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Segmentation, Targeting & Positioning (833 words)SegmentationZara’s segmentation can be described by the principles of demographic segmentation.The target customer is usually aged 18-40, with a mid-range income. As part of his/her occupationfashion trends is usually on top.But not only from a demographic view Zara segments its targets, their products are also designedbased on a psychographic view based on its customers hectic lifestyle which means that they areusually busy people or with some kind of intense activity which combines with Zara’s tactic, makingthe customer to buy by instinct.There is a list of Zara’s segmentation:Small sized customersPlus sizes shaped garmentsDemographic segmentationAged 18-40Mid-range incomeInterested in fashion trendsLifestyle segmentationHectic lifestyleSmall sized customersPlus sizes shaped garments
There is a slide where Zara can be seen as a Designer brand in fashion terms and as a dedicatedrange in price terms.Targeting & positioningWhen targeting and positioning, Zara’s business model cannot be avoided.There are the keys for its business model:Customer – They are the starting point for all Zara’s activities. It has a leading role on the businessmodel since it’s a customer oriented brand.They provide excellent customer care and are frequent to see campaigns to collect customer’sopinion.Store – It meets the point between the customer and Zara’s fashion offer. Rather than payingmillions on advertising Zara locates its stores in customer oriented venues (e.g. in Manchester Zara isat the city centre in a area with huge movement, New Market Street).New products are implemented twice a week and their estimations are that the same customercomes 17 times a week into the store. This is because the windows are always fashion appellative
and the cheap prices are always shown on that window. Moreover the product block, combiningproducts that match with each other makes the customer spend more money and buy more itemsinstead of going to several shops and buy from different ones.Design & Products – proximity of product facilities and immediate reaction to trends.Zara also provides quantity and the more than 1000 suppliers and the 200 designers show it. Itsdifferent from their rivals in the same segmentation, which usually has less different products butmore quantity on sizes and less designers so they have the advantage of making sure that Zara’strend identification is present despite the large number of designers.Logistics – More than 600 million garments are distributed every year.Even the Logistics are customer oriented providing replenishments twice a week grace to a 24hreceiving order office.Teams – Also the teams are customer oriented and part of the employee’s roles is also provide thefriendly environment “feeling” in the store.Concentrated Marketing mixVisualising the impact of a new line, Zara follows its consistent approach, avoiding the plus sizes orshaping them, which shows a consistent approach of its customer type. Its customer orientationleads to an increase on customer satisfaction typical of the South European way of living.Exploring its opportunities and suppressing weaknesses like the lack of plus sizes, Zara hastransformed the customer, now the typical Zara customer wants to fit on the dress and not theinverse. That shows a continuous growth of Zara as a designer brand.Having an overview on the economical side of it we need to have a look in what way some actionsmake the difference on the Economics of scarcity.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– Change the location of key items• Stores are not flooded with garments• A typical Zara customer visits the store17 times/yr (compared to 4-5 for TheGap)• Friends don’t tell friends about ZaraZara is self-considered a Designer boutique but it contrasts with the prices they practice.
On the other hand their style contrasts with the dedicated ranges brands like H&M orMarks&Spencer. So it can be a good point saying that Zara has the best of both, the fashion designfrom boutiques like Louis Vuitton and Armani with the prices of Dedicated ranges like H&M. It leadsto the thought of a comparative advantage but in fact Zara has disadvantages from both sides likelack of plus sizes, typical on designer brands and average quality, typical of dedicated ranges.E-commerceZara is a Designer boutique with an extreme difference on the average price so their competitors arenot luxury brands but dedicated ranges like H&M or M&S. So Zara gains on both ways, because ismore trendy than dedicated ranges but less expensive than the most of the Designer boutiques.On the other hand is less experienced than other designer brands competitors and lacks on e-commerce where not all the products are available and without the store strategy it does not sell asmuch, so the customer has got used to check windows and visit the store more often rather thanchecking the new season garments on the internet.PartnersMagazines like vogue and bazaar are the chosen to show new garments and product blocksEfficient Product placement in magazines.