BRAND EQUITY: A CASE STUDY OF ZARA

BRAND EQUITY: A CASE STUDY OF ZARA

Introduction

The fashion retail industry is one of the most impulsive market characterized by constant change of customer’s tastes and preferences. The retailers must, therefore, provide quality products and services that match quality shopping experience expected by the consumers. In the past, retailing was straight forward, but further development of retailing has created a new wave for retailers to rethink their marketing strategy (Varley and Rafiq, 2014). A successful brand is conscious and is ready to make them aware of the brand and its related products. The fashion retailing industry a field common with strong branding. This case will focus on a well-known fashion retailer Zara.  Zara is a fashion retailing company based in Spain with chain stores in various parts of the world. The fashion retailer has to adopt an appropriate marketing strategy to guarantee that the customers identify with their brand. Although Zara’s products are not significantly different from those of its competitors, the retailer has adopted various marketing strategies to overcome the rapid change in the fashion industry. Brand equity is defined as all of assets and liabilities linked to a particular brand and its name and may either affect it positively or negatively (Aaker, 1991).  This paper seeks to analyse the brand equity method adopted by Zara in Spain in three-level hierarchical model.

Discussion

Brand Awareness

            Creating brand awareness is always the first move in the process of building the brand. Awareness is a fundamental aspect of brand equity. Aaker (2002), stated that brand awareness is the perception consumers have in their minds regarding a particular brand. For instance, the brand logo of Zara has black color to symbolize elegance, excellence, and style with a decent general design. Awareness is the primary dimension of brand equity. Zara has been referred to as a top fast–fashion globally (Tokatli, 2007), and as a result, it has attained a high brand awareness. Moreover, it has strove to provide products according to the customers’ desire making it a reliable brand among consumers. Building brand awareness helps to increase brand visibility to targeted customers (Kent and Stone, 2007). A retailer should carry more research to be well-positioned for a transition to global market (Alexander and Doherty, 2008). With increased awareness of the brand, there is a higher expectation of quality by the consumer.

Brand awareness is a crucial concept in retail marketing. It is used to determine whether the consumers can recognize a brand and the last time they purchase it. The concept is divided into brand recognition and recall. First, brand recall refers to the consumer being able to remember a particular brand anytime he/she is presented with the product category (Warnaby and Medway, 2004). Secondly, brand recognition is the ability of the consumer to ascertain previous exposure to a brand when offered the brand category. Creating brand awareness boosts the chances of the customers’ consideration for purchase next they come across it (Kapferer, 2008). Therefore, the retailer must understand the difference between recognition and recall. People are more likely to buy familiar brands because they are comfortable with them. Therefore, a recognized brand will often be selected over unfamiliar brands. A research by Lea-Greenwood (1998) identified visual marketing as a tool of communication of brand identity fashion industry plays a significant role in the success in the market. Zara has managed to acquire storefronts near high-profile luxury brands such as Gucci and Prada, which has made it be associated with quality products. As Hernández and Bennison (2001) stated, the location of a retail store may determine if it will fail or prosper.

Brand Quality

            Brand quality is the perception of the relative quality of a particular brand. It serves as a precede construct of brand awareness.  According to Davies (1992), the retailer must guarantee their customers that they will receive unique quality.  In most cases, customers tend to assess a particular brand with other similar brands on the aspect of various qualitative and quantitative parameters. The demographic and lifestyle of the customers have been noted to be determinants of brand quality (Sinha and Uniyal, 2005).  Zara has a strategy to be associated with high quality and affordable fashion brand compared to its competitors. By being seen as high quality, this can positively impact Zara’s brand. Zara makes its customers feel connected to the high-end world fashion, providing affordable items that replicate the latest runway looks. The retailer needs to fulfill the brand mission to gain significant brand equity (Keller, 1993). However, quality alone not sufficient to cause overall brand equity.

Brand quality is a basis of brand equity that is created on a foundation of many different factors, such as experience. The perceived quality also influences the pricing decision of the retailer. As Underhill (2000) stated, a small change in the marketing strategy can result in having a significant impact on the brand. In case the company offers quality products, it provides the luxury of premium pricing. A brand will be associated with overall quality, not necessarily based on a specific known detail (McGoldrick and Collins, 2007). A reasonable valuation of the perceived quality leads to an increase in brand association (Keller, 1993). Moreover, perceived brand quality can also support a premium price, which, in turn, creates a gross margin that would be reinvented in brand equity. Brand loyalty cannot exist without prior purchase of the product (Quinn, 1998). The perceived quality directly influences the purchase decision of the customers, especially when the consumer is not able to carry out a detailed analysis.

Brand Association

            Brand association is anything that connects the customer to the brand, including things like imagery which make the brand unique. People are likely to associate with a particular brand on quality acquired. Aaker (1991) argued that a brand manager is interested in those associations that affect buying behaviour either directly or indirectly. Moreover, brand association is an existing base for purchase decision as well as brand loyalty (Beatty and Ferrell, 1998). For example, Zara is known by customers for efficient retail stores and a fast supply of trendy fashion. The association reflect social and position and professional role. Having a brand association is an essential aspect of marketing because it leads to repetitive sales providing the business word of mouth marketing (Supphellan, 2000). Such associations are vital to the brand and make it challenging for a new entrance to the market. Although there are many possible associations that the retailer may build in a brand, not all require but only those that directly or indirectly affect the consumers (Dawson, 2000). Since they offer quality product, consumers are likely to have a higher association with the brand.

The strength of brand association is determined by how the consumers receive the information. A brand manage knowing which elements to consider in marketing would help to create an improved customer satisfaction (Finnand Louviere, 1996). Zara has gained a deep understanding of the full value preposition it exchanges with the customers. The customers have been able to associate the retailer as being able to deliver fast-fashion products in the right quantity, format, and time as requested. In Spain, Zara is famous for how fast they design and provide clothing required by their customers. The underlying value of a brand name is often based upon a particular association attached to it. A study by Burt (2010), indicated that there is a need for the retailer to focus on value and attitude information to be more competitive.

Conclusion

Brand equity has several dimensions, each giving value to the retail company in various ways. The study has analysed the concept of brand equity of Zara with three dimensions and causal relations between them. According to the analysis, Zara has been successful in offering quality products. Zara ensures that the design of their products are flexible and change regularly to match with the changing tastes and preferences. Concerning awareness, Zara has strategically located its retail stores throughout the country in strategic locations such as shopping malls. Once a brand identifies the benefit of brand equity, they can follow the strategy to create and manage the potential benefit. Finally, brand equity is a significant factor in marketing strategy in the sense that the brand is an asset that may drive the performance of a retail performance over time. The concept of brand equity is not only a strategically aid in creating short-term sales, but it is also a strategic move to create a long-term value of a firm. To maintain its reputation as a reliable and successful retailer, Zara must continue to connect with the customers’ emotions to retain them.

This paper would recommend Zara concentrate on promotion to maximize and sustain its performance in the fashion industry.  Moreover, investing more in the promotion of its brand would help the company introduce its brand to new customers. Promotion will further enable prospective customers to identify more with the unique nature of products retailed by Zara. The future and sustainable success of the brand lies within how the retailer communicate and connect with their continually increasing consumer audience. The retail company must be willing to pay a substantial expense for promotion purposes of its brand name. The promotion might have a little impact in the short run but will offer excellent results in the long term. The development may be aimed at making the customers associate the brand of sustainability.