Analysis
ZMET
In this assignment, we attempt to measure Zara's brand value via Interbrand's 5 stage approach. The summary of our stages are as follows:
The average growth rate for the retail apparel industry in Singapore is 6.3% as of 2008. We used this figure as a yardstick to estimate the growth rates for the respective customer segments of Zara.
Forecasted growth rates for respective customer segments:
Fashion Chasers: 6%
Opinion Seekers: 4.5%
Rational Shoppers: 5%
Value Buyers: 3%
As Zara is at the mature stage of growth, we expect the growth rate of each segment to be lower than the industry average. Fashion Chasers are estimated to be the fastest growing segment as it is the segment with highest spending. Value Buyers are unlikely to grow as much since they do not perceive Zara as a brand that provides them products at reasonable prices.
After analyzing each factor, we have rated the following factors accordingly. The discount rate we have estimated is 10%.
Overview
Stage 1 - Segmentation
Stage 2 - Financial Analysis
Stage 4 - Brand Strength
Stage 5 - Brand Value
After completing all stages and doing our calculations, we have come to a brand value of SGD 14,676,761.48.
Through our previous assignment, we have identified four main segments of shoppers from our survey respondents: Fashion Chaser, Opinion Seeker, Rational Shopper and Value Buyer.
We have estimated the Fashion Chasers to be the smallest segment of all, but the highest contributing segment to Zara's profit as they have a larger spending for fashion goods.
Stage 3 - Role of the Brand
We have estimated that the brand is most influential in purchase decision for Fashion Chasers since they are highly sensitive to latest trends and Zara can satisfy their needs to be fashion forward.
Rational Shoppers are brand conscious and place quality as their top consideration therefore they will be willing to pay a premium for better quality apparels. They do purchase on impulse occasionally but usually rationalize their purchasing decisions hence this segment will be important for a brand like Zara.
Opinion Seekers are very reliant on opinions and recommendations of their circle of friends and family. Thus positive word-of-mouth of Zara and a strong brand image are crucial to this segment.
Value Buyers will look for the cheapest available option and the brand will have the least influence on their purchase decision.
Summary
