A differentiation strategy aims at providing products or services with more benefits than those of competitors and that are of great value to customers. The underlying reason for firms’ and organizations’ use of a differentiation strategy is achievement of competitive advantage. Differentiation strategy for businesses offering products is different from that of businesses that solely offer services. The difference is underpinned in services’ intangibility, inseparability, and perishability. This paper explores how Zara differentiates positioning and how it attacks the three differences between goods and services including tangibility, separability, and perishability.
Zara is one of the largest apparel retailers around the world that focuses on fast fashion. In addition to the products it sells to customers in its retail stores, the company is regarded as a fashion service company as it provides a variety of services including retouching services and after-sale services where customers are given leeway to exchange products if they are not satisfied. Regarding the company’s retouching services, differentiation of positioning is achieved by offering relatively lower prices as compared to competitors. An example of a retouch service offered by Zara is a hem. Customers pay between three and six Euros for a hem, which is not really expensive as compared to the price of similar services offered by competitors.
Fig 1: A Hem as Part of Zara’s Retouching Services
Another type of service offered by the company is after-sale service, whereby customers are allowed to exchange products in the event they are dissatisfied. After-sale service also entails refunding customers when the need to do so arises. The company differentiates its positioning with regard to after-sales service by improving how the service is delivered to customers. It stresses a fast response to customers when they seek an after-sales services. It also differentiates its after-sales service by focusing majorly on accuracy and efficiency.
Zara attacks the three differences of tangibility, separability, and perishability in unique ways hence its leading position as a fashion service company.
A characteristic of services is that they are intangible, which means that they cannot be physically seen, touched, or tasted by the customer. Due to intangibility, it is always risky for customers to purchase a service (“Services versus Products”). Zara attacks the issue of intangibility by having clean retail stores that are organized and well-stocked as can be seen below.
Unlike products, services are usually connected with the service performer implying that the performer must exist at the time of service delivery (“Services versus Products”). Zara, like most companies, has laid out standards for the service delivery process. The standards go a long way in defining how the services are to be offered and how service staff are to handle customers.
This concept means that unlike products, services cannot be saved, stored, resold, or returned once they are rendered to customers (“Services versus Products”). When a particular service, such as Zara’s retouching service if rendered, it is consumed and cannot be delivered in the exact same way to a different customer. Zara usually encounters situations where there is high demand for retouching services. In order to maintain high-quality of service, it resorts to hiring more staff to deliver the service.
Differentiation strategies vary for products and services. Services are different from products in terms of tangibility, separability, and perishability. Service differentiation strategies are determined by these factors. A perfect example of a fashion service company with clear service differentiation strategies is Zara. It offers its retouching services at relatively low prices. After-sale services are offered by trained and qualified staff wo deliver quality service.
“Services versus Products.” Lumen, courses.lumenlearning.com/boundless-marketing/chapter/services-versus-products/