends on Spain, which allows it to be more responsive in terms of delays. In terms of standard products, it subcontracts with China. Value Chain Analysis The value chain analysis is a method of improvement that is organized and ensures the creative satisfaction of users, who need a specific approach to design which is both functional and economical. [...]
[...] There is a cost involved in storage before the product is re-routed to another store, as well as the cost of re- routing to another store. All this is done with the assumption that the product would be sold in its new store. The Strengths / Weaknesses of Zara Strengths Weaknesses Product: Product: Trend and range "on - As reported in the paper, paper" with the data received from some questions exist about the the stores, and a team of 200 labor used by Zara with respect to designers renewing its collections working conditions, wages and throughout the year. More than staff. [...]
[...] Responsiveness and Price manufacturing that enables ultra - The pricing policy of fast production, and the marketing Zara may not seem clear to the of a new product in just a few customer, who may find some weeks or 3). references much more expensive than others. Price - Two different pricing The prices are low for a policies: one basic and the other brand which offers goods in high more expensive. fashion styles (up to 10 times lower than those of Armani e.g.) Discount: Zara is limited to a Discount: single communication medium, Communication is leaving the remaining space to its low-cost, and takes place through competitors and could therefore its own windows and storefronts, suffer from a lack of visibility contributing to its policy of low due to not launching advertising prices. [...]
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