My paper topic

ZARA

Do you know any multinational firm which doesn’t use traditional marketing campaigns to attract customers? I do and its name is Zara. As it has 1529 stores around the world, Zara is one of the largest international fashion companies. It belongs to Inditex, one of the largest distribution groups in the world which owns other fashion brands such as Pull and Bear, Massimo Duti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. Created in 1975 by Amancio Ortega, Inditex and Zara has followed such an innovative and effective business model that in less than 40 years has become an example of best entrepreneurial practices.

This is a very interesting topic to study so as to realize a completely different way to do business and attract customers. From my point of view, Zara is so proactive that they don’t need to spend their budget in gaining brand awareness because they know that by being in the most popular and expensive places they will have the required success to achieve their goals. Moreover, as I am going to develop in my paper, their operational process allows them to be constantly changing merchandises in the stores. In other words, they have the ability to renew their stores once every two weeks.

The key point to Zara’s success is that they know how to appeal and persuade because every time potential customers go to Zara realize that what they saw a week before is not in the store anymore. Therefore, as they only have one opportunity to get the product wanted, purchasing in Zara becomes a unique and unrepeatable experience for them. Moreover, all this process affects to its prices because they can reduce their inventories by having high rates of rotation.

The relation between my topic and customer insights is quite obvious. Zara’s business model allows them to define and identify their target market without making any effort. Although they have Zara kids and Zara home, the majority of stores are focused on men and women between 15 and 45 years old. Thus, if we take into consideration the fact that Zara is located in the most visited and crowded places, then we will realize that by having these strategic locations and being constantly up to date, they can appeal potential customers quite easily if we compare it with other competitors.

To sum up, I would like you to see this article I have found surfing the internet. As you will see, all the issues mentioned above are explained in more detail. It is a very short article (2 pages long) but very interesting and illustrative:

http://www.uniquebusinessstrategies.co.uk/pdfs/case%20studies/zarathespeedingbullet.pdf

In fact, I think that Zara’s case should be studied in all Businesses Schools because it shows an effective but completely different way of doing and understand business and success.

Apostle Customers

Apostle customers:

How many times have you seen an Apple sticker pasted in a car? Or how many times when first meet a person have you realized that he probably wore Levi’s jeans? When companies think about their marketing strategies, they always pursue to persuade their target to have a need to purchase their products. They don’t create needs; they just design the right product or service to cover existing needs. Being successful doing that is not easy, but once a company gets it, everything becomes easier: the product will be sold to the right customers, company’s positioning will be the proper and the most faithful consumers will unconsciously start to promote the product by wearing clothes with the name of the brand, pasting stickers on the car or decorating their rooms as if it was a museum of their favorite brand. These are the customers I want to talk about, which are called “apostle customers”.

The marketing mix is more than 4 P’s, it is the beginning and the end of the success of a campaign. Product must appeal customers, Price must be competitive but profitable, the Place where companies sell their products is vital to attract the right customers and the Promotion must be established so as to find apostles. Thus, when marketers design their strategies, they first of all have to identify these customers in order to cover all the P’s properly. They could be seen as “the post sales representatives” because they are the first to purchase, try the product and tell other potential customers its features, advantages and benefits. The only differences are that they don’t solicit orders and they just do it because they want, in order words, they do it for free.

From my point of view, at the very beginning there could be a lot of potential customers but not everyone would react the same way to marketing campaigns. So, how can companies find their apostles? Now that new technologies permit to interconnect people from all over the world and share information in just two seconds wherever you are, products are more common shown first by Internet. Therefore, all the customers interested in purchasing the product will find themselves the information required while at the same moment companies can make surveys to them so as to know how apostles and other faithful customers understand and value the product and the whole campaign to sell it or make it familiar to society.

As they were two thousand years before, apostles keep on being the most appropriate allied for anyone. Marketers can learn from them how the current trends are, how they can present the product or even they can estimate whether the campaigns are going to be successful or not. Moreover, feedback can be received from apostles in several issues once the product has been launched such as the performance of the product, possible improvements and comparisons with other similar products. They form one of the most significant groups of stakeholders a company has, so resources should be allocated in every case in order not only to satisfy them but also to make them “indirectly” participate in creating the right positioning for new products.

To sum up, I would like to say that I don’t consider myself as an apostle. I would better define myself as a follower, once others have tried the product and I know exactly its features then I am ready to try it. In fact, although I think that apostles use to pay more for new products just to demonstrate they are up to date, they are crucial assets companies must take into account.

Paradox of choice?

Have you ever been disappointed for choosing the wrong option? It is quite obvious that everybody has, but...is Barry Schwartz right when he affirms that we are guilty of taking wrong decisions? Actually, listening to him I felt identified with some of the examples that he comically explained but from my point of view, there is a concept which should be deeply analyzed not to confuse anyone, and this refers to consumers’ guilt.

At this point, I would like to differentiate two kinds of customers: the one who knows everything about the product wanted and has in mind just one specific idea; and the other one who has just a need to be satisfied. While the first will spend just a minute purchasing, the second will easily get confused because more than one product will fit his expectations. Thus, the “crime” will be only done by the last one because of his lack of information concerning to the different options available to satisfy his needs.

As far as Barry Schwartz’s opinion is concerned, paralysis does exist when you have to choose among many alternatives. The paradox is that customers can reduce the effects of the paralysis by being more and more informed. First customer can find himself the information he requires but often is easier to ask a professional for a piece of advice, the second customer. The problem comes when instead of solving the doubt, the salesperson only wants to sell something because, at the end, the customer won’t be happy with the acquisition and the salesperson won’t gain the confidence of a potential client.

Now, who is losing more salespeople or customers? Which opportunity cost is higher? What I get from these questions is that salespeople MUST be always honest because otherwise they will never sell more than once to the same customer and although generating new clients is important, it is much more expensive. So, salespeople must take into account that losing a sale could sometimes mean winning a new customer or retaining an existing one.

“The way to maximize freedom is to maximize choice; the more choice people have, the more freedom they have and the more freedom they have the more welfare they have”. Is that sentence so ironic? Taking into account what I have mentioned in previous paragraphs, it shouldn’t be because customers could experience all this process by reducing the risk of uncertainty.

Another important issue is the expectation a product can cause. Once again, the probability that the second customer can be unsatisfied with the decision taken will be considerably higher because his expectations will be “unreal”. So, as the customer is the most interested in choosing the best option, I strongly recommend that everyone should take into consideration all the options available BEFORE purchasing so as not to be frustrated.


THEREFORE…THE SECRET TO HAPPINESS IS NOT LOW EXPECTATIONS; THE SECRET TO HAPPINESS IS LOW RISK OF UNCERTAINTY…