Assignment Sample on 5MK006 Marketing Planning
Introduction
A marketing plan is required to be prepared for a fashion retail company willing to target a new market segment for expanding its business. The company selected here is Zara and the new market segment is based on a demographic segmentation of customers belonging to the age group of 13-18. Zara is a global leader in apparel retail and plans to explore new markets for greater profitability and brand promotion. The marketing plan will discuss the steps that the company may take to create new products that can attract the target customers. The feasibility of expanding a business into a new segment will be evaluated based on the present market conditions and probable future trends in buying behaviour of the customers.
Section 1 – Mission, Aims and Objectives
Mission– The mission statement of Zara is to “give customers what they want, and get it to them faster than anyone else.” (mission-statement.com/zara). The company designs its operations that are in alignment with its mission and that has been a major component behind the company’s success.
Aims and Objectives– The aim of Zara is “to contribute to the sustainable development of society and that of the environment with which we interact” (mission-statement.com/zara). The aim has been followed by the company while developing its products and specifying objectives that lead to establishment of a brand that can provide sustainable clothing solutions for the global population.
Marketing Mission Statement– The marketing mission statement for the new product that is going to be launched by Zara, will be “to provide sustainable and fashionable clothing solutions to teenagers.” The marketing mission has been developed in accordance with the values and corporate mission statement of the organisation of promoting products for sustainable living. It aims to produce wearables with skin-friendly organic materials that will increase customer satisfaction (Jagodic and Milfelner, 2020). The price of the products will be slightly higher than non-organic clothes because Zara will be focusing more on the wearing comfort of the customers than competitive pricing.
Section 2 – Situation Analysis
External Analysis
The external analysis of business situations for any organisation is important as it provides the necessary insights about the adoption of appropriate methods for growing the business in the present market conditions. A PEST analysis of Zara will be conducted in order to gather information about the potential external factors that can influence the success of the new product.
| Factors | Areas of Impact |
| Political | Political instability of the government, Government rules and regulations about sustainable clothing (Xuejie et al. 2019) |
| Economical | Inflation, rise in unemployment due to pandemic situation, discretionary income of consumers (Harrison and Ajian, 2019) |
| Social | Popular clothing trends, Change in preference of clothing alternatives, Rise in demand for organic clothing |
| Technological | Large scale automation in textile industry (Duoyan, 2021) |
Table 1: PEST Analysis of new product launch by Zara
(Source: Created by Researcher)
Internal Analysis
The internal analysis mainly deals with finding out the key organisational areas that can influence the success of the new product. It will be based on the interrelationship of the internal factors within an organisation such as efficiency of product development teams and supply chain management of Zara. A SWOT analysis will provide an overall view of the essential internal factors that will play a vital role in designing and executing the new product.
| Strength | Weakness | Opportunities | Threat |
| ● A brand reputation of being a pioneer in the trend of fast-fashion (Shabir and AlBishri, 2021)
● A highly reliable supply chain management
● Increase in investments to develop online infrastructure to reach a greater section of consumers |
● Recent decrease in sales due to shutting of physical stores following Covid-19 pandemic regulations
● Prediction of consumer behaviour with the help of Ai-based technologies adopted by Zara is still at a developmental stage (Filimonova et al. 2019) |
● Faster Delivery Cycle due to several visits by customers per year (Shabir and AlBishri, 2021)
● ● Increasing global trend among consumers to use organic and sustainable clothing alternatives ● Effective resale strategy adopted by the company can help it to reduce generation of waste and earn greater revenue through resale business |
● Increase in competition in fast-fashion from global rivals
● Decrease in the rate of production due to stringent government regulations in the context of Covid-19 pandemic (Kapustina et al. 2020) |
Table 2: SWOT Analysis of Zara
(Source: Created by Researcher)
Section 3 – Marketing Analysis
Consumer Demographics
The marketing team requires information about consumer demographics in order to select the appropriate product for the target customers. The demographic information of the customers include the age, gender, race, ethnic background, discretionary income and other personal information of the group of customers. Such information helps to create profiles of consumers so that personalisation of features can be done in the new products. It has been found that the customer engagement increases due to personalisation of services or product features, leading to higher generation of revenues. It also helps the organisation to effectively cross-sell its products and introduce customers to new range of products. According to Dewalska-Opitet and Bilinska-Reformat (2021), it helps the marketer to effectively position the product to cater to customers within a certain income barrier such as $20000 per year. The eagerness to buy sustainable wearables among the teenagers has been predicted for the evaluation of consumer demographics.
Market Share and trends
The global market has shown positive response in adopting sustainability measures in all areas of life including clothing. As narrated by Proskokova (2021), the global population is progressing with the mindset of “Sustainability First” for availing any service or buying any product from the retail stores. Reports suggest that the digitalisation of service is highly preferable in the coming years. In both these emerging patterns in buying behaviour of customers, a large share belongs to the individuals belonging to the age group of 13-18. Zara will also have the opportunity to increase sales as cross-border sales are increasing in the world and local or regional fashion items are often finding encouragement from global customers. Relevant study on this topic of market trend indicates that 67% of the respondents of fashion retail surveys are looking for wearables that are made of sustainable materials using innovative techniques.
Section 4 – Marketing Strategies
Marketing, Financial and Social Objectives
Marketing
- To launch a new product that will attract teenage customers looking for sustainable clothing alternatives
- To increase the brand awareness among the millennials and explore new market possibilities
- To increase customer retention with fast delivery of clothes
- To develop product features that deliver a competitive advantage over the rivals
Financial
- To provide a clear estimation to the company management about the cost required to produce and distribute the products to end users
- To project the costs required for effective brand and product promotion to increase sales
- To provide steps to reduce costs in different phases of product development in order to maximise the profits
- To project and monitor generation of profit by selling the new product
Social
- To make the customers aware of the utility of the products
- To generate awareness about the materials and sustainable processes used by the companies to build new and innovative products
- To create a positive brand image of the company among the customers
- To make the aware of the value they are getting for their money
Profile of a core target market
A core target market will contain the customers belonging to the age group of 13-18 and are interested to buy sustainable fashion apparels. The target customers are the individuals who value the adoption of sustainable practices in products that they use. As narrated by Anwar (2017), it has been found that teenagers rapidly change preference of clothing and accept new trends with the passage of time. As Zara is a leading brand in the field of fast-fashion, it can rapidly deliver new products that become fashionable for a shorter period of time and can earn great revenues. The professional designers at Zara can make more effective designs and modifications to existing designs to suit the preference of the teenage customers in the fashion retail industry.
Competitive strategy
The competitive strategy is based on the competitive advantage of fast-fashion that Zara has enjoyed since a long time. It can produce fashion wearables faster than traditional textile production units and deliver them to the customers due to a reliable logistics management (Langaro and Martins, 2020). It will create difficulties for other rivals to deliver the products to customers at such a pace. Moreover, the designs will be continuously modified so that it remains non-imitable by other players in the industry.
Positioning strategy
The positioning strategy that will be suggested for Zara to enter a new market segment is building an awareness among teenage customers about the commitment of the company to provide sustainable clothing solutions. Zara has already a reputation of offering quality products to its loyal customer base spread across different countries in the world. It will create a brand image about its shift to organic and sustainable clothing alternatives that can benefit the young generations of today. Accordingto Carr and Leknes (2020), apart from the customer point of view, positioning of the new product should also be executed in terms of channel of distribution. As more and more teenagers are heavily investing their time and resources on the online platforms for several purposes, and effective planning is required to market the new product in the digital retail platforms.
Section 5 – Marketing Mix
Product
Every product launched by any company passes through a product life cycle from introduction to decline, passing through phases of growth and maturity. It is affected by different phases of diffusion of technological innovation. The “organic clothing” is used here as the product that will be launched by Zara for targeting teenage customers. According to Liu and Zhang (2019), the product decisions will be influenced by the product differentiation as the company is expanding its product lines for brand extension. The market testing of the product will also play an essential role in the product development and the company will find enough eager respondents for the market testing survey. The information gathered from the material testing will help the company to increase the production of the new product.
Price
As Zara is focussing on providing sustainable clothing alternatives to its customers, the pricing strategy used for the new product is Value-based pricing strategy. The company will follow this principle of pricing as it emphasizes on the value perception of the customers apart from cost. The factors that are considered by the marketing team in specifying the price of the new products are – period of payment, price flexibility and bundling of products (Cheah et al. 2020). The consumers who are generally paying over digital medium, resulting in faster returns of the investment made in producing and transporting a new product to the end user. The company can also plan to allow the reseller to sell the new product and other product bundles at a limited deviation of the average market price of the product to increase the number of sales.
Place
The marketing team will help to select the appropriate place for distributing the new product that will be launched by Zara. Place refers to the physical or virtual locations from where the customers can easily buy the products. In the present era of globalisation and digitalisation, most of the fashion retail shopping is taking place over the internet in digital medium. According to Fares and Lebbar (2019), Zara has more than 2000 physical stores and are heavily investing on developing its digital services. Thus, the new products will be required in large quantities to be transported from warehouses to company outlets. Due to the increasing popularity of the e-commerce websites, the marketers will also try to market the “organic wearables” in the digital retail medium such as Amazon. The inventory management becomes more efficient with online retail shopping, resulting in faster transactions and customer feedback.
People, physical evidence and process
The people or the customers are the most important link in the marketing mix as preferences and buying behaviour of customers influence the success of new products in a market. The marketing team will add innovative features to the company website and other digital outlets where the customers can sort their items of choice easily and can write reviews about their experience with the products. As narrated by Dabija (2018), customer satisfaction is one of the most influential factors that can boost the generation of revenues. Feedback from the customers will be considered to modify the product to suit the latest fashion trends. The processes involved in the product design and delivery will also be modified for greater efficiency, based on the acceptance of “organic clothing” made by Zara.
Section 6 – Promotion and Communication Plan
Advertising
Advertising is an effective tool used by sellers to promote their brands or the products sold by them. It is a paid promotional tool used to make the customers aware of the benefits that they are getting from the products. According to Wibawa and Bramanti (2018), it is mainly used to encourage the customers to make immediate purchases and it can subsequently generate higher revenues for the manufacturing company. The marketing team at Zara will create engaging social media advertisements in order to attract a larger section of its target customers. The product will be advertised as the latest offering from the reputed brand of Zara, aimed for sustainable development.
Sales promotion
Sales promotion activities are needed to be performed to increase the sales of the product for a short span of time. Sales promotion is quite effective when a new product is being launched and promoted by the company. The marketing team can adopt sales promotion techniques such as Price Pack Deal to sell large quantities of organic clothing as product bundles. Shopping vouchers can be given as effective sales promotion. One of the most effective techniques in the present business situation is offering online discount coupons to the customers to increase the amount of digital transactions of Zara (Saraswat, 2021). The company can also announce added benefits in case the new products are purchased through the dedicated mobile app of the company.
Online and digital marketing
The digital marketing techniques that can be used by the marketing team at Zara to convert more leads into sales are – Search Engine Optimisation (SEO), Optimisation of Landing Page, Pay-Per-Click, Content marketing and others (Caro and Sadr, 2019). The marketers of most modern companies in the retail industry are using features such as SEO and optimisation of landing pages for better business growth. In this case, as the target customers are teenagers, adopting online content marketing techniques will be effective as the social media
Other promotions
The marketing team can also arrange for alternative forms of product promotion techniques such as “word-of-mouth” promotion. According to Aftab et al. (2018), it creates an excitement to buy a desired product when other users of the same community experience satisfactory customer satisfaction while using the new product.
Section 7 – Planning Budgets and Forecasts
Sales Forecast
Sales forecasting is an essential function of the marketing team employed by Zara to promote and sell the new product that they are planning to launch in the fashion retail market. An effective method that can be adopted by the marketing team is forecasting the length of sales cycle. It helps the company to calculate the time required for a buyer to complete payment for the products. According to Gonda and Farkas (2020), another effective sales forecasting technique that can be used by Zara is Opportunity Stage Forecasting, where the management can predict the development of the sales process and have a better idea about revenue generating deals.
Projected Profit and Loss statement
The projected profit and loss statement of Zara based on the revenue generation of selling the new product will consider different expenses for effective planning. The projected statement will include information about revenue and sales, costs of goods sold (COGS), expenses related to product research and development, operating profit and net profit margin. As narrated by Berbiche et al. (2020), it will also reflect the information regarding Return on Equity (ROE), which will attract more investors to make huge investments in the further development and distribution of “organic clothing” by Zara.
Section 8 – Implementation, Monitoring and Control
Implementation of the proposed plan
The proposed marketing plan will be implemented by Zara in phases of initial testing, analysis of market feedback and standardising production. The initial testing of the product will be conducted over some of the existing customers belonging to the age group of target customers for “organic clothing”. In the next phase, feedback is received from the customers and their review and opinions about the product are thoroughly evaluated to find areas where immediate improvement is needed (Duoyan, 2021). The insights from the customer feedback is used in development of the final product. Then the sequence of operations are standardised as Standard Operating Procedure for the production of “organic clothing”.
Plan to monitor sales and other activities
An overall view of the inventory management can be collected from the sales forecasting processes mentioned earlier. Monitoring sales will be effectively conducted by giving importance to the customer reviews and feedback that are being written in digital platforms. Initiatives will be taken to solve issues with the products at a rapid pace. According to Harrison and Ajian (2019), it will help to generate more sales as the customers become aware of the commitment made by the company to provide effective sustainable clothing alternatives. Project management tools such as Gnatt chart and Kanban will be used to monitor the progress of other stages of product development and sales.
Types of marketing control
The marketing control method that will be used in marketing “organic clothing” by Zara are – Profitability control and Efficiency control (Filimonova et al. 2019). Profitability control will mainly compare the marketing costs and cost recovery from the marketing techniques. On the other hand, the marketers at Zara will use efficiency control to evaluate the efficiency of the process of distribution, production operations as well as operations. The information from the marketing control techniques will help the marketers to change the business strategy for sustainable growth of the company.
References
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