Essay On Zara Sources Of Value

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Delivering Sources of Value (channels)
To what extent does the organisation use multiple channels to deliver sources of value (can be product/service related, process related or communication related) to its customers?

Zara offers many sources of value to their customers, with heavy focus on the social and hedonic benefits of their product lines. Customer value is hard to define, and thus have many different ways of understanding from person to person. Generally, values may refer to: low price, receiving what you want, quality to price, and comparing what is received to what is sacrificed (Zeithaml 1988). Zara appeals to these ideologies of value through a variety of activities. These include:
Affordable prices for the latest and most trendy fashion – ‘Fast fashion’

Zara offers high fashion products which are comparable to competitors such as Raoul and Marc Jacobs, but at a more affordable rate. For example, prices start at $30 during sales peaking at over $500 for the uppermost fashion range. This allows Zara to effectively tackle its target market of individuals who are young, sensitive to prices, and motivated by new and upcoming fashion trends. Basically, Zara’s competitive advantage is because they make use of mass customization. The combination of the low volumes and high efficiency lowers the costs and fastens the production procedure. On the other hand, this aggressive approach of Zara is very risky. Despite considering themselves customer oriented, they actually do not have a lot of interaction with their customers. Moreover, the method of avoiding the segmentation of behavioural and age factors creates the opportunity for Zara to penetrate a wider range of markets. Providing a formidable quality in clothing for pric...

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... Mango e.g. Miranda Kerr and collaborations with renowned designers at H&M e.g. Karl Lagerfeld (head designer and creative director of Chanel). Two areas that Zara has completely steered clear from yet, have not hindered their success, allowing them to build a strong brand identity through its stores, which are its main touchpoints. This allows them to get up close and personal with its customers, building a strong relationship and connecting on not only an emotional level but a psychological level as well, facilitating in customer retention and development.

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Recommendations

I would recommend Zara to design some marketing mechanisms to try to activate the knowledge and labor of consumers. This will not only lead to higher commitment of the consumer, but it also enhances the value for the consumer. Both consumers as firms will benefit of this new strategy.

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