• Objective:
– To develop a solid position in the China and Australia.
– To establish a consistent brand globally.
– To develop brand awareness and brand loyalty.
– To develop the market with an aim to obtain 3%
market share.
By,
Shailesh Kachi (21224071)

Agenda
• Introduction
• Market Analysis
• Market Entry Process
• Conclusion

Introduction
• Born Under INDITEX foundation.
• First Zara Store opened in 1975 by
Spanish Tycoon, Amancio Ortega.
• Over 1975 stores in over 86 countries
in upscale Locations.
• Headquarters: Spain (La Coruna)
• Accounts about 66.11% of Inditex

ZARA’s Product line constitutes of
casual, trendy fashion clothing for women
men & children ageing from 0-45

ZARA’S PRODUCT LINE
 ZARA’s production line covers wide range of clothing including dresses and suites
for events, formal wear, informal casual wear to clothes worn on daily basis
 ZARA product line also includes handbags, shoes, accessories and fragrances
 Around 11,000 distinct products are launched per annum
 ZARA does not keep or sell any of its product for more than four weeks

WHO ARE THE CUSTOMERS?
 ZARA’s target market is young, price-conscious & highly sensitive to latest
fashion trends
 Product line segmented by women (60%), men (25%) and fast growing children
(15%) department
 Gain advantage over traditional retailers by defining target by segmenting ages &
lifestyles

Zara’s Global Positioning Map

ZARA BRAND PERSONALITY
AAKER MODEL
COMPETENCE
3
RUGGEDNESS
1.2
SOPHISTICATION
3.9
RELIABLE
SUCCESSFUL
INTELLIGENT
CONFIDENT
UPPER CLASS
CHARMING
GLAMOROUS
WESTERN
OUTDOORSY
EXCITEMENT
4.2
IMAGINATIVE
UP TO DATE
SPIRITED
DARING

Brand Equity model (Brand Pyramid)
Salience
High Recognition for Zara’s Brand
Known for its differentiating Style
Judgement
Well known Spanish
Brand
Superiority in market
Elite
Social Approval
Comfortable
Conventional
Feeling
Casual, Stylish
Rich Heritage, Elegance
Exclusive
Imaginary
Excellent quality
Reliable and durable
Reasonable Price
Resonance
Performance
Loyal Followers

Brand Identity Prism

Temperature Gradient Model
Hot
Cold
USA & UK
China
Australia
India
Saudi Arabia
Pakistan
UAE
Bangladesh
Brazil

STRENGTHS
•Global outreach
•Strategic locations
•Seamless distribution
•Fast changing collection
OPPURTUNITIES
•Demand for fashion at
affordable prices in
Sydney & Beijing
•Growing economy &
market in China
WEAKNESSES
•Brand image closely
tagged to competitors
•Limited stocks
•Less marketing
•Less communications
THREATS
•Fierce competition
•Forgery of goods
•Dilution of brand
equity
ZARA SWOT ANALYSIS

Decision to
internationalise
Deciding the
markets to enter
China and
Australia
Market entry
strategies
Designing the
global
marketing
programme
Implementing
and
coordinating the
global
marketing plan
Source: Svend Hollensen.; Essentials of Global Marketing; GB; Pearson; 2012, pg 5
Five Stage Decision Model in Global marketing

China
Capital: Beijing
Population: 1,362,391,579
GDP: $12.61 trillion
Labour Force: 795.4 million
Inflation Rate: 2.6%
Monetary Unit: Yuan Renminbi

PESTLE
Economy Analysis:
• Second Largest
Economy (GDP
growth of
10.50%)
• High inflow of
foreign investor
(Total FDI- 1.80
trillion)
Political Analysis
• Stable politics
• Restrictions on
internet
(damaging sales)
Environmental
Analysis:
• Subject to world
extreme
weather.

BERI Index

Porter’s Five Forces
Competitive Rivalry
1. Zara’s brand reputation
2. Fond of western culture
(HIGH)
Threat of New Entrant
1. Removal of import quotas
2. Less infrastructure cost
(MODERATE)
Threat of Substitute
1. No Substitute for clothing
2. Low economies of scale
for local competitors
(Moderate)
Bargaining Power of
Buyer
1. Low switching cost of
buyer
2. Lot of substitutes
(HIGH)
Bargaining Power of
Supplier
1. Switching cost of supplier
is low
2. Integrated logistic system
(LOW)

Chinese Culture
Hall’s Classification: Higher context
• Relies on Implicit communication
• Non verbal communication
• Prefers indirect style
Cultural Framework:
• Education: Literacy rate 95.1%
• Equal career development
• Lack of language skills, do not like to
speak English
• Increased knowledge and sophistication
due to foreign travel and internet
• Aesthetic: Red (Happiness), Green (Bad
for family)

Chinese Apparel Industry
• Leading apparel retail industry
• Market revenue worth 140.7 billion (expected
to be 218.2 billion in 2016)
• Lucrative Chinese market.
• Two main street fashion
– Xiao Qinxin (little freshness)
– Zhong kouwei (heavy flavour)
Datamonitor

China Fashion Industry
• Leading country in Apparel retail industry.
• Market revenues of $140.7 billion (2012)
• Lucrative Chinese market
• Low labour cost
• High quality of clothing
• Leading companies:-
• Me & City
• Bosideng
• MetersBonwe

Chinese Consumer Need and Behaviour
• Price and Quality important
• Brand name is marker for prosperity.
• Seek emotional satisfaction through better
taste.
• Status remains most desired brand quality
among 32% of market.
• Prefer cotton and linen.

Australia
Capital: Canberra
Population: 22,262,501
GDP: $1.54 trillion
Labour Force: 12.15 million
Inflation Rate: 1.8%
Monetary Unit: Australian Dollar

PESTLE (AUSTRALIA)
Social Analysis:
• High labour force
participation
• Low poverty level.
• Very High on human
development
• Aging population.
Legal Analysis:
• Strong business
environment.
• Strong corporate
governance.
• New tax reforms.
• Lengthy permits
process
Economic Analysis:
• Strong FDI
• Growing Industrial
Sector
• Strong Trade and
Investment Policies
• Basically Strong at
Economy

BERI Index
Criteria Weights Rating Index Comments
Economic growth 2.5 3 7.5 Stable economy
Labour Cost/
Productivity
2 1 2 Expensive labour
Attitude towards the
foreign investor and
profit
1.5 4 6 Multicultural country and
welcome foreign investors
Communication: Mass
Media
1 3 3 Good at communication
and technology
Overall 67 Moderate Risk

Porter’s Five Forces
Competitive Rivalry
1. Online retailers like “Asos”
2. 47% increased in sales
(HIGH)
Threat of New Entrant
1. Rapidly growing apparel
industry
2. Experience and
Differentiation
(Medium )
Threat of Substitute
1. High substitutes
2. Retailer, designers and
boutiques
(HIGH)
Bargaining Power of
Buyer
1. Brand conscious customers
2. Average price margin
(Medium)
Bargaining Power of
Supplier
1. Vertical integrated logistics
2. Manufacture and sells itself
(LOW)

Australia Culture
Hall’s Classification: Low context
• Rule oriented
• Task-centered
• Time conscious
Cultural Framework:
• Respect for equal dignity
• Freedom of religion
• Support for parliamentary democracy
• Gender Equity
• Equal opportunity
Diffusion Rate: Fast

Australian Fashion Culture
• Trend are related and playful
• Comfortable and favors casual attitude
• Influence of chinese and japanese silk
• Fashion is distinct and creative

Australian customers need and behaviour
• Cotton and silk preferred.
• Bright colour
• Warm weather so some light clothes.
• Beach clothes
• Sporting clothes

Zara Positioning Map (Price V/s Design)
Design
PriceHigh
Low
HighLow

Zara Positioning Map (Price V/s Trendy)
Trendy
PriceHigh
HighLow

Quality
PriceHigh
Low
HighLow
Zara Positioning Map (Price V/s Quality)

Zara Positioning Map (Price V/s Emotional
Attribute)
Emotional
Atttribute
PriceHigh
Low
HighLow

Market Entry Strategy

Market Entry Objectives
China • Develop a solid position
in both countries
• Establishing a
consistent brand
globally
• Brand awareness
(Advertisement)
• Brand Loyalty
• 1-2% market share in
the first year
• 3-5% market share in
the second year
Australia

Finance
China
• Total budget - $4million
– Wholly owned (High Risk)
$3m
– Franchise (Medium Risk) $1m
– Low infra-structure cost
– Cheap labour
Australia
• Total budget - $6m
– Wholly owned (High Risk)
– High infra-structure costs
– Expensive labour market

Objectives
Psychographic objectives
 To develop a strong position in Japan and France
 To establish a consistent brand globally
 To develop brand awareness and brand loyalty.
Monetary Objective
• To develop the market with an aim to obtain 3% market share
 Specified budget: 10 million

Segmentation
Demographic:
• Emerging middle class
• 75% of urban consumers will earn $9,000 to $34,000 per annum by
2022 (Mckinsey research)
Psychographic:
• 65% women consider themselves as leaders of fashion
• Luxury brand has become a curatorial influence in contemporary
Chinese culture
Behavioural:
• G2 most striking. Confident, Independent minded
• Determined to display their independence through their
consumption.
• Seek emotional satisfaction from higher status

Market Entry
China Australia
• Wholly Owned
Subsidiaries
• Franchising
Entry Mode • Wholly Owned
Subsidiaries
• Beijing Site Location • Sydney
• Focus on small sizes
• Adjustment in seasonal
collection
• 176.6 cm tall (male)
• 161.8 cm tall (woman)
Sizes of Product • Focus on medium and
large sizes.
• Focus on more elegant
clothing
• 170.2 cm tall (male)
• 158.6 cm (female)
• Price is bit higher Price • High Price

Market Entry
China Australia
• High End Shopping
street (Sanlitun Mall)
• One Flagship Store
Place • Shopping mall
(Westfield)
• One Flagship Store
• Fashion magazine
• Fashion weeks
Promotion • Fashion magazine

Advertisement through magazine
China Australia

The Sanlitun, Beijing China New ZARA Flagship store, Beijing
ZARA FLAGSHIP STORE IN BEIJING, CHINA

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