MARKETING ACTIVITY APPLIED TO FASHION COMPANIES - Theoretical concepts of Zara's company, High school final essays of Economics

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MARKETING ACTIVITY APPLIED TO FASHION COMPANIES Theoretical concepts of Zara's company 2 CONTENTS INTRODUCTION ......................................................................................................................... 3 GENERAL CHARACTERISTICS IN CHAPTER ONE .......................................................... 4 1.1 A succinct history of apparel marketing marketing ........................................................ 4 1.2 Current advertising ............................................................................................................. 7 1.3 Zara’s company history .................................................................................................... 10 BIBLIOGRAPHIC SOURCES .................................................................................................. 12 5 make unique clothing, typically suits, for each client. The unmarked doors of Savile Row in London's Mayfair neighborhood once concealed the workshops of custom tailors who created some of the best men's apparel in the entire world. This practice continued until the late 18th century. Savile Row is still renowned for its immaculate craftsmanship, and designers like Oswald Boateng, whose modern style to tailoring mixes sophistication with flair, have drawn a new generation of consumers, despite competition from Italian tailoring firms that appeared on the scene in the 1980s. One of the most significant dates since the General Agreement on Tariffs and Trade (GATT) was established in 1947 — possibly even more significant than the establishment of the World Trade Organization (WTO) in 1995 — was 1 January 2005. On this day, the Multi- Fibre Arrangement (MFA), the restrictive trade regime governing textiles and apparel (T&C), which had come to symbolize hypocrisy and applying different standards to different groups of people as rich countries promoted free trade, officially ended. T&C liberalization was agreed upon as part of the Uruguay Round in 1993, and the MFA was then dissolved in four gradual but uneven steps, with the most sensitive quotas being eliminated on December 31, 2004, as the last stage. However, there was more to the tale. In reality, the US and the European Union (EU) also implemented additional trade sanctions against Chinese goods a few months after the MFA was abolished.1 The original MFA was justified with the exact same justification as these measures, which was to provide a "temporary" transition period to give producers adversely affected by liberalization more time to adapt to freer trade. However, for China at least, this effectively meant that the MFA was extended for a further three years. More importantly, these new trade limitations appeared to go against the fundamental tenets of the modern global order.2 In other words, even though the Uruguay Round formally "put an end to a special and discriminatory regime that had lasted more than 40 years" and established the WTO, where T&C would be "governed by the general rules and disciplines embedded in the multilateral trading system," the industry still seemed to be a kind of right in and of itself (Panitchpakdi 2004). This book aims to trace and explain this distinctiveness.3 1 K.Alicia, B.Emily, C.Jay, (2013). Fashion, Design, Referenced, A Visual Guide to the History, Language, & Practice of Fashion, Rockport Publisher 2 H.Tony, (2012). The Global Political Economy of Trade Protectionism and Liberalization. RIPE Series in Global Political Economy 3 Panitchpakdi, S. (2004) ‘Director-General’s remarks on the occasion of the 117th and Final Meeting of the Textiles Monitoring Body’, speech at WTO, Geneva, 9 December 2004. http: <www.wto.org/ english/news_e/spsp_e/spsp33_e.htm> (accessed 10 May 2007). 6 The industry consists of several different economic activities, each with their own unique technological and structural characteristics. These activities range from the provision of raw materials and intermediate inputs at one end of the supply chain to the transformation of these inputs into final use products and their eventual distribution and retailing at the other end. In Figure 1.1, it is depicted. Fig.1.1 Textile and clothing production chain Source: Adapted from Dicken 2008: p318 7 According to them, this new worldwide division of labor was essentially the result of capitalism's own logic, as corporate executives strove to maximize profits in the face of rising global competition. In order to bolster these assertions, Fröbel et al. cited the outsourcing of the German clothing industry, which they claimed was motivated by transnational corporations' (TNCs') quest for the lowest possible labor costs and that this resulted in a reallocation of production process components to the regions where the most affordable and compliant labor could be found.4 1.2 Current advertising Women's, men's, and children's apparel make up fashion clothing, while hats, gloves, scarves, ties, belts, bags, jewelry, and watches are included in the accessory category. Clothing and fashion accessories make up a significant component of the global economy as a whole. In 2012, the textile and garment industry alone was worth $1.7 trillion; estimates from 2010 indicate that it was worth $2.5 trillion when luxury products and footwear were included. 2 These statistics show that one of the biggest sectors in the world is the fashion market. Even during the global economic crisis, the European and American markets for clothing and footwear have fared better than those for other imported industrial products, according to Gereffi and Frederick (2010).5 The explanation could be that fashion maintains its enviable top position in emerging economic sectors, despite the fact that economic crisis and globalization are frequently linked to supply or demand saturation. Fashion demand is still robust and the fashion supply does not appear to be declining. A European buyer purchases clothing nine times on average each year. American households spent an average of $1,700 on clothes and accessories in 2010, with $562 going to women's clothing, $304 to men's clothing, and $270 going to children's apparel. The remaining money went to footwear and accessories, according to the US Department of Labor (2012). Men, teenagers, and seniors are objectives that are both challenging and promising for developing fashion marketplaces, and some new consumers may offer fresh leverage for growth in this industry of ephemera. Particularly today's guys, who are adopting more and more fashion trends, are participating in fashion more and more. According to Calvin Klein, "men's views toward their garments have 4 Fröbel, F., Heinrichs, J. and Kreye, O. (1980) The New International Division of Labour, Cambridge: Cambridge University Press. 5 Gereffi, G., and S. Frederick. 2010. The Global Apparel Value Chain, Trade and the Crisis, The World Bank Development Research Group Trade and Integration Team, http://www.cggc.duke.edu/pdfs/Gereffi_GVCs_in_the_Postcrisis_World_ Book.pdf 10 1.3 Zara’s company history A few pieces from each class were sold at Zara's launch to accommodate customers. Clothing for men and children, nightgowns and dressing robes that were available in various stores throughout the city, towels, and school supplies that would soon draw young students from Santiago de Compostela. In actuality, one of the items that the first shop sold the most of was a 500 peseta sweater that was purchased by every university student. Amancio Ortega possessed a spirit of expansion, and by 1979, Galicia had four Zara locations. One important aspect of the retail industry would be strengthened by Zara: rapid responsiveness. Similar to how it did so, it started to proliferate into the textile industry in the latter half of the 1980s. Amancio was searching for a name for his very first company. History is rife with instances of businesses that emerged haphazardly, without a predetermined strategy, and went on to become global icons. Although the inspiration for the Zara brand came from a well-known Anthony Quinn movie, its inception can be attributed to a series of coincidences. He would most likely be astonished by Quinn's portrayal in the 1964 movie Zorba el Griego, which wasn't released in Spain until two years later, according to a collaborator of Amancio Ortega: "Ortega found a person in A Corua who had that almost mystical quality of being a fighter, a lover of life, and desiring to advance and spread effort and joy. Many of these attributes were shared by Ortega, who made the decision to open his future clothing store in A Corua, Zorba ". After "Zara" was registered, the aspiring entrepreneur attended the 15 May 1975 opening of his first store at 64-66 Juan Flórez Street in A Corua, just 200 meters from the Gala shirt shop where Amancio Ortega himself had worked as an apprentice and shirt supplier two decades before.7 In 1989, all of the production, distribution, and marketing companies came together to form the group Inditex. Over the years, other significant businesses such as Massimo Dutti, which was acquired in 1995 from businessman Armando Lausaca, and Stradivarius, which was purchased for €108.2 million in 1999, have helped to nurture Inditex. Later, the holding was expanded to include the Pull & Bear chain, Bershka, and the Oysho underwear company. Amancio Ortega made it clear that Zara needed to depart from conventional sales models and that he couldn't be the same as other textile entrepreneurs. The store was, is, and will continue to be the primary point of contact with customers and the source of the information they required to determine what clothes they desired. Therefore, another golden guideline that has been faithfully followed since the first Zara store opened its 7 Martinez, D.(2012). Zara, Visión y estrategia de Amancio Ortega, Editura ePubLibro 11 doors was added to this quick response time to the customer: don't base your business decisions just on the spring and fall collections. Zara was a leader in providing a new way of thinking to the textile industry. It began by developing living collections that were conceived, produced, sold, and distributed as consumers' tastes evolved. Customers at Zara had to realize right away that they had to buy anything they liked right away since it would quickly disappear if they didn't. Zara was able to do this by fostering a feeling of scarcity and an urgent purchase opportunity. Amancio Ortega committed billions of pesetas in cutting-edge technology that was deployed at all levels—management, design, garment placement in the store, window display, clothing, logistics, and marketing—to take advantage of this immediate potential. The Inditex textile group's former international director, Luis Blanc, discusses how stores are positioned on the busiest streets in major cities all over the world.8 Amancio Ortega exposed this element of Zara's organizational structure to his closest associates from the start, and it enables us to comprehend why each store is situated in the busiest areas: "We make investments in prestigious areas. We put a lot of thought into how our shop windows are displayed. That is how we portray ourselves. We want our clients to visit a stunning store where they can choose from the newest models. But more significantly, we want our clients to understand that they should buy everything they like right away because it won't be available next week. It involves fostering an atmosphere of desperation and quick sales. Amancio Ortega's testimony to Leslie Crawford was published in Report on Business Magazine on March 30, 2001, and Pankaj Ghemawat and José Luis Nueno collected it in 2003.9 8 McDonald, M. H. B., Marketing Plans, Oxford, England: Butterworth- Heinemann Limited, 1989 9 Martinez, D.(2012). Zara, Visión y estrategia de Amancio Ortega, Editura ePubLibro 12 BIBLIOGRAPHIC SOURCES 1. K.Alicia, B.Emily, C.Jay, (2013). Fashion, Design, Referenced, A Visual Guide to the History, Language, & Practice of Fashion, Rockport Publisher 2. H.Tony, (2012). The Global Political Economy of Trade Protectionism and Liberalization. RIPE Series in Global Political Economy 3. Panitchpakdi, S. (2004) ‘Director-General’s remarks on the occasion of the 117th and Final Meeting of the Textiles Monitoring Body’, speech at WTO, Geneva, 9 December 2004. http: <www.wto.org/ english/news_e/spsp_e/spsp33_e.htm> (accessed 10 May 2007). 4. Fröbel, F., Heinrichs, J. and Kreye, O. (1980) The New International Division of Labour, Cambridge: Cambridge University Press. 5. Gereffi, G., and S. Frederick. 2010. The Global Apparel Value Chain, Trade and the Crisis, The World Bank Development Research Group Trade and Integration Team, http://www.cggc.duke.edu/pdfs/Gereffi_GVCs_in_the_Postcrisis_World_ Book.pdf 6. Goodreads, (2021). Fashion Quotes, Quotes tagged as "fashion" Accesat la [https://www.goodreads.com/quotes/tag/fashion] 7. Martinez, D.(2012). Zara, Visión y estrategia de Amancio Ortega, Editura ePubLibro 8. McDonald, M. H. B., Marketing Plans, Oxford, England: Butterworth- Heinemann Limited, 1989 9. Martinez, D.(2012). Zara, Visión y estrategia de Amancio Ortega, Editura ePubLibro