ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 2 Marketing Planning and Processes

Submission date 02/10/2022 Date Received 1st submission

Re-submission Date Date Received 2nd submission

Student Name Tran Thi Cam Anh Student ID GBS210268

Class GBH1114 Assessor name Vu Dieu Thuy

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand
that making a false declaration is a form of malpractice.

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 Table of Contents

I. Introduction........................................................................................................................................4
II. Marketing and Marketing Process.....................................................................................................5
1. Definition of marketing...............................................................................................................5
2. The marketing processes.............................................................................................................6
III. Role and responsibilities of marketing.........................................................................................11
1. Identify the market demand and customer demand..................................................................11
2. Defining itself and its segmentation..........................................................................................13
3. Creating a marketing mix strategy............................................................................................13
4. Building relationship with customers........................................................................................17
IV. Roles and responsibilities of Marketing at Zara can be influenced by external environments....18
V. Interrelation between marketing and other departments at Zara.....................................................18
1. Marketing with Finance................................................................................................................18
2. Marketing with Production...........................................................................................................19
3. Marketing with Human Resource Management Department.......................................................19
VI. External and internal environment factors....................................................................................20
1. Internal factor: SIP-CCC framework........................................................................................20
1.1. Intermediary.......................................................................................................................20
1.2. Competitors........................................................................................................................21
2. External factors: DENT-PC framework....................................................................................22
VII. Conclusion....................................................................................................................................23
VIII. Reference......................................................................................................................................24
 TABLE OF FIGURE

Figure 1: The diagram shows 5 steps was operating in marketing process...............................................6

Figure 3: The statistics of Vietnamese customers’ feedbacks about Zara in terms of prices, products,
distributions as well. Sources: Brand Vietnam........................................................................................12
Figure 2: Zara Tet collection for kids proving the market understanding and market localization........12
Figure 4: The diagram depicting 7 elements in 7P’s Marketing Mix.....................................................14
Figure 5: Zara – unique brand with the fashionable high-quality clothes...............................................14
Figure 6: Nice look paper bags may help you build your company's brand............................................15
Figure 7: Zara Vietnam's staff uniforms are significantly newer than the world's black uniform
................................................................................................................................................................. 16
Figure 8: Zara loyalty program promotion..............................................................................................17
Figure 9: Fast fashion retailers growth rate (Rehub, 2021).....................................................................21
Figure 10: Number of forecasted mobile internet users in Vietnam 2010-2025 (Statista, 2021)
................................................................................................................................................................. 23
 I. Introduction
Amancio Ortega founded Zara in 1975, making it the world's largest apparel business and the largest
store owned and run by Inditex. The corporation operating in 88 countries and has approximately 2,220
locations globally. Since its establishment, more than 40 years ago, Zara has owned almost 6500
locations worldwide, including two stores in VietNam. In 2017, Zara entered the fashion market in
VietNam and it was immediately embraced by shoppers. The business, which has been operating in
VietNam for almost 5 years, is well-known and specializes in the direct distribution of garment products
and fashion shows for both young people and higher incomes (Roll, 2021).

This assignment will define the marketing and marketing processes as well as depict clearly which
function and obligations the marketing has in a firm. Furthermore, I will analyze how marketing affects
and interrelates with other functional departments in business and provide a deep analysis of internal
and external environmental factors that has a crucial impact on Zara in VietNam’s market.

II. Marketing and Marketing Process

1. Definition of marketing

Marketing refers to the actions that a firm engages in to promote the purchase or sale of a product or
service. Advertising, selling, and delivering products to customers or other businesses is a part of
marketing. Affiliates perform some marketing on a company's behalf. (Kotler and Amstrong, 2018)

Marketing plans that are well-defined may assist a firm in a variety of ways. It may be difficult to design
the proper strategy or execute the plan; but, when done well, marketing may produce the following
results. (Alexandra Twin, 2022).

Why did I choose this definition? So simply, it has a quite common misconception in terms of the
definition of marketing, but, in fact, there are any facets marketing includes. The above definition has
consisted of all aspects of marketing requires such as advertising, selling, delivering to the clients. And
how crucial marketimg is for a firm is also well understood.
 2. The marketing processes

Figure 1: The diagram shows 5 steps was operating in marketing process

Marketing is the process that business needs to build strong customer relationships and add value for
potential consumers in order to make profits from them. There are five steps in this process, and they are
divided into two primary objectives which is to create value for customers and capture value from
customers

Step 1: Understand the marketplace, and customer needs and wants.

Firstly, the organization has to do research about the market place, what is the current market trends and
what macro factors are affecting the business… Also, the customer analysis needs to be carried out to
picture the customers, what is their need and want, what they are expecting from the products/ service so
the company can satisfy… All of those data need to be gathered, filtered, stored and visualized so a clear
picture of both macro and micro factors are presented (Conrad Chan, 2011).
 Step 2: Design a customer value-driven marketing strategy
The organization will be in a strong position to build their overall marketing plan after they have a good
understanding of the market. Their marketing plan should be "customer-driven," as the title suggests,
which means it should be tailored to suit consumer requirements and deliver value. At this stage, the plan
for segmentation and targeting should be implemented to identify which part of the market the company/
product/ service should aim for. A value proposition strategy should also be identified, including:
production concept, product concept, selling concept, marketing concept, social concept…. (Conrad
Chan, 2011).

 Segmentation
Segmentation refers to the process of dividing a broad market into smaller, more manageable groups of
consumers or businesses who share similar characteristics, needs, or behaviors. These segments are
typically defined based on various factors such as demographics, psychographics, geographic location,
or behavioral patterns. By segmenting the market, businesses can tailor their marketing strategies,
products, and services to better meet the specific needs and preferences of each group, thus improving
the effectiveness of their marketing efforts and maximizing profitability (Helmold, 2022).

ZARA categorizes the Vietnamese market into three segments: geography, demographics, behavior and
psychology. Geographically, Vietnam boasts a thriving high-end fashion market, particularly among its
youthful population, which gravitates towards branded products. This makes Vietnam an attractive
prospect for ZARA, offering ample opportunities for revenue growth, market expansion, and product
development. Demographically, ZARA targets men, women, and children with affordable yet stylish
clothing and accessories, focusing primarily on the 18-40 age group characterized by a passion for
fashion, tech-savviness, and environmental awareness. Psychologically, ZARA caters to customers
seeking trendy fashion at reasonable prices, appealing particularly to students and young professionals
who appreciate the brand's sophisticated aesthetic. Moreover, ZARA strategically creates a sense of
urgency among customers by offering limited quantities of fashionable items during specific periods,
encouraging frequent store visits (Aimacademy, 2023).

 Positioning
 Positioning involves establishing a distinct image or identity for a product, brand, or
company in the minds of target customers relative to competitors. It's about how a product or brand is
perceived in relation to others in the marketplace. Effective positioning communicates the unique value
proposition or benefits of a product or brand and emphasizes what sets it apart from competitors. This
can be achieved through various means such as advertising, branding, pricing, distribution channels, and
messaging strategies. A strong positioning strategy helps to differentiate a product or brand and create a
strong, memorable presence in the market (Helmold, 2022).

In Vietnam, ZARA positions itself as a leading provider of trendy and affordable fashion for the fashion-
conscious and style-savvy demographic, particularly targeting young adults aged 18-40. By offering a
wide range of clothing and accessories for men, women, and children, ZARA caters to individuals who
seek a sophisticated yet accessible look. Emphasizing its global reputation for high-quality fashion at
reasonable prices, ZARA distinguishes itself as a go-to destination for those who value both style and
affordability. Additionally, ZARA's strategic approach to product availability, with limited quantities
released periodically, enhances its image as a trendsetter and creates a sense of exclusivity among its
customer base (Lam, 2022).

 Differentiation
Differentiation is the process of distinguishing a product or brand from others in the market and making
it more attractive to target customers. It involves identifying and highlighting unique features, benefits,
or characteristics that set a product or brand apart from competitors and provide added value to
customers. Differentiation can occur in various aspects of a product or brand, including product design,
quality, performance, customer service, branding, and marketing. By effectively differentiating
themselves, businesses can create a competitive advantage, increase customer loyalty, and command
premium prices for their offerings (Helmold, 2022).

Zara sets itself apart from its competitors in Vietnam through a combination of factors that collectively
create a unique value proposition. Firstly, its vertically integrated supply chain enables Zara to swiftly
translate fashion trends into new collections, ensuring a constant influx of fresh designs in stores, a
capability not matched by many competitors. Secondly, Zara's focus on offering stylish apparel at
affordable prices appeals to a wide range of consumers, particularly the fashion-conscious younger
demographic. This affordability coupled with a reputation for
 quality gives Zara an edge over competitors who may not strike the same balance between
style and accessibility. Moreover, Zara's strategic positioning as a trendsetter, combined with its limited
availability strategy, cultivates a sense of exclusivity and urgency among shoppers, distinguishing it
from other brands in the market. Lastly, Zara's ability to adapt its global brand identity to resonate with
Vietnamese consumers' preferences and culture further cements its differentiation in the Vietnamese
fashion landscape (Mondial, 2024).

Step 3: Construct an integrated marketing program that delivers superior

value
At this stage, the marketer creates integrated marketing programs that provide target customers with the
value they expect. It is made up of the company's marketing mix (4Ps) including Price, Product, Place,
Promotion; which is the collection of marketing instruments it employs to carry out its marketing plan. It
must do it by combining all of these marketing methods into a holistic, integrated marketing campaign
that communicates and provides the promised value to customers Conrad Chan, 2011).

 Product

From the outset, Zara embraced a distinctive strategy in the fashion industry, although it wasn't initially
termed "instant fashion." Rather than adhering to the traditional seasonal model prevalent among
retailers, Zara's founder sought to revolutionize clothing sales. Unlike conventional practices of bulk
production followed by steep discounts to clear excess inventory, Zara focused on continuous design
innovation throughout the year, producing limited quantities of each design before swiftly transitioning
to new ones. This accelerated production cycle results in quicker sell- outs and minimal leftover stock.
The wide variety of designs enhances customer choice, while the limited quantities per design add an
element of exclusivity, making the garments more appealing. Zara's decision to conduct all
manufacturing in-house provides greater control over quality and streamlines the production process
significantly (Edrawmind, 2024).

 Price

Despite offering clothing of comparable quality to many high fashion brands, Zara maintains
affordability, surprising customers with its relatively low prices. Although Zara products are considered
high fashion and command a premium compared to typical apparel, the company adopts strategies to
minimize production costs. By doing so, Zara aims to make its products
 more accessible to the average shopper who desires stylish clothing without overspending.
Thus, while the price tags may still be perceived as somewhat expensive for some, Zara's commitment to
affordability ensures that its offerings remain within reach for a broader audience, aligning with the
company's core objective (Edrawmind, 2024).

 Place

Zara's place strategy in Vietnam is characterized by its strategic positioning of stores in prime retail
locations within major cities across the country. By strategically placing its stores in high- traffic areas,
Zara maximizes its visibility and accessibility to its target market. The brand's stores are often located in
prominent shopping districts and malls, ensuring that they attract a steady flow of foot traffic from both
locals and tourists. Additionally, Zara's omni-channel approach, which includes both physical stores and
online platforms, further enhances its reach and convenience for customers. This multi-channel presence
allows Zara to cater to the diverse shopping preferences of Vietnamese consumers, whether they prefer
the tactile experience of browsing in-store or the convenience of shopping online. By strategically
positioning its stores and embracing an omni-channel approach, Zara ensures that its fashion-forward
offerings are easily accessible to a wide audience of Vietnamese consumers, contributing to the brand's
success and popularity in the Vietnamese market (Lam, 2022).

 Promotion

Zara's marketing strategies stand out due to their minimal reliance on traditional advertising methods,
contrasting sharply with competitors who invest heavily in multiple advertising campaigns. Unlike its
rivals, Zara refrains from spending significant sums on TV commercials or other costly advertising
ventures. Instead, the brand leverages highly cost-effective yet potent social media advertising tactics.
With a vast online following of 30 million on Facebook and 45 million on Instagram, Zara can swiftly
and efficiently promote events or new designs by simply posting updates or images, capitalizing on the
power of social media engagement to spread its message. In addition, while Zara primarily focuses on
social media advertising, it also utilizes traditional channels such as print media, television, and outdoor
advertising to broaden its reach in Vietnam. Despite the potential expense, these traditional ads are
carefully crafted to engage the youthful demographic, which constitutes a substantial portion of Zara's
customer base. Moreover, Zara complements its advertising efforts with in-store promotions and
events
 designed to drive foot traffic and boost sales. By offering limited-time discounts, special
deals, and exclusive events, Zara creates a sense of excitement and urgency among shoppers, further
enhancing its marketing impact (Edrawmind, 2024).

Step 4: Build profitable relationships and create delight

Customer relationship management (CRM) is the process of establishing and sustaining profitable
customer relationships by providing greater value and satisfaction. Customer relationship management
strives to increase customer equity, which is defined as the entire cumulative lifetime worth of all of a
company's customers. The provision of outstanding customer value and satisfaction is the key to
establishing long-term connections. Companies nowadays strive to develop lucrative partnerships and
build relationships that will enhance their share of client purchases in their product categories. PRM can
also be implemented to create a strong relationship with business partners and enhance the connection
with those firms Conrad Chan, 2011).

Step 5: Capture value from customers to create profit and customer equity
The larger the customer equity, the more loyal the company's profitable customers are. Customer equity
may be a stronger indicator of success than market share or current sales. Customer value and customer
connections cannot be created and maintained just by the marketing department. They must collaborate
extensively with other corporate divisions as well as external partners. They must be effective at
customer and partner relationship management in addition to customer relationship management (Conrad
Chan, 2011).

III. Role and responsibilities of marketing

1. Identify the market demand and customer demand
In the case of Zara in Vietnam, the company has researched and understand about the market of Vietnam
so they tend to choose products that have lower price in comparison with other Zara in other countries in
order to fit with Vietnamese budget. The company also merchandise and choose products have Asian-
friendly with texture from China and Vietnam to fit with style and eyes of Vietnamese shopper. Plus-size
fashionistas Zara Vietnamese women aged 25 to 38 who are financially stable need attractive clothing
that fits their plus-size bodies. Despite the fact that it is still considered fashionable, there is a major
shortage of apparel in bigger sizes in Vietnam today. The early unavailability of plus-size clothing in
Vietnam was mostly due to societal
 difficulties. Both historically and currently, society does not accept the larger size trend and
movement (Pamela N. Danziger, 2018).

Figure 3: The statistics of Vietnamese customers’ feedbacks about Zara in terms of prices, products,
distributions as well. Sources: Brand Vietnam

Figure 2: Zara Tet collection for kids proving the market understanding and market localization
 2. Defining itself and its segmentation
Zara has well segmentation their target customers in Vietnam market. Differ from other market that Zara
is considered as fast and cheap cloth, in Vietnam, the company has redefine its positioning to be
“affordable luxury” brand with considerably high but not too high for customers (Nhi, 2022). The
customer segmentation can be presented as below:

3. Creating a marketing mix strategy

This step was formed based on the marketing mix (7P’s – product, price, place and promotion)
 Figure 4: The diagram depicting 7 elements in 7P’s Marketing Mix

Products - Zara in Viet Nam is a clothing company that offers stylish clothes and accessories
(sunglasses, belts) that replicate other well-known brands such as Louis Vuitton, Gucci, and Balengacia
at reasonable costs.

Zara employed untreated materials like as cotton,

organic cotton, recycled fabric, and recycled
polyester. For their purpose and to ensure that their
products are safe for the environment and consumers,
and picking such raw materials may help reduce
the negative impact on the environment and
biodiversity variation (Zara.com/vn).

Furthermore, Zara has pledged to not producing

products that include animal leather or bone, in
Figure 5: Zara – unique brand with the
opposition to animal protection group Fur Free fashionable high-quality clothes
Alliance and retailer program that is animal fur free (Fur free store) to avoid animal exploitation (Inditex.com).
Zara Viet Nam goods range in age and gender; they have divisions for men,
 women, and children, and within each sector, they divide a variety of cloths such as t-shirts,
shirts, and suits, which is a popular clothing approach.

Furthermore, Zara Viet Nam employees will package

your goods in a memorable design back such with their
brand's emblem in the middle after you acquire things.
According to Veronica Maria Jarski
Marketingprofs.com, exceptional packaging may
improve sales by 30%, contribute to impulse
purchases, and attract new customers. And having a
tired logo that customers can quickly recognize might
aid in developing a strong bond with them.

Figure 6: Nice look paper bags may help

you build your company's brand.

Place - Zara Viet Nam has two retail locations in Ha Noi and Ho Chi Minh City. In Ha Noi, they chose
Vincom Tower, 191 Ba Trieu, Le Dai Hanh, Ha Noi and VINCOM CENTER, 72 Le Thanh Ton, Ben
Nghe, District 1, Ho Chi Minh City. Zara Viet Nam was chosen because the Zara philosophy of Zara
strategy in business is that the distribution channel is the most important one to raise the awareness in
costumer mind is that they concentrated investment on the place that is extremely popular and has a
strong position in costumer mind like Vincom center. Zara Viet Nam must spend 96 billion VND per
year to rent a space in the Vincom Center in Ha Noi (zing.vn, 2017). Zara Viet Nam also launched online
purchasing and delivery throughout Vietnam on 5/4/2017. (cafez.biz, 2017). You pick the goods you
want to buy, the method of payment, and your address, and Zara Viet Nam will send it to you.

Promotion - Zara Viet Nam does not spend money on online or social media advertising; instead, they
focus on shop location. For example, they picked a well-known location in the city center and placed
their store among other well known apparel brands that spend a lot of money on advertising, such as
Gucci or Nike. Zara in Ha Noi is located in the Vincom Tower in Ba Trieu, which is well known among
Vietnamese people, and its store is located adjacent to Adidas and Nike retailers. Another feature that
makes Zara Viet Nam stand out in the minds of customers is their return policy. If you purchase a
product from Zara Viet Nam, you may return it to their shop
 and receive your money back within 30 days if the items are stable, unwashed, and the price
tag is undamaged (Kim, 2024).

Price - As a result, with costs ranging from 149,000 VND to over 1 million VND/product,
Vietnamese people can afford it totally (Luong Hanh, 2018). Furthermore, Zara clothing and shoes
are quite costly in Vietnam due to the typical income loss of individuals. Not only is it pricey in
comparison to the average of other fashion companies on the market, but it is also underwhelming in
terms of value. Zara products also include low-cost items starting at 299,000 VND, but they are mostly
T-shirts; the remainder of the men's, women's, and children's prices range from 899,000 to 1,099,000
VND. T-shirts and pants often cost 500,000 VND or more .

People - Zara has personnel working under its sales team who are essential to its marketing initiatives.
These individuals have been taught not just in persuasive strategies, but also in showing respect to
company customers while taking their preferences into account. It employs individuals in its customer
service section. Customers contact them if there are any problems with the goods, and these personnel
walk them through the process of resolving the problems. These employees have been educated to
respect consumers and do their utmost to fix their problems. Zara has personnel who work with suppliers
to get raw materials; these people are critical to maintaining or increasing the quality of the finished
product. (Addison, 2019)

Figure 7: Zara Vietnam's staff uniforms are significantly newer than the
world's black uniforms
 Process - Zara has procedures in place to ensure that its items are always available in retail
outlets, and retailers may be notified when their inventory levels are low. Provides them with additional
items while directing manufacturing to restock its inventory. This guarantees that clients always have
access to things when they need them. Zara has an online delivery procedure in which orders are
processed in the computer system and the applicable product from the inventory is dispatched to the
delivery service provider based on these orders. Zara is continuously committed in researching market
potential in order to better understand client requirements. It also improves awareness of client demands
through feedback gathered in the store, its helpline, or its social media platforms. (2019, Addison)

Physical Evidence - Zara puts their items on store shelves in easily identifiable, color-coded
packaging. They are displayed on company-supplied specialty shelves, which come in a variety of colors
and styles. This makes it simple for customers to find such shelves in crowded retail outlets. Zara also
offers an easy-to-use internet website where customers can browse the company's merchandise in high-
quality photos taken from various perspectives. (Addison, 2019)

4. Building relationship with customers

At Zara, the company build up a strong relationship with its customers especially loyalty group through
the loyalty program for its customers in Vietnam. Loyalty customers will receive exclusive offers
and privilleges thus making people to feel satisfied and want to attached to the brand.
Figure 8: Zara loyalty program promotion
 IV. Roles and responsibilities of Marketing at Zara can be influenced by external
environments
External factors such as Covid-19 pandemic (Environment factor in PESTEL) can largely affect the
organizational marketing roles and responsibilties of the company. Due to the social lockdowns policies
of the local government both in Hanoi and Ho Chi Minh City during the pandemic time, both stores of
Zara have to be closed leading to to the fail to deliver the product and services and fail to implement the
Stage 3 since the Place (in 4Ps) or Everywhere (in 4Es) is fail to properly operated. Meanwhile, it is also
lead to fail in Stage 5 which is capturing the customer value since customers cannot shop at stores lead to
the lost in revenue (Indeed, 2024).

V. Interrelation between marketing and other departments at Zara

Marketing plays a pivotal role in shaping the overall direction of a business by driving strategic
decisions, influencing product development, and fostering customer relationships. mSpecifically,
marketing helps businesses understand their target market, including consumer needs, preferences, and
behaviors. This market insight informs product development and innovation, guiding businesses in
creating offerings that meet customer demands and differentiate them from competitors. Furthermore,
marketing plays a crucial role in guiding business expansion efforts, whether through entering new
markets, launching new products, or diversifying offerings (Indeed, 2023).

1. Marketing with Finance

To begin, the Finance Department is responsible for controlling the company's money flow, both in and
out, as well as the company's investment and financial resources, such as loans, stocks, and so on. In
order to get funding for marketing operations such as campaigns, TV commercials, advertising,
branding, and consumer interactions, the marketing department must collaborate closely with the finance
department. As a result of all of these operations, brand awareness and customer happiness grow,
resulting in greater total sales and an increase in the Finance Department's balance sheet. However, a
conflict may arise if the Finance Department does not pay marketing initiatives in order to keep the
balance sheet balanced. (Wetzels, 2000)
 This cooperation will help the company branding activities to be smoothly run without
disruption of money shortage and the speed of trends and fashion will be delivered faster to customers,
thus achieving the company's mission. For example, thanks to the investment in AI powered by the
finance department, the marketing department of Zara has the mean to dramatically boost sales through
experience-based marketing campaign, result in online sales increased from 884 million USD in 2014 to
4849 in 2020 (Statista, 2021)

2. Marketing with Production

The Production Department is responsible for creating the company's principal products or services, as
well as designing, testing, and quality control. Because the production and marketing departments are
inextricably intertwined, they must collaborate closely. In order to develop accurate and relevant
messaging for their marketing campaigns and activities, the Marketing Department must have a thorough
understanding of the product and service they are promoting. In exchange, the production department
must consider data from Marketing operations such as early market research in order to build a viable
product, as well as customer feedback in order to enhance their current offerings. (Steinberg, 1997)

This cooperation will help the company to deliver the best product and message, thus achieving the
corporate purpose of improving life through qualified products with the fastest speed, especially of the
characteristic short life-span of fast fashion. For example, from the production process to marketing
activities of Zara only take 2 to 3 weeks for a completed product, making it one of the fastest fast fashion
retailers in the world (Conlon, 2021).

3. Marketing with Human Resource Management Department

The Human Resources Department is in charge of the company's human resources, including recruiting,
employer branding, onboarding, internal activities, performance management, remuneration, and
working contracts. Human Resources is in charge of providing employees to all other departments,
including Marketing. To run a successful business campaign or build a brand identity, people in the
marketing department, in particular, must meet all of thecriteria. The HR department will check that
entry-level staff of the marketing department are competent in carrying out their obligations and, if
necessary, will provide training sessions for them. Furthermore, both the marketing and human resources
departments must guarantee that all corporate workers are aware of the company's essential values,
missions, aspirations, and goals, as well as any new business strategy and application through internal
marketing campaigns and
 employer branding, which need the involment of both marketing and HR departments.
(Ahmed, 1993)

This co-operation will help the company to have better workforce with higher efficiency, results in better
product/ services and branding, leads to the higher customer awareness, customer satisfaction and
customer loyalty. In fact, Zara has the extreme high requirements for marketing position with good
compensation and benefits as well as aquedate training offered by HR department to ensure the
quality of marketing staff at Zara (Inditex, 2021)

VI. External and internal environment factors

1. Internal factor: SIP-CCC framework

1.1. Intermediary
Firstly, with the fact that Zara having no intermediary and distribute their products through their own
stores both online and offline, it can create a lot of opportunities and threats for the brand. The fact that
this is the trend for many other brands especially luxury brand, making Zara appears to be closest to it
self-defined brand image which is “affordable luxury”.

Opportunities that this internal factor bring are including high quality control and higher profit margin.
Since Zara operates the stores itself, the brand can easily decorate and set up store design and customer
experience by its will and easily assess the performance of stores, in order to make suitable changes right
away. Moreover, since the brand does not have to share its sales revenue and profit for a thir party
retailer, Zara can have a higher profit margin for its selling.
 Threats this internal factor bring includes low expansion rate and resource
consuming. By having to set up and operate the stores itself, Zara will take time to do the placement
research, setting up process, facilities investment and operation which can cost a lot of time leading to
the low expansion rate that we can see since Zara only has two locations at the moment in Vietnam
(Zara, 2022). Market share could be lost during this time since the competitors can rapidly expand and
take market share. Meanwhile, the resources required are huge since the companies have to recruit
stores staffs, do training and development programs and so on.

1.2. Competitors
Because customers now having a lot of choices in fast fashions due to a number of direct competitors
including H&M, Uniqlo, Blue Exchange… In fact, Zara is being outperformed in term of global sales by
those companies

Figure 9: Fast fashion retailers growth rate (Rehub, 2021)

Therefore, Zara needs to increase its competitiveness through differentiation strategy in Porter’s
Generic competitive strategy, since the size of Zara is only half of H&M in term of number of stores
(2250 for Zara and 4856 for H&M) (Statista, 2021). Meanwhile, the switching cost of customers is
insignificant since they can easily change from one fashion retailer to another as they wish without any
expense. The quality between those fast fashion retailers are
 insignificant since they are all produced from certain third party manufacturers such as
Crystal Martin. Thus, it must be the service that has to be distinctive in order for Zara to stands out and
gain customer attraction and customer loyalty.

2. External factors: DENT-PC framework

In this part, technological factor will be analysed since the author believe it is one the the most
important factors impacting Zara business due to the increasing number of young customers and their
purchasing behaviour. In fact, according to Statista, the worldwide smartphone penetration rate has
increased dramatically from 49.35% in 2016 to 78.05% in 2020 (Statista, 2021) while Vietnam
smartphone penetration rate has increased from 65% to 75% over 5 years from 2016 to 2021 (Statista,
2021). This technology factors leads to the swift in customers behaviour that they are more dependent
on mobile phone as the interaction between human and devices increase. Smartphones have allowed
people to review, make payment, check-in, and many other tasks which save a lot of time.

This will bring the opportunities for Zara to easily approach young customers online through social
media and online sites and easily communicate with customers to build brand awareness and brand
loyalty. It also helps the company to boost sales through ecommerce on its website, taking advantage of
the current distribution system.

However, this will oppose some threat for the company such as data privacy and data security can be
leaked or stolen if the company do not have proper preventation in the online environment. Moreover,
the company also have to adapt with the technological trend by applying a wide range of new payment
method as well as applying new technologies at stores to attract customers, which can be a real cost of
money.
Figure 10: Number of forecasted mobile internet users in Vietnam 2010-2025 (Statista, 2021)

VII. Conclusion
The results of this study convinced me that Zara is a strong corporation with worldwide recognition.
This company is among the greatest in the fashion industry since it has been able to meet and exceed its
clients' expectations. Despite competing in a highly elite fashion sector, it has consistently been able to
create fashionable clothes that is in line with current trends.

This was done without jeopardizing the product's quality. Many people purchase at Zara not just for the
stylish items, but also because they trust the quality. It has been able to build a significant brand
recognition among individuals who purchase its things, making it essentially a status symbol.
 VIII. Reference

Ahmed, P. K. (1993). The scope of internal marketing: defining the boundary

between marketing and human resource management. Journal of marketing
management.

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