Brand Building of a fashion company - MMKT 1 Master Degree...

MMKT - 1 Master Degree Internship
IQ House
Andrey Nassybullin 20141341
Aidana Yessengulova 20141949
Alexandra Tarassova
Ordabayez Sanyaz
Instructor: Geniyat Issin

Introduction
Established in 1975, Zara is the flagship of Inditex, a holding company located in Galicia
(north-west Spain). In a relatively short time frame Inditex has become the world’s second
largest clothing retailer with 2,692 stores spread across 62 countries worldwide by the end of
January 2006. In addition to Zara which accounted for 66 percent of the group’s turnover in
2005, Inditex owns seven other clothing chains: Kiddy’s Class (children’s fashion), Pull and Bear
(youth casual clothes), Massimo Dutti (quality and conventional fashion), Bershka (avantgarde
clothing), Stradivarius (trendy garments for young women), Oysho (undergarment chain) and
Zara Home (household textiles).
The Zara Concept
Zara’s aim, according to Amancio Ortega, founder of Inditex, is to democratise fashion
by offering the latest fashion in medium quality at affordable prices. What differentiates Zara’s
business model from that of its competitors is the turnaround time, and the store as a source of
information. Zara’s vertical integration of design, just-in-time manufacturing, delivery and sales;
flexible structure; low inventory rule; quick response policy and advanced information

technology enable a quick response to customer’s changing demands (Castellano, 1993; 2002). A
completely new piece of clothing can be designed, manufactured and delivered in less than four
weeks. Changes of an existing garment can be put on display within two weeks, much faster than
the competition (The Economist, 2005). Zara internally manufactures its ´live collections´, the
most receptive garments to fashion, which account for almost half of its production, and
outsources those that are not subject to seasonal variation. About 11,000 new items are launched
every year (Ghemawat and Nueno, 2003). 4 The store acts not only as a point of sale but also
influences the design and speed of production. It is the end and starting point of the business
system. Zara’s production cycle starts with customers´ judgements on the new designs of clothes
and the information collected by staff members who travel to fashion cities, observing people on
the streets, browsing publications and visiting the venues that are frequented by their potential
customers (Fabrega, 2004). What distinguishes Zara from its competitors is the feedback that
Zara’s managers get from the customers at the point of sale about new garments or new products
that they are interested in. Store managers report the demands of customers and the sales trends
to the headquarters on a daily basis. The design group will use the feedback to create new articles
or modifications to the existing goods and then deliver the items to the stores (Martinez, 1997).