University of Nottingham

How to manage a brand to be strong: a

study of Zara

Danye LUO

MSc International Business

1

How to manage a brand to be strong: a

study of Zara

by

Danye LUO

2008

2

Contents

Acknowledgements

Abstract

ChapterⅠⅠⅠⅠ Introduction

1.1 Background to brand management……………………………………..8

1.2 Research question………………………………………………………..9

ChapterⅡⅡⅡⅡ Literature Review

2.1 What is a brand?................................................................................12

2.2 How a brand is managed?.................................................................13

2.2.1 Brand strategy…………………………………………………..…13

2.2.2 Three instrument of a brand strategy……………………….......15

2.2.2.1 Brand name……………………………………………………16

2.2.2.2 Design of the brand…………………………………………..17

2.2.2.3 The effect of advertising…………………………………..…18

2.2.3 Planned meaning of a brand…………………………………..…19

2.2.3.1 Positioning choice………………………………………….…19

2.2.3.2 Brand value choice…………………………………………...22

2.2.4 Brand image………………………………………………………..23

2.2.5 Brand-added value………………………………………………...24

2.2.6 Development of brand……………………………………………..26

2.2.6.1 Brand portfolio………………………………………………….26

2.2.6.2 Brand extension and endorsement strategy………………..27

2.3 The brand of Zara is a good study……………………………………….29

Chapter ⅢⅢⅢⅢ Methodology

3.1 Qualitative and Quantitative Research Methods………………………..30

3.2 The chosen research approaches………………………………………..31

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3.2.1 Case study…………………………………………………………..31

3.2.2 Questionnaire survey………………………………………………31

3.2.3 Triangulation of these two methods……………………………...32

3.3 Questionnaire method………………………………………………….....32

3.3.1 Participants……………………………………………………….…32

3.3.2 Questionnaire design…………………………………………..….32

3.3.3 Questionnaire procedure……………………………………....…33

3.4 Ethical issues that may need to be considered……………………….33

Chapter ⅣⅣⅣⅣ Case study of Zara

4.1 Overview of Zara…………………………………………………………35

4.2 Fashionable design with medium price………………………………..35

4.3 Product strategy of Zara……………………………………………...…36

4.4 No traditional advertising………………………………………………..36

4.5 Customers’ feedback and Zara’s image……………………………….37

4.6 Inditex Group……………………………………………………………...38

4.7 Summary of case study……………………………………………….....40

ChapterⅤⅤⅤⅤ The findings from questionnaire

5.1 The effect of design and price strategy…………………………………42

5.2 Intrinsic aspect of positioning…………………………………………....43

5.3 Choosing brand value……………………………………………….…...44

5.4 Brand images, brand-added value and brand name………………....45

5.5 Advertising…………………………………………………………………48

5.6 Zara’s extension strategy………………………………………………...48

5.7 Summary of the findings………………………………………………....49

Chapter ⅥⅥⅥⅥ Further discussion

6.1 The influence of three instruments……………………………………...51

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6.2 Positioning and brand values choice………………………………….52

6.3 Brand images and added value…………………………………….…54

6.4 Brand portfolio, extension and endorsement strategy………………55

Chapter ⅦⅦⅦⅦ Conclusion

7.1 Limitations of the study…………………………………………………58

7.2 Recommendations for future research……………………………….59

References …………………………………………………. . .………….........60

Appendix 1 Questionnaire …………………. . .……………………………69

Appendix 2 One sample of questionnaire ……………………………….74

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Acknowledgement

I would like to give a huge thanks to my supervisor Harjit Skehon, who gave

me a lot of encouragement and suggestions in my entire writing process and

appreciate his hard work on the revision of it. I also would like to express my

grateful appreciation to all those who kindly took part in and supported this

dissertation.

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Abstract

The meaning that a brand stands for is extremely significant for consumers, so

a considerable number of researchers (Philips, 1988; Murphy, 1990; Brymer

and Schiro, 1989; Temporal, 2002) are increasingly interested in brand

management. The main purpose of this study is to investigate how a brand is

managed to become a strong brand. The study will commence with an

analysis of several key elements in the management of a brand. The three

major instruments of a brand strategy are: positioning and brand values choice;

brand images; and added value. If corporations exploit some brands into more

than one market, the development of a brand portfolio, extension and

endorsement strategy may be used (Riezebos et al., 2003; Riezebos, 1995b;

Temporal, 2002).

Zara is a good case study to show how the brand has been managed to

become a powerful brand in the fashion industry (Tungate, 2005). A

combination of qualitative (case study) and quantitative (questionnaire survey)

methods will be employed to ascertain whether Zara’s success is in terms of

vital elements, as mentioned above, in the brand management.

Research suggests that a brand with accurate positioning and brand values

choice, positive brand image and high brand-added value, should become a

powerful brand. Brand name, design and advertising have an important

influence on this progression. A brand portfolio, brand extension and

endorsement strategy can be used to develop brands for entry into other

markets. If these strategies are managed well, a brand can also become

stronger.

Key words : brand management, positioning, brand values, brand images,

brand-added value, a brand portfolio, extension and

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endorsement strategy, Zara.

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ChapterⅠⅠⅠⅠ Introduction

1.1 Background to brand management

When people see the word “Nike”, “BMW” or “Coca Cola”, brand is a word that

springs to mind. The English word `brand’ originated in the Middle Ages (from

476 to 1492). It is “… a degenerate of the old Norse word brandr, which refers

to the branding of cattle” (Riezebos et al., 2003: 2; Keller, 1998; Cheverton,

2006; Olins, 2003). This was a way of making a differentiation in ownership.

“The Vikings may have spread the word brandr in England, where it was

eventually incorporated into daily language” (Riezebos et al., 2003: 2).

What is a brand? There are countless species of definitions of a brand; the

benevolent see benevolence and the wise see wisdom. As stated by the

American Marketing Association, a brand is a “… name, term, sign, symbol, or

design, or a combination of them intended to identify the goods and services of

one seller or group of sellers and to differentiate them from those of

competitions.” (Keller, 1998: 2) This definition is adopted by a great number of

scholars (Kolter and Keller, c2006; Keller, 1998; Kotler and Pfoertsch, 2006).

All believe that brands could be the embodiment of a specific value for the

organisation. According to Philips (1988), Murphy (1990), Brymer and Schiro

(1989), reality confirmed the point that brands show a financial value. For

example, in the process of acquisition, the buying party was often willing to pay

in excess of the book value of the corporation. In addition, consumers’ brand

experience can vary significantly from the production experience, and even

one of the most powerful brands worldwide needs support from consumer

acceptance (Hartley, 1995). From these two facts, brands not only stand for a

financial value but also a strategic value for the corporation, and strong brands

can be of great financial and strategic significance for corporations. Having

said that, almost all corporations are devoted to making their brands strong in

order to gain more value. So how do they do it? A great number of scholars

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(Temporal, 2002; Riezebos et al., 2003) pointed out that good brand

management helps corporations make powerful brands. Put simply, brand

management “… is a process that tries to take control over everything a brand

does and says, and the way in which it is perceived” (Temporal, 2002: xiii).

1.2 Research question

In this study, the crucial research question is “How are brands managed in

order to become strong brands”?”.

The first step of good brand management is formulating a brand strategy,

which provides a pivot and orientation to brand management, and offers the

policy that helps brand managers to obtain coherence in whole

brand-connected actions. Brand management becomes arduous and complex

without a brand strategy (Temporal, 2002; Aaker, 2004). There are three key

instruments of a brand strategy: brand name, design and advertising; making

full use of any instrument allows corporations to manage brands well. For

example, excellent design provides a positive image. In the introduction of a

brand, its design must be meaningful to consumers. Positioning choice and

brand value choice are made for the intended meaning of a brand by

managers. If the choice is related to consumers’ needs and attitudes, it is the

cornerstone of brand management’s success. Then, through the expression of

brand meaning, consumers can build a specific image of a brand and

understand brand-added value (Riezebos et al., 2003). Consumers have an

important influence on brand management. Therefore, in a brand strategy,

positioning and brand values choice, brand image, and added value are

central parts.

At the present time, there is an increasing tendency for corporations to exploit

several brands into more than one market, which means they can choose the

development of a brand portfolio, or brand extension and endorsement

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(Riezebos et al., 2003; Keller, 1998; Murphy, 1990). Whether building up a

brand portfolio or, selecting extension strategy or endorsement strategy to

exploit a brand to be powerful, these are significant components in the

management of a brand which should be taken into account in a brand

strategy.

In summary, a brand with accurate positioning and brand values, positive

image and high brand-added value - in other words, with a good brand strategy

- must become a strong brand. This transformation may benefit from three

main instruments: brand name, design and advertising. Moreover, if a brand

portfolio is well-managed, its brand should be very strong. A successful brand

is then extended or endorsed to other brands in order to become more

powerful.

Zara is a good case study to show how it has managed to become a powerful

brand in the fashion industry (Tungate, 2005). Zara is only a high street brand;

however, in the 2007 Best Global Brands, it was ranked at No. 64, thereby

exceeding some luxury brands such as Prada, Burberry, Polo RL (Interbrand,

2007). Zara has managed to become the most valuable brand of the Spanish

fashion distribution group, Inditex (a brand portfolio). Having 8 endorsed

brands in the portfolio has helped Zara to gain power. It has also extended to

set up another product class, Zara Home, as a result of its success and

influence (Inditex Group, 2008).

Two key factors that distinguish Zara from other fashion brands are design

(most fashionable) and speed of launching a new collection (fast); these

factors make it easier to implement a good brand strategy. Zara brand

managers are more likely to use design and brand name to carry out a brand

strategy, and there is almost no advertising involved. In the fashion industry,

the design of Zara plays the most significant role in the success of developing

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a strong brand. In addition, Zara is positioned in the premium price (price

dimension) and impressive approach (intrinsic dimension) by managers, and

the material and quality of it is relevant to this price strategy. The chosen

values of Zara fulfill not only the material need of consumers (e.g. clothing is

for security), but also consumers’ demand for self-actualisation (e.g. wearing

Zara, they feel they are beautiful). Besides these, there is a positive image

(which can be obtained from Zara’s fashionable design) and a high

brand-added value (which has high perceptions of quality and high brand

name awareness) of Zara for consumers. For instance, Zara’s name springs

to consumers’ minds when people mention the high street fashion brands.

Research into how Zara works towards becoming a strong brand will be

conducted using a mixed research method. Qualitative research will take the

form of a case study of Zara, and quantitative research will take the form of a

questionnaire survey.

The results chapter provides a conclusion of the case study and displays the

findings of the questionnaire. This will be followed by a discussion section,

when issues arising from the research will be discussed and analysed.

Finally, a conclusion will pinpoint the limitations of this research and

recommendations for future research will be made.

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ChapterⅡⅡⅡⅡ Literature Review

2.1 What is a brand?

A brand has two main characteristics: it is a logo and enables consumers to

identify products or services of a corporation (Riezebos et al., 2003; Keller,

1998; Petty, 2008; Kohli et al., 2002; Kohli and LaBahn, 1997; Olins, 2003).

The logo may perhaps be a name (e.g. a shop name as in ‘Boots’; ingredient

branding as in ‘Intel’; or a TV channel such as ‘BBC’). The logo may take the

form of a picture (e.g. a monogram: Yves Saint Laurent) or form mark (e.g. the

Pepsi bottle) (Kolter and Keller, c2006; Keller, 1998).

More explicitly, a brand comprises both intrinsic and extrinsic attributes

(Szybillo and Jacoby, 1974; Riezebos et al., 2003). A change of qualities of

merchandise or a service will result in the product being changed. These kinds

of properties are termed as intrinsic attributes (Nelson, 1974). On the other

hand, extrinsic attributes are entire properties of a brand that do not belong to

the intrinsic attributes, and consumers are easily able to distinguish

merchandise from each other. Brand name, packaging, price, and information

about the brand (such as the geographic area of origin) are considered part of

the extrinsic attributes. Both sorts of attributes have an effect on the evaluation

progression of consumers (Achabal et al., 1987). In fact, a brand is a

complicated thing. “Not only is it the actual product, but it is also the unique

property of a specific owner and has been developed over time so as to

embrace a set of values and attributes (both tangible and intangible) which

meaningfully and appropriately differentiate products which are otherwise very

similar” (Murphy, 1990: 2).

Owing to the development of brands, the notion of a brand is changing from a

brand being a ‘product-plus’ to a concept (Riezebos et al., 2003). Traditionally,

a brand name has served to complement the product itself; a name was affixed

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to a product when manufacturers created it, which had to be meaningful to the

consumer (a brand as ‘product-plus’). Nowadays, however, more and more

corporations draw attention to the brand-as-a-concept method, because they

hope to attract particular group of consumers. Central to this method is the

idea that “… one develops a strong and attractive idea that is not so much

rooted in product advantages but more in a lifestyle associated with the brand

(Nike, Swatch, etc.)” (Riezebos et al., 2003: 14). The traditional view of brand

meant that corporations adopted ‘product-driven’ strategies, whereas the more

modern strategy is ‘market-driven’ (Moran and Riesenberger, 1994; Temporal,

2002). This focus on the market means that brand managers are increasingly

taking part in product development, with brand management gradually

becoming more salient for corporations.

2.2 How a brand is managed?

In brief, the management of brand is the utilisation of marketing techniques to

a certain brand. There is a demand to influence the perceptions of diverse

target consumers to make sure they see what corporations want them to see in

relation to their brands, which means “… identifying clearly what [a] brand

stands for, its personality, and how to position it so that it appears different and

better than competing brands. It involves integrated communications, and

constant tracking of the brand and its competitors” (Temporal, 2002: xiv;

Bureau, 1981; Riezebos et al., 2003). The general purpose of this progression

is to increase the brand’s value, and it should begin with a brand strategy.

Each part of brand management must be guided by the brand strategy

(Temporal, 2002; Murphy, 1990).

2.2.1 Brand strategy

Brand strategy is grounded on two factors: differentiation and brand-added

value (Riezebos et al., 2003). A corporation attempts to distinguish its goods or

services from other competitors through differentiation. This indicates that the

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motivation for a brand strategy has a competitive parameter. “By aiming for

differentiation in a brand strategy, one tries to give a brand a competitive

advantage” (Riezebos et al., 2003: 18; Aaker, 2004; 1989; Arnold, 1992).

Another basic trait of a brand strategy is brand-added value, which points out

the reality that a brand has more value for consumers than the product itself. It

not only refers to a functional value (i.e. the bare product), but also to a

non-functional value. The brand-added value of a product is frequently built on

the differentiation foundation of the product involved. Besides, Riezebos et al.

(2003: 20) stated that “Either material or immaterial differentiation can serve as

a basis for adding value to a brand”. However, immaterial differentiation, which

happens by generating a particular experience world around a brand, is more

useful than material differentiation. An effective differentiation on the

foundation of immaterial parts has two merits: firstly, using this strategy,

competitors find it difficult to imitate; and secondly, “Consumers usually feel

more involved with the associations called up by the experience world around

a brand, than with associations related to the product itself” (Riezebos et al.,

2003: 20; Arnold, 1992). Therefore, if a corporation wants to examine whether

their product class is appropriate for a brand strategy, in the first instance they

should answer whether the product class is distinguishing. Although some

researchers (Levitt, 1980; Murphy, 1990; Pine and Gilmore, 1999; Hague and

Jackson, 1994; Shipley and Howard, 1993) suggest that all goods and

services are distinguishing and fitting for a brand strategy, they neglect the role

of brand sensitivity amongst products classes. In some products, a brand

name affects consumers more readily than others. Even in a monopolistic or

oligopolistic market, there is frequently no necessity to conduct a brand

strategy because of there being few or no competitors. In general, the great

majority of products are appropriate for a brand strategy (Riezebos et al., 2003;

Temporal, 2002; Aaker, 2004). After deciding to pursue a brand strategy,

managers should pay attention to several points: positioning and brand values

choice, brand image, and brand-added value. They are essential components

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of a brand strategy.

The importance of implementing a brand strategy is that it has three

advantages: financial, strategic and management advantages (Srivastava et

al., 1998). Financial merit is important for a corporation because it is the

ultimate aim of doing businesses. In the long term, a brand strategy can help

the brand owner gain higher sales and higher margins, and an effective brand

strategy gives a promise of future revenues (Ourusoff, 1994). There are three

different facets of strategic merit. In the first place, the corporation has a good

position in connection with imminent competitors. If one brand has an

enormous and constant market share, other brands struggle to enter that

market. The creation of this barrier is dependent on consumers’ loyalty and

buying habits (Karakaya and Stahl, 1989). Another strategic merit is that a

corporation achieves a more independent position in connection with trade as

consumers will force retailers to sell a brand that satisfies their demands

(Murphy, 1990). Reichheld (1996) highlighted the fact that people are more

likely to work for corporations with strong brands. So, a powerful brand has a

significant influence on the labour market; it attracts new employees. This is

the third strategic merit. In relation to the third advantage of brand strategy,

management merits demonstrate that a strong brand can easily gain entry into

various markets. Through extension or endorsement and international

branding, a greater market share may be achieved. Therefore, a brand

strategy plays a crucial role in brand management.

2.2.2 Three instruments of a brand strategy

A number of instruments can be employed to implement a brand strategy.

Brand name, design and advertising are extremely important and can have a

significant effect on brand management. According to the definition of a brand,

one of the most outstanding distinctions between a product and a brand is that

a brand has a brand name. For consumers, the brand name is one of the most

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meaningful attributes (extrinsic attributes) of a brand. For corporations, it

stands for the value of their brand. The brand name is also a significant

element from a management perspective (Riezebos et al., 2003).

2.2.2.1 Brand name

In brand management, brand name strategies are pursued by corporations.

These strategies include a monolithic (i.e. one brand in different product

classes), a dualithic (i.e. two brand names for the same goods), and a

multilithic (i.e. brands having their own name) (Olins, 1990; Biggar and Selame,

1992). The great majority of corporations use more than one strategy (Laforet

and Saunders, 1999).

The choice of a brand name should take account of four main long-term

components. The first is the size of marketing communication budget for the

new brand. If there is a larger budget, a corporation prefers to select a

multilithic brand name strategy. Secondly, the sort of positioning has a crucial

influence on the relation between the product and the brand. For example, the

differentiation of a brand is based on an expressive aspect; the name should

connect to an experience world around the brand. The third component is the

competitive position of the brand. The name of a brand that has a strongly

distinguishing feature from other brands should have originality so consumers

receive a signal from the original brand name that this is something new.

Finally, corporations should be mindful of the fact that some names already

selected may carry negative meanings in countries where the population

speak a different language. For instance, in Spain, the name `Matador’,

which is a brand of American Motors, means ‘killer’ (Riezebos et al., 2003).

The effect of the brand name can be great when consumers cannot thoroughly

assess a brand before purchase; on the other hand, it decreases the risk to

buy a brand for consumers that they can not evaluate before purchase. If

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consumers are acquainted with the brand name, they can more readily

distinguish between the intrinsic attributes amongst brands. Another fact that

“… is of influence on the importance of the brand name as an attribute is the

extent to which a branded product functions as a social symbol” (Riezebos et

al., 2003: 45). In this way, a product is used to show which social group

consumers belong. From these points, brand name will add value to a brand,

and is a key element in the brand management.

2.2.2.2 Design of the brand

The next main instrument of a brand strategy is design. It is a combination of

shape, which is a product’s form (such as packaging and logo), and graphic

style, which can depict the typography, color and diagrams as they are utilised

on the product or in-house style. As an instrument, design can be classified

according to its effects as a management and a brand instrument. Design

management should be considered as the progression of management that

directs the execution of design to help fulfill the organisational aims:

maximising the impact of design to profit the company. When design is taken

as a brand instrument, it can distinguish products, generate a elebated selling

position and evoke sensations of satisfaction and interest. “The most important

effects of design are felt in image, target group reach and turnover increase.

Besides this, design offers many opportunities to improve the functionality of

information flows and also to clearly convey the characteristics of products”

(Riezebos et al., 2003: 134). Design can help to enhance the credibility,

reliance and familiarity of both internal and external relationships, stakeholders

and retailers. Hence, design as an instrument of a brand strategy can help a

brand to be strong, which is useful in the brand management.

Design plays a character in four brand attributes owing to the nature of a

product. Product design is seen as the design of a tangible product. In brand

development, it plays an active or a passive character. A passive one means

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the design does not convey any associations to the mind of consumers relative

to the brand. Product design is a powerful differentiated element and

subscribes to the progression of brand development. Another is packaging

design. It can communicate with consumers and with the market. Packaging

can act as a signal for the brand values and, in packaging design, it can “…

contribute to brand development and is not just good for the stimulation of the

buying impulse” (Riezebos et al., 2003: 137). Corporate design is focused on

the corporation; a good corporate design can be used effectively to connect

the brand identity and to help to remind its shareholders of the intended

associations. A logo provides a visual brand sign; it can ensure instant

recognition of the brand and its design can convey specific associations to

consumers’ minds. There are some standards to measure a good logo design:

identification (reducing the recognition time of a brand by its logo);

differentiation; communication of brand values; attractiveness and familiarity

(Henderson and Cote, 1998). Carter (1999) even concluded that constant

utilisation of the logo makes a strong brand.

2.2.2.3 The effect of advertising

Advertising, which is a vital instrument of marketing communication, has

several roles as an instrument in a brand strategy. One aspect is that

advertising offers information which makes consumers accustomed to the

brand name, and negative associations evoked by a brand name can be

decreased or removed through the utilisation of advertising. Secondly,

research has revealed that a considerable number of advertisements

emphasise the distinguishing merits of a brand and even promote the

perceived differentiation of a brand (Boulding et al., 1994). It also has the effect

of reinforcing the message to consumers. The fourth role of advertising is to

give consumers a thorough knowledge of a brand, stimulating them to

purchase the brand.

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There is also a relationship between advertising and brand sales: higher sales

of a brand can be contributed by advertising. Two forms of advertising

implementation have been studied, and both are relevant to the positioning

approaches. One is called informational advertising because functional factors

play a vital part in it; another is transformational advertising, as an expressive

positioning approach is a central theme in it. In summary, advertising has an

outstanding influence on the development of brand (Puto and Wells, 1984).

As can be seen, therefore, a brand strategy is the first fundamental step to

managing the brand, and a good strategy can help a brand become powerful.

Although there are a wide variety of instruments in a brand strategy, brand

name, design and advertising are crucial ones to the management of a brand.

2.2.3 Planned meaning of a brand

After determining to carry on a brand strategy, “One of the first problems a

manager is faced with in the introduction of a brand is the question of which

field of play a brand should have on the market relative to competing brands.”

(Riezebos et al., 2003: 53). This is referred to as the positioning choice. In

the next step, a manager must more explicitly choose the values that a brand

should represent.

2.2.3.1 Positioning choice

Two aspects are relevant for positioning: the brand’s price aspect and the

intrinsic aspect. Although only the intrinsic aspect of positioning is managed in

many articles (Ries and Trout, 1986b), Riezebos et al. (2003) stated that the

comparative price is a powerful determinant for the intrinsic aspect. Basically,

a corporation can select one of three strategies in the price aspect of

positioning - a low-cost, a premium and a prestige strategy. In a low-cost

strategy, the corporation elects to compete with other brands on the lowest

probable price. However, in premium and prestige strategies, the corporation

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attempts to make a brand differentiable for consumers rather than starting

price competition; in particular, for a prestige strategy, the degree of

differentiation of a brand is quite high. In the market, one can give an option

with regard to which level of price a brand is to be positioned based on the

price strategies. If a low-cost strategy is used, the corporation preoccupies

itself with rivalry by creating the brand as effectively and cheaply as possible,

but in the brand’s intrinsic positioning the corporation can do nothing except

stress a proper quality for a low price. Consequently, in this strategy, “The

brand name will usually only function as a recognition sign for the low price

and the brand name will add little or no material or immaterial value to the

product for the consumer” (Riezebos et al., 2003: 53). When a premium

strategy is employed, the maximum amount that consumers are willing to pay

for a brand will be calculated by gaining their opinions about the highest priced

competing brands; this information will then be used to determine the price of a

brand. Due to Steenkamp (1989), Gerstner (1985), and Smith and Nagle

(1995), a large number of consumers believe that a high price represents high

quality. Besides, premium strategy provides many probabilities to give

meaning to the brand, and in a prestige strategy, which offers certain

exclusivity (i.e. differentiation) to a brand. Such exclusivity is connected with

the brand’s intrinsic attributes and with the target group to which the brand is

referred. Therefore, the price aspect cannot be regarded as separate from the

intrinsic aspect that the brand represents. In fact, managers pay more attention

to the intrinsic aspect of positioning than to the price aspect. It has two main

approaches, functional (the intrinsic attributes are central) and expressive (the

world of utilising the brand is central) (Riezebos et al., 2003). There are

instrumental and impressive facets of intrinsic attributes within the functional

approach: the former one emphasises the intrinsic attributes themselves, while

the accent of impressive facets, which can be referred to as ‘experiential’

facets, is on the benefits of intrinsic attributes for consumers (Park et al., 1986;

Rossiter and Percy, 1997). The feelings connected with the use of the brand

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are more essential in the stressing of impressive facets than instrumental

facets. When there is a high degree of resemblance amongst brands, a

functional approach would become difficult; an expressive approach could

solve this problem. Central to the expressive approach is to alter the use

experience of consumers. In this situation, a brand has ‘psychosocial meaning’,

which means by the buying and open expenditure of brands, consumers

clearly understand which social class they belong, or aspire to belong, to and

those to which they do not wish to belong (Mittal, 1988). An expressive

approach targeted at social respect is particularly appropriate in a prestige

strategy (price aspect) and an added value.

Besides price, the type of purchasing motivation can affect the option between

functional and expressive positioning. Fennell (1978) and Rossiter and Percy

(1987; 1997) have studied both negative and positive aspects of purchasing

motivation of consumers. Positioning targeted at the negative one refers to

consumers utilising a brand in a condition that is experienced as unpleasant.

Essentially, this type of purchasing motivation needs an instrumental facet of

the functional approach. By contrast, positioning targeted at the positive one

refers to consumers utilising the brand in a condition that is experienced in a

positive way, which can be built on “… pleasurable sensory experiences,

socially rewarding situations or intellectually challenging situations” (Riezebos

et al., 2003: 58). Fundamentally, the positive purchasing motivation is

applicable to use a functional approach with the stress on impressive facets, or

an expressive approach.

Positioning is essential to brand management as it takes the fundamental

tangible facts of the product and sets up the intangibles in an image’s format in

the minds of consumers. It concentrates on the target consumers and affects

their views about the brand in connection with other brands. “Positioning seeks

the best way of convincing people that this particular product is both different

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from and better than any other product” (Temporal, 2002: 37). On the other

hand, building a powerful brand is impractical without strong positioning.

2.2.3.2 Brand value choice

After choosing a specific positioning, the manager should make more explicit

options for the planned meaning of a brand by selecting one or more values

that a brand must attach to. A brand value is defined as “… a state of mind that

is important to consumers and that is used to decide the mission of a brand. [It]

is considered to be a strong determinant of attitudes as well as behaviour.”

(Riezebos et al., 2003: 60). The process of formulating and using brand values

has three phases. The option of the desire level of the brand is the initial

phase in selecting brand values (Mitchell, 1983; Maslow, 1954). There are

three desire levels: the need-driven level (i.e. the brand connects to

physiological and biological consumers’ demands), the outer-directed level (i.e.

the brand concerns the relative demands of consumers), and the

inner-directed level (i.e. the brand refers to consumers’ demand for

self-actualisation). In the process of the option for a desire level, three

elements should be taken into account: the features of the product; the

features of the corporation; and the selections made by competitors. Taking

the product’s features, for example, the need-driven level is chosen for a brand

of rice, while for cars both the outer-directed and inner-directed desire levels

can be selected. This is because buying a car is a form of conspicuous

consumption, and can distinguish a consumer from other groups. So, from this

point, managers are not restricted to choose one desire level. In the second

phase, the greatest three values may be chosen within the desire level

selected (Kahle, 1983). In the final and the most important phase, managers

should answer a question how to translate every value to material attributes.

The essence is that anything that consumers are in connection with the brand

should communicate with the brand values selected.

Brand values provide a chance for differentiation of a brand and attract

23

consumers whose values correspond to those being reflected by their selected

brand. Some groups of consumers welcome a brand with a definite list of

values as it makes emblematic, non-verbal explanations about themselves

(Ellwood, 2002).

Therefore, the planned meaning of a brand is strongly decided by the options

made by the manager. Usually managers select two options in order to make

the brand meaningful to consumers: one is positioning choice, and the other is

brand value choice. At this stage, the concept of a brand is accomplished.

There is “… every sign that is capable of distinguishing the goods or services

of a company and that can have a certain meaning for consumers both in

material and in immaterial terms” (Riezebos et al., 2003: 63).

2.2.4 Brand images

Once a brand has already had an intended meaning, consumers begin to

shape a kind of image of it for themselves. Advertising can play a significant

role in the transmission of the foundation of brand meaning to consumers. In

addition to advertising, an excellent design provides a good image to

consumers as an instrument of brand strategy. The brand image that

consumers have is a subjective emotional picture, and is dependent on their

experience of that brand. Content, favorability and strength are the essential

parts of brand images (Keller, 1993); they may be measured. The content of a

brand image means that a brand name perhaps invokes some associations.

There is a difference between the manifest and the latent content in images

(Bromley, 1993). The manifest content of a brand image refers to associations

that consumers can directly name, while associations that they cannot directly

speak about create the latent content. The description of a brand image

follows from the positioning choice. More physical association will be evoked

by a functionally positioned brand than an expressively positioned brand.

Actually, the brand associations can be separated into material (physical

24

product) and immaterial. Negative or positive forms the two values of the

favorability of a brand image, which is the feeling of consumers in connection

with each association. The strength is associated with the degree that an

association has related to the brand. A combination of favorability and strength

relates to the reputation of a brand, which is linked to the level that it evokes

powerful and positive associations, such as an international impression of a

brand. “Brands with an extremely high positive reputation are often brands that

are based on a prestige strategy” (Riezebos et al., 2003: 65). A good brand

image can result in a positive influence on brand preference, which is an

extremely strong motivator for consumers to make a purchasing decision, and

even stimulates the sales of this brand. Managing brand images perfectly are

vital to build up a strong brand. As a matter of fact, a brand image offers no

perception into the related value that consumers attributed to associations.

The distinctions in significance amongst associations are considered by the

notion of brand-added value.

2.2.5 Brand-added value

Riezebos et al. (2003: 69) define brand-added value as “… the contribution of

the brand name and its related connotations to the consumer’s valuation of the

[brand] as a whole”. Perceived performance (the value from material brand

association), psychosocial meaning (the value from immaterial brand

association) and the level of brand name awareness determine brand-added

value. The perceived performance functions are the perceived quality and the

perceived material differentiation of the brand. In general, a high-perceived

performance is more valuable to consumers, and a highly psychosocial

meaning of a brand can help consumers to convey who they want to be (Aaker,

1997; 1999). Brand-added value includes a value ingredient for every

association and it specifically takes brand name awareness as an element;

those factors are the difference between it and brand image. A famous brand

name can conjure up sensations of familiarity in consumers, and can make

25

lead to a high probability of purchase. At this stage, advertising can help

consumers become familiar with a brand name since the more advertising that

takes place, the greater the awareness of brand name (Riezebos et al., 2003).

Moreover, brand name awareness may have a huge influence on the intrinsic

facets (perceived performance and psychosocial meaning) of brand-added

value. This indicates that perceived performance and psychosocial meaning

determine brand-added value’s direction and that brand name awareness

determines to a great extent what part brand-added value plays. In relation to

brand-added value, “A brand can be of use before sale because it can ease

and promote the information processing; … during sale, a brand can satisfy a

resembling function for consumers, and the confidence in the option of one

special brand should be raised with a brand name “ …(in other words, a brand

can reduce the feeling of risk that a consumer experiences); [during]

consumption, a brand can finally increase the satisfaction that a consumer

experiences” (Riezebos et al., 2003: 73). Brand-added value can also offer an

incentive to increase sales when it is managed well.

If these four major elements of a brand (positioning, brand values, brand

image and brand-added value), or a brand strategy can be managed well, this

brand must become a strong brand. They are closely related to the consumers,

where managers carefully control them according to consumers’ views and

attitudes (i.e. their feedback). However, with the development of brand and

extremely strong competition in the market, corporations are not just satisfied

with one brand; they exploit several brands in more than one market. How to

manage this strategy becomes more and more significant in the brand

management. Brand portfolio, brand extension and endorsement are main

forms of brand development for a corporation.

2.2.6 Development of brand

2.2.6.1 Brand portfolio

26

A brand portfolio means a collection of brands from one and the same

corporation. There are some advantages to the development of several brands

in a corporation (Barwise and Robertson, 1992). The exploitation of several

brands enhances the opportunities that consumers will buy a brand from the

portfolio of the corporation, and lead to strategic merits (i.e. generating an

effective barrier to latent rivals’ entry). This strategy is relevant to a larger level

of risk spread, and offers the more steady foundation for extension to the

brand. Besides, “Synergy effects can take place which among other things

may benefit the profitability of the organisation” (Riezebos et al., 2003: 194),

and the corporation benefits from some scale merits by this strategy. So, a

brand portfolio is good for a corporation, and the key is to employ other brands

to defend the most valuable brand of a corporation from competitive

aggression

.

In a brand portfolio, four types of brand are distinguished. A bastion brand has

the largest strategic and financial advantages for the corporation, as it is the

most profitable brand in a brand portfolio. A flanker brand has the highest

strategic advantages because it is used to prevent potential competitors. “A

bastion brand can be protected from competitive discount brands by

introducing one or more fighter brands” (Riezebos et al., 2003: 198). The

fourth type of brand is a prestige brand, the financial value of which is great.

Except for the bastion brand, the other three types of brand are not fit for

extensions (management advantages).

In the process of building a brand portfolio, initially the corporation should

decide which brand is the most valuable for it and how it intends to defend this

brand. How is a brand portfolio set up? Three strategies can be used: brand

development (corporations exploit the individual brand itself), brand acquisition

(by purchasing related brands) and brand alliance (by making arrangements

with other corporations). The first strategy takes a long time to exploit brands

27

and has average control over the market position of the brand. It also needs

high investment. In brand acquisition. The speed of building a brand portfolio

is quite fast, and the level of control is maximised, while the financial

investment is very high. There needs low control and low investment in brand

alliance, and the time of building a brand portfolio is neither too quick nor too

slow (Ourusoff et al., 1992).

A great brand portfolio provides a steady foundation to a corporation not only

to help gain entry into other product groups, but also to help gain entry into

other countries. The development of a successful brand into other countries is

termed international branding. This branding can promote the financial

condition of a corporation, and enhance the strategic position of this

corporation in other countries (Marston, 1992).

2.2.6.2 Brand extension and endorsement strategy

A successful brand has both manifest value (in the international brand strategy)

and latent value; however, through brand extension and endorsement strategy,

the latent value of a brand can be exploited.

A brand extension refers to the name of an existing brand employed for a

product in a dissimilar product group, such as Virgin Media and Virgin Atlantic.

“The choice for a brand-extension strategy is based on the idea that a brand

name has a certain value for consumers and that [a corporation] can capitalise

on this value” (Riezebos et al., 2003: 214). From the financial perspective, the

extension strategy needs lower marketing communication costs than the

strategy of introduction of a new brand, and generates high sales in a short

time. The corporation can regard a brand extension as a method for gaining

entry; clearly, an effective brand is well suited for entry into any kind of product

class. If a brand extension is successful, the corporation achieves a

strategically stronger position. In the literature, dissimilar aspects that affect

28

the success of a brand extension strategy are addressed. For three

components of brand-added value - perceived performance, psychosocial

meaning and brand name awareness - a higher value of each of them has a

positive influence on a brand extension’s success (Bottomley and Doyle, 1996).

However, the extension strategy has some disadvantages: consumers are

more willing to buy the extended product than the parent product; no transfer

of associations; negative feedback; and brand dilution (Ourusoff et al., 1992).

In developing a brand’s latent values, the endorsement strategy can replace

an extension strategy. In an endorsement strategy, a new product has a new

and unique brand name, and this brand is then endorsed. Using an

endorsement strategy, corporations can stimulate the agreement and the sale

of a new brand by associating it with a common brand name, can promote the

range of the corporation distinctly to consumers, competitors and stakeholders.

In fact, “If a company wants to attract other consumers than those in its current

consumer franchise, the endorsement strategy is a better way of reaching this

goal than the extension strategy” (Riezebos et al., 2003: 233). An endorsed

brand can be dealt with more readily than an extended product to another

corporation; this is one of the strategic merits of the endorsement over the

extension strategy. In short, brand extension and endorsement strategy are

useful for corporations to exploit a successful brand to become more powerful.

In summary, many factors should be taken into account in the management of

a brand. Initially, managers should work out the brand strategy, which guides

every aspect of brand management. It includes positioning and brand values

choice, brand image and added value. While brand name, design and

advertising are major instruments in a brand strategy, each of them can

influence the brand management. The choice of positioning and brand value

can make a brand meaningful for consumers, thereby creating a brand image

in their mind. Brand-added value also plays an important role in the

29

management of brand. Nowadays, corporations are not limited to developing

only one brand into one market; they are eager to exploit several brands into

more than one market or country. In order to achieve this goal, corporations

can set up a brand portfolio, or use a brand extension and endorsement

strategy. Therefore, these strategies are important components in the

management of brand.

2.3 The brand of Zara is a good case study

Zara is the flagship retail chain of Spanish fashion distribution group, Inditex

Group. This Group has other brands, such as Zara Home (which is an

extension of Zara brand), Pull and Bear. The first Zara store opened in 1975,

and Zara currently has stores in 68 countries (Inditex Group, 2008). In 2007,

the revenue of Zara brand reached €6 billion; it occupies the most significant

position in the Inditex Group. In fact, in the fashion industry, the brand Zara is a

good case study to show how it has managed to become a powerful brand

(Tungate, 2005). Zara belongs to a high street brand; however, in the 2007

Best Global Brands, Zara was ranked at No. 64, beating some luxury brands

(such as Prada, Burberry, Polo RL) (Interbrand, 2007).

Whether or not Zara has managed to become powerful in terms of those vital

elements in brand management, discussed above, is something that will be

considered during the course of the research undertaken for this study.

30

Chapter ⅢⅢⅢⅢ Methodology

3.1 Qualitative and Quantitative Research Methods

In general, research methods can be divided into qualitative and quantitative.

According to Bryman (1988: 1), “Quantitative research is typically taken to be

exemplified by the social survey and by experimental investigations.” It

concentrates much more on the collection and investigation of digital data and

statistics. A questionnaire is the most frequently used method in quantitative

approaches. A qualitative approach, on the other hand, is much more reliant

upon interviews and case studies and deals generally with much smaller

numbers. It “… uses an inductive logic, with categories emerging from the

participants, rich context-bound information leading to patterns or theories that

help in understanding a phenomenon, thereby making the whole process very

dynamic.” (Jindal-Snape, 2004: 15) Researchers differed in their attitudes to

the reality. “The quantitative researcher views reality as ‘objective’ and

independent of the researcher. The qualitative researcher believes that reality

is constructed by the participants in research situation.” (University of Dundee,

2004: 10)

Although there are some differences between qualitative and quantitative

methods, these two methods can complement each other. Creswell (1994: 178)

pointed out advantages of this mix. It “… adds complexity to a design and uses

the advantages of both the qualitative and the quantitative paradigms.

Moreover, the overall design perhaps best mirrors the research process of

working back and forth between inductive and deductive model of thinking in a

research study.”

A combination of qualitative and quantitative approaches was used to collect

data in this study, which makes my study findings more reliable.

31

3.2 The chosen research approaches

In my research, two methods were selected to be the most proper instruments

with the purpose of collecting authentic and helpful data - case study and

questionnaire survey.

3.2.1 Case study

The case study research method usually deals with “How?” questions, which is

a practical investigation that examines a contemporary phenomenon within its

actual context. More explicitly, it can create attractive and in-depth details

about life in a certain organisation (Cassell and Symon, 2004). The distinctive

advantage of a case study is its capability to manage completely the diversity

of interviews, observations and evidence-documents. In addition, it “… may be

essential when a research is made to understand what concepts mean to

people, the meanings attached to particular behaviors and how behaviors are

linked” (Yin, 2003: 325).

3.2.2 Questionnaire survey

A questionnaire survey is the most commonly utilised instrument, which is

convenient to conduct and produces data quickly. This method can access

different levels of people from different areas that will help to diminish

estimation biases. In addition, it obtains the opinions of the greatest amount

people compared with other information acquirements. Participants can

complete questionnaire by mail or self-administered, so they arrange a

convenient. A questionnaire is more economic than other methods, both in

terms of time and cost. The questionnaire I used only took participants five to

ten minutes to complete. On the other hand, questionnaires can limit the

responses of the participants, and “Researchers cannot visually observe the

respondent’s reactions to questions, physical characteristics, or the setting”

(Neuman, 2003: 289).

32

3.2.3 Triangulation of these two methods

In this study, the research question is how has a brand managed to become a

strong brand, and Zara is taken as a good case study. The material of the

case study is from Inditex Group’s annual reports, which pays more attention

to the financial and economic report as well as international expansion. The

financial data clearly show whether the management of Zara brand is

successful or not. This case study can illustrate how a brand portfolio and

brand extension is administered, whereas this information cannot be obtained

via questionnaire survey because consumers are not likely to understand the

corporation’s internal strategy simply by purchasing the Zara brand. Although

data on how the design of the Zara brand is controlled can be collated from

the questionnaire results, a case study provides more detailed statistics and

information. In fact, whether the image of the Zara brand is positive or

negative depends largely on consumers’ view (i.e. questionnaire), although

the case study of Zara can be used to describe how it manages brand image.

Moreover, the brand values and brand-added value are shown through

questionnaire rather than case study, in other words through the feedback of

consumers. Therefore, it can be seen that the case study and questionnaire

survey complement each other.

3.3 Questionnaire method

3.3.1 Participants

30 participants took part in this research. All participants were university

students because the same targeted sample is easy to analyse the data.

They were all under 35 years of age, and of either gender. The target group of

Zara focuses on consumers under the age of 40. The most significant thing

was that they should have purchased Zara brand as it enables participants

(i.e. consumers) to fully comprehend Zara as a brand.

3.3.2 Questionnaire design

33

There were 30 closed questions, all of which were single-choice questions,

and easy to understand (see Appendix 1). The design of the questionnaire was

based on the literature review. Questions were designed by me and covered

the main elements of brand management. The purpose of the questionnaire

was to investigate whether positioning, brand values, images and added value,

and the three instruments of brand strategy (namely, brand name, design, and

advertising) are significant in the brand management from a consumer’s

perspective. In addition, questions made limited reference to brand extension,

but none to brand portfolio or brand endorsement. The length of each question

was no longer than two lines. Five scale points of agreement could be selected

by participants, which are strongly agree (5 points stands for it), agree (4

points), neutral (3 points), disagree (2 points) and strongly disagree (0 point).

These scale points provided a convenient measure of consumers’ attitudes.

Take one question for instance:

You are familiar with the logo of “Zara”.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree 0.

Strongly disagree

If the mean is 3.80 (larger than neutral points 3), consumers’ attitudes tend to

familiar with “Zara” logo.

3.3.3 Questionnaire procedure

I sent 40 emails to students who are studying in the Nottingham University

Business School. In the email, I told them the main purpose of my research,

and asked them two questions: Are they below 35 years of age? Have they

ever bought Zara? If both answers were yes, and they replied to say that they

were willing to participate in the study, then I sent them a questionnaire. In a

few days, 22 emails returned with completed questionnaires attached. I then

collated the data (or scale points) and used SPSS to analyse it.

3.4 Ethical issues that may need to be considered

34

In the process of carrying out the research, ethical issues were taken into

account. Some of them were relative to participants of the research.

Participation had to be voluntary, and all participants were reminded of their

right to withdraw at any time during the research. Confidentiality was also a

factor and participants’ privacy was respected, particularly as they could be

traced through their email addresses. In addition, a summary of the research

findings should be made available to all participants. The findings of the

research will be reported accurately and truthfully because participants may

check it. If the information collected from the participants will be used in other

research, then their prior consent must first be obtained.

35

Chapter ⅣⅣⅣⅣ Case study of Zara

4.1 Overview of Zara

Zara is one brand in the Spanish fashion distribution group, Inditex Group.

Since it opened in 1975 in Spain, Zara has transformed the fashion world with

an innovatory business pattern. Nowadays, Zara is one of the largest global

fashion companies. In 2007, the net sales of Zara was €6.264 billion (an

increase of 13% over 2006), and EBIT (Earnings before interest and tax)

reached €1.116 billion (an increase of 23% over 2006). There were 1,361 Zara

stores in 68 countries all over the world at the end of 2007 (Inditex, 2007).

Moreover, Interbrand and Business Week ranked the Best Global Brands by

value for 2007, and Zara was ranked at No. 64 (brand value is ＄5 billion),

which exceeds some luxury fashion brands, such as Prada (ranked at No. 94),

Burberry (No.95) and Polo RL (No. 99) (Interbrand, 2007). On the basis solely

of the above financial data, it can already be deduced that the high street

brand Zara is a strong brand in the fashion industry.

4.2 Fashionable design with medium price

Design is one of the determinants of the brand’s success in the fashion

industry, and Zara has more than 250 designers (Inditex, 2007). “Zara was a

fashion imitator. [Design of its product] focused its attention on understanding

the fashion items that its customers wanted and then delivering them, rather

than on promoting predicted season’s trends via fashion shows and similar

channels of influence, which the fashion industry traditionally used.” (Kumar

and Linguri, 2005) Zara’s product design is one of the most differential features

in comparison with other brands, which also occupies an important position in

a brand strategy. This is an active product design because consumers are able

to make associations relative to Zara, such as ‘fashionable’ and ‘beautiful’.

These associations are then transformed into positive brand images, as “A

brand image is a subjective mental picture of a brand shared by a group of

36

consumers” (Riezebos et al., 2003: 63). So design can affect brand images; an

excellent one offers a strong brand image to consumers. In addition, Zara

chooses a premium strategy in the price dimension of positioning; its price is

neither too high (like Prada) nor too low (like Primark) for consumers. Finally,

the irresistible combination of latest fashion and quality (i.e. product design) at

an affordable price is one of the most valuable differentiations of Zara, which

results in Zara’s brand being strong. This characteristic also promotes brand

images to a high level.

4.3 Product strategy of Zara

Product strategy is one of key components of a brand strategy, and a special

one can lead to brand strategy’s success. Zara provides a considerable

number of products, which are more than rival corporations in the fashion

industry. It produces approximately 11,000 different products per year, while its

major rivals only produce 2,000 to 4,000. Zara spends four to five weeks on

the process of designing a new product and getting finished products in its

stores (Inditex, 2007). So, Zara is the leading brand in `fast fashion’. It can

redesign existing products in no more than two weeks. The shorter the product

life cycle, the larger success it will have in meeting consumer preferences. “If a

style doesn’t sell well within a week, it is withdrawn from shops, further orders

are cancelled and a new design is pursued. No model stays on the shop floor

for more than four weeks, which encourages Zara zealots to make repeat

visits. ” (Roux, 2002) The above unique product strategies are successful due

to data gathered. In Spain, a high street shop has an expectation that

consumers (or zealots) will visit it three times a year, whereas that rises to

seventeen times in Zara’s case. This uniqueness offers a positive image to

consumers. Hence, these particular product strategies help Zara to become a

powerful brand in the fashion industry.

4.4 No traditional advertising

37

Advertising is the main instrument of a brand strategy; it not only makes

consumers accustomed to a brand but also adds value to a brand. Owing to

the research by Simon Broadbent (in Jones, 1989; Riezebos et al., 2003: 150),

there is an absolute influence of advertising on sales: “An increase of 1% in

advertising expenditure results in an average rise of 2% in sales”. However,

Zara only spends 0.3% of sales on advertising, while Zara’s rivals spend 3% to

4% of sales on it. This almost zero advertising is another peculiar strategy of

Zara’s management. “The reason for not spending money on publicity is that it

doesn’t bring any added value to our customers. We would rather concentrate

on our offering more in terms of design, prices, rapid turn-around of stock and

the store experience.” Carmen, a press officer at Inditex Group, remarked.

(Tungate, 2005: 51).

4.5 Customers’ feedback and Zara’s image

The in-store feedback from consumers is sent back to designers every day.

“The fashion requests collected by stores leads to the initiation of the

productive process, which puts together a supply in agreement with the

customer’s wishes as quickly as possible. This business strategy involves

constant relations with the commercial supply and bringing personnel closer to

the customer.” (Inditex, 2007: 27) Brand values, images and brand-added

value cannot be evidenced directly through Zara’s management, but they can

be reflected by customers’ feedback. For instance, whether Zara’s image is

positive or negative for consumers; whether consumers see extra value add to

Zara; and which values of Zara they will choose. With regard to brand image, a

good design or a unique product strategy can influence it to be positive as

mentioned above. While in 2007, Zara launches “… its first collection of

maternity wear. The Zara for Mum line went on sale in March in over a hundred

stores in the main cities of Spain and since September it has been available at

all establishments of the chain in the world with a wide range of articles.”

(Inditex, 2007: 43) This Mum line promotes a powerful image of Zara into the

38

minds of consumers, as it takes consumers’ demands seriously and seeks to

meet mothers’ needs and feedback. As a result, Zara improves its reputation in

the fashion industry still further.

4.6 Inditex Group

Inditex, “Textile Design Industries, Inc.”, is one of the world’s largest fashion

distribution groups. In 2007, its sales were €9.534 billion and net profits

reached €1.25 billion. It has 3,691 stores in 68 countries. In fact, Inditex is a

brand portfolio, and it uses a multilithic brand name strategy to name seven

endorsed and one extended brands: Zara, Massimo Dutti, Bershka, Oysho,

Pull and Bear, Uterqüe and Zara Home (a new brand opened in 2008) (Inditex,

2007). Meanwhile, Inditex adopts brand development strategy to build its

brand portfolio. The self-managed development of Inditex takes a great deal of

time to exploit brands and has average control over the market position. It also

needs high investment.

There are some advantages to being part of the Inditex Group. Firstly, the

development of several brands can increase the opportunity that consumers

will purchase a brand that belongs to Inditex. No matter which brand you buy,

Zara or Zara Home, they belong to Inditex. Secondly, “A high barrier of

entrance for potential competitors is created” (Riezebos et al., 2003: 194). For

example, although Massimo Dutti and, Pull and Bear are fashion brands, their

target group is different. The former one is chic design with high quality for men

and women; its target age is from 25 to 45 years old; while the latter one is

casual fashion and sport design for young women and men; their target age is

from 14 to 28 years (Inditex, 2008). So a fashion industry with a single brand

strategy will struggle to gain entry into Inditex’s market. Besides, if another

industry competes with Inditex, which has a target age for men and women

from 20 to 35 years old, then the risk equally impacts on Massimo Dutti and,

Pull and Bear. As a result, Inditex will succeed in the competition. These

39

examples illustrate one of reasons why Inditex chooses the endorsement

strategy rather than the extension strategy, because it “… wants to attract

other consumers than those in its current consumer franchise” (i.e. the

different target age) (Riezebos et al., 2003: 233). Therefore, Zara can be more

forceful in the fashion industry as a bastion brand of Inditex, because other

brands in the Inditex Group can help Zara to prevent potential rivals from

entering its market, and they also help Zara to spread risks in the competition.

Table 1 shows the sales, stores and distribution of each brand in 2007 (except

new brand Uterqüe).

Table 1: sales, stores and contribution each brand in 2007 (In millions of

euros) (Inditex Annual Report, 2007: 41)

Sales

by

brand

Contribution

by brand

No. of

stores financ

ial year 2007

Net

markets

2007

Countries

where it is

present

Zara 6,264 66.4% 1,131 5 68

Pull and

Bear

614 6.5% 519 8 35

Massimo

Dutti

696 7.4% 426 3 32

Bershka 925 9.8% 510 11 35

Stradivarius 521 5.5% 381 5 24

Oysho 213 2.3% 290 10 22

Zara Home 201 2.1% 204 5 20

From the above table, it is clearly shown that Zara is the bastion brand in the

Inditex Group, which is the most profitable brand, since its sales and

contribution are greater than other brands. Inditex has another merit in that it

40

can provide a more steady foundation for extension to Zara. In 2003, Zara

Home was opened, which “… introduces trends into the home with a

wide-ranging textile range, with bedlinen, table-linen and bathroom textiles,

which is complemented with crockery and decorative objects.” (Inditex, 2007:

55) Zara means a successful and strong brand by extending it to Zara Home.

Awareness of the brand name Zara Home is automatically boosted as a result

of the Zara brand already being known to consumers. In addition, Zara

conjures up feelings of familiarity (positive association) for consumers, which

perhaps leads to a larger possibility of purchasing Zara Home. For instance,

one characteristic of Zara is the fashionable design in combination with the

medium price; consumers will automatically think that Zara Home has the

same features. From the data in Table 1, although Zara Home was created in

2003, its sales have reached €201 millions. This success demonstrates the

effectiveness of Zara’s extension strategy, giving Zara a strategically stronger

position in the fashion market.

Riezebos et al. (2003: 29) suggest that “A successful brand can more easily be

exploited on an international market”. Obviously, Zara is a strong global brand;

there are 68 countries that have Zara stores. Using an international branding

strategy, Zara not only increases its financial position, but also reinforces its

strategic position in the world.

4.7 Summary of case study

Fashionable design with medium price is one of the most valuable

distinguishing features of Zara, which means Zara mix the active product

design and a premium strategy in the price dimension of positioning. It is one

of the determinants which makes Zara’s brand so strong; another one is

unique product strategy. In comparison with other competitors, Zara can

produce 11,000 different products per year. The speed of creating a new

design and delivering it to Zara stores is fast. There is a special situation in that

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Zara does almost no advertising. However, this is not hindering Zara in

becoming a very well-respected brand worldwide. Zara’s strategy is to pay

more attention to the feedback from consumers, and such feedback is

reflected in its values, images and added values. Therefore, good control of

customers’ feedback helps Zara to be stronger. For example, according to

consumers’ needs, Zara has launched a new collection called Mum line. This

enhances a good image of Zara. Although brand image should be shown by

consumers, fashionable design and unique product strategy have a salient

effect on it. Moreover, as an independent and the most valuable concept of

Inditex Group (a brand portfolio), Zara can become a powerful international

brand more easily. Inditex’s other endorsed brands assist Zara to compete

against its rivals and achieve success in other markets. The triumphs of Zara

Home have relied on Zara’s strong brand (i.e. Zara’s effective extension

strategy). In a word, if these characteristics and strategies are well-managed,

Zara can become a strong global brand.

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ChapterⅤⅤⅤⅤ The findings from questionnaire

5.1 The effect of design and price strategy

Table 1: the mean for each question

Questions The Mean

The design of Zara is one of the most fashionable designs in the

fashion industry.

3.86

The speed of launching a new collection of product of Zara is fastest

and often is not reproduced.

3.77

The design of Zara is the most significant reason that you are loyal to

it.

3.41

You are familiar with the logo of “Zara”. 4.50

You can distinguish the logo of “Zara” from other logos, such as

“Channel” and “Primark”.

4.50

The price of Zara is neither too high nor too low. 3.86

You can accept this medium price of Zara. 3.86

You are satisfied with the design of Zara with relation to its price. 4.05

Compared to brands like Primark, Zara has higher quality of material. 4.55

“Design creates corporation distinctiveness in an otherwise product and

image-surfeited marketplace” (Riezebos et al., 2003: 127); it is a remarkable

instrument for brands being forceful. The results of the questionnaire show that

participants are inclined to agree that Zara’s design is the most fashionable in

the fashion industry, and the speed of launching a new collection of Zara is

fastest. As in the former question, the mean is 3.86; the latter one is 3.77.

Both mean figures are larger than the scale point of the neutral, 3 (see Table 1).

These two points show Zara’s product design is very popular, whereas the

latter view is related to the product strategy of Zara. Whether the most

important reason that they are loyal to Zara is the design, half of them adopt a

neutral position to answer this question, while there are 41% are definitely sure

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Besides product design, logo design has a central place in brand management.

All participants tend to be familiar with the logo of ‘Zara’ and can distinguish it

from other brands, such as “Channel” and “Primark”. So logo design is one of

main differentiations of Zara when compared with other brands. While Zara’s

price strategy is effective, respondents are satisfied with the design of Zara in

relation to its medium price. According to consumer views, this fact is one of

the main characteristics of Zara’s brand management. All respondents think

Zara has higher quality than low cost brands like Primark. This indicates that a

great number of consumers see the price of a brand as an indicator of quality,

whereby a high price is indicative of high quality.

5.2 Intrinsic aspect of positioning

Table 2: the mean for each question

Questions The Mean

Wearing Zara clothing, you feel very comfortable and fashionable. 3.68

You enjoy buying Zara. 3.68

You are willing to buy Zara because you feel it reflects your social

class.

3.05

Regarding the intrinsic dimension of positioning, Zara is an impressively

positioned brand, which means the feelings connected to the utilisation of a

brand. The first reason is that respondents are inclined to feel comfortable and

fashionable when they are wearing Zara clothing (see Table 2). The type of

purchasing motivation affects the option between a functional and an

expressive positioning; a positive one “… demands a functional approach with

the emphasis on impressive aspects, or an expressive approach” (Riezebos et

al., 2003: 58). The second reason is that participants enjoy buying Zara so that

the purchasing motive is positive. Actually, fashion is difficult to emphasise the

instrumental aspects of intrinsic attributes, so it is not a good decision for Zara

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to focus on this part. In the intrinsic aspect, there is another approach - the

expressive positioning. It is means that “By the purchase and open

consumption of [a brand], consumers can make it clear to which social group

they belong and those to which they do not want to belong” (Riezebos et al.,

2003: 56), and Mittal (1988) refers to it as ‘psychosocial meaning’ of a brand.

The answer to Question 13 reveals whether Zara can be emphasised in the

expressive approach positioning. There is a tendency that participants are not

sure the motivation of purchasing Zara is that they feel it reflects their social

class, such as middle class. Whereas 28% of participants agree this view,

percentages of the choice of disagree and neutral are the same: 36% (see

Figure 1). It is better for Zara not to put an expressive approach into its heart

positioning because of uncertainty from consumers’ feedback.

5.3 Choosing brand value

Table 3: the mean for each question

Questions The Mean

You choose the Zara only because you need clothes. 3.68

Do you think Zara appeals to middle class professional people? 3.09

Wearing Zara, you feel yourself being beautiful, stylish or elegant. 3.77

Figure 1: You are willing to buy Zara because you feel it reflects yoursocial class.

Strongly agree 14%

Agree 14%

Neutral 36%

Disagree 36%

Strongly disagree 0% Strongly agree

Agree

Neutral

Disagree

Strongly disagree

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According to the literature review, the core of the notion of brand values is that

a value must control everything that is associated with the brand. “The first

phrase in choosing brand values is the choice of the aspiration level of the

brand”, and there are three aspiration levels. Participants tend to choose Zara

only because they need clothes (see Table 3), which is needs-driven aspiration.

Since clothing protects people’s bodies, the value of need-driven is security.

With reference to Question 12, they are inclined to choose a neutral response.

More explicitly, 32% respondents agree (14% of them strongly) that Zara can

appeal to middle class professional people, whereas 36% disagree and 32%

are not so sure (see Figure 2). This point is related to relational demands of

consumers, which is called outer-directed aspiration level. The third level is

inner-directed aspiration, which refers to consumers’ demand for

self-actualisation. Respondents have a tendency to feel they become more

beautiful, stylish or elegant when they are wearing Zara. So the value of this

level emphasises personal factors, such as self-fulfillment or self-respect.

Compared with these three levels, Zara should take more notice of

need-driven and inner-directed aspiration than outer-directed aspiration, and

brand values should be concentrated on those two levels as well.

Figure 2: Do you think Zara appeals to middle class professionalpeople?

Strongly agree14%

Agree18%

Neutral32%

Disagree36%

Strongly disagree0%

Strongly agree

Agree

Neutral

Disagree

Strongly disagree

5.4 Brand images, brand-added value and brand name

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Table 4: the mean for each question

Questions The Mean

The image of Zara is modern and fashionable. 3.95

Zara has a positive image. 4.09

Zara has a good reputation amongst fashion brands. 4.14

The branding of Zara offers you a guarantee of quality. 3.91

The branding of Zara gives you product satisfaction. 4.05

Zara keeps a high level of quality all the time. 3.55

When you see or hear the brand name Zara, you immediately know it

is a fashionable brand.

4.00

When you see or hear the brand name Zara, you can distinguish it

from other brands.

4.00

When people mention other high street brands, such as Next, Gap,

H&M, the brand name, Zara, appears quickly in your mind.

3.77

You can associate the brand name, Zara, with the product itself. 4.5

The trend of the questionnaire results is that the image of Zara is modern and

fashionable, and positive (see Table 4). What is more, the Zara brand has a

good reputation amongst fashion brands. Due to participants’ views, the

creation of images in Zara is very successful. The better the brand images, the

more the management of that brand is effective. Similarly, positive and strong

brand image can enhance brand-added value.

The perceived performance of a brand is one segment of brand-added value,

which can be divided into perceived quality and the perceived material

differentiation. Participants are inclined to consider that the branding of Zara

offers them a guarantee of quality and gives them product satisfaction. The

most important thing is that they think the Zara brand keeps a high level of

quality all the time (41% of participants agree with this view; 59% keep a

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neutral view; and no one disagreed). A highly perceived performance leads to

a high brand-added value. Another segment of brand-added value is

psychosocial meaning, which is mentioned in the positioning (Question 13). So

in this study, the psychosocial meaning has not had an important influence on

added value. On the other hand, Zara can not clearly show which social class

it stands for. Finally, brand name awareness is a major element that

distinguishes between the notions of brand image and brand-added value.

There are four levels of brand name awareness, from unawareness to

top-of-mind awareness. “A well-known brand name can have more value to a

consumer than an unknown brand name. In general, consumers also have a

preference for articles with a well-known brand name” (Riezebos et al., 2003:

72). The results illustrate how participants tend, on hearing or seeing the brand

name Zara, to immediately know it is a fashionable brand and can distinguish it

from other brands. As the mean of both two is 4.00 (equals to ‘Agree’ choice).

There is also a tendency, when people mention other high street brands, such

as Next, Gap, H&M, the brand name, Zara, quickly springs to their mind.

Participants also associate the brand name, Zara, with the product itself.

Therefore, the level of awareness of Zara’s brand name is high. This

awareness has a reinforcing influence on the perceived performance and on

the psychosocial meaning of a brand. “For two brands with the same positively

experienced associations, the best-known brand has a more than

proportionally high level of brand-added value than the lesser-known brand”

(Riezebos et al., 2003: 72).

To sum up, a high level in perceived performance and in brand name

awareness leads to a high added value of Zara. More importantly, this

awareness indicates that Zara uses brand name as an instrument effectively. It

stands for a value that the corporation has and helps consumers to

differentiate Zara from other brands.

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5.5 Advertising

Table 5: the mean for the question

Question The Mean

You have rarely seen advertising of Zara brand. 4.32

Although the effect of advertising on brand development and management is

significant - for example, more advertising results in a high level of brand name

awareness and a positive image for consumers - Zara does not spend much

money on it. Most participants have rarely seen advertising of the Zara brand

(see Table 5). According to the results, advertising does not play a role in the

management of Zara.

5.6 Zara’s extension strategy

Table 6: the mean for each question

Questions The

Mean

Besides clothing, Zara brand has perfume, shoes, belts and cosmetics

in one store.

3.82

You are aware that Zara has introduced Zara Home, which sells home

furnishings.

3.14

You would be interested in Zara home because of your loyalty to the

Zara.

2.91

You have seen Zara store in more than two countries. 4.41

Zara has several basic product lines. Women’s and men’s clothing are the

most important product line in Zara, whereas there are perfume, shoes, belts

and cosmetics lines also. Respondents tend to agree this point as they find

these products in Zara stores (see Table 6). In 2003, Zara was extended to

create another product class, Zara Home, which sells home furnishings. The

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reason why Zara chose an extension strategy is that the opportunities of

triumph of a new brand are not great, and the marketing costs of introducing a

new brand are extremely high. In such a case, Zara can obtain financial

benefits and a larger market share (e.g. different target groups). Whether this

strategy is successful in the view of consumers (Questions 28 and 29), most

respondents seemed unaware that the Zara brand had introduced Zara Home.

In more detail, 81% of them keep a neutral position; 14% were aware this

extension; 5% were strongly aware; and 5% were definitely not aware of this

strategy (see Figure 3). Interestingly, my question asked whether they would

be interested in Zara Home because of their loyalty to Zara. The findings show

that respondents were generally unsure. In fact, 59% chose the neutral choice;

14% agreed with this view; and 27% disagreed. Hence, whether the extension

strategy of Zara is successful or not, this outcome is not decisive. However, all

respondents deemed that Zara is an international branding, as they tend to

have seen a Zara store in more than two countries.

5.7 Summary of the findings

According to the data that was collated from consumers, positioning and brand

values choice, brand images and added value of Zara are shown. It is clear

that in the price dimension of positioning, Zara uses a medium price strategy to

Figure 3: You are aware that Zara has introduced Zara Home, whichsells home furnishings

Neutral81%

Strongly agree5%

Disagree5%

Strongly disagree 0%

Agree 9% Strongly agree

Agree

Neutral

Disagree

Strongly disagree

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manage, whereas in the intrinsic dimension, Zara chooses an impressive

functional approach. The feedback from consumers indicates that the

instrumental functional and expressive approach are not suitable for Zara. In

comparison with three aspiration levels, Zara should select values related to

the need-driven and inner-directed levels. Almost all consumers consider that

Zara has a positive and strong image, and enjoys a high reputation amongst

the fashion brands. In addition, Zara’s added value is upward, because its

quality (perceived performance) and brand name awareness are high.

Because of a high level in brand name awareness, it is shown that Zara utilises

brand name as a successful instrument. The design of Zara is really latest and

positioned in medium price; this feature is a main differentiation from other

brands. Its fashionable design can also improve the good images and add

value for consumers. Another instrument, advertising, does not affect the

management of Zara. In the findings, the data cannot demonstrate whether

the extension strategy of Zara is effective or not. Consumers are not definitely

aware of this extension. Nevertheless, all believe that Zara is an international

branding.

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Chapter ⅥⅥⅥⅥ Further discussion

The findings of the case study and questionnaire survey complement each

other. One gains information from the corporation, whilst the other gains

information from consumers. Then results can be divided into several parts:

the role of three instruments (brand name, design and advertising); positioning

and brand values choice; brand images and added value; brand portfolio,

extension and endorsement strategy.

6.1 The influence of three instruments

Riezebos et al. (2003) pointed out that design; brand name and advertising are

three key instruments of a brand strategy. This means that they have an

important effect on the brand management, full use of which can help a brand

to become powerful. “Design is most effective when it is based on a strong and

relevant idea, for example a brand concept” (Riezebos et al., 2003: 127), it

also can be the centre of product innovation. Owing to roles of design, as an

instrument it can be divided into a management instrument and a brand

instrument (Kapferer, 1992). Design plays an important role in four brand

attributes: the product, the packaging, the corporate design and the logo

(Henderson and Cote, 1998; Carter, 1999). Brand name is one of the most

unchanging components of a brand. It provides a meaningful attribute of a

brand for consumers, and for the corporation, and it is the substitute of the

value that a brand can have (Riezebos et al., 2003). There are many roles that

advertising has. For instance, consumers can be familiar with a brand name

through advertising; more significantly, it promotes the added value of the

brand (i.e. high awareness of brand name). However, not all three

instruments should be used for a corporation. Every corporation must choose

the most appropriate instrument to manage its brand effectively. Like Zara, it

utilises two instruments - design and brand name - but almost no advertising.

The product that Zara designs is fashionable and modern in the fashion

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industry worldwide, and consumers all agree with this feature, so this

instrument is used effectively by Zara.

It is known that excellent design offers a good image to consumers, and adds

value to the brand for them. On the other hand, Zara’s design improves its

image and provides a high brand-added value. Consumers believe they can

distinguish the brand name “Zara” from other fashion brands easily. Even if

they are talking about other high street brands like “Gap”, the name “Zara” will

spring to their minds in order for them to differentiate it from “Gap”. The fact

that Zara only spends 0.3% of sales on advertising can be classed as `zero

advertising’. Consumers reported having rarely seen advertising of the Zara

brand.

Despite corporations choosing one instrument to use, their brands can still be

strong as long as that instrument is employed effectively. In general, every

instrument can help the choice of positioning and brand values, enhance the

brand image and added value, because these elements lie at the heart of a

brand strategy.

6.2 Positioning and brand values choice

One of the first problems that managers should deal with after deciding to carry

out a brand strategy is how a brand is positioned in connection with competing

brands in the market. The positioning choice has two dimensions: price aspect

and intrinsic aspect. There are three strategies that can be used in the price

dimension of positioning (Ries and Trout, 1986b). A low-cost strategy refers to

when a corporation selects to contend with other brands on the lowest price. In

a premium and a prestige strategy, a corporation attempts to make a brand

differentiable for consumers rather than starting a price war; for a prestige one,

the degree of differentiation is higher. In the intrinsic dimension of positioning,

it is classified as a functional and expressive approach. To explain, the

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functional approach is constituted of instrumental and impressive aspects.

In the case of Zara, although it has already chosen the premium strategy

(medium price) in the price positioning, whether this option is proper or not

should be reflected by consumers’ consumption. Consumers are satisfied with

this price strategy in relation to fashionable design. According to consumers’

feedback, Zara needs to focus on the impressive approach in the intrinsic

positioning, as Zara is hard to reflect social class (expressive approach).

Besides, the motive of buying Zara is based on pleasurable experiences, and

a positive purchasing motivation demands an impressive approach, so Zara

does not focus on an instrumental approach.

After choosing the positioning, managers should more explicitly determine the

values that a brand should represent. The first and most significant step to

choose brand values is choosing the aspiration level, which has three levels:

need-driven, outer-directed and inner-directed (Maslow, 1954). Then

managers choose a maximum of three values within the aspiration levels

selected (Kahle, et al., 1986), and translate each value into concrete attributes.

From the replies of consumers, they are willing to purchase Zara because of

material need, and the need for self-actualisation. The relative values with

these two needs are security and self-fulfillment. Zara clothing protects

consumers’ bodies and, by wearing it, they feel they become more beautiful

and stylish. So Zara should convert these values into actual attributes.

So far, Zara’s positioning and brand value choice are successful according to

consumers’ feedback and Zara’s corporate strategy. The more appropriate the

positioning and brand value choice, the more successful a brand becomes. A

brand can be meaningful to consumers if the choice of positioning and brand

value are made. Furthermore, an accurate choice of these provides the

cornerstone to a well-managed brand.

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6.3 Brand images and added value

Positioning and brand values that are chosen can be conveyed to consumers

and form an image. Consumers’ attitudes determine whether the brand image

is positive, and whether the brand-added value is high. So managers should

take consumers’ attitudes into account when they express their brands’ images

and added value. Zara is good at collecting consumers’ feedback, because the

in-store feedback is sent back to designers every day.

A brand image comprises content and reputation. The content “… refers to the

associations a brand name may invoke” (Riezebos et al., 2003: 64). Some

brands call up many associations. Due to the consumers’ attitudes, they

receives a positive image from Zara (the content is high quality and modern;

the reputation is high). Although positive or negative brand images are decided

by consumers, design and product strategy have an effect on the creation of

brand images. The chic design of Zara evokes several associations such as

“fashionable”, “beautiful” and “colourful”, and these associations give

consumers a good image, while this design with medium price enhances

Zara’s image to be stronger and more positive. In addition, the unique product

strategy of Zara promotes the brand images. Consumers deem the speed of

launching a new collection of products of Zara is fast. Due to the exact data

from the corporation, it produces about 11,000 different products annually, and

spends four to five weeks on the process of designing a new product and

getting finished products into its stores. If the product life cycle is shortening,

consumers’ preferences will be fulfilled with a greater success (Roux, 2002). In

2007, Zara launched a Mum line (Inditex, 2007). This strategy improved

Zara’s image in the mind of consumers, strengthening the brand still further.. It

takes account of consumers’ demand, which extends to accomplish mothers’

needs and feedback, and obtains a high reputation in the fashion industry.

However, “A brand image gives no insight into the relative value that

consumers ascribe to attributes or associations. The concept of brand-added

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value does take into account the differences in importance between

associations.” (Riezebos et al., 2003: 69)

Brand-added value is constituted of perceived performance (perceived quality

and perceived material differentiation), psychosocial meaning and brand name

awareness, and a high level in any one of these components leads to a high

brand-added value (Riezebos et al., 2003; Aaker, 1997; 1999). Owing to

consumers’ attitudes, the branding of Zara provides them with a guarantee of

quality and offers them product satisfaction. What is more, they think Zara

keeps a high level of quality all the time. These views show that Zara is

perceived as having high performance levels. As mentioned in the positioning

part, Zara struggles to convey which social class it belongs to. So psychosocial

meaning has not a remarkable effect on Zara’s added value. Awareness of

Zara’s name is extremely high; when consumers hear or see this brand name,

they are instantly aware that it is a fashion brand, and can differentiate it from

other high street brands. In a word, the added value of Zara is high.

Therefore, a brand with positive images and highly added value can easily

become a powerful brand.

6.4 Brand portfolio, extension and endorsement st rategy

Corporations have a tendency to develop several brands in more than one

market, and how to control this situation is something which must be

considered as part of the brand’s management. Brand portfolio, brand

extension and endorsement are main forms for a corporation.

Zara belongs to a brand portfolio, Inditex Group. There are many advantages

to building up a brand portfolio. For instance, this strategy is relative to a

greater degree of risk spread, and offers a more steady foundation for

extension to the brand. In a brand portfolio, four types of brand are

differentiated. A bastion brand has the greatest strategic and financial merits

56

for the corporation, as it is the most valuable brand in a brand portfolio. A

flanker brand is used to prevent potential competitors. Fighter brands defend

the bastion brand from competitive discount brands. And finally the prestige

brand is one with the greatest financial value (Riezebos, 1995b). According to

Table 1, Zara is a bastion brand, which is the most profitable brand and has a

high strategic advantage. Other brands in the Inditex Group can assist Zara to

stem possible rivals from entry into its market, and to spread risks in the

competition. Moreover, three strategies can be used to set up a brand portfolio:

brand development, brand acquisition and brand alliance (Riezebos et al.,

2003). The Inditex Group adopts a brand development strategy. It is obviously

shown that, as a bastion brand in a brand portfolio, Zara is being more

successful. In other words, if a brand portfolio is well controlled, it can develop

more successfully than other corporations with a single strategy.

Zara is an international branding because 68 countries all over the world have

its stores. It also demonstrates that Zara is an effective brand. This type of

branding can advance the financial condition of a corporation, and promote the

strategic position of this corporation in other countries (Marston, 1992). A

successful brand has a manifest value and a latent value. In the international

brand strategy, a powerful brand has a distinctly manifest value, but the latent

value of a brand can be exploited by brand extension and endorsement

strategy.

In developing a brand’s latent values, the endorsement strategy can be used.

In an endorsement strategy, a new product has a new and unique brand name.

Inditex has seven endorsed brands: Zara, Massimo Dutti, Bershka, Oysho,

Pull and Bear and Uterqüe (Inditex, 2007) Inditex selects the endorsement

strategy rather than the extension strategy, because it is eager to appeal to

more consumers than those in its contemporary consumer franchise (i.e. the

different target group) (Riezebos et al., 2003). A brand extension means the

57

name of an existing brand is employed for a product in a dissimilar product

group, such as Zara and Zara Home. Zara is a successful and strong brand, so

it is extended to another product class, Zara Home. Awareness of brand name

Zara Home is higher as Zara, its parent brand, is already known to consumers.

In addition, Zara evokes feelings of familiarity (positive association) within

consumers, which perhaps results in a greater probability of purchasing Zara

Home. It is well-known that the fashionable design with the medium price is

one main characteristic of Zara, and then consumers think Zara Home also

has the same feature. From the corporation’s view, Zara Home is successful.

From the view of consumers, they are not so sure whether Zara’s extension

strategy is rewarding. Perhaps Zara Home is still a new brand for consumers,

and there are not so many stores in the street about this brand. Hence, no

matter which strategy is chosen, it must be useful to develop a brand to

become powerful.

In summary, Zara chooses premium strategy and impressive approach

positioning, and the brand value of Zara is related to need-driven and

inner-directed aspiration levels. It has positive and strong images and high

brand-added value. Although brand name, design and advertising as an

instrument have an important effect in the brand management, not all of them

should be employed. It is better to use the most appropriate one, so they

chose to employ design and brand name. Zara set up a brand portfolio, Inditex

Group, which utilizes an endorsement strategy to exploit more brands. Zara

also developed a new extended brand, Zara Home. Based on these factors,

Zara has become one of the largest global fashion companies.

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Chapter ⅦⅦⅦⅦ Conclusion

In this study, the research question is how a brand has managed to become a

powerful brand, and Zara is taken as a good case study to indicate it. Both a

case study and questionnaire survey have been used to collect data. The

former method gathers the information from Zara, whilst the latter one

accumulates scale points to measure consumers’ attitudes.

According to the findings of Zara, the choice of positioning and brand values,

brand images and added value lie at the heart of a brand strategy, even in the

brand management. Brand name, design and advertising are crucial

instruments to help a brand to develop more successfully, but it is not

necessary to employ all of them. Even if corporations only select one

instrument, their brands can be powerful as long as that one is used effectively.

Brand portfolio, extension and endorsement are good strategies to exploit

more brands. Consequently, a brand with precise positioning and brand values

choice, positive brand image and high brand-added value, should become a

powerful brand. Brand name, design and advertising have a significant

influence on this process. If corporations are interested in exploiting several

brands into more than one market, the building of a brand portfolio, brand

extension and endorsement strategy can be used. A brand must be forceful if

these strategies are to be controlled well.

7.1 Limitations of the study

Although the research question had been answered, there were some

limitations. At first, the questionnaire survey gave respondents only a short

amount of time in which to submit their forms. Consequently, not many of

those sampled returned their forms on time. Then the most serious limitation

occurred, which was the size of questionnaire survey. Due to the initial filtering

process, only 22 participants took part in this study, which perhaps may have

59

adversely impacted on the reliability of the results. Next, the questions were

designed by me, so the design was not perfect, and participants’

misunderstanding the questions might have led to them choosing a different

answer than they would have if they fully understood the question. Since the

researcher did not conduct this questionnaire survey face-to-face, no

opportunity was given for respondents to clear up any such misunderstandings.

Thirdly, the information for the case study was not enough, as I had just found

the Inditex Group annual reports and some articles in the website. When I

began to analyse the case of Zara, my gathering of data may have been

biased.. Finally, in the literature review, the theories perhaps are insufficient.

7.2 Recommendations for future research

Brand management is increasingly becoming a remarkable debate. In such a

brief study, it is difficult to draw precise conclusions about how a brand has

managed to become a powerful brand. More explicit research must be

undertaken in the future. The size of questionnaire survey sample should be

increased significantly - to hundreds. Then the information that is used for the

case study must be collected as widely as possible, for example, contacting

the corporation directly. The scope of brand management is extremely wide,

which is not only related to the brand, but also related to many other things,

such as corporation, employees and shop location. So in the further research,

it is better to take more factors into account.

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Reference:

Aaker, D. A. (1989), Managing assets and skills: the key to a sustainable

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69

Appendix 1: Questionnaire

Thank you for taking part in this study. Before we start the questionnaire,

please answer the following questions.

� Have you ever bought Zara brand? Yes / No

� Are you a university student? Yes / No

� Are you below 35 years of age? Yes / No

Please choose answer from the following five answers ranging from strongly

agree to strongly disagree. (Single-choice question)

1. The design of Zara is one of the most fashionable designs in the fashion

industry.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

2. The speed of launching a new collection of product of Zara is fastest and

often is not reproduced.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

3. The design of Zara is the most significant reason that you are loyal to it.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

4. You are familiar with the logo of “Zara”.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

5. You can distinguish the logo of “Zara” from other logos, such as

“Channel” and “Primark”.

70

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

6. The price of Zara is neither too high nor too low.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

7. You can accept this medium price of Zara.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

8. You are satisfied with the design of Zara with relation to its price.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

9. Compared to brands like Primark, Zara has higher quality of material.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

10. Wearing Zara clothing, you feel very comfortable and fashionable.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

11. You choose the Zara only because you need clothes.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

12. Do you think Zara appeals to middle class professional people?

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

71

13. You are willing to buy Zara because you feel it reflects your social class.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

14. Wearing Zara, you feel yourself being beautiful, stylish or elegant.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

15. You enjoy buying Zara.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

16. The image of Zara is modern and fashionable.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

17. Zara has a positive image.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

18. Zara has a good reputation amongst fashion brands.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

19. The branding of Zara offers you a guarantee of quality.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

20. The branding of Zara gives you product satisfaction.

72

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

21. Zara keeps a high level of quality all the time.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

22. When you see or hear the brand name Zara, you immediately know it is a

fashionable brand

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

23. When you see or hear the brand name Zara, you can distinguish it from

other brands.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

24. When people mention other high street brands, such as Next, Gap,

H&M, the brand name, Zara, appears quickly in your mind.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

25. You can associate the brand name, Zara, with the product itself.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

26. You have rarely seen advertising of Zara brand.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

73

27. Besides clothing, Zara brand has perfume, shoes, belts and cosmetics in

one store.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

28. You are aware that Zara has introduced Zara Home, which sells home

furnishings.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

29. You would be interested in Zara home because of your loyalty to the

Zara.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

30. You have seen Zara store in more than two countries.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

74

Appendix 2: One Sample of Questionnaire

Thank you for taking part in this study. Before we start the questionnaire,

please answer the following questions.

� Have you ever bought Zara brand? Yes / No

� Are you a university student? Yes / No

� Are you below 35 years of age? Yes / No

Please choose answer from the following five answers ranging from strongly

agree to strongly disagree. (Single-choice question)

1. The design of Zara is one of the most fashionable designs in the fashion

industry.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

2. The speed of launching a new collection of product of Zara is fastest and

often is not reproduced.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

3. The design of Zara is the most significant reason that you are loyal to it.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

4. You are familiar with the logo of “Zara”.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

5. You can distinguish the logo of “Zara” from other logos, such as “Channel”

and “Primark”.

75

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

6. The price of Zara is neither too high nor too low.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

7. You can accept this medium price of Zara.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

8. You are satisfied with the design of Zara with relation to its price.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

9. Compared to brands like Primark, Zara has higher quality of material.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

10. Wearing Zara clothing, you feel very comfortable and fashionable.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

11. You choose the Zara only because you need clothes.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

12. Do you think Zara appeals to middle class professional people?

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

76

13. You are willing to buy Zara because you feel it reflects your social class.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

14. Wearing Zara, you feel yourself being beautiful, stylish or elegant.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

15. You enjoy buying Zara.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

16. The image of Zara is modern and fashionable.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

17. Zara has a positive image.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

18. Zara has a good reputation amongst fashion brands.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

19. The branding of Zara offers you a guarantee of quality.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

20. The branding of Zara gives you product satisfaction.

77

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

21. Zara keeps a high level of quality all the time.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

22. When you see or hear the brand name Zara, you immediately know it is a

fashionable brand

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

23. When you see or hear the brand name Zara, you can distinguish it from

other brands.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

24. When people mention other high street brands, such as Next, Gap, H&M,

the brand name, Zara, appears quickly in your mind.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

25. You can associate the brand name, Zara, with the product itself.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

26. You have rarely seen advertising of Zara brand.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

78

27. Besides clothing, Zara brand has perfume, shoes, belts and cosmetics

in one store.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

28. You are aware that Zara has introduced Zara Home, which sells home

furnishings.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

29. You would be interested in Zara home because of your loyalty to the

Zara.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree

30. You have seen Zara store in more than two countries.

5. Strongly agree 4. Agree 3. Neutral 2. Disagree

0. Strongly disagree