Presents. Zara and Chanel are known worldwide as two successful trade names. The former is a mass vesture retail merchant whose production takes merely hebdomads whereas the latter is perceived as one of the most constituted retail merchants in haute couture. specializing in luxury goods whose production takes months. Zara has more than 800 shops worldwide. in crisp contrast to Chanel which has about 160 dress shops ( wilkepedia ) .
Coco Chanel founded her trade name 106 old ages ago while Amancio Ortega created the Zara label 35 old ages ago ( World Wide Web.
misslopezplane. wordpress. com ) . At first glimpse these two companies seem alien in their market mentalities. nevertheless in many facets. such as pricing. quality. and market scheme they are rivals. This is an unexpected result and 1 that will be investigated in this study.
The distinguishable similarities coupled with the obvious differences between these two trade names make them utile and relevant for a comparative analysis. Therefore. these trade names are the focal point of this probe into the importance of market research and consumer cleavage in placing and specifying mark groups and the application of basic selling rules to guarantee client demands are met.
2. The Marketing mix of the shops investigatedThe selling mix is focused on 4 elements – merchandise. monetary value. topographic point. and publicity – used by concern in selling merchandises or services ( Daniels et al. . 2007 ) .
2. 1. Merchandise and monetary value: What are they selling and for how much Zara and Chanel have ever been perceived as two strong trade names which offer vesture to work forces and adult females. The former besides offers a children’s wear and a Home section. The latter has developed a strength “maroquinerie” ( bags. bags etc ) and a jewelry offering.
Zara occupies an unusual niche in that it targets and entreaties to a mid-market section in its different operating districts. However. it besides entreaties to high and low terminal client who enjoy the stylish and easy to have on orientation of the vesture offering while being able to afford this merchandise besides. Therefore. it is similar to Selfridges and other suppliers in this regard. Customers who frequent. and can afford. Coco Chanel will non experience embarrassment in shopping in Zara despite the much cheaper and mass produced merchandise that is available at that place.
The design attack of Zara has become good known and is advanced. It adopts a “co-creation” attack in that the concern appropriates the tendencies that are manner tendencies that are emergent in urban Centres and studies these back to its design section. In bend. this section completed designs that reflect these tendencies and so this merchandise is marketed and sold. Therefore. Zara is besides stylish in that it reflects predominating tendencies in vesture and is normally first to market with this manner because of its short supply concatenation. This creates competitory advantage every bit good as driving strong trade name development. Furthermore. smartly Zara have created the perceptual experience of merchandise traveling rapidly through its shops and this creates urgency on the portion of clients to purchase an point.
Chanel’s merchandises are driven by purer design motives. Therefore. Chanel reflects the involvements of the manner purist and the quality of its designs mean that the market is by and large really positive as the merchandise offers workmanship. exclusivity. and aspiration. This drives the trade name development of the concern. Because of the clip and inputs used in Chanel merchandises. the cost base is significantly higher than the mass and out-sourced production of Zara and. as a effect. the monetary value of Chanel merchandises is much higher.
Where the two trade names differ is in the nature of the demand they appeal to. They are non direct rivals but they do vie in a figure of countries peculiarly as Zara’s merchandises entreaty to the wealthy every bit much as to take down economic groups. In many senses Zara meets the cliche . “when ‘haute couture’ meets fast fashion’ . ”
Waiting lists for certain point. such as the Chanel figure 5 aroma. reinforces the exclusivity of the merchandise and the phenomena of the ‘waiting list’ is now about as much a selling tool as a practical restraint. Furthermore. Chanel produces everything in-house and so production corresponds to exceptionally high criterions. With Chanel their “haute couture” merchandises are merely available in one store in Paris on Rue Cambon ( World Wide Web. chanel. com ) . This exclusivity reinforces the trade name image.
Monetary value: ?800. 00 Monetary value: ?39. 99
2. 2. Topographic point – “The stores make the brand”In selling. the location of the shops is one of the most of import factors in pulling clients. That is why Chanel and Zara’s selling squads do their best to open stores in peculiar countries.
Chanel has a presence in esteemed locations in the best known metropoliss in the universe such as New York. London. Paris. Tokyo and so forth. In London it is located on Sloane Street. Their direct rivals are located nearby such as Dior or Gucci. However. and remarkably. this is non a failing but alternatively it helps reenforce the trade names of these concerns and there is important client convergence.
Zara’s shops are located in the chief commercial and popular countries of metropoliss across Europe. America. and Asia. Thus. the shops are easy accessible by the mid-market section referred to earlier. Their stores have to be seeable. broad and supply easy entree so that they can set up a strong nexus with the client base.
2. 3. PromotionHarmonizing to Bruno Remaury. “Fashion is a mill which produces desire” ( Tungate. 2009: P ) .
Therefore. by cleverly and disposed publicity. it is possible to make desire and want among a big client section. and finally interpret this into a purchasing action.
High terminal trade names such as Chanel do non hold a selling section. The interior decorator. Karl Lagerfeld. helped by the artistic manager. is responsible of the image of Chanel. They have entree to a important budget for advancing the trade name and with this they recruited. for illustration. the manager Baz Luhrmann and the actress Nicole Kidman to movie an advertizement in order to relaunch the figure 5 aroma. The cost of this was Euro 26m.
By presenting a new aroma every ten old ages with a strong and advanced publicity. Chanel is able to put a criterion in the industry and nurture exclusivity and a powerful trade name image.
By contrast. Zara has the “most unusual strategy…its policy of zero advertisement ; the company preferred to put a per centum of grosss in opening new shops instead” ( . concern word magazine ) Furthermore. Zara’s logo does non state the populace what Zara is approximately. Thus. Zara relies on the strength of its merchandise. word of oral cavity. and elusive promotional activities to drive the trade name image. Its store Windowss are an of import agencies of communicating in that they change the content on a regular basis and so invariably present newness and freshness to their client base. Thus. in how they promote their merchandise. the two trade names are rather different.
3. SWOT analysis3. 1. SWOT analysis for Coco ChanelTable 1 sets out the comparative strengths. failings. chances. and menaces of Coco Chanel. There are significantly more strengths than failings and with the outgrowth of new economic systems and turning wealth in these states the demand for this merchandise will go on to be important.
Table 1 – SWOT analysis for Coco Chanel|Strengths| Weaknesses| Opportunities| Threats|Product range| High Prices| Expand concern in emerging markets even more rapidly| Counterfeits| 1. Haute couture luxury goods| | | |2. Perfume| | | |3. Jewelry| | | |4. Watches| | | |5. Beauty products| | | |6. Eyeglasses| | | |Quality of natural materials| Limited Production| Art exhibitions and events around the trade name in China and other emerging markets| The competition within new markets and emerging interior decorators and brands| 1. Tweed fabric| | | |
2. Cosmetic chain| | | |3. Embroidery| | | |4. Buttons| | | |Quality of workmanship – cut. run alonging etc| High manner is non ever comfy. places are good cognize to be ‘awful’| Possibly develop the trade name “Karl” by Karl Lagerfeld more as it is low-cost to many more people| Global recession| | | | |
Promotion – the Camelia logo. strong advertisement etc| The accoutrements are highly expensive and the quality is non ever consistent| | | | | | |Lead interior decorator is Karl Lagerfeld – good known. talented. creates a batch of attending for the brand| | | |
3. 2. SWOT analysis – ZaraTable 2 sets out the comparative strengths. failings. chances. and menaces of Zara. Again there are significantly more strengths than failings and with the outgrowth of new economic systems and turning wealth in these states the demand for this merchandise will go on to be important
Table 2: – SWOT analysis for Zara|Strength| Weakness| Opportunities| Threats|Accessible manner and an effectual cost strategy| Zara works much better in ‘fashion countries’ such as UK. Italy. France. and Japan. | Enlarge their scope by making cosmetics. underwear and swim suits. | Many local and planetary rivals ( H & A ; M. Top Shop etc ) | Diverse merchandise range| | Organize events around the trade name such as manner shows. | | 1. Womans. work forcesand children’s wear| | | |
2. Home| | | |3. Perfume| | | |4. Accesories| | | |5. Eyeglasses| | | |Home Production. 50 % of their merchandises are made in Spain or in Portugal| Cultural troubles in states like USA and Germany| Create ‘Inditex’ stores. with all the trade names in a shop. | | | | | |
Fast bringing of new merchandises. good design and trendy| Merely one mill for the production and distribution – therefore. in instance of work stoppages. natural catastrophe etc Zara would hold trouble| India and other emerging states are an obvious beginning of possible growth| | Part of a immense group Inditex which includes Massimo Dutti. Bershka etc| Price base is euro and this can take to interchange rate jobs particularly in the current market| Copy Top Shop or H & A ; M by using either good known interior decorators or new designers| | Online market| | | |
4. Research methodsPrimary and secondary informations research methods were adopted in this survey. The primary informations aggregation method involved a short study of persons coming out of the Zara shop on a weekday around 5pm on Oxford Street. The chief result was how surprisingly heterogeneous the clients where.
No primary research was conducted on Coco Chanel but alternatively there was a trust of secondary informations which is to the full detailed under the bibliography. The interview inquiries are set out in appendix 1 to this study.
5. Market cleavage – Interpretation of the interviews
Table 3 – Summary of the interview consequencesProfiles| Age| Occupation| Origin| Income| How much do they pass in Zara/month| Customer 1| 49 old ages old| Journalist| London| 35. 000 /year| ?50| Customer 2| 26 old ages old| Student| India|600 /month| ?100| Customer 3| 71 old ages old| Nurse| Outside London| 12. 000 /year| ?0| Customer 4| 25 old ages old| Chiropractor| London| 28. 000 /year| ?150| Customer 5| 38 old ages old| Personal trainer| Iranian| 30. 000 /year| ?200| Customer 6| 20 old ages old| Student| Preston. England| 1. 000/month| ?50-?60| Customer 7| 29 old ages old| Public relations| London| 1million/year| ?50| Customer 8| 32 old ages old| Service| Bangladesh| 25. 000/year| ?500| Customer 9| 50 old ages old| Senior Banker| Paris. France| 100. 000/year| ?300| Customer 10| 17 old ages old| High school| Italy| 400/month| ?50|
5. 1. Statistical analysisAverages based on the above but excepting client 7 ( net incomes degree distorts the consequences ) : – Age: 36. 4 old ages oldIncome: ?28. 222/year. which corresponds to ?2. 352/monthSpend at Zara: ?155. 55/month which corresponds to 6. 6 % of their income/month
Therefore. in footings of the market sections. there is a assortment of demographics attracted to the Zara trade name but the mid-market section is the dominant 1.
5. 2. Qualitative analysis* 10 people interviewed: 6 thought that the quality was good. 3 ok. and I excellent – “I bought bloomerss in Zara 10 old ages ago and I steel wear them” ( client 8 ) * They all agreed that the client service was alright but that sometimes they were to decelerate – “I waited 10 proceedingss in forepart of the adjustment room last Saturday” ( client 3 ) * Most of them concluded that the trade name corresponded to their manner and that the addition of the VAT will non impact their shopping wonts.
5. 3. Pen portrayal
6. DecisionThis paper provided an probe into the importance of market research and consumer cleavage in placing and specifying mark groups and the application of basic selling rules to guarantee client demands are met.
In making so the centrality of the selling mix ( 4Ps ) to the success of both concerns was set out. Furthermore. the SWOT analysis of both concerns should the built-in strengths in the nucleus competences and stigmatization of concerns every bit good as the chances open to them and how these chances can be exploited through promotional activity.
Market research was shown to be indispensable to the success of the offering of Zara and therefore its association with modernness and fashionability. Both concerns know their client based good and are able to present merchandise to market at monetary values that match their client outlooks.
Therefore. the over-riding decisions are 1 ) that market research. peculiarly for Zara. is indispensable in consumer cleavage which. in bend. leads to good designation and definition of mark groups and 2 ) the application of basic selling rules such as SWOT have an every bit of import function to run into in guaranting client demands are met.
BibliographyBooks:Daniels. J. D. . Radebaugh. L. H. . Sullivan. D. P. ( 2007 ) – International Business: environments and operations. 11th Edition ; Upper Saddle River. New Jersey: Pearson. Prentice Hall
Tungate. Martin: Le monde de la mode. dunod etition. published in October 2009
Helen Goworek. manner purchasing. first edition published in 2001 by Blackwell Science and the 2nd edition published in 2007 by the same publishing house.
Tim Jackson and David shaw. the manner enchiridion. edited by James Curran. Godsmith college. University of London. in 2006.
Tony Hines and Margaret Bruce. Fashion Marketing. published in 2007 by Elsevier Ltd.
Tim Jackson and David shaw. Fahion Selling
Web site:hypertext transfer protocol: //misslopezplanet. wordpress. com/2010/02/18/zaras-owner-among-the-richest-men-in-the-world/ World Wide Web. zara. comhypertext transfer protocol: //en. wikipedia. org/wiki/Zara_ ( vesture )marketingcollege. blogspot. com/…/zaras-marketing-mix. hypertext markup languageWorld Wide Web. doc-etudiant. fr/…/Marketing/Expose-Cas-dentreprise—Zara-2550. hypertext markup language World Wide Web. slideshare. net/…/zara-marketingWorld Wide Web. tendances-de-mode. com/…/345-zaraWorld Wide Web. schemes. fr/…/zara-fait-des-petits-dans-le-linge-de-maison. hypertext markup language World Wide Web. lexpress. fr/…/zara-lance-son-e-shop_916151. htmnut. wikipedia. org/wiki/ChanelWorld Wide Web. replies. com/topic/chanel-s-a –hypertext transfer protocol: //www. Central Intelligence Machinery. co. uk/resources/productsandservices/home. aspx
Magazine: Zara: Spanish season Businessworld India
Appendix 1: – The interview inquiries were as follows1. How old are you and what is your business?2. Sexual activity: female – male3. Where are you from: Home if yes where – Europe / International? 4. What is your income?5. How much do you pass in Zara per month?6. How frequently do you travel to Zara?7. What do you believe of the quality?8. What do you believe of the Customer service?9. Have you of all time shopped on Zara’s web site? If yes what did you believe? 10. Is it your first clip in this shop?11. Make you believe there are adequate picks?12. Make you believe the trade name corresponds to your manner? If non. is it to Young or excessively old? 13. Is the addition of the VAT affects your wonts of shopping? 14. Where else do you shop?15. How would you depict your manner? ( Trendy. classic )16. What magazine do you read?17. Where make you travel in Holidays?18. Make you hold something to add? A remark?
Appendix 2: Who’s who?
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