From choosing target markets and building profitable relationships with them?????
Questions to ask:
1. What customers will we serve? What is our target market? 2. How can we best serve these customers? What is our value proposition?
Marketing Management
“How did Zara Capture the Chinese Market?”
Damak Donia 杜宁
• What is Marketing Management? • Overview Zara
– Zara’s Success: Its Business Model
Target Marketing
Market Segmentation: Divide the market into segments of customers
Target Marketing: Select the segment to cultivate
Value and Satisfaction
– Easy access – Financial benefits – Free access to natural resources for textile clothing
Market attractiveness
Demand Design • World class design schools Industry Production • Estimated GDP growth of 6-7% in fashion industry • Undersupply for branded fashion products Target markets • 30% potential customers for branded fashion products • 60% estimated for 2010 • High innovation potential for manufacturing procedures • High productivity potential • Cheap and skilled labour force • High investment in technology Distribution • High investment in customer delight’ malls Supply
• Advertisement in the streets and in the metro stations • Want to be known as a provider of quality Product
Promotion
SWOT analysis: Threats and Opportunities
H&M
Learning from Competitors: H&M and Esprit in China
Esprit
• Clothing, fragrances, sunglasses and home textile
• casual, formal and party wear • three collections per year • Brand extensions: bags, caps, sunglasses, wallets and fragrances • Premium price • Strong control on promotions • International option at high quality / price ratio • international format in major cities (large shopping malls) • Focus on metros and modern cities • Strong support on printed media (adapting to Chinese culture)
Product
• Introduced watches and accessory (departure from its global tradition)
Price
• luxury brand • High Prices
• Shopping mall and shopping aria
Place
COMPANY
COST/ SPEED
COMPETITOR
Logistics Strategy
• Localise and implement just-in-time and ‘quick response times’ to demand • Modernising the supply chain with the use of information technology • Forge strong relationships with ‘value chain partners’ (suppliers and delivery co)
The industry Environment
Demographic Structure
– 1.7 billion people – 85.2% literacy rate – Skilled labour available – English speakers Exist
The Natural Environment Technology
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Marketing environment:
– – – – – China Marketing Environment Market Attractiveness Learning from Competitors: H&M and Esprit in China SWOT Analysis:Threats and Opportunities Key Success Factors to enter the Market
Threats
• Low entry barriers • Customer bargaining power • Unpredictability of consumer behaviour • Product quality • Traditionalism
Opportunities
• Huge untapped market • Changing lifestyle and clothing preferences • Demand outstrips supply!! • Cheap labour and opportunities for local sourcing • High productivity potential
Overview
• Business
• The world’s fastest growing fashion retailer of Spanish Brand • Ranks among the three “global winners” with Gap and H&M ⇒ Compelling mix of fashion, price and quality • First store in 1975. Today 536 stores within 30 countries worldwide ⇒ 199 openings in 2009 • Financials • Sales: €4.5 Bn in 2008 • International sales 60% of total turnover
Africa:Βιβλιοθήκη 41 storesAsia - Oceania: 7 stores
Marketing Environment: China case
Chinese Economy
– GNP per capita $ 5890 – GDP growth of 10.7% – Industry/service economy
Demand
• No advertising or promotions • 10,000 new items at highly competitive price
Around the world
North America: 47 stores Europe: 407 stores
South America: 30 stores
Strategic Recommendations to Capture the Chinese Market
Business Strategy
Goal • Fast growth in China
CUSTOMER
How Implement Zara business model • Introduce European supply chain system with fine tuning to suit the Chinese market • Customise the marketing mix
Social Structure Government & Politics
– Deregulation of most sectors –New textile policy – Stable communist country – around 8 national languages –Country of two speeds: urban vs. rural – ‘New’ middle class with purchasing – Cultural shift in urban areas