Survey
Hypothesis Testing 1 – Customer service/ Sales support
Based on the 100 survey respondents, it seems that customer service does not play a significant role. However, reading deeper into our results, we found that a handful of respondents who falls in the high shopping expenditure segment actually values in-store customer service. This could be a segment Zara could explore customer service for.
Hypothesis Testing 2 – Social/ Environmental causes
Stemming from our consumer study in assignment 2a, we discovered that people are willing to pay more if they knew that the products support a cause. However, the general consensus in the focus group opposes the initial findings. Hence, we used the survey to find out if this was true for a larger sample.
From the survey, only one-third of the survey respondents claimed that they would be more inclined to purchase from Zara if they knew it supported a cause. We therefore have to conclude that there are mixed views about social causes and it should not be an area that Zara spends all its resources on. However, at the same time, we believe this aspect should not be abandoned as a third of consumers is still substantial enough and a social mission will add a meaningful purpose to the brand.
Hypothesis Testing 3 - Aspirational brand
Unfortunately, the survey results did not concur with our previous finding that Zara is an aspirational brand. From the focus group, we found that people will not intentionally save up to purchase Zara items. Hence, the experiences from the 7-day diary participants were isolated cases and cannot be used to generalize to a larger group.
1. Brand Awareness
Consistent with our qualitative research, Zara has high brand awareness. When asked to name the first few clothing brands, 63% has named Zara. In the same category, brands such as Mango, H&M, Topman and Uniqlo are also listed. When asked if they know the brand Zara, 99% of the respondents marked yes. This is a reliable support that Zara is strong in brand awareness, in both depth and breadth.
• For the importance aspect, survey respondents were asked to rate the 7 attributes based on a constant sum (the scores of 7 attributes have to tally to 100), to determine their relative importance.
• For the performance aspect, respondents had to rate each of the 7 attributes for each company on a scale of 1 to 10, with 1 being the lowest performance and 10 being the highest performance.
• The various scores of the 3 brands are plotted in the 3 graphs below.
• H&M and Mango were selected as Zara’s closest competitors as these were brands usually considered along with Zara when one is making a fashion purchase (as found from our exploratory research and focus group), which also coincides with our initial research in assignment 1.
3. Performance-Importance Analysis
We have identified Price, Design and Quality as the most important attributes to consumers when purchasing fashion apparels. For all 3 brands, they are doing well in these three attributes. However, in comparison, Zara falls behind H&M in terms of Price and Design.
Even though lowering the price could possibly cheapen the image of Zara brand, at the current prices in Singapore market, it is perceived as overpriced. This is incoherent with its brand promise to deliver designer-style clothes at affordable prices. Price seemed to be a deterrence to many consumers who likes Zara and some research should be done to see if there is dissonance in consumer's expected price and actual price. At the same time, emphasis should be put on the value Zara creates for consumers through stronger branding activities.
Other ways to further enhance the perceived value-for-money could be to look into improving its in-store service and variety of products, which are factors that Zara are falling behind competitors. While in-store service and variety are not particularly high in importance to consumers and may not seem to affect their purchase decisions, the lack of attention in these areas could possibly result in customer dissatisfaction. By ensuring it is at least on par with its competitors in these aspects, Zara would stand more chance in consumers' evaluation of choices. Moreover, our survey findings showed that respondents with higher purchasing power (more than $300 a month on fashion goods) value in-store service. Working on this aspect could lead to Zara potentially attracting more customers who can generate higher sales for them.
4. Hypotheses Testing
For the association with 'stylish', 'fast-fashion' and 'wide range of designs', Zara has scored in strength and favourabiity. We noticed that the uniqueness is moderate and we see that this could be due to little differentiation between fashion brands in these three associations. It might be unnoticeable that Zara changes its collections very frequently (fast-fashion) as only loyal customers who visit the store often will know this.
Unfortunately, Zara is under-performing in 'quality', which is a promise they have prided themselves with. 'Quality' is favourable so it has to strength its association with it. It also fared poorly in 'value for money' as most respondents perceive the opposite for Zara. Strategic communication might be needed to better position Zara in the market and provide a better value proposition to the consumers.
Across the few associations, we see that there is none which are unique to Zara and it is critical for Zara to find a unique selling proposition to emerge from the crowded market.
2. Brand Imagery | Test of Associations
With our focus group findings, we wanted to test the associations with 'quality', 'exclusivity' and 'stylish'. Also, the other associations such as ‘fast fashion’, ‘value for money’ and ‘wide range of design’ are tested in the survey.
In this section, we tried to test if some of the findings we had from our qualitative research is representative of the population. Our findings are summarized in the table below.
5. Net Promoter Score (NPS) - Negative
Unfortunately, Zara scored poorly in terms of Net Promoter Score, with a value of -46.2%. This means that majority of its customers are not loyal to the brand and do not actively promote it. We believe that the low NPS could be due to its price as it is hard to recommend products which are expensive and not exceptional as compared to other brands. Zara needs to work on improving various aspects as mentioned above to improve its NPS.
6. Distinctions between groups
i) Influences on Purchasing Behavior – differ between segments
From our focus group, we found that the media and word-of-mouth carried significant weight in affecting one’s purchasing decisions. It is then through the survey that we ascertain that opinions of friends and family members matter over the media communications. Intriguingly, for the opinion seeker segment, the opinions of friends and family mattered significantly more over the sales assistant’s.
ii) Perception of Price/ Value-for-money – differ between segments:
Based on customer segmentation, we found a group of respondents who spent a sizeable amount on shopping (above $300 per month), they ranked Zara favorably on price. On the other hand, there was a group of Value Buyers, who found Zara’s products poor on value-for-money. Hence, Zara needs to understand the different needs of the 2 distinct customer segments and determine its strategy.
iii) Differences in perceptions between gender
Based on our focus study, it seems that females have a higher brand preference for Zara and we used the survey to ascertain this. However, from the analysis of the survey results, it seems to suggest that gender does not affect consumers’ perceptions towards Zara. We will hence not pursue the topic of gender of Zara's branding.
