Customer satisfaction: Marketing Strategies, Zara Case Studies

Customer satisfaction

Marketing Strategies

(2000 Words)

  1. Introduction

1.1 Background of the problem/issue

1.2 Research objectives/questions

1.3 Importance/contribution of your research

1.4 Outline of the remainder of the report

  1.  Literature review
    1. Overview of the organization of the present chapter
  • Use appropriate headings and/or sub-headings with corresponding numbering (e.g., 2.2, 2.3, 2.4 … to
  • identify and highlight important variables
  • define terms
  • integrate relevant information – do not just report studies in chronological order
  • highlight strengths and weaknesses and identify gaps in the literature

Note: Goals of a literature review

  • To demonstrate a familiarity with a body of knowledge and establish credibility
  • To show the path of prior research and how a current project is linked to it
  • To integrate and summarize what is known in an area
  • To learn from others and stimulate new ideas
  1. Methodology

3.1 Chapter overview

3.2 Sample (e.g., description of sampling method, size and characteristics)

3.3 Method (e.g., description of data collection method, rationales for using this method(s)   as compared to the others, data collection procedures, and any ethical     concerns you may need to address)

3.4 Measures (e.g., description of measures/instrumentations – i.e., your questionnaire)

  • Provide sample questions/scale items
  • Give information about reliability and validity

3.5 Limitations

3.6 Data analysis (e.g., description of data processing and analytical techniques)



Literature Review

Today’s market is characterized by highly competitive organizations which are all vying for consumer’s loyalty. Firms are faced with the challenge to maintain their own competitive edge to be able to survive and be successful. Strategies are carefully planned and executed to gain the ultimate goal of all: company growth. However, external factors are not the only elements which influence growth. Today most companies find that it impossible to create any kind of sustainable competitive advantage based on product alone. It is common knowledge that every one of the successful companies sought and found a precise understanding of how it could create a customer-centered competitive advantage.


Competition is an important factor to consider before entering a business. Companies should have successful competitive strategies to be able attract, retain and grow customers. However, before the company can plan and execute these strategies, it should be able to pinpoint its sources of competitive advantage which can be differentiated through products, services, channels, people and image (Kotler & Armstrong, 2001). Moreover, consumers tend to buy what is already familiar to them (Mittelhauser, 1997). A fine and well-advertised brand might have a competitive edge from a lesser exposed brand name. But then, a lesser known brand can also have an edge over price, given that they cost less than known brands (Kim et al, 2002).


Customer satisfaction refers to the consumer’s positive subjective evaluation of the outcomes and experiences associated with using or consuming the product or service. It refers to either a discrete, time-limited event or the entire time the service or product is experienced (Duffy & Kechand, 1998). Satisfaction occurs when the product has been able to meet or exceed the conceived expectations that the customer has (Padilla, 1996). Furthermore, customer satisfaction may also be considered as the measure of the high degree of quality of the product (Jacobs et al., 1998).    Crosby and colleagues (2003) deemed that once a product or service has been delivered or sold, its quality is believed to have been established.


Customer satisfaction is the primary aim of marketing. Most enterprises  ensure the best possible chance of attaining long-term stability and competitive standing through comptehensive customer analysis and implementation of marketing communication plans. Marketing makes the basic assumption that customer satisfaction should be the primary aim of the business. Such satisfaction can be achieved and sustained through the provision of competitive products or services, at competitive prices (Spreng, MacKenzie & Olshavsky, 1996). It should focus on every aspect of marketing, not only on promotion and sales techniques, to persuade customers to buy but also on target market, marketing mix and the effective marketing strategy (Kotler & Armstrong, 2001) because successful marketing results in stronger products, happier customers, and bigger profits.


Most companies find it impossible to create any kind of sustainable competitive advantage based on product alone. It is common knowledge that every one of the successful companies sought and found a precise understanding of how it could create a customer-centered competitive advantage. Hessan & Whitely (1996) emphasized the idea to take advantage of the competitive situation not just by being better in how that product gets sold, serviced, and marketed at the customer interface. It requires that companies create breakthroughs in how they interact with customers, and design a way of interacting that makes an indelible impression on customers, one that so utterly distinguishes them from others that it becomes a brand in itself.


The advances in technology and the fast modernization of the world, in general, opened new and very promising avenues of business opportunities not just in an individual’s locale but also abroad. A lot of business-minded individuals from different countries with different nationalities and cultural orientation have and continuously defied the geographic boundaries that exist between continents. This is evident in the growing number of internationally-operating business firms all over the world run by entrepreneurs of varying race and culture. The information man has successfully rebelled against intercontinental borders and the challenge that confronts him the most, deals with how to fit and blend in the new cultural environment in which their businesses are situated.


Key Industry Success Factors

One of the core characteristics of a successful organization is focus. Since the business environments are fast becoming more and more complex added to the fact that it changes rapidly and dynamically, businesses need to concentrate on a few key elements that are most important to their organizations survival. Thus, it is not surprising the critical success factors keep the organizations from straying too far with external issues not relevant to their company’s success.


Critical success factors (CSFs) in business, are the limited number of areas in which results, if they are satisfactory can ensure that successful competitive advantage for the company (Thierauf 2001). Determining these factors is an old concept in business because there were great leaders throughout history who have identified and addressed key factors to achieve their successes. There is no one definition of CSF but it is considered that these are the areas which the company needs to concentrate on to flourish. Therefore, the activities should be carefully monitored and guided by the management.


Chung (1987) defined critical success factors as managerial factors that create a competitive edge for a company in its respective industry. There is no specific process in identifying and executing critical success factors in strategic management planning. This is the reason whyThierauf (2001) asserts that different companies which have similar structure can conduct its market entry forming different strategies which lead to the development of various critical factors. As the primary means for an organization to achieve its strategy, critical success factors must take into account the differences in the environment and organization that exists.


There significant success factors that can determine and predict the positive outcomes and benefits of the organization strategic options. This is regardless of the scope of the operations and business transactions of the (local or international) of the organization. Such success factors are the significant considerations of variables that can directly and indirectly influence the growth and development of the company.


Porter’s Five Forces Model

Understanding the dynamics of the competitors in the industry helps assess the potential opportunities of every business venture by differentiating the similar products or services offered by the company against other business organizations. According to David (2003), there are at least four types of resources which the company can use to achieve its objectives: financial, tangible, human and technological resources. As such, it is necessary to realistically assess potential levels of profitability, opportunity and risk based on five key factors within an industry so as to determine the long-term profitability of a market or market segment.


  1. Suppliers. An organization that offers products as well as services also depends on suppliers that deliver the company’s raw materials. This condition leads to the buyer-supplier relationships within different industries. Such relationship is directly influence by the changes in the supply and demand variables based on the existing needs of the consumer population (Lee & Billinton, 1995; Katsikeas, Schlegelmilch & Skarmeas, 2002). The influence of the supplier is defined by its ability to dictate price and influence availability of materials. Other strengths of the supplier include their ability to (a) increase prices without suffering from a decrease in volume, (b) reduce the quantity supplied, (c) organize in a formal or informal manner, (d) compete in an environment with relatively few substitutes, (e) provide a product/material that is a critical part of the end product or service, (f) impose switching costs on their customers when they depart, and (g) integrate downstream by purchasing or controlling the distribution channels (Berry et al, 1998; Degraeve & Roodhooft, 1999;Anderson & Katz, 1998).


  1. Buyers. The power of buyers describes the impact customers have on an industry. When buyer power is strong, the relationship to the producing industry becomes closer to market conditions wherein the buyer has the most influence in determining the price (Owens et al, 1998; Bowman, 1999). As such the bargaining power of buyers increases when they have the ability to (a) make agreements with other companies providing similar products and services, (b) purchase a product that represents a significant fraction of the expenses incurred by the company, (c) purchase of a product that is undifferentiated, (d) incur low changes in costs when they change vendors, (e) be price sensitive by bearing in mind the options available, and (f) integration to purchase the goods of the suppliers (Baldwin et al, 2002; Bowers, Martin & Luker, 1990).


  1. New Entrants and Barriers of Entry. The possibility of new companies entering the industry influences the pace of the competition. Thus, the key is to evaluate the methods of entry and exit for a new player to the industry. Although any company should be able to enter and exit the sector, each industry presents different levels of difficulty influenced by economics. These unique characteristics of the each industry are referred to as barriers to entry which may come from different aspects of the business ranging from supplies to technology. They seek to reduce the rate of entry of new entrants which leads to maintenance of a level of profits for the existing players.


In terms of fashion retailing, Birtwistle and Freathy (1998) stated that its market has gained criticism for a lack of differentiation, possibly due to greater degrees of market concentration and the standardization of the fashion retail offer across stores and regions. With the addition of new technological developments, fashion retailers face both a differentiation dilemma and a challenge in maintaining any long-term advantage over their competitors. Competitive advantage is needed, and being unique and persuasive are important in order to attract the attention of customers and create positive consumer behavior that would benefit the company. Davies (1992) stated that four things are needed to be considered in order for retail stores or fashion brands to achieve competitive advantage. They are: the ability to differentiate; command a price premium; have a separate existence to the corporation; and provide a form of psychic value to customers. Similarly, these are the significant considerations made by new fashion retail stores in entering the fashion industry market.


  1. Substitutes.  “Substitute products” as those that are available in other industries that meet an identical or similar need for the end user. As more substitutes become available and affordable, the demand becomes more elastic since customers have more alternatives. The treat of substitutes often impacts price-based competition since substitute products may limit the ability of firms within an industry to raise prices and improve margins. Other concerns in assessing the threat of substitutes include the presence of new technologies that can contribute to competition though more diverse and economical substitute products and services. A segment is unattractive when there are actual or potential substitutes for a product.


Azuma and Fernie (2003) stated that fashion is an aesthetic expression that aims to communicate notions, subtleties, and therefore, as soon as an aesthetic order comes to be generally perceived as a code, then works of art tend to move beyond this code while exploring its possible mutations and extensions. The creative aspect of fashion in general cultivates the numerous ways of expressing oneself through other products available in the market. These include accessories and jewelries, bags, shoes, parlors and salons. Furthermore, fashion is believed to be a cyclical reflection of social, cultural, and environmental characteristics that are unique to a certain point of time in a particular geographical setting, in addition to playing a crucial role in complementing one’s self-image. As such, the never-ending and ever-increasing possibilities of portraying an individual’s self-image through other products available in other mentioned industries pose disadvantages as well as challenge in the entire clothing line of the fashion industry.


  1. Industry Competitors. A considerable number of companies have developed into an essential part of the period of global competition, increasing development, improved business paradigms, and corporate reorganization. The continuing transformation from the traditional industrial framework with its hierarchical companies to a worldwide, knowledge-founded financial system and intelligent corporations necessitates business management to realign and relocate its strategies (Mcmenamin, 1999). Along with the intense marketing nowadays, firms are faced with the challenge to maintain their own competitive edge to be able to survive and be successful. Strategies are carefully planned and executed to gain the ultimate goal of all: company growth (Karp & Schlessinger, 2002).


Among the largest apparel manufacturers in Hong Kong that likewise operates clothing fashion outlets in China includes Lai Sun Garments (under the brand Crocodile), Trinity Textiles, Smart Shirts, Giordano, Tal Apparel, Fang Brothers Knitting (with brand names: Jessica, Episode, Colour 18), Unimix (with brand names: Gieves & Hawkes, Lee Cooper Jeans), Peninsula Knitters, Esquel Enterprises, Yangtzekiang Garments (with brands: Michel Rene, Daniel Hechter), Crystal Knitters, Goldlion and  Winner Co. Garments which offer retail apparel products internationally. Other recognized apparel companies that manufacture overseas through sub-contractors include Esprit, Bossini, G2000/U2 and Shanghai Tang. Esprit Bossini and G2000/U2 are the local retailers and franchisers which are characterized with relatively stronger local market share compared with the foreign brands in the same price range like Benetton and Mango (Cheong, 2004).


SWOT Analysis

The success of the business organization entails detailed understanding and examination of political, social and economic factors that influence the growth and continuous operations of the company. Studying the important consideration relevant to the organization to serve the purpose and objectives of the company will determine its success. Consequently, decision-makers of the company should be sensitive of the general trends and changes that are taking place in their industry. This will include efforts to maximize the opportunities available while reducing the risks that confront the business organization.