MarketLine Blog

Segmented marketing driving Inditex’s growth

In FY2013 Inditex reported strong like for like sales with an increase of 3%. At the end of FY2013 Inditex had grown its operations to 6,340 stores in 87 markets.

Under the company’s segmented marketing strategy, each brand tailors its product offering to separate groups and enables catering for multiple customers, allowing Inditex to maximize its consumer base.

Prior to the development of market segmentation, mass marketing was the prevailing method; which meant the same product and marketing mix were offered to all consumers.  Inditex adopted the segmented marketing approach favored by Gap and its use of multiple brands: Gap, Banana Republic, Old Navy and Forth & Towne.

Inditex operates eight different sales formats, namely Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque. Zara is an international fashion retailing segment which offers a range of clothing based on ongoing trends and customer demands and also includes childrens clothing range. While Pull & Bear offers casual clothing and accessories which are targeted at young customers, Massimo Dutti offers urban, cosmopolitan and sophisticated high-end fashion and casual wear to men and women. Bershka offers music, art and street fashion to Inditex’s youngest target market. Stradivarius’ offerings include the latest international fashion trends in fabrics, design and accessories. Oysho offers a wide range of women’s undergarments and lingerie.

These diverse product offerings have enabled the Inditex group to carve a niche for itself and emerge as one of the largest fashion distributors globally. Inditex has made it clear that there are no limitations to its offerings within the fashion/ apparel industry and the company caters for the need of separate target groups and this seems to have driven profits.

Although Inditex followed Gap’s segmented marketing strategy, the company has in fact taken the concept further and its success is evident from Inditex’s revenues and profits, which reached EUR16.7bn and EUR2.4bn respectively in 2013.

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