Research Proposal on A comparative case analysis of Zara and Topshop co

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					                              Research Proposal

  A comparative case analysis of Zara and Topshop Company



Fashion industry market as of the present is growing and is booming as there are

sectors focused on the type of business. But, how come low cost fashion companies

do impact in competition within the fashion industry? Is there really an issue pointing

towards these companies such as Zara and Topshop? Fashion industry can have

greater demands from various customer types and due to globalization, such low

cost fashion companies can be in to prove its worth in the fashion market. The

research can be used to determine underlying factors in such cases to be taken from

Zara and Topshop and thus, provide awareness to the fashion business of such

impact in the market mostly, to those first class fashion companies.


Background

The problem can be that nowadays, low cost fashion companies can possibly

dominate the industry of today and in the future and the situation for competition in

the fashion industry can amicably be on high demand on such products and services

and that there is evidence of business risks as possible. The interest of the paper will

be to determine how low cost fashion companies impact the competition within the

fashion industry in the aspect of its market stance. There should be awareness and

assessment on the presence of the two low cost fashion companies, Zara and

Topshop will be considered as the focus for this study. Amicably, it is also imperative

for this research to determine and evaluate such customer views with regards to the

two low cost fashion companies (Zara and Topshop) and in thus, the study can

involve such frequent shoppers of those companies and from such responses can
possibly linked and indicate as to why these low cost companies do impact such

competition within the fashion market industry.




Relevant Literature

A consumer preference for brands with a global image, even when quality and value

are not objectively superior, has been proposed as a reason for companies to

consider global brands (Cited from, Shocker et al., 1994; Taylor and Raymond,

2000). Therefore, Fashion Company needs to identify the response of consumers

worldwide to its global advertising for such specific consumer segment. For instance,

the fashion industry for women is particularly relevant in terms of examining the

feasibility of cross-national segmentation. Research indicates that females tend to be

more fashion conscious, be more knowledgeable about fashion brands (Cited from,

Blyth, 2006), and read more fashion magazines than male consumers (Cited from,

Chamblee et al., 1993; Putrevu, 2004). This implies that marketers need to pay

special attention to women when expanding and advertising fashion brands to

international markets. The fashion industry is characterized by a considerable

amount of standardized advertising. In fact, global advertising in fashion magazines

such as Vogue and Elle helps create the image of a designer brand name for fashion

goods, such as apparel, accessories, and perfume, and has been used by many

leading firms (Cited from, Blyth, 2006). Increasingly, some fashion marketers have

discovered that their advertising is directly linked to retail sales and strong retail

performance (Cited from, Callan, 2006).
Fashion lifestyle segmentation


In recent years, it has been suggested that we are seeing the emergence of a new

group of consumers who have similar preferences and buy similar brands that are

promoted globally as well as in local media. These new consumers have been

referred to as "global consumers," who exhibit similarities to people in other nations

in terms of lifestyle and consumption patterns (Cited from, Hassan et al., 2003).

Although differences abound in music, values, and cultures, some have argued that

commercial advertising on mass media (TV, magazine and internet) has contributed

to a global consumer culture, particularly for global brands (Cited from, Arnold and

Thompson, 2005). In various contexts, it is important to examine whether evidence

really shows support for the notion of global consumer context. Thus, again, it is

important to examine whether fashion segments cut across national boundaries.

Lifestyle segmentation has received considerable attention in fashion products, such

as clothing, accessories, and sportswear. Fashion lifestyle is defined as consumer

attitudes, interests, and opinions related to the purchase of fashion products (Cited

from, Gutman and Mills, 1982; Ko et al., 2006). In a study of the female apparel

market in the USA, Shim and Bickle (Cited from, 1994) outlined three fashion

lifestyle segments: symbolic/instrumental users, who are younger, innovative,

fashion-conscious, and represent higher social class level; practical/conservative

users, who are oriented more toward comfort and function than toward fashion or

appearance and are not likely to enjoy shopping; and apathetic users, who tend to

patronize discount stores. In another study from the USA, Kim and Lee (Cited from,

2000) identified six fashion lifestyles price-consciousness, fashion-consciousness,

information seeking, self-confidence, attitude toward local stores, and time-

consciousness and was related to different segments that sought benefits from
catalog shopping. As Lee et al., (Cited from, 2004) divide TV home shoppers into

four segments based on fashion lifestyle the aesthetic group, the economic fashion

innovator group, the showy uncritical group, and the fashion-uninterested group and

discuss their different responses to product advertising on TV home shopping.

Finally, Ko and Mok (Cited from, 2001) found that fashion lifestyles have significant

effects on advertising effectiveness in an Internet shopping context (Cited from, Ko

and Park, 2002). The low cost companies can be guided by philosophy of producing

fashionable cheaply made clothing, but adapts its clothing lines to each country and

ensures that stores are permanently restocked. To strengthen brands that involve

such mixture of fashion and cheapness, there can be collaboration among celebrities

and famous designers available at low prices.


Thus, for instance, Hennes and Mauritz there can be the support of singers such as
Kylie Minogue and Madonna and Chanel designer Karl Lagerfeld have all worked
with H&M and their collections have sold out in hours. Hennes and Mauritz reported
then, such sales of €8.6 billion approximately $11.9 billion, putting it slightly ahead of
its nearest rival in the clothing retail industry, Spanish group Zara, as the principle
remains the same: fashion and quality at the best price. The emergence of
international low-cost fashion chains such as Hennes and Mauritz is linked to
shopping trends as the success of these brands is evidently down to their low prices,
which is the main point. (Cited from, The Local, 2007 in Business Region Goteborg)
The people and the environment where people live in are affecting the changes in
fashion. These changes are influenced by celebrity culture, demand for cheap, fast
fashion and the ever-increasing demand to help save the planet. Fashion brands
realize the needs and act upon it to keep people interested, and to keep people from
buying their brand. However, the regular consumer doesn't know about seeding, so
therefore she believes that the celebrity has bought into a brand they trust.




Information on Zara


Source of image:
From: http://en.wikipedia.org/wiki/Image:Ifc_Zara_20071110.jpg




Zara is a successful fashion chain store for the Spanish group owned by Spanish

tycoon Amancio Ortega as the group is headquartered in Spain, where the first

Zara store opened in 1975. Today, Inditex is probably the world's fastest growing

retailer with over 3,100 stores around the world in over 70 countries the Zara format

taking around 1,000 of those stores. In March 2006, the group overtook Sweden's

Hennes & Mauritz to become Europe's largest fashion retailer. For instance, it is
                                           [1]
claimed that Zara needs just two weeks           to develop a new product and get it to

stores, compared with a nine-month industry average, and launches around 10,000

new designs each year. Zara has resisted the industry-wide trend towards

transferring production to low-cost countries. Perhaps its most unusual strategy was

its policy of zero advertising; the company preferred to invest percentage of

revenues in opening new stores instead. Zara was described by Louis Vuitton as

"possibly the most innovative and devastating retailer in the world". Zara has also

been described as "Spanish success story" as reported by CNN news. The clothing

industry followed design and production processes that required long lead times,

often up to six months, between the initial design of garment and its delivery to

retailers. This model effectively limited manufacturers and distributors to just two or

three collections per year. Predicting consumer tastes ahead of time presented

inherent difficulties, and producers and distributors faced the constant risk of

becoming saddled with unsold inventory. The company's instant fashion model,

which completely rotated its retail stock every two weeks, also encouraged

customers to return often to its stores, with delivery day becoming known as "Z-day"
in some markets. The knowledge that clothing items would not be available for very

long also encouraged shoppers to make their purchases more quickly. Moreover,

such article written in the Businessworld magazine describes Zara's fashion

strategy as follows: "Zara was fashion imitator. It focused its attention on

understanding the fashion items that its customers wanted and then delivering them,

rather than on promoting predicted season's trends via fashion shows and similar

channels of influence, which the fashion industry traditionally used." (Cited from,

Zara: Spanish Season, Businessworld) As the shortening the product life cycle

means greater success in meeting consumer preferences. (Cited from, Zara's Secret

for Fast Fashion, Harvard Business School Working Knowledge for Business

Leaders) Thus, if design doesn't sell well within week, it is withdrawn from shops,

further orders are cancelled and innovative design is pursued. No design stays on

the shop floor for more than four weeks, which encourages Zara fans to make repeat

visits. An average high-street store in Spain expects fans to visit three times per

year. That goes up to 17 times for Zara (Cited from, Zara: Taking the Lead in Fast

Fashion, 2006 in Business Week).




Zara's success story


While retailers concentrate their money and efforts on building a brand image

through advertising campaigns, their lack of control over sub-contractors has left

many open to accusations of using sweatshop labour when unacceptable practices

are uncovered at factories producing their merchandise. The company's success lies

in it having total control of every part of the business. It designs, produces and

distributes itself. By controlling the entire process from factory to shop floor, Zara can
react quickly to changing fashion trends and customers' tastes, providing

innovativeness that has taken Europe by storm. Shoppers addicted to the Zara

brand know exactly when the deliveries will be arriving at their local shop and some

even turn up before opening time on delivery days to be the first to pick up the latest

lines. (Cited from, Zara, Spanish success story, CNN, 15 June 2001) The company's

success is proof that it is still possible to build a massive brand by doing no more

than meeting a market need. It has achieved this without any advertising or

promotion and without outsourcing it’s manufacturing to countries where labour is

cheap.


Source: CNN.com Europe Business (June 15, 2001)

From: <http://edition.cnn.com/BUSINESS/programs/yourbusiness/stories2001/zara/>


Information on Topshop




"Topshop was established in 1964 within Sheffield department store called Peter

Robinson; however, the same store allocated Topshop space in the basement of

its Oxford Circus store in London. During the year 1974, Topshop was taken out

of Peter Robinson and set up as standalone retailer. When Jane Shepherdson

became Brand Director in 1999 her vision was to establish the brand as fashion

authority. Since then, Topshop has gone onto become one of fashion's major

success stories with over 309 fashion stores nationwide, including the world's

largest fashion store at Oxford Circus, which attracts over 200,000 shoppers per

week. Then, during September 2005 Topshop showed its in-house design

collection Unique as part of the official London Fashion Week schedule and
subsequently forged exclusive partnerships with international boutiques 'Opening

Ceremony' in New York, 'Colette' in Paris and Tokyo's '10 Corso Como Comme

des Garcons'. During summer 2006 'Barneys' in the US began retailing Topshop's

best selling Baxter jean in its flagship stores. Plans to expand internationally are

also underway with stores in Moscow and St. Petersburg due to open in 2008.

Topshop has offered a number of celebrity and designer collections and after the

recent success of the Kate Moss clothing range, Topshop has decided to

introduce the range to the US market. Topshop has struck deal with U.S.

department store to sell through its 19 stores.[4] Topshop is known for its unique

and trendsetting styles, its clothing design is usually heavily influenced by the era

the company formed in 1960's".


Source: Topshop Website
From: <http://www.topshop.com>




Research Questions




The research questions for the study provide a crucial factor in understanding the

value of the study presented as a whole context and will guide the flow of research

organization.




The core research question can be:
In what ways and how does such low-cost fashion companies impact in the

competition within fashion market industry? (Implying to Zara and Topshop)




The sub research questions are as follows:


   1.    What are some of the factors affecting the fashion industry market in relation

        to such impact of the low cost companies?


   2.    What are the possible effects of such low cost company presence on such

        customer preferences when it comes to choosing fashion products?


   3.     Does such impact have any relevance to fashion lifestyle segmentation?

        (Discuss the idea fashion lifestyle segmentation)


   4.     Does competition in the fashion industry provides a healthy relationship

        among low cost companies as compared to first class companies? (Consider

        one first class company as an example)




Research Objectives



The main objective for this study is to be able to identify possible assumptions of the

low cost fashion companies as there is impact on the competition within the fashion

industry and to be able to provide a sound research equipped with appropriate

primary and secondary data to incur a substantial case study application in

comparing Zara and Topshop respectively. Thus, to be able to link well with such

research questions in lieu to such research evidences and findings backed up with
appropriate supporting data and knowledge found in the literature study. Then, the

need to identify the present state of competition within the fashion industry and lastly,

in order for the research to execute as well as to perform valid and reliable research

design and methodology as relevant as possible in achieving a sound realization of

the study's objective.




Research Design and Methodology



For determining ample substance of such impact of low cost fashion companies, the

research samples to undertake will be subject for survey questionnaire in support to

case studies as presented for Zara and Topshop respectively. It can be divided into

two groups of shoppers, 50 loyal shoppers of Zara and the other 50 shoppers of

Topshop, the two groups of respondents are Hong Kong shoppers as the two stores

have branches in Hong Kong. It is essential to focus on such sample population in

order to control such feasibility problems that may come along in research. The age

bracket of the shoppers can range be from 25-35 years old. Then, quantitative and

qualitative data will be analyzed and that quantitative will be sourced to the primary

data gathered and will be undergone into compilation, frequencies, percentages and

determination of relationships. Qualitative data will come from the open type of

questions in the questionnaire that will reflect the personal opinions of respondents

not included in the selection, data will be significant when quantitative data is

discovered to have deviations from such factors seen. For the realization of the

study in progress, one crucial methodology to be applied is through survey

questionnaires that will be given to the shoppers coming from Zara and Topshop

stores. The survey questionnaire can be in easy and simple form for the students to
respond well and fairly. Thus, basic shopper information has to be included in the

survey questionnaire such as the shopper’s age, gender, occupation and income

bracket (optional, only if the shoppers want to tell how much their income is). The

questions can be divided into 3 subsets, 5 questions will be asking how they are

influence by the services and products being offered by those low cost fashion stores

and possibly ask them if they see and feel any sense of competition among other

fashion stores and if there is, any specific indicators of it. The next 5 questions will

be price ranges of such products probably, clothes on regular price, new arrival of

items, and also those products on sale and or bargain and then ask the shoppers

opinions if prices do matter to them as to why they shop at Zara or Topshop and not

on those signature, first class fashion stores and possibly to give their ideas on

prices when it comes to competition from within the fashion markets. The last 5

questions can be identifying of such Zara and Topshop effectiveness in such

promotions they give to their shoppers and basically, ask the shoppers to give their

satisfaction ratings of those fashion stores and to ask them to give general

assumptions of Zara and Topshop and probably suggest areas for improvement that

caters to the shoppers in majority. Thus, there can also be utilization of several case

study examples supporting these low cost fashion companies for the underlying

outcomes they contribute in fierce competition among fashion industries and its

markets and these cases can be found from secondary sources of information as

such supported by peer reviewed journals and or academic articles related to the

conjectures of the fashion market today. The qualitative approach is to answer

questions about the nature of phenomena with the purpose of describing and

understanding them from Zara and Topshop shoppers' point of view. Thus, the case

study design have the capability of uncovering causal paths and mechanisms and by
precise detail there identifies several causal influences and interaction effects which

might not be treated well in such statistics investigation as particularly helpful in

generating useful concepts for better development of the fashion industry reflected in

those low cost companies. (Cited from, Leedy, 1997; Yin, 1984) Thus, the case

study approach will amicably involve the utilization of such methodological

information integrating certain suitable ideas and concepts from such primary

resources as handed well using first hand findings and research outcomes signifying

research appropriateness through any case study material based on amiable

research tools and techniques to be executed in research. (Cited from, Leedy, 1997;

Yin, 1984)


 The research methodology and design process would involve such primary as well

as secondary sources for bringing about substantial studies that are literature based

and theoretically inclined for which such research methods utilized may truly serve

its first hand purpose for this study. The primary sources will have to represent

original thinking as the core data for the research will have to be in case studies as

well as survey questionnaires equipped with suitable statistical data and its

measures as it can have direct observation to the research process as undergoing

research should be handed in with empirical facets and crucial points gathered by

the researcher. There should also be the integration of secondary data as findings

and assumption studies made by several researchers can be good option that

supports any valid information. The secondary data will then analyze and evaluate

information as being found in the primary sources and creates information more

accessible to the readers and the parties involved as these were supported by good

books, peer reviewed journals as well as articles and other publication types. When

moving the case method for instance, can have such shifts from one paradigm to
another and in handling study discipline, such careful approach is amicably needed.

The data to be gathered will be tallied by the researcher and will be encoded in the

computer. Hard copy will be printed to ensure that files are kept including the

questionnaire responses of the sample.           Frequencies will be computed into

percentages    and    will   be   presented   through    graphs,    tables   and   textual

arrangements. VR data will also undergo interpretation to determine student to VR

relationships indicating the applicability of the research study.


 The analysis of data can be through scaling interpretation for the survey questions

that can be in support to any descriptive type of analysis basing from the responses

of shoppers of both Zara and Topshop. The measurement for such analysis, must

take such forms of non-comparative scales to be illustrated as qualitative approach

can involve numeric value and on the other hand, be it in semantic way with

complete scaling measurements as equipped to understand applications in such

fashion essence. There will be utilization of interval scaling as the researcher can

justify the use of the arithmetic mean as measure of average. Thus, Likert scales

have been described in this chapter are among the most commonly used in

marketing research. Whilst there are great many more forms which scales can take,

if students are familiar with those described in this chapter they will be well equipped

to deal with most types of survey problem. Furthermore, through such application of

the Likert scale measurement, the degree of agreement as well as disagreement will

be given desired numeric value wherein there can include such 2-5 interpretative

points from strongly agree up to neutral scaling aspect down to strongly disagree as

to be effective in calculation processes (Cited from, Underwood, 2004 p. 1 in

Greymaterial, May 3, 2007). The data to be presented will have to be in tabulation

and due analysis through the use of deviations in median and percentage
standardization. Future studies that could be of use by the researchers can be seen

in the matter of how effective this particular research study to the society that will be

transpired that the study is of applied values and norms that could be the useful

indication of the studies to be discussed and be able to assimilate in the future

research studies that is more or less related to the presumed study. The proposal

then, may possibly explain relevance of research approach and its affectivity to the

served purpose respectively.


Resources

The resources deemed for the realization of the study can come from related books

and certain publications mostly underlying to the support resource materials ideally

as basis for the literature studies of the study. The knowledge and information to be

integrated and evaluated for validity and reliability can be resources directed to

EBSCO – the emerald insight journals and articles as well as from Blackwell Synergy

if possible and thus, good sources of books that can be found from Amazon books

online and Questia Library.


Access to study population


For such access to study population, there can be distribution of permission letters

and that should be given to the supervisor heads of Zara and Topshop and ask their

permission to use their stores as the venue for giving out of the survey

questionnaires to their customers/shoppers who come in their stores and buy

something on their products. Thus, informing Zara and Topshop that such suitable

information about them will be use as information reference for whatever case data

needed for the overall aspect of the research.

				
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