ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 2 Marketing Planning and Processes

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1. Introduction

Zara is one of the world's most successful fashion retail brands. Dramatically introducing the
concept of 'fast fashion' retail since its founding in Spain in 1975, Zara strives to instill a responsible
passion for fashion in a wide range of consumers of different cultures and ages. Many factors
contribute to Zara's success, but one of the key strengths that has helped Zara become the global
fashion company it is today is its ability to put its customers first. Zara puts its customers first, and
they have shaped the culture of the company and brand from the beginning (Martin, 2021).

The Zara brand offers men's and women's clothing, children's clothing (Zara Kids), shoes and
accessories. Sub-brands of Zara TRF offer trendier and sometimes quirkier items for young
women and teens (Martin, 2021).

2. The concept of marketing

Marketing is a form of activism that meets people's wants, needs and demands. Companies also
create value for their customers and build strong customer relationships to keep in touch with their
old customers and attract new ones. Marketing ranges from traditional to modern forms, from
websites to social media. Bottom line: Marketing surrounds us everywhere and in many forms.

3. Overview of the marketing process

The marketing process to create and capture customer value must go through these 5 steps:
clarifying the marketplace and customer needs and wants; designing a customer-driven
marketing plan; generating an integrated market strategy that provides superior value;
building profitable relationships and creating customer delight; and capturing value from
customers to create brand equity.

• Understand the marketplace and customer needs and wants

Companies should research the market before entering. They need to understand the needs
and desires of the market and customers before taking any further steps (Minh, 2022)
Write a paragraph about conducting market research that will help you gain a lot of insight
into the market, such as identifying how your company meets customer needs and using that
knowledge to plan your sales strategy ( Minh, 2022)
Businesses need to know about their competitors. Because this is the only way to
differentiate yourself from others. It's also important to be able to see which tactics work well
for other companies and which tactics don't need to be tried often. Knowing your competitors
can save you time and money when entering a particular market and help you identify the
challenges they may face (Minh, 2022).
For example: A substantial amount of Zara's designs are influenced by the most recent
trends, and they are frequently adjusted in response to instant input from buyers. The Zara
service team is attentive to customer demands and responds fast to fulfill them. Within a few
weeks, the designs will be updated, created, and replenished in stores. If a design is wildly
disliked, Zara won't be concerned about taking it off the shelves. It is able to predict
international fashion trends before its competitors thanks to its vast customer feedback
network and global exposure. This demonstrates that Zara has been cognizant of its target
market since the company's inception and has consistently pursued customer value through
a variety of actions to gain consumers' trust in each product the company introduces (Alan,
n.d).
• Design a customer value-driven marketing strategy
First, the company decides who to serve, then segments the market. Further, it categorizes
the target market section. Market segmentation is based on the timing, level, and type of
demand for elements of the marketing process ( Thekeepitsimple, 2021).
Second, solve the problem of how to serve customers. This explains how the company
differentiates its market position. The term value proposition describes the benefits and value
promised to the customer. This decision ensures that the company achieves maximum
dominance in its target market ( Thekeepitsimple, 2021).
For example: Women and men between the ages of 18 and 40 make up the majority of
Zara's target market. As a result, Zara's segmentation strategy primarily targets Millennials
and Gen Z, who are tech savvy and fashion conscious (start.io, 2022)
In the UK, Zara has more than 4 million female consumers, compared to about 2.4 million
male customers, indicating that the market for the brand tends to skew more toward women
than males. The Zara Kids brand caters to parents looking for fashionable yet reasonably
priced children's clothes (start.io, 2022).
A woman entered a Tokyo Zara store in 2015 and inquired about the availability of pink
scarves. Customers were also requesting scarves at several Zara locations throughout the
world at the same time. necklace in pink. Pink scarves are undoubtedly a popular fashion
trend. After being shipped to Zara stores all over the world just seven days later, 500,000
pink scarves were gone in three days (start.io, 2022)
The foundation of Zara's marketing plan is the promise of "instant fashion" — offering
customers the looks they want more quickly and more affordably than the competitors.
Compared to other quick fashion rivals, Zara produces three times as many things annually
in less volume. As a result, there is a limited supply of fresh styles that change
quickly(start.io, 2022).

• Construct an integrated marketing program that delivers superior value

The next stage for you as a marketer is to create an integrated marketing plan that is focused
on providing value to customers when you have a clear understanding of the general
framework of your company's marketing strategy. A company uses a combination of various
 marketing techniques known as the "marketing mix" to carry out its marketing strategies.
Building solid customer relationships, providing the desired value to customers, and attaining
the organization's overall goals will all depend on the marketing mix (ShaharYar, n.d).
For example: Zara has finished a marketing mix to build the brand in the Vietnam market.
The price of Zara stands out the most in the marketing mix. Most customers are pleasantly
surprised to learn that Zara's prices are extremely reasonable when compared to other
clothing in its class, especially given the superior quality of its items, which is comparable to
the majority of other high fashion brands today. Zara's premium pricing strategy and the fact
that its products are still regarded as high fashion mean that the price may still be out of
reach for the average consumer. However, because affordability is one of Zara's main goals,
the company is constantly looking for ways to reduce production costs. This allows Zara to
offer its products at lower prices and make them more accessible to the typical consumer
who wants to wear stylish clothes without breaking the bank.

• Engage customers, build profitable relationships, and create customer delight

Without creating a mutually beneficial relationship with your clients, a straightforward
marketing procedure is lacking. In order to be "profitable," you must satisfy your clients and
persuade them to keep using your product or service (ShaharYar, n.d).
Yes, you must work hard to attract new clients, but it's equally critical to keep clients over the
long term. In plainer terms, the main objective of any marketing mix should be to increase
customer equity. reate relationships with customers by: providing value to customers,
assisting clients during the pre-purchase stage, offering post-purchase services, requesting
regular client input, requesting feedback and ideas from customers regarding your products
(ShaharYar, n.d).
For example: Customers' data is gathered by Zara, who then transmits it to designers so they
can create products based on their wants. If you frequent Zara, you'll notice that the staff
always pays close attention to you because that is one of the skills they are required to
possess.

• Capture value from customers to create profits and customer equity

Developing client equity is the best approach to extract value from customers. The number of
devoted consumers a business has is directly correlated with its customer equity. Most
importantly, these devoted clients serve as your marketing ambassadors, helping to turn
prospects into paying clients while also bringing in business (and, ultimately, revenues).
There is no question that marketers cannot develop client connections or generate client
value on their own. They can only do this if they work closely with other organizational
departments and form alliances with outside entities. This means that marketers need to be
skilled at managing both customer and partner relationships (ShaharYar, n.d).
Example: With only two locations in Hanoi and Ho Chi Minh City, Zara Vietnam's income in
2018 exceeded 1,700 billion VND, surpassing even the sales of high-end apparel retail
chains like Tam Son Fashion or Mai Son International Retail.

Data from 2018 show that this group earned

more than 1,200 billion rupiah, or roughly 1,970
billion dong, from sales in the Vietnamese
market. Zara Vietnam alone has provided over
90% of the 5 operating legal companies.

This fashion brand made close to VND3,100

Vnexpress.net billion after three years on the Vietnamese

market, with an average annual gross profit
margin of roughly 40% (vnexpress, 2018).

4. The role and responsibilities of marketing function

4.1. The role and responsibilities of marketing function
A company's marketing department is crucial. This department must constantly learn new
skills and find methods to cut costs. The function and obligations of marketing: market
research, competition planning or marketing, and the execution of marketing initiatives as
planned create a pricing plan that is appropriate for the market, customers, and provided
products. Determine, create, and put into action a successful distribution operation.
Promote and advertise the product brand to keep in touch with customers on a regular
basis.
 The extraordinary "fast fashion" retail model was introduced by one of the most well-known
international fashion retail firms, Zara. Zara has worked to create a new fashion culture that
is suitable for a wide range of customers from different ages and ethnic backgrounds since
it was founded in Spain in 1975. Although there are numerous factors that have led to Zara's
success, one of the most important ones that has allowed this company to grow into the
worldwide fashion empire that it is today is that it puts its consumers first. Customers are
the object of Zara's passion, and they have been familiar with the company's and brand's
culture since the beginning. Vietnamese customers could only afford to buy from the more
expensive Zara stores in Singapore and Thailand, order online, or use a single personal
sales channel when this brand first came out. The gratification of not having anything to say
is "wonderful" in Vietnam. They can select or try on their favourite outfit patterns, so they
don't have to worry about buying phony or inferior goods.
4.2. Marketing environment forces:
4.2.1. Macro environment PESTLE
• Political
Since Zara is a Spanish company, it benefits from all the advantages of doing business within
the European Union. One of the major advantages of operating a business in the EU, politically
speaking, is the nation's wide trade agreements. This not only makes it very simple to export
finished goods and import raw materials within the European Union, but it also enables Zara
to ship its items around the world for little effort and expense. Overall, Zara has benefited
greatly from the EU's free-trade policy; let's just hope the Union keeps growing! (Bush, 2019).
• Economic
Finding work is a constant worry for everyone in Vietnam, and businesses like Zara, which
prioritizes hiring Vietnamese workers, have annual recruitment campaigns. However,
according to Tong cuc thong ke (2022), from January 2020 to December 2021, the working-
age population's unemployment rate fluctuated from 1083.4 thousand to 1714.8 thousand,
showing that unemployment remained a high level. Positively, a high unemployment rate
shows that there are a lot of unemployed people, which aids major businesses like Zara in their
hiring processes and also signifies a significant rise in the number of competent individuals.
However, when Zara has hiring requirements, so do competing businesses. This puts pressure
 on them to find top talent, and forces Zara to provide more alluring employee benefits than its
rivals in order to draw in top candidates.
• Social culture/ Demographic
The social, cultural, and demographic sectors are key elements that have a continuous impact
on the retail sector. Due to the expansion of social media, consumer preferences are constantly
changing, especially among millennials and the gen z cohort. The number of users using social
networks such as facebook, zalo, tiktok instagram is very much, and they spend a lot of time
on social networking sites. Fashion brands in general and Raza in particular have used social
media optimization to promote products. So, as social media permeates people's daily lives,
more and more brands are changing the way they communicate and market to their buyers.
For that reason, taking advantage of social media and staying updated on trends is vital in
remaining competitive. That's why it's important to leverage social media and keep up with
trends to stay competitive. As the market becomes more saturated with more competitors and
choices, brands are becoming more focused on customer experience. Customers benefit from
lower switching costs. Therefore, a negative impression and encounter with a brand can
quickly damage its image. On the other hand, you can provide excellent customer service and
keep your customers happy increase brand loyalty and word of mouth, increasing company
sales in the long run. A completely satisfied customer brings in 2.6 times more revenue than a
moderately satisfied customer and 14 times more than a slightly dissatisfied customer
(Frichou). It's easier and cheaper to keep existing buyers than trying to attract new ones
(Jessica, 2021).
• Technological
Zara is one of the world's most successful fashion retail brands. Zara is not only the clear
leader in the fashion industry, but also a major technology company.The key to Zara's success
is that its business model relies heavily on technological innovation and customer experience.
Thanks to its pioneering technology strategy, Zara maintains its leading position in the market.
By embracing new tools such as big data, augmented reality and artificial intelligence, Spanish
clothing retailers have overtaken their direct competitors. Zara has applied technology to
increase customer experience such as Fast Fashion Shopping Experience with AI, Sizing Tool
for Online Shopping based on big data analysis, Live chat-based customer service. With just
a "click," consumers may choose things and view products they like. With initiatives that help
 address some of its issues, Zara has taken steps to enhance and improve the customer
journey as a result of its increased focus on technology (Retail, 2018).
• Environmental
Being pro-environmental and having a "Green consciousness" are current lifestyle trends that
are becoming more and more well-liked. People are becoming more aware of what they buy
and conscious of how their choices may impact the environment. Brands that are dedicated to
providing eco-friendly and sustainable products are increasingly receiving more attention from
consumers. In a McKinsey & Company 2019 survey, 67% of consumers considered the use of
sustainable materials to be an essential purchasing factor, and 63% consider a brand’s
promotion of sustainability in the same way (Anna, 2020). A increasing number of garment
firms have taken the sustainability oath to engage in practices like recyclable packaging and
environmentally friendly sourcing in an effort to reduce their environmental impact and
capitalize on rising awareness (Jessica, 2021).
• Legal
If your brand operates in multiple regions, your business should be subject to local laws. Zara
is a fashion brand and there can be some legal issues that can have a big impact on sales.
Trade and labor laws can affect a company's supply chain and production. Zara has a smooth
supply and export of raw materials due to the EU's free trade policy. Likewise, the laws of the
countries in which your company operates may affect your business. The brand strives to
provide its customers with the latest trending clothes. In this case, you may be fined for
copyright issues or trademarks.There may be allegations that you stole a design or concept.
They were previously accused of copying designs from Balenciaga and Adidas (Farooq, 2022).
The laws of the countries in which Zara operates may be important to the strategies Zara
pursues in these territories to grow its business ( Farooq, 2022).

4.2.2. Microenvironment
• Supplier
Comditel, a wholly owned subsidiary of Inditex, is responsible for supplier relationships and
has a portfolio of over 200 external suppliers of fabrics and other raw materials. In addition,
Comditel handles the dyeing, patterning and finishing of gray fabrics for all his Inditex chains,
 including Zara, and supplies finished fabrics to external and internal manufacturers. Too many
suppliers and no bargaining power (Wonwossen, 2014).
57% of ZARA's suppliers are based in Spain, close to neighboring countries Portugal, Morocco
and Turkey. According to ZARA's official website, there are 1,437 suppliers and his 6,594
factories in 47 countries, and mainly in 12 countries, he has 1,824 suppliers providing products
and services. ZARA uses a combination of external and internal shipping. About 40% of the
textile materials are sourced in-house and the remaining 60% are sourced from 260 suppliers
close to our headquarters, avoiding over-reliance. Offered with a single supplier to ensure
shipping flexibility. In addition, most of ZARA's major suppliers are concentrated around the
headquarters to improve production efficiency. First, the design team makes construction
drawings, then the purchasing department purchases textile materials from nearby suppliers,
It is then transferred to production for processing. After making the sample, we will try it on.
The technical department then refines the drawing further and the manufacturing department
edits it again. The entire process of designing, purchasing and improving finishes is fast and
efficient ( Observations by Raun et al. 2022).
• Competitor
Zara's three main competitors, Mango, The Gap and H&M, pose the biggest threat. Due to
Zara's wide range of product groups, almost any retailer can pose a threat to Zara. He is one
of Zara's main competitors because The Gap sells the same products as Zara at a lower price
but in a less trendy style. Additionally, the company has a global presence. H&M (Hennes and
Mauritz) is one of Zara's strongest competitors. H&M is also rapidly internationalizing, with
sales outside of its native Sweden. H&M is also more cautious about entering new markets,
and unlike Zara, who can multitask globally, he is more likely to enter one country at a time.
H&M is building distribution centers at its international locations to reduce lead times and
potential logistics costs. Another threat to Zara is H&M's trendy clothing designs based on a
fusion of international clothing tastes. Spanish fashion retailer Mango is also known for its
excellent business model and supply chain management. Mango has a history that rivals Zara
as a Spanish company with roughly the same number of stores in the same number of
countries around the world, and a recent history of great success. Like Zara, all his Mango
stores are located in prime locations such as major shopping malls and city center buildings.
The shop is large enough to display collections. Mango's products are similar to Zara in style,
 price and quality. However, since Mango is based on a franchise system, it differs significantly
from Zara in its organizational strategy and marketing strategy, which relies heavily on
advertising campaigns (Wonwossen, 2014).
• Intermediaries:
social media as a component of a marketing plan. sophisticated technology used by managers
to track and report which products are doing well in stores, such as PDAs with wireless
transmission. IBM's DOS-based POS system is used in stores (Emily, 2013).
• Public
Owned by Inditex, whose CEO Jose Rios has more than 60,000 shareholders, with Garter,
S.L. holding the largest stake (50.01%) (Emily, 2013).
• Customer
The buyer's or customers' leverage in negotiations is average. They exert indirect pressure on
apparel firms like Zara to grow and diversify in order to attract and retain customers. Due to
their freedom from being restricted to a single market, the clients have varying degrees of
negotiating power. Customers can switch brands with little expense, which puts pressure on
Zara to remain competitive and delight customers while keeping prices down. In order to
compete in the market, they use a customer-centric strategy and seek to improve the total
customer experience. Zara's supply chain model employs a vertical integration strategy to
guarantee that its clients continually receive fashionable, in-style apparel and thereby raise
customer happiness. Although purchasers are not actively participating in cost reduction, the
flexibility of multiple clothing sources allows them to select from a large selection of products,
giving them indirect bargaining power (Mbaskool, 2022)
• Company
The group now has eight distribution chains and 4,359 stores in more than 70 countries around
the world. Zara is he one of the most successful global retail networks. Therefore, companies
should determine their brand's goals, vision, mission, and values. A business needs the right
people structure to efficiently support its marketing department, and a board of directors is
critical in guiding the business toward the goals Zara was founded with. Zara also needs to
invest in its marketing department to ensure that its message is recognized by its customers.
In contrast, marketing and HR positions are reported using a matrix structure by division,
product and region. A central marketing direction will therefore monitor the performance of
individual units and set targets to maintain a group-wide integrated strategy. However, every
company has sales representatives who organize customers from all over the world. It also
oversees a group of managers, each responsible for a specific number of deals. On the other
hand, the Directorate General for Human Resources has departments for each country, with a
directorate managing regional activities based on the number of stores (Polese, Moretta
Tartaglione, Sarno and Carrubbo, 2009).

5. Interrelationship between marketing function with other functions in the

organization
Marketing functions within an organization do not exist in isolation. Therefore, it is important
to see how marketing connects and permeates other functions within the organization.
Marketing interacts with R&D, Finance and Human Resources as described below:

5.1. Interrelationship between marketing function with R&D function in the organization
Research and development (R&D) is the engine within an organization that produces
new ideas, innovations, and creative new products and services. According to Drucker
(1999), innovative products and services are usually the result of a conscious and
deliberate search for innovation opportunities that are found only in a few contexts.
Research and development should be driven by marketing concepts. The needs of
consumers or potential consumers should be the focus of new research and
development in order to provide products (or of course services) that meet customer
needs. The actual research and development takes place in companies, universities
and sometimes national central research facilities. Because Zara conducts its own
research before releasing any product on a specific market anywhere in the world,
products may vary from those on the market. It offers goods that are appropriate for the
community's tastes and culture. It is renowned for its trendy, modern, and cutting-edge
designs. Every year, Zara releases over 10,000 new designs and develops new
products in about two weeks ( Boxme Blog, 2022).
5.2. Interrelationship between marketing function with Finance function in the
organization
 The Finance department is responsible for Zara's financial flow. As a result, they
leverage their marketing department to help them create a fair cost sheet for their
marketing plan with pricing details. The marketing department supports the finance
department in the effective and judicious use of budgets for advertising, customer
discount programs, and marketing processes (IMM Graduate School, 2019). Zara's
finance department supports the marketing department in achieving specific product
marketing objectives and adheres to Zara's mission, vision and core values (Edrawsoft,
no date).
The marketing department plays a key role in bringing the company's products closer
to the customer, and the marketing strategy financial plan ties them to the finance
department. In order to carry out the marketing process, this department needs funds
from the finance department, and the success or failure of the campaign influences the
finance department (IMM Graduate School, 2019). Our goal is to meet the needs of our
customers, help companies reach their goals faster, and work with Zara's finance
department to deliver quality over quantity (Edrawsoft, no date).
5.3. Interrelationship between marketing function with Purchasing function in the
organization
Zara's purchasing department's impact on the marketing department's ability to meet
customer needs and desires is the purchasing department's procurement of materials
to create products that meet customer needs and desires. Marketing campaigns and
attract the most customers (Bocconcelli and Tunisini, no date). Zara's Purchasing
Department, with a mission to "deliver what customers want before anyone else", helps
formulate customer expectations and the company's ability to pay for raw materials out
of them.Customers will benefit from the marketing department's offer (Edrawsoft, no
date).
The marketing department needs to understand the needs and desires of the customer
in order to assist the purchasing department in identifying sources of raw materials to
produce products that best meet customer expectations. As a result, the marketing
department has a significant influence on the purchasing decisions of the purchasing
department (Bocconcelli and Tunisini, no date). One of Zara's core values is
adaptability. The marketing department helps the purchasing department to obtain high-
 quality raw materials that meet customer requirements, making it easier for the
purchasing department to purchase raw materials (Edrawsoft, no date).

6. Conclution
Zara is a retail company that has been in the fashion industry since 1975 and is now doing
well despite many problems and market volatility. As a marketing analyst, Zara may not
have the best marketing strategy right now, but its branding strategy is very unique and
attracts many customers. Zara uses a co-creative approach to meet the needs of its
customers, turning them into brand creators. Zara is a brand that responds quickly to
changing trends and establishes fashionable limited-edition items. As a marketing analyst,
he appreciates Zara's vision of keeping every step clean yet fast.
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