Session Product Strategy and Zara Case

2/6/2019
Action Plan
• Where are we headed? 
• How will we get there? 

Developing Product Strategy
• What will we do? 
A competitive sensible startegy should

A Successful Strategy: have at least one of four characteristics
• Helps achieve coordination among

functional areas of the organization.
■ It is something a competitor cannot do
• Defines how resources are to be ■ It is something a competitor will choose not to do
allocated. ■ Competitors will be at a disadvantage if they do
it
■ It causes us gain if the competitor does it
• Leads to a superior market position.
1
2/6/2019
Developing A Product Strategy: Ansoff Matrix- the risk of growing business
■ Setting Objectives- where do we want to go

■ Choosing a Marketing Strategy
Hierarchy of Objectives Setting Objectives
Company
Level 0 mission/vision
Corporate
1. Characteristics of Good Objectives
Level I objectives
1. Quantified standards
Corporate strategies
2. Challenging
Level II
Divisional
objectives 3. Milestone
Divisional strategies
Product/brand
objectives
2. Two Major Decisions
Level III
Brand strategies 1. Which Objective to Pursue?
Program
2. How High it should be?
objectives
Level IV
Tactics
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Elements of a Product Strategy Consideration of Strategic Alternatives
1. Statement of the objective(s) the product Two Major Paths

should attain* 1. Increasing Sales/Market Share
2. Selection [Consideration] of strategic 1. Market Development Strategy
alternative(s) 2. Market Penetration Strategy
3. Selection of customer targets 2. Increasing Profitability
4. Choice of competitor targets 1. Decreasing Inputs
5. Statement of the core strategy 2. Increasing Outputs
6. Description of supporting marketing mix.

7. Description of supporting functional programs
Strategic Alternatives
Targeting and Positioning
Long-
term
profits
Growth in
Efficiency,
■ Statement of the Core Strategy =Value
sales or
market
share
short-run
profits Proposition
 Economic (cost/price) Advantage
Market Market Decrease Increase
development penetration inputs outputs
 Functional Advantage
New Existing Reduce Increase  Psychological Advantage
segments customers costs price
Competitor Improve
Convert Improve
s’ asset
nonusers sales mix
customers utilization
New product
development
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Core strategy- Price OR Non Price Broad Strategy Over the Life Cycle
Skimming Customer
and Retention Harvest
Penetration
Try to be last
Example: New Honda City Car in India

4. Supporting Marketing Mix & Programs 2014
Objective:
■ Product and Brand To capture 30 percent of the Mid Size Sedan market by the end of
year 2, a 5 % increase from the present 25 percent
■ Pricing
Customer Targets:
■ Marketing Channels Quality-conscious professionals
Non business professionals
■ Communication: ex) Advertising and Sales Non professionals
Promotion Competitive Targets:

Maruti Ciaz
Hyundai Verna, Skoda Rapid,
Toyota Yaris
Core Strategy:
Quality
Reliability
Expansion in tier 3 cities
4
2/6/2019
ZARA Zara central design team
Zara Distribution Plan Zara Product strategy
■ Short Lead Times: Keeping Up With Fashion-

Zara can move from identifying a trend to having clothes
in its stores within 30 days
■ Reducing Risks
By reducing the quantity manufactured in each style,
Zara not only reduces its exposure to any single product
but also creates an artificial scarcity.
■ Leadership in Numbers
Instead of more quantities per style, Zara produces more
styles, roughly 12000 per year, and offer more choices
than its competitors
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2/6/2019
Zara Product strategy Zara Product strategy
■ Ownership and Control of Production ■ React Rather Than Predict

80 per cent of Zara's production is carried out in Europe, Rather than concentrating on forecasting accurately, it
much of it within a small radius of its headquarters in has developed its business around reacting swiftly.
Spain.
■ Quick-Bake Recipe: Well-Mixed Ingredients Store
■ Supercharged Product Development feedback to design with pre died fabric ,approval and
1,000 new styles every month is managed by a design distribution within 48 hours
team of over 200 people, all based in Spain ■ Keeping Costs Down
Contractual assembly workshops, a meagre 0.3%
advertising cost against 3.5% norm ,Low volumes per
style and changing products quickly

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2/6/2019

• Where are we headed? 

• How will we get there? 

A competitive sensible startegy should

• Helps achieve coordination among

Developing A Product Strategy: Ansoff Matrix- the risk of growing business

■ Setting Objectives- where do we want to go

Hierarchy of Objectives Setting Objectives

Elements of a Product Strategy Consideration of Strategic Alternatives

1. Statement of the objective(s) the product Two Major Paths

6. Description of supporting marketing mix.

Example: New Honda City Car in India

Promotion Competitive Targets:

ZARA Zara central design team

Zara Distribution Plan Zara Product strategy

■ Short Lead Times: Keeping Up With Fashion-

Zara Product strategy Zara Product strategy

■ Ownership and Control of Production ■ React Rather Than Predict

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