Who is the customer? They have an advantage over traditional retailers because they do not define their target by segmenting ages and lifestyles giving them a much broader market. Zara started operations in Spain inand now operates in 74 countries worldwide.
Well this is what seems to be a rage these days in the up-market society of Mumbai. Zara is a Spanish clothing and accessories retailer based in Arteixo, Spain.
Funny story about the founder is, because of the fluctuation in the stock markets, he became the richest man on the planet for couple of minutes and then was back at number 2. Before knowing the exact business model of zara, we must know one thing from the fashion industry i.
Similar to FMCG — this fashion comes and goes. Fast Fashion also means that the impulsive nature of the buy transaction is highly impulsive, because girls know that what ever I am seeing today — may not even be in stock in the next 15 days — so if I like it to the extent of buying it later — I might as well buy it now — BRILLIANT!
Lot of advantages with Zara Business model: They quickly spot new fashion trends, they always under predict the forecast of stock requirements which reduces discount wars on leftover stock and artificially drives demands to the sky, quick churning of the stock which keeps ladies coming back for new everytime.
They are also extremely responsive to factors like the weather, and competitor trends and designs. From the first design up to the final production and ultimately distribution to the stores happens all within 7 days flat.
Since the lead time is less than a week from design to doors, they do not have to stock stuff and then sell — they can adapt to the weather and other conditions and change their entire collection within a week. Roll over the inventory at such a fast pace that consumers are actually scared that if they like anything — will it stay till the next visit so that they buy it off immediately on seeing.
They do this in a continuous loop: Fashion Spotting newest trends based on fashion, weather etc.Zara’s target demographic would be young adults between mid 20’s to mid 30’s who need to dress a bit more maturely than they did when the were younger.
In simple terms it’s basically the matured version of h&m. The clothing is very fast fashion wh. Market Segmentation of Haagen-Dazs. Market Segmentation Market segmentation refers to the process of dividing a market into a smaller group of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes.
Audience segmentation is a process of dividing people into homogeneous subgroups based upon defined criterion such as product usage, demographics, psychographics, communication behaviors and media use. Audience segmentation is used in commercial marketing so advertisers can design and tailor products and services that satisfy the targeted.
Zara and H&M approach discounting in noticeably different ways. Zara has exceptionally low levels of discounting for 10 months of the year, promoting hard and fast in June and December only.
Zara currently has % of their offering discounted, and only % of the offering is reduced by 50% or more. The market segmentation of Zara, UK is different than that of the other retail brands. Most of the retail brands prefer to undertake segmentation based on sex, age, demographics of the customer but that is not the case with Zara.
Zara targets mainly the women who comprise that largest part of its target segment. Apart from them, men also comprise a smaller segment of its target market and the smallest segment is that of the kids.