Comment on David Valls’ Blog: Zara Fashion Chain

I decided to comment on this blog because it is a very well-known company for me, especially because I have done many projects about Zara’s business model back in Barcelona. I am sure that David will focus his project on the main points, but I want to help him on what I think could be improved.

I would like to start by highlighting how Inditex (parent company) describes Zara and its business model: Zara is a high fashion concept offering apparel, footwear and accessories for women, men and children. Zara offers a compelling blend of fashion, quality and price offered in attractive stores in prime locations on premier commercial streets and in upscale shopping centers. The in-house design and production capabilities enable us to offer fresh designs at our Zara stores twice a week throughout the year" (University of Oradea, Strategy and Sustainable competitive advantage: The case of Zara Fashion Chain, 2007).

Once we know how Zara works, I am able to compare it to David’s Blog. First of all, I would like to stress the fact that Zara tries to increase brand awareness through its stores design, instead of advertising the company in all media. David says in his blog that they gain Brand Awareness thanks to its prime location, but I would also say that store design and climate of scarcity is more important than prime locations. By climate of scarcity Zara means the feeling customers have when they go to the store and they know that the clothes they are seeing right now could be the last time they see them, because Zara changes its clothes every two weeks.

David did a very good research project to define the company and its processes. There’s not too much information to what he wrote in his blog, but I would change the main subject of the paper from Zara case to how Zara can enter the American apparel market.

 

It is pretty clear that Zara is performing very well and doing a really good job. But I would like to know why Zara is not that successful in the United States. As David said, Zara is present in several countries with an excellent performance, but United States. Maybe, that’s the element missing in his blog because he is defining Zara’s strategy but everything seems to be perfect. A good contrast would be to analyze how to enter successfully the saturated American market.

I spent an afternoon with David at Starbucks talking about Zara and here it is the result of our conversation. We found that America accounts for 29% of total apparel market and plays a key role in the global market. However, Zara is not performing well because it misunderstood what the American market wants. The main problem we found with Zara’s American strategy is that they decided to enter the market as a luxury brand instead of entering as a low-priced fashion chain (as they are in Europe). The problem arises when they continue the same business model: zero advertising policy, high inventory turnover and prime locations. American tastes are extremely different comparing to European tastes.

What I would do is to focus my paper on how to appeal American consumers in the apparel market. What Zara has to do to generate higher flows in its stores, what strategies Zara might follow to increase market share and brand awareness, describe its current pricing strategy and the best one Zara could use, etc. 

Guerrilla Marketing

During my paper I will define accurately every term, and I will try to show more examples of how to do guerrilla marketing. In this outline, I wanted to have a clear structure and develop a topic that could help marketers understand easily how it works.  

1.     Introduction

 a.      Trends in Marketing today

Marketing is every bit of contact your company has with anyone in the outside world. Every bit of contact. That means a lot of marketing opportunities. It does not mean investing a lot of money.

Marketing includes the name of your business, color, size, product, packaging, shape, advertising, salespeople, follow-up, web site, branding and a large etcetera. Marketing is the art of getting people to change their minds, so everything you do is going to affect people’s perceptions of your company. But marketing is not only prospects; it is also your current customers. A cornerstone of guerrilla marketing is customer follow up.

Marketing is also the truth made fascinating. You can help your customers, show them how to achieve their goals. Marketing is also a circle. It becomes a circle when you have the blessed patronage of repeat and referral customers. Moreover, marketing is more of a science every day as we learn new ways to measure and predict behavior, influence people, and test and quantify marketing.

Marketing is not only advertising. It has become a very powerful tool, but it has to be used in the right way, joining all the efforts and all the tools to meet your customers’ needs.

b.      What’s Guerrilla Marketing? 

Guerrilla Marketing is an easy and inexpensive strategy for making profits from your small business. A guerrilla marketer is a kind of business owner who seeks conventional goals, such as profits and joy, but achieves them using unconventional means. 

c.       The need for guerrilla marketing

If you are an entrepreneur, you need guerrilla marketing because the competition is smarter, more sophisticated, and even more aggressive than it was in the past. Guerrilla Marketing is effective and less costly. Marketing is the painfully slow process by which you move people from their place in the sun to their place on your customer list, gently taking a grasp of the inside of their minds and never letting go. Each component that helps you sell your product is part of the marketing process. The smaller the detail, the more important it is to a customer. But more important is to sell quality products. If you are selling quality, you are ready to practice guerrilla marketing. 

2.     Body

a.      Developing a Guerrilla Marketing Plan

Before you launch a marketing campaign, you need a core story: a real-life story about a problem involving the people to whom you are telling the story and how your solution to that problem can make life better for them. As a guerrilla your story can be more powerful because it can be more personalized. The most important part is to start with a plan, but also to be committed to that plan.

The main stage is to think about positioning: determining the specific niche that your offering is intended to fill. Anyway, your planning should be able to answer these questions: What business am I in? What is my goal? What benefits do I offer? What are my competitive advantages? What do I fear?

b.      Developing truly creative marketing

Guerrillas have only one definition of creativity in marketing: something that generates profit for their business. Creativity in marketing has everything to do with profitability and nothing to do with awards and compliments. The basic steps are as follows:

                                                               i.      Find the inherent drama within your offering

                                                             ii.      Translate the inherent drama into a meaningful benefit

                                                            iii.      State your benefits in as believable way as possible

                                                           iv.      Get people’s attention

                                                             v.      Motivate your audience to get involved

                                                           vi.      Be sure you are communicating clearle

                                                          vii.      Measure your results against your creative strategy

c.       E-marketing and Guerrillas

Before entering the world of online marketing, you need to know 2 things. The first is the size of e-commerce: Forrester Research predicted that online retailing will grow from $95.8 billion in 2003 to $229 billion in 2008. U.S. online consumers spent in excess of $632 billion outside of the Internet as a direct result of research they conducted on the Web.

The second thing you need to know at the outset is that the Internet is a direct-marketing weapon. The tactics and nuances of direct mail definitely continue to apply to Internet Marketing. Guerrillas succeed online because regardless of their background, they make it a point to learn the art and science of direct marketing, providing them with crucial insights about people.

Points to develop: begin with a product, create a Website and link your web.

d.      Examples of successful campaigns

Here is a link to a very interesting website where they explain and show some of the most amazing guerrilla marketing campaigns:

http://weburbanist.com/2008/08/27/15-amazing-dramatic-guerrilla-marketing-campaigns/ 

3.     Conclusion

a.      Guerrilla marketing in small companies

Guerrilla markets should take advantage from all the costless tools they have to promote their businesses. The use of guerrilla marketing allows a company to be more customized by using unconventional means. If you reach the objective of being customized, you can establish closer relationships between your company and your customer. It means having loyal customers instead of brand switchers.