Keywords: fast fashion market strategy, zara market strategy
There are very large amount of literatures show the supply chain and the marketplace strategy of the fast fashion companies. However, building new fast fashion businesses in China also need to know the neighborhood information like the Chinese customers' buying habit, the most well-liked location, the marketing tools they used, etc. The fast fashion model is well suited for the Chinese Market is the main hypothesis. To be able to better understand this is from the gathered data, some sub-hypothesizes were proposed and then be verified through data examination and conduction.
Thus, the income or the cost on clothes per month has the immediate website link with the buying action. The mark customer for fast fashion brand would prefer to be more fashionable, however, the budget is definitely limited. They did not quite prefer famous brands and overseas brands. That fits our hypothesis (The income will effect customers' buying action. ).
We use Zara as an example to analyze the consumer's frame of mind to an easy fashion brand and their buying behavior. The satisfaction reasons for Zara, the varieties of clothes customers choose to buy in Zara, the reasons to allow them to buy and the place they get the fashion information. We get the info as below. We classify those 132 of 228 people who have shopped or been to Zara stores for the next analysis.
We list seven main factors or specifically advantages for buying Zara. As examination shows above that the Store Location is the most crucial factor which has an average report of 6. 9 in 10. The swiftness of fashion upgrade and the fashionable are pursuing which both have the average make of 6. 6. Furthermore, the shopping environment and the design of clothes are also two important factors.
Actual need is the key reason behind consumers to buy new clothes. However, there are also quite a big amount also choose "spontaneous shopping", "special discount" and "fashion followers". Which means besides the real need, consumers buying patterns is also influence by the spontaneous, speicial discount, fashion style and etc.
As the question "Where do you get the style information?" shows, publications and Internet rank the first and second. More than half of the respondents choose both of these as the major tool they get the information. Pursuing with the store screen decoration, the ratio of this tool is also high which means additionally it is a factor can't be ignore. Thus, the fast fashion businesses need to place more focus on their marketing through journals, Internet and the store home window decoration.
According to feedback we get from the questionnaires, 95. 50% consumers of Zara buy daily casual clothes, which means the requirements for daily everyday are the major part. Meanwhile, actual need and special discount get ranking high in the reasons to buy clothes.
Moving onward to the income per month part, it shows that the major consumers of Zara are the middle classes. This band of customers is purposefully and efficiently and they're more knowledge about what they want, where they can purchase them and when they will buy (Levy S. J. & Rook D. W. , 1999). They have significantly more own opinion for choosing the clothes. "Fashionable however in best price (H&M Annual Record 2009, 2010)" this slogan of fast fashion might be ideal for this band of consumers.
This group of men and women prefers to get the fashion information from journal, Internet and store window decor. Fast fashion firms always have contrary views for the marketing communication. Zara tends to use store window decoration showing its brand image it only has some marketing performance initially of a fresh store (Ghemawat & Nueno, 2003). However, other fast fashion organizations such as H&M spend more on marketing and sales communications in order to improve its brand image (H&M Website, 2010).
Furthermore, predicated on an research for the Rate of recurrence Tendency examination of consumer habit in Shanghai (He, 2006), we can summarize the characteristics of consumer tendencies as the next points:
They consider not only the purchase price, but also the preference of fashion. Consumers in Shanghai are generally more rational, price-comparison shopping. They will do more comparison with the products that have the similar feature and choose the main one with sensible price. This means they seek the high quality and style.
Brand commitment. Most consumers know their favorite brands. Some of them won't replace the daily use of the brand.
Great room for online use. Higher education, youthful consumers with an increase of online shopping experience, and they are more willing to simply accept this mode of usage.
Combine our survey with the Consistency Tendency research of consumer behavior in Shanghai (He, 2006), we get the effect that Zara is successful because of its ability to get customers' needs. They know the best store location in a city, the kind of clothes consumers buy most as well as the right communication tool for an easy fashion brand. As fast fashion is quite unique and the business model differs from traditional fashion brand, knowing their customers buying patterns seems to be very important.
Thus, our hypothesis appears to be right in fast fashion brands. The store location should be in the shopping center so that customers could easily see their store and receive the latest fashion information from the home window decoration. On the other hand, the major kind of clothes customer prefers is daily everyday as it is the mostly actual need. Furthermore, as quick response is the vital good thing about fast fashion brand, the communication way is also have to be considered carefully. The magazine and the internet are the top two communication techniques the customers get the fashion information. Their immediate responses buy into the quick response nature of fast fashion.
Thus, the fast fashion industry has a confident develop environment in the east of China, because the majority of fashion manufactories are found in China's eastern locations. As the China Textile Exhibition Article (2008/2009) shows, China's textile industry is principally focused in coastal areas and almost over 80% of Large-scale manufactories are centralize in Jiangsu Province, Zhejiang Province, Guangdong Province, Shanghai and Shandong Province. The locations for manufactories are significant for fast fashion organizations as they are famous by its speedy response. New organizations which plan to open the Chinese market need to put emphasis on the east market not limited to its leadership also for the easy move location.
From all these analysis and results for questionnaires, we offered five suggestions. As our main aim for this dissertation is to learn whether the fast fashion model is well suited for Chinese market. Therefore it will be quite beneficial to give some advice to help the companies that want to use this kind of business design.
Zara differs in the organization and design level with the majority of the clothing company. It provides the inspirations from the customer needs and quickly responds to them. Zara continue to keep rate with fashion, not to predict 6-9 a few months later or even longer needs as other conventional companies. The team of Zara is made up by the designers, marketers, potential buyers and cross-functional people. Their functions are to ensure swift copy of information, the executable program, and easy to implement.
Sourcing and Manufacturing
In the stage of buying and producing, Zara differs with almost all of the clothes companies. The major manufactories of Zara are in European countries, and most are based in Spain, around a little range. While other fast fashion firms such as Benetton, Difference, H & M are in essence as a setting of "the first world's brand, the third world's production". (Ghemawat & Nueno, 2003) The biggest advantage is low cost, while the downside is gradual response velocity. Inditex in Spain has a capital-intensive manufacturing facility, and it is a vertically built in company, it has a dyeing, building, tailoring and garment handling and delay creation strategy(Inditex website, 2010). Inditex bought white material in advance, standardized semi-finished products significantly and shorten the creation cycle. By preserving control of dyeing and digesting field, it makes Inditex have on-demand capacity to produce new models for providing the required cloth. However, the majority of the Chinese language fashion companies were not used to store the cloth and the amount of every collection was quite large. Zara gets the advantage of creation speed because it contracts with some small factories. Thus, they could change easily in line with the market.
Zara places more focus on swiftness, and even get no matter what some time. Since there is no lack of time is the idea of fashion. While other fashion firm pay more attention to the cost. Zara's distribution middle is in the fast, useful operation. In fact, it works just like a clothing middle and its own main function is turnover, not storage space. But many domestic garment enterprises' circulation centers are greater and much more built inside the mountain of storage product. Essentially, all the stores of Zara from syndication centers are with immediate distribution model, some domestic garment companies are built of local branches and warehouses. They have links in any way levels and a large backlog of finished goods inventory. However, Zara is high occurrence, fast, with a small safe-keeping; variety of replenishment strategy also ensures a rich store of the kind.
Zara is completely broken the original clothing brand practice method of operation and take a completely different damaging innovation road. By far the most fundamental factor is its reliable operation as the core operating system for collaborative supply chain. Zara is success of its collaborative resource chain operation. This may be learned by some home enterprises. Maybe it's concluded as follows: taking consumer as the center; shortening the prepare time and all supply chain's to be able to squash time and eliminate possible problem; lowering or eliminating those that cannot bring value-added component; being more variety to create in order to improve brand value and competitiveness.
2. Marketing strategies
Comparing with the original fashion businesses, Zara's marketing strategies is quite unique. It spent quite small amount of money in advertising only in the start of a fresh store open up. (Ghemawat & Nueno, 2003) They put focus on the rapid consumer information reviews by the store sales people and the adornment for the own store and the screen. Through these ways, Zara develops its brand image. Compared, H&M use star effect to appeal to the consumers. The advantages and cons of Zara's marketing strategy will be explored.
A store as a show platform
One of the most crucial reasons of Zara's success is the fact the company can take every store as its show platform. At the start of the new store launched, the positioning selection is the top essential thing for the business to inject account. Usually, the most prosperous shopping mall will be targeted and a large amount of money will be allocated to letting the store. In the mean time, expense will never be saved on home window adornments and store options. The staffs of the stores are asked to wear the even and communication skills will be trained as well.
Zara is currently engaging more in social performance in order to enhance its brand consciousness. However, H&M signifies much wiser than Zara upon this point. To illustrate, in conditions of brand value, H&M's brand value is $12, 131 million while Zara's is $8, 966 million. (Millward Brown: Top 100 Most effective global brands 2010, 2010) According to the market value, H&M equals to $50, 587 million which is 10, 468 million more than Zara (about $40, 119 million) (H&M Total annual Survey 2009, 2010; Inditex Annual Statement 2009, 2010). Furthermore, the brand value of H&M needs 24% of the full total market value. In comparison, the ratio of Zara's brand value altogether market value is 22%. However, the problem above will not means that Zara do not think highly of creating brand image. With the management of each store, namely, the decor, service, turnover velocity and so on, Zara shows its advantages to the clients and passes-by vividly. That is also a sensible way to build the corporation's image and promote itself.
Methods for ingestion stimulation
Pricing strategy is also another important factor for Zara's success. The accurate position for target customer, the control of cost and the reasonable price setting works equivalent significant role and cannot leave anyone. Due to Zara mainly targets on the young era, the price element seems to be quite important. Most of the young decades are students in the universities or senior classes. Since they haven't any job and the parents are their only current economic climate source, they cannot afford too expensive clothing or they could contain the conception of saving cash. When talking about the teenagers who are in occupations, because they are the trainees or the new arrival staffs, they may possess the big pressure of renting house and resolving living problems, and have no extra money to buy expensive clothes. Therefore, the young customers might be the price-hunting shopper. They might be hesitating when they end up buying one new item. Zara's fast revise rate solves the condition as it stimulates people to choose the products quickly. Furthermore, discount is absolutely a wise approach to stimulate ingestion.
To sum up, although Zara still have some down sides such as its branding and communication, we can learn a great deal of experience especially in its unique supply chain. However, the home firms can not directly replicate Zara's mode as a result of business environments, the local markets and the corporation's goal are particular from each other.
First, if the Chinese company want to create international fast fashion brand, effectively collecting the fashion information partially from the customers is quite significant, (ѕёЄREFERENCEЇјЁї ҐЇїҐє) the store managers and employees have a significant responsibility of the task. Basically, the business should interview and utilize the staff who is very sensitive at fashion and capable to accumulate, conclude and share the aspect of fashion trends. Furthermore, the personnel could adopt the technique of questionnaires to investigate the personal preferences and recommendations of the buyer. Copies of questionnaire could also be sent to the university students in the big city, like Shanghai, Peking, Hangzhou etc. In order to catch the fashion trends, the company could send the specific investigator to different fashion zones to travel, observe and get the style trend, for illustration, Nanjing Neighborhood of Shanghai, Wangfujing Neighborhood of Beijing, and etc.
Second, China mainly takes on a role of export country somewhat than an import country. The materials in China is relatively sufficient and prepared to use. (ЁїёЄ-RecommendationЇјё) Like Zara, the vertically involved structure of the organization could be found, forming design, production and delivery as a vertical brand. Therefore, both time and the money will be saved. From the local country, the harsh materials is relatively cheaper than that from other countries and you will see no duty on the freight. Furthermore, the transport price will be saved as well. Furthermore, discount is an excellent way to market as well if the cost price is low.
Third, in China, most of the firms still contain the perspective of keeping cost rather than conserving time. Absolutely, keeping time needs money. However, saving time could gain additional time, more chance, and much more profit which could cover the costs. It benefits the company's image and strengthens the competitive ability. (ҐҐЅҐ ё ref) Aiming at the time aspect, the inventory or circulation centre should pay more attention on turnover somewhat than storage. The direct syndication model and variety of replenishment strategy could be used in the company to guarantee the high speed of goods turnover and storage supplement. Using one part, it'll build good image of the business at the functional level. On another part, fast-changing goods to get could encourage the consumption. It gives strain on the consumers and reduces enough time on considering whether to buy or not.
Fourth, the business in China often is divided into several parts and each supervisor only observe his own division. (ResearchЇјё) However, it'll be better if the departments of the complete supply chain can work coherently and communicate with each other in time. For example, enough time to replenish the goods should be supervised orderly and purely. The daily sales, inventory and after-sale information should be counted and reported to the company. For instance, which are the best and the most severe selling, just how many items have been sold, and so on. In addition, the unsold clothing could be repaid to the company for the re-manufacture.
Fifth, building the brand image through display of stores somewhat than celebrity result is a fresh way for Chinese companies. The brand new available store should be furnished attractively, especially the screen window. The personnel in stores could wear the new introduction clothing rather than the uniform to truly have a show and also to get the consumers. Furthermore, it continues to be a great way for Chinese company to ask a film or singing legend as a brand image position for the business because the movie star effect is relatively strong in China.
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