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The value of a brand has just recently been recognised. Both quality and value were much more important than the name on the package in the 1950s. Through branding, companies have become popular brands in the 1960s advertising boom. As a result, brand names have become a proxy for desired attributes such as nice design, reliability, elegance, responsiveness, and innovativeness. People have become more engrossed in the culture of brand identification and significance that it is inconceivable making a buying choice without it. It's natural for those who use the brand name of an object as an indicator of its worth (Nazarani and Suparna, 2021). The fact that brands are now highly sought-after assets that can be developed, cultivated, and even traded between corporations is no surprise. Using advertising, businesses can take their consumers from brand knowledge and identification to a better understanding, resonance, and commitment.
According to the original concept, brand value chains begin with marketing, which creates the brand in the consumer's consciousness. Customers who have a positive encounter with a brand are more likely to remember it. Consumers have come to demand more from companies than just high-quality goods and services, and studies indicate that many are prepared to pay more and prefer a brand above its rivals if they have had a satisfying experience with it. Consumers' perceptions of a corporation's customer service, image, marketing, and logo are all factors that contribute to branding (He and Calder, 2020). A healthy brand is one that has a strong foundation of all of these components operating together. The company's brand is a major contributor to its worth.
It's standard for a well-known brand to ensure future sales. Many workers are looking for more than just a paycheck; they are looking for a goal. Employees who are aware of a company's purpose and why it exists are more inclined to share that enthusiasm and work together to accomplish the company's objectives (Goldring, 2017). With a great brand, businesses convert the business emblem into a standard for the rest of the organization to motivate and inspire. In addition to attracting new customers, a company's brand may assist generate recommendations. If a customer remembers the best experience from a brand, he or she is likely to increase the value of that brand by spreading good reviews and word of mouth to their relatives or friends. Marketing and HR professionals must contribute to the effort for a genuine alliance in today's competitive business environment where both employees and consumers are critical (Kim and Sullivan, 2019). A corporation's success relies on its ability to hire the best and brightest people. additionally, the right approach of marketing creates the combination that allows companies to enhance their value in the saturated market.
It's a huge win when marketing and human resources operate collaboratively. Workers, customers, and prospective employees all profit from these advantages. Employees are the primary focus of the HR department. Through training, assessments, and employee briefings, marketing may communicate the brand message it has developed in marketing with the team's personnel. It is possible for the marketing staff to assist convey the business's principles and purpose because of their ties with customers (Goldring, 2017). Human resources and other departments may benefit from marketing's expertise in connecting with customers. All of these factors create a strong foundation for a company and its brand value. In this report, the key discussion will revolve around the globally known brand Zara, and how the HRM and marketing efforts are tailored in favour of the company's brand image and value.
Zara is a clothing and accessory retailer based in Spain and is the flagship brand of the Inditex company. There are few apparel labels that stay up with the newest trends, are of excellent quality, and are still relatively inexpensive (Nazarani and Suparna, 2021). These characteristics are what made Zara a go-to brand for everyone in terms of fashion. Zara, which began as a simple shop in Spain, has grown to become the biggest retailer in the world, and its creator, Amancio Ortega, is now the world's fourth wealthiest man. In the year 1963, Ortega founded Inditex, a dress-making enterprise. After ten years of hard work, he opened Zorba, a modest shop in La Coruna, Spain, with a capital of only 30 Euros. That's how today's modern and most famous fashion label came to be. After starting off in a small town in Spain, Zara eventually extended its dominion to include the rest of the nation and subsequently, Zara now has over 6,500 locations in 88 different countries. Zara's success may be attributed in large part to its ability to keep up with the fast-paced changes in street style. The company keeps tabs on the rapid evolution of fashion. It creates fresh designs in a matter of days or weeks and distributes them to retailers (Nazarani and Suparna, 2021). Most other fashion companies would need a minimum of six months to bring their newest concepts to market. That's where Zara excelled above the competition and became a go-to brand for those who prefer to stay on top of the latest trends.
At the heart of Zara's success and prosperity currently is the brand's unwavering emphasis on its customers. When it comes to co-creating items with its consumers, Zara has a remarkable narrative (Merz, Zarantonello and Grappi, 2018). For instance, there were no pink scarves available at the Tokyo Zara shop in 2015, when Miko, a Japanese woman, entered the store and inquired for one. Michelle in Toronto, Elaine in San Francisco, and Giselle in Frankfurt all went to Zara and requested for pink scarves at the same time, quite instantaneously. They all walked out of the Zara shops without any scarves, which was a common occurrence for Zara lovers throughout the world over the following several days.
Zara began selling pink scarves seven days later, at almost 2,000 locations worldwide. Exactly 500,000 pink scarves were sent out. Three days after they were on sale, they were all taken. The more organisations know concerning their consumers, the more innovative and competitive they can be in today's business world (Costa, 2017). However, it might be difficult to get the proper information at the right moment and continuously across time without information. Implementing Radio Frequency Identification Technology (RFID) in Zara's shops is one of the keys to its popularity. It employs cutting-edge technology to monitor the position of apparel instantaneously, allowing shoppers to get their hands on the most sought-after items quickly. Additionally, it reduces inventory levels, improves agility to introduce new designs and patterns.
Zara’s culture: The word “impossible” does not exist:
Zara has a strong spirit of entrepreneurship and attracts many young people that swiftly rise through the levels. Zara develops from within and has little attrition. The culture supports risk-taking (as long as learning occurs) and rapid implementation (the core of fashion) (France etal., 2020). Senior management empowers retail executives with planned budget, revenue, and growth possibilities, as well as a variable and fixed incentive system. It accounts for up to half of overall pay, making retail personnel highly motivated. As part of Zara's dedication to developing talent, whenever an employee is promoted, their shop designs a thorough training plan with human resources, which is immediately followed with regular additional training.
The organisation is flat, with few management levels (France etal., 2020). In addition to customers, Zara, like any other fashion firm, engages trend analysts and consumer insights specialists, as well as some of the top designer expertise. Zara's creative team includes around 200 specialists. For them, the term “impossible” doesn't really exist in Zara.
4Ps of Marketing Mix
By effectively utilising the above-discussed theory and model, the organisation has been able to relentlessly focus on the consumers, customises its products for specific buyers, revolutionise its products even more. In addition to this, pink scarves were suddenly available at every Zara shop on the globe. Within three days of being on sale, all 500,000 of the goods were gone. Zara was able to deploy new designs at lightning-fast velocity because of its direct access to the manufacturing chain and timely analysis (Snyder, 2019). Zara's goods are tailored to each customer's specific physical, cultural, and/or climatic requirements. Smaller sizes are available in Japan, women's clothing in Arab countries, and seasonal merchandise in Latin America, for instance. Zara's "Edited" line allows customers to add personalised sewn names or messages to their clothing. With a new 28-item collection, the whole editing process may be completed online.
It is because Zara places a high value on client satisfaction that the company can provide contemporary clothing at competitive costs in a timely manner. Zara's supply chain is not only efficient, but it also incorporates consumers in the creative process, giving it an edge over the competition. Zara has always been able to capitalise on the latest fashion trends swiftly and provide precisely what customers want to purchase (Shen et al., 2019). It's easy for me to see more and more companies adopting Zara's commitment to product development and consumer support in the age of big data and fast choices. In the future, Zara will have to accommodate a shifting marketplace. If people believe in the "quick fashion" mentality, the consumers will see how Zara modifies their marketing approach in the future.
Research shows that Zara's strategic human resource management (SHRM) is implemented in a one-way vertical fit based on literature evaluation. Human resource management methods or practices should be aligned to the company's primary business plan in order to maximise efficiency and productivity. One of the world's most successful fashion retailers, Zara, has clearly succeeded in aligning its human resources procedures with its key business strategy (Freudenreich, Lüdeke-Freund and Schaltegger, 2020). One-way vertical fit SHRM strives to enable how exactly to manage human resources to accomplish Zara's established business targets and growth targets in the fashion sector by boosting yearly revenues in fashion accessories by at least 20%.
As a result, Zara's specialised HRM responsibilities, including staff recruitment and selection, on-the-job training, reward/recognition, worker awareness, and education and advancement policies, are inherently tailored to accomplish and maintain the defined business goals. The external labour market is used by Zara to acquire new workers, especially those in lower ranks (Lehrer et al., 2018). HR at Zara focuses on creating a "locus of control" where employees can build trust, cooperate, and respect one another, all while maintaining a laser-like focus on the company's stated goals. Zara's HR strategy demonstrates the high commitment HR strategy concentrates on the internal improvement of employees' fashion industry competencies and the management of results.
Talent Management Model
Maslow’s Hierarchy of Needs Theory
Structure and culture are inextricably interwoven in every organisation. Both are intertwined and interdependent. Employee morale suffers when the organisational structure is confusing and complicated. It interferes with their ability to do their jobs. It is possible for every employee to create a positive business culture but only those who hold leadership positions are allowed to do it. Consequently, employees are unable to demonstrate their full abilities. A worker's ideals and cultural practices are reflected in their organisational structure. Workers will not be able to provide the required results if their independence is restricted by management (Ma, 2018). The organization's culture is critical to its success. That's why most successful companies have a well-structured work environment in order to keep their employees refreshed. To illustrate this point, let's take a look at the Zara case study. Zara opted for a more flexible approach to consumer service, rejecting the rigidity of its business model.
Human Resource Management is quite crucial in Zara's business strategy, as guys can see. All Inditex businesses have their own Human Resources managers, who are responsible for all problems relating to human resources outside of the company's operations. They place a high value on staff training, which is typically held for at least one week at all shops (Hossain, Akter and Yanamandram, 2021). Product development teams must keep up with the latest fashion trends, which is why they are often required to visit fashion events and fairs. The happiness and engagement of workers, as mediated by store managers, is a critical component of their human resource management approach.
Multi-brand strategy: This marketing approach involves creating two or more items concurrently under distinct brand names. Zara is famous for integrating labels like Pull&Bear, Oysho, Massimo Dutti, and Bershka. These worldwide brands generate considerable annual income. This allows the firm to reach a larger market. Zara, like other major garment shops worldwide, uses the multi-brand approach. It is comparatively riskier when it comes to the probability of success. For any brand, this approach may result in reduced sales and income (Valecha and Khadir, n.d). As a result, the emergence of one brand pushes other brands aside and consumes them literally. Zara minimizes these undesirable outcomes by launching its brands first in the native market before expanding to other areas.
The items under many brands names range in design, pricing, and performance. Although the brand has taken the required measures to mitigate the challenges but yet the risks are higher when in comparison (Ronda, Valor and Abril, 2018). Zara has tried to keep its brands distinct by quality and pricing yet the probability of getting threatened by inequal customer preferences can be an issue for the powerhouse of fashion which might prove to be difficult to eliminate in an upcoming competitive market.
Lack of creative designers: For the first time in years, a 26-year-old designer Bassen shared her design on Instagram and alleged that Zara had been using it for years. In the past, the Spanish powerhouse has consistently refuted any allegations that they stole the concept. The flowing skirts were one of four pieces the shop was accused of stealing ideas (Merrilees, Miller and Yakimova, 2017). Zara rejected the accusations, claiming that the designer's ideas were unoriginal and that Zara's consumer base had fewer concerns than the designers.
Controversy erupted as a result of this comment. As a result, a huge numeral of designers has vocalized out against the company, accusing it of replicating their work without crediting their efforts. A representative from Inditex, the parent company of Zara, actually contacted Bassen's lawyer in an effort to settle the dispute peacefully. This has even been looked at by the firm. According to Inditex's response to this matter, it recognizes the intellectual property rights of the third party involved. In addition, they've taken down all the alleged stolen designs from the offer. Another incident of design infringement is to be mentioned as founded in the case of Rains which is an outerwear brand known for its long jackets and parkas. They had used social media aggressively to promote these items (Merrilees, Miller and Yakimova, 2017). Their raincoat design, they claim, has been stolen by Zara. In order to imitate Rains' goods, they've contacted the proprietors of clothing manufacturers in China.
Zara is being sued by Rains for violating its intellectual property. Rains has won the copyright action against the Spanish company in the local courts, but the amount of compensation has still to be determined. Moreover, Rains claims that Zara will face worldwide retaliation from them. These factors of infringement are crucial to consider as the brand is in q1uestion for their loyalty towards their customers (Ronda, Valor and Abril, 2018). Design infringement is a serious concern for the brand whi8ch requires complete mitigation as an effort to enhance brand reputation which further contributes to the brand value. It is necessary for the brand to eliminate this aspect by focusing on the development of original design creation.
Employee compensation issue: Zara has been facing severe complaints and protests from its employees because of discriminatory salaries and benefits and pays (Duoyan, 2021). Women have said that they are being paid less for the same responsibilities as men which makes the brand unethical and therefore causes reduced brand value.
For a brand like Zara, addressing the existing and probable constraints is necessary. Most importantly the brand needs to consider a few identified matters to protect the reliability and value of the brand.
Throughout the analysis of the entire study, it is considered that Zara proficiently and potentially operates its business throughout the world by gathering a large number of consumers with its organisational business operation. Through this, the organisation has been able to enhance its profitability and market position in both the national and international platforms. However, the organisation also faces some effective hindrances during its business operation regarding its marketing and human resource management. The multi-brand strategy of Zara provides a significant threat to the company during its management of marketing. Generally, the multi-brand strategy provides risks to the company and confusion to the consumers to select their desired product. On the other hand, the pay gap system between the male and female employees within the organisational culture significantly hampered its business. In this aspect, Zara has decided to implement and utilise the most resilient and reliable theories and strategies in order to overcome these hazards.
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