Final Presentation

Title

Subtitle

Introduction

Fashion apparel retail store from Spain

A brand of the Inditex group

Established globally; 10 stores in the U.S.

Fashion at affordable prices positioning

Unique business model

SWOT: External Analysis

Opportunities

Standardized fashion industry

Downtrend for US department

stores

Internet retailing

Increased buying power of

Zara’s target market

Importance of differentiation

in retailing

Metrosexuality trend

Threats

Established competitors

Economic downtrend –

customers may turn to discount

stores like TJ Maxx, Marshall’s,

etc

Price sensitivity of Zara’s target

market, looking for more at less

Continuous changing trends in

the fashion industry

SWOT: Internal AnalysisStrengths

Unique business model: vertical integration and working

through the whole value chain In-house production: flexibility

in terms of variety, amount, sizes of products & very quick to response to needs of consumers

Central distribution: minimizing lead times

Best designs: very quick fashion follower

Weaknesses

Not realized economies of scale Higher R&D costs to respond quickly and efficiently No internet retailing Tendency to prefer American brands: different tastes & expectations Lack of brand awareness and equity No advertising besides in store

Marketing Problem

Market saturation – fierce competition

Low brand presence – low brand awareness

Research Objectives Looking into the potential consumers’ buying behavior with

regard to fashion apparel - Consumers’ purchase intention - Apparel purchase behavior - Key attributes that consumers look for when buying

apparel

Evaluation of the Zara product concept and potential- Desired brand image for Zara - Examine possibility of introducing Zara to the Boston

market - Examine brand awareness and brand knowledge of Zara

- Examine proclivity toward shopping Zara’s clothes online

- Identify the best location for a Zara store in Boston- Examine the potential for a male product line

Methodology

Data Collection Method

Purpose of study: to gather information about consumers’ purchasing habits and behaviors, attitudes, awareness level, purchase intentions, brand’s positioning, competitors, etc.

o secondary (exploratory) method o primary (descriptive) research: surveys

Methodology (cont’d)

Sampling Method and Samples

o Convenience sampling

o Sample size: 100 people Breakdown by Gender

Male38%

Female62%

Breakdown by Age

18-2122%

22-2537%

26-3541%

Breakdown by Income

27%

42%

31%

<20K

20K-59.99K

>60K

Methodology (cont’d) Measures

- The questionnaire is divided into 3 sections- Four kinds of different measurement levels: nominal, ordinal, interval, and ratio

Data Analysis

- SPSS software - Frequencies, cross-tabulations, t-test, and one-way ANOVA

Action standard: moderate

- A top 2 box %: 50 %- A mean score of 3.25.

Findings

Awareness

58% have never heard about Zara

25% have heard, but never purchased its products

Break-down:- 49% of females have heard or have purchased from Zara- 62% in the less than $20K income group

- 48% for the 26-35 age group

Usage Behavior

Target Market:

Shop about twice a month (34%)

Spend mostly $30-$50 (26%) or “more than $110” (24%) per month

24% bought something “trendy” in the last 2 weeks

Most utilized channel to shop from: specialty store (1.82), followed by department store (1.97)

Factors Influencing Buying Decision

Factors Influencing Buying Decision

0

20

40

60

80

Total 37 58 17 30 19 8 57 26

Males 47 58 11 11 16 5 50 24

Females 31 58 21 42 5 10 61 27

Partner/Spouse/Family

FriendsCelebrity Styles

Fashion Magazines

TV Programs

Fashion Shows

In-Store Displays

Others

Factors When Selecting a Store

1. Variety of product choices (3.06)

2. Discounts offered (3.29)

3. Store location (3.58)

Overall Evaluation

Gender differences- females more positive evaluation

Age differences- oldest least positive

Income differences- middle income group least positive

Overall Evaluation

0

20

40

60

80

100

Top 2 Box % 46 29 56 55 50 41 62 33 55

Total Male Female 18-21 22-25 26-35 <$20K$20K -

$59.99K>$60K

Overall Evaluation

1

2

3

4

5

Mean scores 3.46 3.32 3.55 3.55 3.58 3.38 3.65 3.35 3.55

Total Male Female 18-21 22-25 26-35 <$20K$20K -

$59.99K>$60K

Brand Image

Brand Image

-3

-2

-1

0

1

2

3

Mean score 1.72 1.03 0.92 1.4 1.32 1.75 0.78 1.83 0.77 1.09

Attractive Classy Beautiful Chic Sexy Young Dressy Trendy Expensive Quality

Purchase IntentionPurchase Intention

1

2

3

4

5

Mean scores 3.37 3.24 3.45 3.45 3.44 3.33 3.54 3.3 3.48

Total Male Female 18-21 22-25 26-35 <$20K$20K -

$59.99K>$60K

Top 2 Box % of 50 Mean score: 3.37 Females moreinclined to purchase Age and incomedifferences

Average Spending

Total: 30% - $30 to $50; 27% - $51 to $70 34% of females - $30 to $50; 35% of males - $51 to $70 Spending increases with age

Effective Promotional Tools

Promotional Tools

0

10

20

30

40

50

60

70

80

90

100

%

Discounts

Special promotions

Magazine inserts/coupons

Celebrity endorsements

Membership incentives

Free gift

Binding with a social cause

Others

PlacementOnline Shopping

Largely neutral attitude: mean score 2.77 No gender difference Middle age group: most inclined (3.06) Middle income group: least inclined (2.68)

Store Location

Newbury Street strongly favored: mean score 4.22 Prudential Center (3.99) and Copley (3.98): second

alternatives

Conclusion

LAUNCH

Target market: females aged 18-25 young, trendy, economically conservative, and fun

Trendy, attractive, young brand image

Unique business model - success

Recommendations

Product Zara will offer fresh, stylish, trendy,

vibrant products to the female consumer

Price $30-$70: keep current pricing strategy

Recommendations (cont’d)

Promotion

On first day of opening, offer 10% off purchase and first 100 purchasing customers to receive free gift bag to include Zara tee and gift certificate for $10 off future purchase

End of first month after opening will implement friend/family discount - bring someone, and they both receive 15% off their purchase

Placement

Respondents rate Newbury Street as their top

retail location

Launch Zara here to take advantage of convenient

public transportation and high foot traffic

Focus on building Zara brand awareness before

implementing online store

Recommendations (cont’d)

Future Research Direction

Measure brand awareness and attitude

Male consumers

Online store

Questions and comments?

Thank you!