India - Vienhang Yeungvienhangyeung.com/Coursework/International Business/Zara India.pdf · expansion in India. Foreign Exchange Management Act, 1999 Issue Identification | Recommendation

IndiaJaspreet TathgurJacqueline YoungVien YeungDevin Drinker-PearsonErnestina Quintero

Issue Identification

Ineffective Marketing Strategy

Homogenous fashion models

Varied amount of sales in brick and mortar locations.

65%=Delhi (2), Mumbai,

Bangalore.

Pune, Surat, Jaipur, Chandigarh

& Chennai

Rules and Regulation inhibiting business expansion in India.

Foreign Exchange Management Act,

1999

Issue Identification | Recommendation | Risks & Mitigations | Timeline | Appendix | Q&A


Marketing Strategy Recommendation“ Dress like the West for Less ”

The Strategy will target people under the age of 50. Mainly focusing on locations of major College towns and emphasizing online sales. Target

We need to create a connection. Instead of promoting western people wearing our western clothing, we

must promote Indian people wearing our designs.

Billboards in College Areas. Advertisements in major Magazines like Savvy and Harper’s

Bazaar Most Importantly Online website

Results

The Indian people will be able to build a visual connection between a younger population and Zara clothing.

This will build brand and consumer loyalty that will increase sales and profit

Design

Method

SHOP ONLINE

Improve Online Presence


Trends 40% prefer shopping online Western style adoption by younger audience Northern and Western regions account for the highest sales in designer apparel

Content Multi-Platform Improved aesthetics Category Filters Product Discovery In-store shipping

Results Access a larger

portion of the retail market

Cost-Effective Market Data

Partnership with Big Bazaar

• Strict Indian Regulations make it difficult for foreign brands to expand

• High cost associated with increasing brick and mortar presence

• This partnership is a cost-effective way to expose the Zara brand to the Indian target market


Risks & Mitigations


Limitations/Risk

• High cost of localization

• Consumer tastes & preferences

• Target market acceptance

• Potential increased administrative costs

• Partnership issues

• Profit-sharing with Big Bazaar

Solution

• Anticipated high ROIs that exceed investments

• Gauge market acceptance to change and continually adjust

• Retail still available; tech increase in future generations

• Online sales exceed; reduce operational costs in B&M

• Negotiate favorable contract from onset

• Increase revenues through volume increase

Recommendation Timeline


Marketing Localization• Successful local marketing strategy

employedOnline Sales Presence• Strong online retailing presence

augmenting B&M sales and revenuesLocal Partnership • Mutually beneficial partnership with Big

Bazaar increasing Zara revenues and profits

Marketing Localization• Begin discussing cost and switching strategiesOnline Sales Presence• Strengthen online platformLocal Partnership • Reach out to Big Bazaar and pitch partnership

idea

Marketing Localization• Start switching to localization marketingOnline Sales Presence• Launch online sales platform Local Partnership • Begin negotiations with Big Bazaar for

partnership

Marketing Localization• Invest in localization marketing strategyOnline Sales Presence• Evaluate and adjust online sales platform

based on consumer reactionsLocal Partnership • Finalize partnership negotiations

DESIRED END RESULT

Appendix


Appendix: Issue Identification


• Rules and Regulation inhibiting business expansion in India.

– The Companies Act of 1956

– Foreign Exchange Management Act, 1999

Appendix: SWOT Analysis


Strengths Weakness

ThreatsOpportunities

• Extremely fast product cycle• Brand new designs in-store in 4-5 weeks• Produce 11,000 unique items/year; competitors =

2,000-4,000 items• Vertical integration

• Careful analysis of consumer acceptance with new products

• High turnaround speed• Clothes remain in warehouses for only a few hours

• Low advertising expense• Only 0.3% of revenue spent on media advertising;

competitors = 3-4%

• Lack of appropriate advertising strategies• Lack of strong global brand awareness and

presence • Potentially limiting target market segment

• International growth and expansion• Expanding target market and

consumer base• Increasing investment in advertising• Growing online sales capacities• Partnerships with global department

stores

• Competition (H&M, GAP, etc.)• Insufficient consumer loyalty• Rules and regulations governing

international business and expansion

Appendix: Competitors

Strengths

Lower Prices

Marketing, Designer Collaborations

Retail Locations

Weaknesses

Few stores (2)

No e-commerce

No partner

Strengths

Brand, Star Power

Partner

Variety (Lifestyle)

Weaknesses

Few stores (2)

No e-commerce

Monochromatic style

Appendix: Zara Locations


Documents

India - Vienhang Yeungvienhangyeung.com/Coursework/International Business/Zara India.pdf · expansion in India. Foreign Exchange Management Act, 1999 Issue Identification | Recommendation