BUMKT 6922 MARKETING IN INTERNATIONAL ENVIRONMENT INTERNATIONAL MARKETING WATCH

Internationalisation of the Spanish fashion brand Zara

SOURCE: Lopez, C., & Fan ,Y., (2009),Internationalisation of the Spanish fashion brand Zara. Journal of Fashion Marketing and Management ,13(2),279-296

MOHAMMAD TAGHI ABEDIAN

(STUDENT NO. :30064405)

ABOUT ZARA

Established in 1975, Zara is the flagship of Inditex (Industria del Diseno Textil, SA), a holding company located in Galicia (Northwest Spain). Across 62 countries worldwide by the end of January 2006. In addition to Zara, which accounted for 66 percent of the groups turnover in 2005, Inditex owns seven other clothing chains: (1) Kiddys Class (childrens fashion); (2) Pull and Bear (youth casual clothes); (3) Massimo Dutti (quality and conventional fashion); (4) Bershka (avant-garde clothing); (5) Stradivarius (trendy garments for young women); (6) Oysho (undergarment chain); and (7) Zara Home (household textiles).

INTERNATIONALIZATION OF ZARA
Motivation Push factors Push factors are those that encourage the organisation to search for international opportunities. i.e.: Spain joined the EU, economies of scale, globalisation Pull factors Pull factors involve attractive conditions in the host market i.e: Maturity of Market, change in consumer behavior, low growth opportunities Market selection

Zara behaviour in selecting its overseas markets for internationalisation is discussed in three phases: Reluctance and trial (1975-1988), which is experience acquiring phase and started with opening the first abroad store in Portugal , Captious expansion (1989-1996) that during this phase Zara added one or two similar socio-economic countries per year to its markets, and finally Aggressive expansion (1997-2005) that during this phase Zara practiced global expansion in many countries regardless of socioeconomic similarities.

Entry options

Own subsidiaries:the most expensive mode of entry for high growth potential and low business risk countries i.e. EU Joint ventures :large and competitive markets i.e. Japan Franchising :franchising for high risk countries i.e. Saudi Arabia.
3

INTERNATIONALIZATION OF ZARA

International Marketing strategies

At the first stages Zara followed ethnocentric strategy ,by encountering unexpected difficulties in some countries due to cultural differences Zara changed its international marketing strategy to geocentric strategy .

Branding considerations
Zara was a local brand that changed itself to a global brand in less than 30 years and ranked as 73 rd brand in the list of the worlds 100 top brands 2006 by interbrand. The point is by declining linking its products to its origin Zara convinced its customers in international markets regarding its higher prices.

PERSONAL EVALUATION

Zara is controlling whole of its production chain. In the article the main reasons for Zaras vertical integration discussed as more flexibility and fast supply . In my opinion the cost is another issue that should be discussed and it should be clarified how Zara is doing trade-off between cost and time In different markets to add value to its customers and increase its profit.