5033 MARKETING PROCESSES AND PLANNING ASM2

Assignment 1 of the Marketing Planning and process subject will make readers understand the role of marketing in an organization, which main research object is HM company. It is a global fashion group and has a significant influence on the fashion industry. Marketing is known as a department responsible for representing the companys image in front of the community and society. In the current context, the Covid19 epidemic is still very complicated. Therefore, marketing becomes more critical for every company to pay attention to new customers and maintain relationships with loyal customers. This article will dig deep into modern marketing research and its process to demonstrate its necessity for businesses, especially HM.

ASSIGNMENT 2 FRONT SHEETQualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 2 Marketing Planning and Processes

Group number:

1 Pham Van Luong- GBD201449

2 Bui Quang Huy- GCH200751

3 Dang Thuy Trang- GBH200743

4 Dinh Hai Trang- GBH200790

5 Le Quang Hiep- GBH200777

Student declaration

1.1

I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism I understand that making a false declaration is

a form of malpractice.

2.1

OBSERVATION RECORDStudent 1 Pham Van Luong

Description of activity undertaken

Assessment & grading criteria

How the activity meets the requirements of the criteria

Student

3.1

Assessor

name:

Student 2 Bui Quang Huy

Description of activity undertaken

Assessment & grading criteria

How the activity meets the requirements of the criteria

4.1

Student 3 Dang Thuy Trang

Description of activity undertaken

Assessment & grading criteria

How the activity meets the requirements of the criteria

5.1

Student 4 Dinh Hai Trang

Description of activity undertaken

Assessment & grading criteria

6.1

How the activity meets the requirements of the criteria

Student 5 Le Quang Hiep

Description of activity undertaken

Assessment & grading criteria

How the activity meets the requirements of the criteria

❒Summative Feedback: ❒ Resubmission Feedback:

Internal Verifier’s Comments:

Signature & Date:

9.1

Part A: Competition Analysis (H&M and Zara) 11

2.6.5 Competitive advantages 21

Part A: Competition Analysis (H&M and Zara)

1 Product

H&M is a fast fashion brand and a longtime rival of Zara H&M launched in Vietnam on September 9,

2017 Before the opening, there were thousands of people queuing outside After only two months, H&Mopened its second store in Vietnam and confirmed its hotness Currently, in the Vietnam market, H&Mhas 12 stores in many big cities such as Hanoi and Ho Chi Minh (Nguyen, 2021) It can be said that this will

be one of Zara's direct competitors

Products are divided into three levels before being delivered to customers

Zara's core value is the initial value of each product and is the main factor for customers to buy theproduct Zara’s clothes not only carries famous fashion brands but also the main purpose is to bringtrendy fast fashion products and good materials

Actual products: Zara is a globally famous fast-fashion brand with many stores in all countries including

Vietnam Zara sells clothing products and fashion accessories for men, women, and children, but focuses

on women High-quality, besides products designed by famous designers, products are always carefullypackaged before reaching customers Zara always catches up with fashion trends very quickly and adds toits collection, with fashion acumen, new Zara products will be in store in 1 or 2 weeks That is also the keydifference between Zara and its competitors (Oliveria, 2014)

Augmented products: Zara products are supported by delivery and credit which makes it easy for buyers

to order products in many places Besides, Zara products will support exchange and return productswithin 30 days (Zara.com,2021) customers will have special promotions when buying products at Zarawith a specified quantity

H&M’s core value is to bring customers products with global brands, and help customers express

themselves through fashion the main purpose towards the sustainability of the product

Actual products: H&M is a well-known company that aims to bring sustainability to its customers Wide

range of prices, fashionable apparel, accessories, lingerie, and beauty products for men, women, andchildren of all ages and sizes Product quality is not so high but rather aimed at durability (Oliveria, 2014).The difference between the company is that the designs are divided into many events to reach closer tothe audience For example, H&M has a product category for weddings, party wear, Masquerade parties,

office wear the products are always carefully packed before being delivered to customers The designersalways partners with Pattern Makers, Buyers, and Business Controllers to plan and create new H&Mcollections (H&M CAREERS, 2021)

Augmented products: H&M products support door-to-door delivery and credit There are additional

promotions when buying 3 for 2 socks Besides, there will be detailed support for exchanging or sellinggoods when there is a problem

Zara and H&M have clear product differences, while Zara focuses on high-quality products, h&m focuses

on product variety and long-term durability Besides, the enhancement products are quite similar butH&M has more promotions With the above analysis, it is easy to see that H&M's products are likely tohave more sales than Zara because of their durability and affordable prices, targeting many customercriteria as delicious and cheap

2 Price

In some Asian countries, such as Japan and the Arab Emirates, Zara is known as a fast-fashion brand with

mid-range prices However, Zara still maintains modest prices in its home country, Spain, which areslightly higher than other countries in the euro area It can be said that this brand is pricing its productsbased on what customers are willing to pay Instead of using the seller's cost, Zara's pricing is based onthe buyer's perception of value (Value Based) Depending on the product category, target group andquality, prices range from 3.95 € to over 200 € (ZARA PRICE, 2021) Based on the market, Nordic countrieswill grow 40%, other European countries 10%, Americas 70% and Asia and similar regions will increase100% (with worldwide distribution costs) (Oliveira, 2014) The use of Value-based pricing has fueled amassive customer strategy for Zara Zara cares about customers' feelings as well as adjusts reasonableprices to better suit customers

H&M is a well-known brand in the fashion business, and it is perhaps Zara's most significant competitor

at the moment H&M can purchase materials at a lower cost than Zara, allowing it to maintain a lowaverage price across all markets H&M's pricing strategy seeks to appeal to a wide range of customerswith varying levels of purchase Depending on the product category, target group, collection and productquality, prices range from €1.50 (accessories) to over €150 (exclusive collection) (H&M, 2021) H&M uses

a Cost-based strategy, pricing is cost dependent However, it is fairly widely distributed globally (a shirtpriced at €15.95 in Europe would cost $15, 95 in the United States) (Oliveira, 2014).

It can be seen that H&M's pricing strategy is doing better than Zara, they know how to adjust prices to

suit all customers, even those with low average income can still buy products of this brand Instead ofusing a pricing strategy based on what customers can afford like Zara, H&M has come up with a pricingstrategy based on production and product costs

3 Place

Zara owns 6,600 stores in 96 different countries around the world, each store receiving new shipments

twice a week There are four Zara distribution centers throughout Spain that each clothing product has to

go through (Hanbury, 2018) With a strong distribution network, Zara can deliver to stores in Europewithin 24 hours and to stores in the US and Asia in less than 40 hours (Commerce, 2018) The company'sVMS (Vertical Marketing System) is very suitable for the company's Zara system VMS structure includescontrol over almost every aspect of the supply chain, more items manufactured, faster design-to-shelf,lower inventory, and more frequent shipments, so this is Zara's strong point compared to thecompetition

Approximately 4,850 stores in 75 markets and 53 online markets In the H&M group (H&M Group, 2021)

H&M owns two marketing channels, one where it sells directly to its customers through its online

website, the other through distributors who then sell to other retailers nationwide For example, inVietnam, customers will often encounter H&M stores in commercial centers such as Vincom time city,Vincom plaza Because the salary is widely distributed and is a famous brand, H&M is not difficult toreach customers Besides it focuses on omnichannel distribution, customers can easily access informationabout the company and shop on many mediums such as websites or in-store

H&M currently owns a smaller number of stores than Zara but distributes products more multi-channel,besides that H&M's website is designed to be more diverse and accessible than Zara, but in contrast toZara's products more often and transported to regions faster

4 Promotion

Zara spends very little money on marketing It does not participate in any showy marketing, unlike its

competitors This is why Zara commercials aren't broadcast on television Its outdoor advertising, on the

other hand, is eye-catching and focuses on young people's favourite fashion trends Zara's distinct sellingfeature is its quick turnaround time, a large selection of designs, and low costs Rather than using priceymarketing methods, it depends on word-of-mouth and social media Zara has a very unusual social mediafollowing On Facebook, it has 30 million fans, and on Instagram, it has 45 million Zara's goods, however,

do not have the Zara brand Zara enjoys allocating a portion of its profits to the opening of new locations.The company invests in high-end real estate and interior design for its locations Zara feels that itsshowrooms are sufficient for promotion and that it does not require any more marketing to sell its goods (Thomas, 2021)

H&M has a diverse product portfolio appealing to various groups Each brand is in charge of its own

marketing strategy To raise awareness, the commercials are aired at regular intervals and on networksthat are mostly viewed by young people (Team, 2021)

H&M's TV commercials are imaginative and highlight its most inventive designs H&M has its ownYouTube account where it creates distinctive marketing campaigns in order to engage customers Toconvert potential buyers into customers, it engages in a lot of search engine marketing and social mediamarketing (Team, 2021)

Second, Parineeti Chopra is the first Indian H&M store owner Such stunts help the brand gain a lot ofattention in a short amount of time (Team, 2021)

The next, during the end-of-season sale, promotional codes and discounts are available Discounts areavailable in both online and physical establishments

Finally, H&M inked a contract with The Weeknd, sponsors Caitlyn Jenner and Musee Des Arts Decoratifs.Collaborative projects with high-end designers and fashion icons will be showcased at this year's H&MParis Fashion Week (Team, 2021)

H&M has a more diverse and accessible way of promoting than Zara, it has made the most of advertisingforms to be able to bring its products to users And Zara only focuses on attracting signs and openingmany new stores It can be said that Zara tends to be traditional and wants customers to focus onproducts, designs, quality and wants to spend less on advertising

5 People

Zara's parent company, Inditex, has a professional and enthusiastic staff of more than 144,000 people

(Inditexcareers, 2021) Zara's employees have been through rigorous recruitment rounds, to findemployees who are creative, flexible, pioneer, passionate and enthusiastic about fashion The Zaraemployees are very active in supporting customers in some countries, they always respond to messages

or questions from customers quickly, and they always have a big smile on all customers

H&M staff are friendly, stylish, and enjoy working with people That's the big difference in the H&M store.

Customer consultants need to multitask, like to move around, be active, and be friendly (H&M CAREERS,2021) Besides, the customers will be served wholeheartedly about all information about products,problems in the store and problems when customers encounter them

Both companies have quality and customer-friendly staff, but that is not enough to have a breakthrough

in sales, so Zara needs additional staff to be able to bring In return for more sales, for example, youshould incentivize your sales force through bonuses for completing goals, or through commissions forsales made There are training courses for employees on customer psychology and how to handle trickyproblems when meeting difficult customers

6 Process

Zara's designers will identify the latest fashion trends, then sketch and then give it to the manufacturer,

the finished product will be distributed to subsidiaries, and after reaching the consumer Salesinformation such as preferences, customer reviews, and inventory, returns, etc are all digitized andanalyzed This information will be sent to the production department to continue to create products thatfollow the trends and needs of consumers The design team is divided into three stages, the first ispreliminary design, then the product varies according to the most popular fashion trends, and finally,based on old products and creating newer products Zara's inventory problems are also very few WhenZara's products are constantly updated and the number of products on each design is not much, it canlimit a lot of difficult products and if customers are not decisive in choosing the product, it will lead to thephenomenon of being out of stock (Kenh14.vn., 2015) The online delivery process is handled entirely bycomputer

H&M does not own any factories H&M's apparel is procured from around 800 independent suppliers,

mostly from Europe and Asia The production office is based around the world, where H&M handlesmanufacturing issues and liaises with suppliers, and the manufacturing office ensures the right product at

the right price, good quality, and right delivery products will have to go through a strict control and auditprocess and ensure safety and quality (H&M CAREERS, 2021) Retailers install systems to notify whentheir inventory is low Give them more products while ordering production to replenish stock Thisensures that the product is always available to the customer when the need arises H&M has an onlinedelivery process where orders are processed in a computer system and from these orders, the relatedproduct from the warehouse is routed to the delivery service provider

Zara's process part is more proactive as both a supplier and as a product designer, so their changes will beimproved from customer feedback in a better way and will bring a unique style of zara In contrast, H&Mwith a large number of product suppliers will have an advantage in terms of manpower and productvolume, moreover its processes are used by machines and can bring speed

7 Physical Evidence

Zara has 1,400 medium-sized stores in the city centers The interior is white, clean, simple to "The

product speaks for itself" wearable mannequins to introduce products to buy together Productplacement changes every 3-4 weeks Products are displayed less, creating a sense of scarcity (Oliveria,2014) Products are sold and appear in high resolution on the company's website system

H&M has 1,800 medium-sized stores in city centers and fashion districts Interior "exotic" with emphasis

on price and product sales Product placement changes once or twice per season Products on display arediverse (various sizes and colors) Shop mannequins also wear different outfit combinations to suggestoutfits that should go together (Oliveria, 2014) All products are photographed and sold on personalwebsites and are beautifully designed and easy to use for users H&M products are available inindividually colored packaging in retail stores It is placed on special shelves provided by the company andcomes in distinct colors and designs This makes it easy for customers to locate such shelves in busy retailstores

The product arrangement of the two stores is different and brings unique effects suitable for eachcompany, with Zara's layout promoting sales of newly sold products, while H&M targets the beauty of thepackaging and the familiar customers when not highlighting any product alone but focusing on the varietyand quantity of products and customers can know which products are selling well and which products arefew buyers

Part B: Marketing plan

1 Executive summary

The fashion industry is a competitive market in Vietnam In Vietnam, there are famous domestic fashionbrands such as REN, ELISE, OWEN, etc Although imported to Vietnam quite late, the appearance of Zarahas created many new fashion trends in Vietnam

Appearing in Vietnam in 2016, Zara is distributed by Indonesia's Mitra Adiperkasa group, Zara is operating

by providing a variety of clothing products, fragrances, accessories for men, women, and children Zaraproducts always set the criteria of affordable prices, quality products, always put customers at the heartand from there to perfect their products Foreign brands with affordable prices like Zara quickly provedattractive to Vietnamese consumers when the revenue from this brand far surpassed domestic fashionchains like Blue Exchange, Ivy Moda, or Kowil According to the financial report of Zara Vietnam, with onlytwo stores in Hanoi and Ho Chi Minh City, the revenue of this brand in 2018 exceeded 1,700 billion VND(Minh, 2019) Zara's success in Vietnam has attracted the attention of other foreign companies andlanded in this country Domestic brands also promote the design and production of more high-qualityproducts But consumers still understand the value that the company brings and are enjoying qualityproducts of international stature Today, the company still listens to customers' input, always makes surethat the customer is the beginning of all that is necessary, and gives the company a time and place wherethey can provide the product (Inditex, 2020)

In recent years, the fast fashion market has attracted many young consumers with its features such astrendy design, quick response to market trends, diverse styles, and reasonable prices Many othercompanies have also been competing with Zara with more reasonable prices and similar products Some

of Zara's shortcomings will be pointed out, the company will aim to create marketing strategies bymaximizing Zara's strengths and minimizing its weaknesses, marketing for new products, strategies, andcorresponding solutions to enhance the customer shopping experience

The promotional campaign for the winter collection called "the wonder story" is inspired by the strongrise, overcoming all difficulties of the Covid-19 pandemic The estimated revenue for this collection isVND 150 billion and the target audience will be people aged 18 to 40 years old This strategy focuses onunderstanding customers and will try to reach the most customers through online tools

First, the company will expand its marketing by using advertising in the media, offline magazines sold instores, and online magazines in popular newspapers Brand ambassadors who are famous KOLs such asKhanh Linh and Chau Bui are famous fashionistas, or influencers will make Zara's image widely spread andmessages are sent to customers easier The promotion will be further expanded through Facebook,Instagram, and the emerging platform Tiktok The new products in this collection will be put one-commerce platforms Use large signs and stand out from other stores in high-traffic locations.

To retain customers, and make them come back to buy again and again, it is necessary to build strongrelationships with customers The company will have many programs to innovate and create closerelationships with customers Sale events and discounts will be created to attract more customers Thesewill be events that help stimulate the curiosity of customers, attract the attention of the public, andincrease the rate of people knowing about this collection With special holidays like Black Friday, therewill be a huge discount For each product in this collection that is sold, a portion of the profits will go tothe government's vaccine fund The program was created to encourage customers to regularly buyproducts to contribute more to the community

2 Situation analysis

2.1 Market analysis

In Vietnam today, the fashion industry has become a desirable industry with outstanding developmentalong with the appearance of fashion giants such as Zara, H&M, Uniqlo, According to research by thecompany Statista (2021), the expected revenue of the fashion segment will reach $ 1,756 million in 2021.The clothes will be the most important and revenue-generating segment, with it expected to grow to 65.1million users in 2025

Along with increasing appearance awareness, consumers are increasingly favoring branded products for ahigher quality experience and better design In addition to large domestic companies, countless othersmall brands are also well received by consumers

Fashion items, especially clothes and shoes, have become stable commodities instead of basiccommodities In fact, companies have launched a lot of new products, new designs, and new things thathave created the trend of consuming this item in recent years to meet the shopping needs of customers

It is the ability to allow customers to access the latest designs at affordable prices that have created theattraction of "fast fashion" with Vietnamese consumers

The fast fashion industry is most commonly used in urban areas Urban people have better fashion sense,catch up with trends, have more means, care more about fashion They regularly update new fashiontrends and have a stronger shopping ability The cities are denser in population than rural areas, so itbecomes more attractive to display fashion products in prominent locations That is the reason most ofthe famous fashion brands are served in big cities.

2.3 Review customer needs

The appearance of many foreign fashion brands in the domestic market shows that world fashion brandsare very interested in Vietnam because this is a market with great consumption Vietnamese shoppers arealso prioritizing items such as clothing and fashion Vietnam is ranked 3rd globally in terms of the number

of people who like luxury goods, only behind China and India (Le, 2021) Vietnamese consumers changingtheir shopping habits, especially in big cities, are turning to higher-quality clothing products, typicallyhigh-end products of famous fashion brands that can meet quality standards In the coming time, thefashion industry will focus more on sustainability including materials produced from environmentallyfriendly sources, recycled materials, and less use of chemicals; The production process ensuresenergy-saving factors, labour welfare, etc Consumers have turned to more online shopping channels.The main reason is due to better quality management on e-commerce sites, stricter regulations onproduct images and descriptions, which improves consumer confidence in clothing online In addition,Covid-19 is also the cause of promoting the trend of online shopping for fashion items Social distancingand restrictions on gatherings in large crowds have led people to form the habit of online shopping to

limit the spread of the disease Grasping this trend, Zara is in the process of promoting stronger productquality, launching more models to suit the tastes of Vietnamese consumers.

2.4 Marketing environment and affect customer purchasing

2.4.1 Micro Environment

2.4.1.1 Companies

Zara, which is a subsidiary of the Inditex group is a global fashion brand, is considered the leader of thefast fashion industry Ranked 73rd in the world's top 100 brands selected by Interbrand in 2006, Zara hasgrown from a local business to a global brand Zara's success comes from changing fashion from a luxuryaccessory of the super-rich to a mass product Zara products are not associated with any specific images

of any country, so they represent a global product With this attraction, Zara has been successful in allcountries in a short time (Dahan and Peltekoglu, 2011)

The Zara fashion empire has grown so powerfully because most departments in the company are alwaysclosely linked An ongoing exchange of information takes place between store managers, marketspecialists, designers, production staff, and marketing departments Each department is a link, all work isorganized following a certain operating procedure to easily transfer information and deliver products inthe fastest way (Ferdows, Lewis and Machuca, 2003)

2.4.1.2 Supplier

Zara is currently active in 88 countries and the elements of the trading company are at the forefront ofthe company's success They ensure that their employees share a shared vision of values built on thesustainability of career growth, equity, diversity, and volunteering They also ensure that their suppliersenjoy fundamental workplace rights The company tries its best to create an enthusiastic, vibrant, andopen working atmosphere It also allows us to scale innovation for long-term success and build an agencybase that reflects the company's workforce and customers (Ferdows, Lewis and Machuca, 2003)

2.4.1.3 Intermediaries

Zara sells its products through retailers, distributors, and the company's official website Deciding on areasonable retail location will create favorable conditions for the company to operate stably, contribute toimproving business efficiency, reduce production costs, transportation costs, reduce unnecessary waste,

etc Zara always set up their stores in a prominent, conspicuous, accessible location, with a largepopulation and many passersby On most major roads, the intersection corner is the most ideal locationwhen opening a store Considering the nature of business, in these areas, the exchange capacity is large,the shopping demand is large, the consumption level of the people is high, so it is easier to do businessand more attractive to consumers By choosing the most prominent locations in the city, Zara ensures avery high customer base for its stores Not only that, with the widespread use of media, sales have alsogrown stronger on the website Each intermediary will be a resource to promote the purchase ofcustomers ( Jiang, Lu, Wang and Yu, 2019).

2.4.1.4.Customer

Zara's unwavering focus on the customer is at the core of the brand's success and the pinnacle ofachievement it has achieved today In the world of fashion, a trend starts small but grows quickly Zara'sproducts are diverse, with thousands of products from clothes to shoes, accessories, perfumes Zara'sproduct lines are offered globally reflecting the unique needs and wants of customers in terms of bodycondition, climate, and culture Thanks to the development of a huge quantity but still ensuring quality,Zara attracts a diverse customer base, with an extremely diverse aesthetic Zara products also focus onthe physique, skin, and size of customers Zara offers smaller sizes in Japan, special clothing for women inArab countries, and different seasonal clothing in South America This difference in product offeringbetween countries is facilitated by frequent interactions between Zara's local store managers and Zara'screative team Zara employees are trained to listen, observe and pay attention to even the smallestsignals from their customers, as these could be signs that a new trend is forming Zara knows that thefaster it responds, the more likely it is to succeed in delivering the right product at the right time in itsglobal retail chain They must not only brand themselves but also develop intimate ties with theircustomers (Inditex, 2021) Products that meet the needs and trends of customers today focus on designs,bringing high quality and applicability to daily life

2.4.1.5 Publics

Similar to Apple, Zara has almost no advertising policy Zara spends just 0.3% of its sales on advertisingcompared to an average of 3.5% for its competitors ( Jiang, Lu, Wang and Yu, 2019) Instead ofadvertising, Zara uses its store location and in-store displays as key elements of its marketing strategy Bychoosing in the most prominent locations in the city, Zara ensures a very high number of visits In the

intro screen/banner will have the most prominent pieces in the collection According to Zara's fast fashionphilosophy, window screens are constantly changing To tap into the emerging e-commerce trend, Zaralaunched its online store in September 2010 The website was initially available in Spain, UK, Portugal,Italy, Germany and France, and has been extended to Austria, Ireland, the Netherlands, Belgium andLuxembourg.

2.4.1.6 Competitors

Offering the latest fashion lines at affordable prices continues to be a competitive advantage for Zara, but

it also cannot continue to be its only advantage Competitors are cutting prices and improving theirbusiness models to undercut the competitive advantage Zara has Swedish fast-fashion retailer, H&M,ranks 37th, just behind Zara in Interbrand's list (Interbrand, 2021) The "affordable" price policy to attractbuyers has been applied by H&M in Vietnam, but H&M's prices are considered lower than that of Zara.With the goal of targeting the highest number of buyers, H&M combined with famous designers such asKarl Lagerfeld or Balmain has given this Swedish fashion a new position in the mass fast fashion industry.For Zara to be able to compete effectively and maintain its strategic advantage, it needs to shift its focusfrom price to quality Zara needs to start investing in building a strong brand positioning with positivecommunication

2.4.2 Macro Environment

2.4.2.1 Political

The stability of the country is also a factor that sets the stage for Zara's success A change in the politicalenvironment can positively or negatively affect the company's growth rate A stable and peacefulenvironment is a decisive factor in the company's investment regime (Nguyen, 2018) Vietnam is apeaceful country, the political situation is relatively stable and the development is getting stronger andstronger These attract large foreign companies to infiltrate the Vietnam market

2.4.2.2 Technology

The increasingly progressive development of technology has greatly contributed to Zara's success.Technology has helped Zara launch many new products with outstanding and fast performance Zarainvests in many manufacturing plants with advanced technology, and the product design team isequipped with the best tools to design new product lines It is modern devices that accelerate Zara's

product launch process They can design and produce new products within 1 to 2 weeks, not waiting aslong as several months like other fashion brands While some industries seem to be far from Internetcompanies like Google and Facebook, Zara's scale and dominance in industry competition are comparable

to that of its high-tech rivals Social networks are also the main source to bring Zara's products toconsumers According to Facebook's third-quarter earnings report for 2012, there were a total of 1.01billion monthly active users (as of September 30, 2012), a year-on-year growth of 26% per year On theworld map, Vietnam ranks 54th out of 213 countries that have Facebook users (Dao, 2013) With such alarge number of users in Vietnam, promoting and bringing products to the main customer segment is notdifficult Consumers will know more about the product without going to the store because all theinformation about the product is already available on Facebook and Zara's official websites

2.4.2.3 Environment

Zara is an enterprise that exploits fuel from nature to serve its manufacturing business In order to ensurethat it does not cause too much damage to the environment, the company always strives to comply withUNSDGs (United Nations Sustainable Development Goals) They are committed to making clothes withonly natural cotton, linen, and polyester that are produced organically and recycled Zara has triedeverything to avoid polluting the environment by fashion production waste and excess raw materials,they avoid wasting materials as much as possible (Inditex, 2012)

2.4.2.4 Economy

According to Le (2021), the GDP of Vietnam is expected to grow by about 4.8 percent in 2021, 2percentage points lower than expected in December 2020 by the World Bank Group The given reason isbecause of the negative impacts of the fourth COVID-19 wave on economic activity The economic painsrelated to the COVID-19 outbreak recently In July, retail sales had the largest drop since April of 2020(19.8 percent) Whether the economy of Vietnam will rebound in late 2021, although it depends on thecontrol of the COVID-19 outbreak, vaccination rate, how the government supports the affected businessand households, and to stimulate the recovery, said Rahul Kitchlu He also mentions the growth rate of6.5 to 7 percent from 2022 onward Instead of buying a shearling jacket for $2700 from Acne, people caneasily find a similar one in Zara with $149, which might be a reason for Vietnamese to choose Zara.Vietnamese customers still prefer cheap products, so Zara still occupies a large market in the Vietnameseeconomic market Therefore, marketing needs more appropriate advertising strategies targeting the maincustomer segments in Vietnam

2.4.2.5 Social

Zara always chooses places with a rich history, culture, and society like Paris, London to expand its

business and develop markets In such places, the economy is developed, the society is prosperous, thepeople's mentality is liberal, keeping up with the trend Many fashion trends have been derived from thefashion capital of Paris Vietnam is the intersection of many different cultures, with a mixture of Westernand Eastern cultures, Zara has seen the potential to expand the market in this region

According to the report of the Department of Population (2021), Vietnam is ranked 15th in the world inthe ranking of the population of countries and territories, and is the leading country in terms ofpopulation in Southeast Asia Vietnam's population currently accounts for 1.25% of the world'spopulation A large population means a great demand for apparel With an average age of 32.9 years old -

an age that can be said to be very young compared to the world With a young population, a high level ofeducation, and increasing social trends, Vietnam is a potential country, ready to pursue new fashiontrends

The "foreigner" mentality is one of the reasons why Zara is successful in this country Vietnamese peoplestill can't give up thinking that foreign goods are good products, only foreign goods can guarantee quality.The increase in cultural and ethnic diversity is leading to a lot of opportunities and challenges forchoosing product criteria and business strategies Consumers are more and more interested in the qualityand reputation of the brand, rather than the price Zara is one of three top fashion retailers in Vietnam in

2020, Vietnamese’s enthusiasm for foreign fashion brands helps Zara make trillions of Dong In 2018,according to Zara Vietnam's financial report, from 2 stores in Hanoi city and Ho Chi Minh city, ZaraVietnam got VND 1.7 trillion A German market research company forecasts the growth rate in the2017-2022 period to be 22.5%, and it is estimated to reach US$1 billion in 2022 A Nielsen survey showedthat the number of people fond of luxury goods in Vietnam ranked third in the world just after China andIndia (Ha, 2019) Due to Zara's highly competitive customer research capabilities, its product offeringsglobally reflect the unique needs and desires of each individual customer based on physical, climatic, orcultural differences The differences in product offerings across countries are greatly aided by frequentinteraction between Zara's local store managers and the brand's creative team

2.4.2.6 Legal

The entry of big fashion companies, such as Zara, can be said to be the success of politicians In a peacefulcountry like Vietnam, the opportunity and potential for business development is huge It can be said thatthe political-legal environment has a great influence on improving the business efficiency of enterprises

by directly or indirectly affecting the activities of enterprises through the legal system of the country.When participating in the business, Zara has carefully researched the legal system and policies of thecountry to build an appropriate business plan Zara is committed to complying with all tax laws wherethey do business (Inditex,2021) With Zara's commitments in Vietnam, consumers can put their trust inZara's products that always ensure quality and ensure the interests of the whole country

2.5 Review of competition

H&M brand fashion abbreviated from Hennes & Mauritz is a Swedish multinational fashion retailer,known for its low-priced fashion items H&M and its affiliated brands currently operate in 74 countriesand territories with more than 5000 stores This is the second-largest fashion retailer in the world afterInditex (Zara) H&M was founded in 1947 by founder Erling Persson in Sweden H&M's headquarters are

in Stockholm, Sweden, and are run by Stefan Persson as chairman and Karl-Johan Persson as director andCEO H&M is the world's largest fashion retailer, so its main products are clothing and fashion accessories.Because H&M was founded in 1947, with this rich history, the mayor of H&M is very large, populararound the world The company sells both men's and women's clothing and accessories With themajority of their customers being young and middle-aged people Today, fashion brands like ZaraandH&M all follow the business philosophy of fast fashion Fast fashion is the business philosophy thatdominates the fashion retail market today H&M aims to expand and capture multiple customer segmentswith diverse spending levels In recent times, H&M has been quite lagging behind Zara, as statistics showthat Zara's retail sales have surpassed H&M's H&M and Zara have been rivals for a long time because thetwo brands have a lot in common, and are always competing with each other Zara has cheap clothes forlow-income people, H&M also offers cheap fashion models to compete with Zara Zara and H&M alwayscompete with each other from the smallest

Despite its weaknesses and threats, Zara still has a competitive advantage with the giant of the fashionindustry In today's era, the environment is the issue that companies are most concerned about,businesses have been taking actions to protect the environment Therefore, sustainable fashion has

become the fashion philosophy that Zara's designers follow Zara has chosen a unique sustainableformula that is consistent with those values, beliefs, people and financial resources is to useenvironmentally friendly materials Therefore, Zara company is very popular in the eyes of customers forusing natural materials to be environmentally friendly such as polyester, wool, cotton, etc Zara's goal isalso towards the The showroom will use electrical equipment that causes the least environmentalpollution, ensure 80% of renewable energy sources in stores, and install second-hand gift boxes at allpoints of sale (Sitaro, 2020).

2.6 SWOT analysis and Competitive advantages

2.6.1 Strengths

The strength of Zara over H&M is that Zara catches up with trends very quickly After they identify thetrend, they start designing, manufacturing and selling immediately Because Zara is a fast fashion brand,they have their own strategies and management methods Zara is one of the world's largest retail fashionbrands, as of 2020, ZARA is present in 202 markets and has stores in 96 of them With a total of 2249stores, ZARA has the largest number of fashion retail stores in the world ZARA's principle is to alwaysrefresh its online and retail collections twice a week They always have a fast delivery team, to be able todeliver goods to customers as expected, they also design software to speed up delivery For Zara, theirdesign team is very important, designers can design very quickly and with quality Zara is known as thepioneering king in the fast fashion trend, so with the development of technology, Zara knows how toreach users through social networks So selling online is part of their policy

2.6.2 Weaknesses

Besides, there are still some weaknesses that Zara still overcomes Especially in recent years, topics such

as “sustainable development”, or “green economic development” have become the concern ofconsumers and policy makers in many countries What ZARA needs to do is balance sustainability withfast fashion During the covid19 pandemic, sales of physical goods have plummeted Due to the strongreliance on global stores, Zara's sales have dropped a lot during the Covid19 pandemic (Nguyet, 2019).And the market distribution is uneven, the US is the largest apparel market in the world and Asia takessecond place However, ZARA's presence in these two markets is very lacklustre As you have heard about