Zara’s Competitors

Competitor Analysis The fashion industry is one of the most fast-paced and fast-moving consumer sectors in the market, so it is no surprise that there are many companies who are competing against each other in terms of obtaining the most market shares. This industry also attracts numerous consumers who are style-conscious and are up to date with fashion and trends; therefore companies must continuously develop themselves in order to stand out and to be chosen by consumers.

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Our final project’s main concentration is on one of the most famous clothing companies, Zara, but we cannot deny that there are also other competing brands in the market as well. We have chosen two other comparable brands in the market to illustrate the differences and similarities among various fashion brands and to help us understand this industry better. The two main competitors of Zara are Forever 21 and Topshop.

Forever 21 and Topshop are entirely two different companies originated from two different countries, the United States of America and England respectively, but they are similar in terms of their sense in fashion and uniqueness in trends. Although they are both famous fashion brands, their positioning are quite different and their target markets are also differentiated as well. This report will illustrate various components of each brand as follows: 1. Background information 2. Core competencies 3. Segmentation, targeting, and positioning 4. Marketing strategies 5. Marketing mix Forever 21 Background Information

Forever 21 was founded in Los Angeles, California in 1984 by Do-Won Chang and Jin Sook who were a Korean-American couple residing in the Highland Park distric of Los Angeles. Originally the chain of these clothing stores was called fornever 42 and its first retail store was called Fashion 21. Fashion 21 was targeted at the Los Angeles Korean Community and its clothes had similar designs with then current fashion trends in Korea. By the end of its first year in the market, Fashion 21 had total sales revenue of $700,000 and eventually the owners of Fashion 21 opened a new chain store every six months.

The fashion outlet changed its name to Forever 21 and by 1989 they had 11 stores around the US. Its 11th store was located in Panorama Mall in Panorama City, California, having a store size of 5,000 square feet. In 1997, there were 40 stores of Forever 21 and it is considered to have become successful in the market today. Core Competencies Forever 21 has several core competencies which can be considered as its sustainable competitive advantages in the fashion industry as they are able to grow quickly and expand their stores into different locations.

In order to remain competitive in the market, Forever 21 must expand their locations into popular places so that its target market can gain easy access. As mentioned in the company background, Forever 21 has the ability to open new stores every six months and its newer stores are even larger and provide even more varieties of products. Not only Forever 21 is able to expand new locations quickly, the store formats are also exciting and interesting for the customers. The environments of the store induce customers’ wants to shop and spend money, combing with pleasant music and friendly employees, customers also feel there are well looked after.

Forever 21 aims to give a constant flow of fun and creative clothing designs and accessories to its customers so that customers’ needs of being fashion-savvy are answered. Segmentation, Targeting, and Positioning The segmentation of Forever 21 is based on demographics similar to other fashion brands in the market that sort their customers according to their age, gender, income, and lifestyle. For age, Forever 21 is aimed at young teens up until young adults, or anyone who wants to look young forever.

Most of the customers are female customers but since Forever 21 has launched a new product line for men, the customer base has expanded to the men’s market as well. The level of income for this target market is from low to medium as the prices are affordable and not too expensive, while at the same time the designs are also attractive to those who are not price sensitive (that can afford more high-end clothing). This marketing strategy is suitable and supportive of Forever 21’s target market and its main target group is anyone who is style-conscious, and trend-savvy.

Trend-savvy shoppers are ones who are up-to-date with the fashion industry and like to express their personalities via their styles in clothes. Moreover, the price of Forever 21’s clothing’s allow these customers to lower their transaction costs because fashion trends fade away quick and in order to be updated, clothing’s must be repurchased quite often. To conclude Forever 21’s positioning in the minds of consumers, according to its website, Forever 21 is a source for most current fashions at the greatest value. Marketing Strategies

In order to be updated with the fashion industry, Forever 21 is able to provide fast fashion, cheap, and trendy clothes to the market before any of its competitors. Another marketing strategy is that Forever 21 possesses the ability to launch new items into its retail stores on a daily basis and its able to maintain its production level to the maximum in order to serve its large customer base. Furthermore, Forever 21’s greatest advantage is they are able to provide a wide range of product variety suitable for many lifestyles of consumers. Examples of their product varieties are clothes, footwear, accessories, cosmetics, and fragrance.

Marketing Mix: Product Forever 21’s main product line is called Forever 21 with its newest flagship stores called XXI Forever because they carry a variety of products including men’s clothing lines. The Forever 21 main product line has the same positioning and target market as mentioned earlier in this report, while the other product lines have allowed Forever 21 to focus on an even larger base of consumers that are also style-savvy. For example, Heritage 1981 is a product line that targets both males and females that have vintage-style clothing preferences.

The Twelve by Twelve brand of clothing is more glamorous and more up-market suitable for social events or parties. Another alternative for Forever 21 customers is a line of clothing that is more contemporary or suitable for a more grown up market of young adults of middle-aged females. Recently Forever 21 has launched a plus size or extended size clothing line for bigger women who are also style-conscious, this has made Forever 21 more popular and well-known among young women and has gained higher acceptance in the fashion industry. Marketing Mix: Price

The original clothing line’s prices are lowest among the product lines because this brand is targeted at a younger target market that obviously have a lower income than other customers. The Heritage 1981 product line’s prices are about 30 percent more expensive as they have more details and more complicated designs, we can conclude that they have a more premium image and their pricing strategy supports this positioning. Twelve by Twelve is located in the mid-range of all of the prices also falling in the same range as the Faith 21 product line.

Examples of the prices can be seen from the diagram above. Marketing Mix: Place Forever 21 has numerous retail outlets in leading department stores around the United States of America and as well as 17 other countries around the globe. This brand has a worldwide distribution network that is able to serve customers’ demands around the world. There are several store formats with the XXI Forever being the largest and the newest type of all because it contains all of the available product lines. XXI Forever is considered to be a specialty store because they contain few similar types of products.

Other retail formats include stand-alone retailers as well as flagship stores in famous locations around the world. Moreover, there are also several factory outlet stores located throughout the US, and most recently The Forever 21 Retail Inc. plans to open a flagship megastore in Times Square replacing the famous Virgin Megastore in the US. Multichannel retailing is a strategy done by Forever 21 as well because there is an Internet channel for consumers that do not have time to shop at a store retailer.

Customers of the Internet store can access exclusive website features that allow them to browse different categories such as “Shop by Outfit,” “Daily 21 Specials,” and “Fabulous Finds. ” There are also special promotions and updates that can be retrieved from the website. Another benefit that customers can receive from the online retailer is that they can track orders receive immediate customer services, and allow others to see their wish list. Marketing Mix: Promotions Customers of Forever 21 can receive promotions by emails, newsletters, as well as in-store promotions.

Currently the main clothing line is on sale to induce purchases as gifts for the holiday season. Forever 21 also advertises on magazines and other types of print media, but rarely advertises via television or other types of broadcast media. Forever 21 also offers membership through the website where customers can receive exclusive news and invitations to sales and promotions. Furthermore, there are also customer services to assist with transaction activities such as exchanges and refunds. Topshop Background Information Topshop is a UK chain of clothing store that is a part of Arcadia Group.

Arcadia Group also owns other famous clothing brands as well, such as Dorothy Perkins and Miss Selfridge. Topshop has numerous retailers in more than 20 countries around the world selling various clothing lines and accessories. There are 300 stores in the UK and 67 more stores internationally. Jessie Pearman founded Topshop in 1964, and in the late 1970s this fashion retailer launched a male line of products called Topman to capture a larger base of target market. In the 1990s, Topshop was not as popular as the present but it successfully repositioned itself to become one of the most fashionable brands in the market.

Recently, there have been famous celebrity designers to design and market several collections in order to attract more consumer attention. This was the responsibility of Jane Shepherdson, one of the fashion industry’s most influential individuals. Core Competencies Topshop is famous for its product offerings that are up-to-date and unique. One of its core competencies is its ability to launch products at a faster rate than most of the other fashion retailers in the world. This is possible due to its short lead times starting from its production process up until the time when its products are delivered to store locations.

Topshop possesses the ability to provide its target market with stylish clothing’s that can be chosen from about 700 new pieces each day. This fast responsiveness to emerging trends has been a key factor in the building of brand reputation for Topshop and has allowed it to grow by ten percent between 2003 and 2008. Moreover, Topshop also has the ability to make their clothes creative and differentiated from comparable brands in the market; this also coincides with its fresh store environments allowing customers to enjoy their shopping experiences.

Previously, Topshop was just a cheap and cheerful brand, but now it has transformed into a seriously cool and a trendsetting brand for the market. Recently Topshop has won the Customer Service Initiative of the Year for its new Topshop To Go service that allows customers to order clothing and have them delivered to their doors within only a few hours’ time. Segmentation, Targeting, and Positioning Consumer segmentation of Topshop is similar to Forever 21 in terms of its demographics and lifestyles of consumers.

For demographic segmentation, Topshop targets young females who are trend-savvy and wish to be unique or want to stand out from the crowd. The age range of Topshop’s consumers is from 18 to 35 years old with an income level between middle to higher end. The segmentation for this group is classified according to those who are fashion-forward, and interested in celebrity trends. Topshop has answered this trend by having various celebrity designers launch different lines of clothing. The positioning of Topshop in the minds of consumers is that Topshop is a rend-savvy brand that launches product on a continual basis and having a store environment that is creative, exciting, and fresh. Consumers enjoy shopping at Topshop because not only they can find unique clothing items, they can also find a wide variety of styles suitable for both men and women. Marketing Strategies There are several marketing strategies for Topshop; the first and most outstanding one is its store environment that aims to be entertaining. Topshop believes that if a customer enjoys their shopping experience, they will shop longer and will become a regular customer.

Creating an exciting and tempting store experience by having music and exciting light fixtures in the retail stores will result in longer shopping times for customers, and a supporting element of its retail store is that it must also have a large variety of product lines to serve the customers’ interests as well. The second marketing strategy for Topshop is its guerilla marketing campaigns. For example, Topshop has held a “Topshop Freshers’ Week Party” by inviting regular customers for an exclusive party event with DJs and free alcoholic drinks.

Another marketing campaign launched by Topshop was that customers were allowed to borrow a bicycle and must ride to designated destinations and the winner would win the bicycle. Marketing Mix: Product There are six main product lines under the Topshop brand and first one being Topshop that is targeted at females aged 15 to 25 years old. The second one is Topman; a clothing line fore young boys and men aged between nine to 25 years old. Another famous product line extension for Topshop is the Topshop Boutique, which was created for customers that are design-aware such as celebrities and industry insiders.

The forth collection is called Unique, and it is created by the Topshop in-house design team with the philosophy of taking pride in oneself and trying to think big in terms of fashion and its possibilities. Unique was created in 2001 to reverse the controversy of consumers believing that Topshop was only a copycat of the catwalk. The in-house designers of Topshop have created an entire new brand called Unique and it has been hugely successful due to its design and credibility.

The last two collections are Kate Moss and Christopher Kane, which are the fashion industry’s most well known designers or celebrity figures. They have been designing various collections and have brought great attention to the brand. Marketing Mix: Price Marketing Mix: Place There are over 200 Topshop store retailers in the world and they carry a wide range of products from shirts to scarves. Topshop also has online website which customer can order clothing items online and they will be delivered through the international shipping service.

There are various unique online functions on the webpage, which are differentiated from the store format. For instance, there is a Style Advisor section where the customer can receive tips in choosing clothes to buy. Furthermore, there are several official blogs by Topshop and Topman in which consumers can visit and browse through the latest news in the fashion industry. Marketing Mix: Promotions The promotion element of the marketing mix consists of authoritative advertising, constant innovation, and the sponsorship of young design talent.

Topshop receives a lot of publicity and sponsorship from various fashion-related events regularly. For example, the London Fashion Week, which is known for launching one of the world’s most exclusive designers’ clothing. Topshop also offer a 20 percent discount for students, and the website also acts as an attractive incentive for consumers to visit Topshop as well. As mentioned earlier in this part of the report, there are numerous functions in which the consumer can utilize and enjoy within their homes.