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CASE: I Managing the Guinness brand in the face of consumers’ changing tastes

1997 saw the US$19 billion merger of Guinness and GrandMet to form Diageo, the world’s largest drinks company. Guinness was the group’s top-selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$1.2 billion. More than 10 million glasses of the popular stout were sold every day, predominantly in Guinness’s top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon.

However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six months of 2001 and, more alarmingly, sales were also down 4 per cent in its home market, Ireland. How should Diageo address falling sales in the centuries-old brand shrouded in Irish mystique and tradition?

The changing face of the Irish beer market

The Irish were very fond of beer and even fonder of Guinness. With close to 200 litres per capita drunk each year—the equivalent of one pint per person per day—Ireland ranked top in worldwide per capita beer consumption, ahead of the Czech Republic and Germany.

Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the way in volume sales and accounted for 40 per cent of all beer value sales. Guinness, first brewed in 1759 in Dublin by Arthur Guinness, enjoyed legendary status in Ireland, a national symbol as respected as the green, white and gold flag. It was by far the most popular alcoholic drink in Ireland, accounting for nearly one of every two pints of beer sold. Its nearest competitors were Budweiser and Heineken, which held 13 per cent and 12 per cent of the market respectively.

However, the spectacular economic growth of the Irish economy since the mid-1990s had opened up the traditional drinking market to new cultures and influences, and encouraged the travel-friendly Irish to try other drinks. Beer and in particular stout were losing popularity compared with wine or the recently launched RTDs (ready-to-drinks) or FABs (flavoured alcoholic beverages), which the younger generation of drinkers considered trendier and ‘healthier’. As a Euromonitor report explained: Younger consumers consider dark beers and stout to be old fashioned drinks, with the perceived stout or ale drinker being an old, slightly overweight man and thus not in tune with image conscious youth culture.

Beer sales, which once accounted for 75 per cent of all alcohol bought in Ireland, were expected to drop to close to 50 per cent by 2006, while stout sales were forecast to decrease by 12 per cent between 2002 and 2006.

Giving Guinness a boost in its home market

With Guinness alone accounting for 37 per cent of Diageo’s volume in the market, Guinness/UDV Ireland was one of the first to feel the pain caused by the declining popularity of beer and in particular stout. A Euromonitor report in February 2002 explained how the profile of the Guinness drinker, typically men aged 21-plus, was affected: The average age of Guinness drinkers is rising and this is bringing about the worrying fact that the size of the Guinness target audience is falling. The rate of decline is likely to quicken as the number of less brand loyal, non-stout drinking younger consumers increases.
The report continued:
In Ireland, in particular, the consumer base for Guinness is shrinking as the majority of 18 to 24 year olds consistently reject stout as a product relevant to their generation, opting instead to consume lager or spirits.
Effectively, one-third of young Irish men and half of young Irish women had reportedly never tried Guinness. A Guinness employee provided another explanation. Guinness is similar to coffee in that when you’re young you drink it [coffee] with sugar, but when you’re older you drink it without. It’s got a similar acquired taste and once you’re over the initial hurdle, you’ll fall in love with it.
In an attempt to lure young drinkers to the somewhat ‘acquired’ Guinness taste (40 per cent of the Irish population was under the age of 24) Diageo had invested millions in developing product innovations and brand building in Ireland’s 10,000 pubs, clubs and supermarkets.

Product innovation

Until the mid-1990s most Guinness in Ireland was drunk in a pint glass in the local pub. The launch of product innovations in the form of a new cooling mechanism for draft Guinness and the ‘widget’ technology applied to cans and bottles attempted to modernize the brand’s image and respond to increasing competition from other local and imported stouts and lagers.

‘A perfect head’ for canned Guinness
In 1989, and at a cost of more than £10 million, Guinness developed an ingenious ‘widget’ device for its canned draft stout sold in ‘off-trade’ outlets such as supermarkets and off-licences. The widget, placed in the bottom of the can, released a gas that replicated the draft effect.
Although over 90 per cent of beer in Ireland was sold in ‘on-trade’ pubs and bars, sale of beer in the cheaper ‘off-trade’ channel were slowly gaining in importance. The Guinness brand manager at the time, John O’Keeffe, explained how home drinkers could now enjoy a smoother, creamier head similar to the one obtained in a pub thanks to the new widget technology:
When the can is opened, the pressure causes the nitrogen to be released as the widget moves through the beer, creating the classic draft Guinness surge.

Nearly 10 years later, in 1997, the ‘floating widget’ was introduced, which improved the effectiveness of the device.

A colder pint
In 1997 Guinness Draft Extra Cold was launched in Ireland. An additional chilled tap system could be added to the standard barrel in pubs, allowing the Guinness to be served at 4ºC rather than the normal 6ºC. By serving Guinness at a cooler temperature, Guinness/UDV hoped to mute the bitter taste of the stout and make it more palatable for younger adults, who were increasingly accustomed to drinking chilled lager, particularly in the summer

A cooler image for Guinness
In October 1999 the widget technology was applied to long-stemmed bottles of Guinness. The launch was supported by a US$2 million TV and outdoor board campaign. The packaging—with a clear, shiny plastic wrap, designed to look like a pint complete with creamy head—was quite a departure from the traditional Guinness look.

The objective was to reposition Guinness alongside certain similarly packaged lagers and RTDs and offer younger adults a more fashionable way to drink Guinness: straight from the bottle. It also gave Guinness easier access to the growing number of clubs and bars that were less likely to serve traditional draft Guinness easier access to the growing number of clubs and bars that were less likely to serve traditional draft Guinness, which could be kept for only six to eight weeks and took two minutes to pour. The RTDs, by contrast, had a shelf-life of more than a year and were drunk straight from the bottle.

However, financial analyst remained sceptical about the Guinness product innovations, which had no significant positive impact on sales or profitability:

The last news about the success of the recently introduced innovations suggests that they have not had a notably material impact on Guinness brand performance.

Brand building

Euromonitor estimates that, in 2000, Diageo invested between US$230 and US$250 million worldwide in Guinness advertising and promotions. However, with a cost-cutting objective, the company reduced marketing expenses in both Ireland and the UK up to 10 per cent in 2001 and the number of global Guinness agencies from six to two.

Nevertheless, Guinness remained one of the most advertised brands in Ireland. It was the leading cinema advertiser and, in terms of advertising, was second only to the national telecoms provider, Eircom. Guinness was also heavily promoted at leading sporting and music events, in particular those that were popular with the younger age groups.

The ultimate tribute to the brand was the opening of the new Guinness Storehouse in Dublin in late 2000, a sort of Mecca for all Guinness fans. The Storehouse was also a fashionable visitor centre with an art gallery and restaurants, and regularly hosted evening events. The company’s design brief highlighted another key objective:
To use an ultramodern facility to breathe life into an ageing brand, to reconnect an old company with young (sceptical) customers.
As the Storehouse’s design firm’s director, Ralph Ardill, explained:

Guinness Storehouse had become the top tourist destination in Ireland, attracting more than half a million people and hosting 45,000 people for special events and training.
The Storehouse also had training facilities for Guinness’s bartenders and 3000 Irish employees. The quality of the Guinness pint remained a high priority for the company, which not only developed pub-like classrooms at the Storehouse but also employed teams of draft technicians to teach barmen how to pour a proper pint. The process involved two steps—the pour and the top-up—and took a total of 119.5 seconds. Barmen also needed to learn how to check that the pressure gauges were properly set and that the proportion of nitrogen to carbon dioxide in the gas was correct.

The uncertain future of the Guinness brand in Ireland

Despite Guinness/DUV’s attempt to appeal to the younger generation of drinkers and boost its fading image, rumours persisted in Ireland about the brand future. The country’s leading and respected newspaper, the Irish times, reported in an article in July 2001:
The uncertainty over its future all adds to the air of crisis that is building around Guinness Ireland Group four months ago…The review is not complete and the assumption is that there is more bad news to come.
In the pubs across Ireland, the traditional Guinness drinkers looked on anxiously as the younger generation drank Bacardi Breezers, Smirnoff Ices or Californian wines. Could the goliath Guinness survive another two centuries? Was the preference for these new drinks just a fad or fashion, or did Diageo need to seriously reconsider how it marketed Guinness?

A quick solution?

In late February 2002, Diageo CEO Paul Walsh revealed that the company was testing technology to cut the waiting time for a pint of Guinness from 1 minute 59 seconds to 15-25 seconds. Ultrasound could release bubbles in the stout and form the head instantly, making a pint of Guinness that would be indistinguishable from one produced by the slower, traditional method.
‘A two-minute pour is not relevant to our customers today,’ Walsh said. A Guinness spokeswoman continued, ‘We have got to move with the times and the brand must evolve. We must take all the opportunities that we can. In outlets where it is really busy, if you walk in after nine o’clock in the evening there will be a cloth over the Guinness pump because it takes longer to pour than other drinks. Aware that some consumers might not be attracted by the innovation, she added ‘It wouldn’t be put everywhere—only where people want a quick pint with no effect on the quality.’

Although still being tested, the ‘quick-pour pint’ was a popular topic of conversation in Dublin pubs, among barmen and customers alike. There were rumours that it would be introduced in Britain only; others thought it would be released worldwide.

Some market commentators viewed the quick-pour pint as an innovative way to appeal to the younger, less patient segment in which Guinness had under-performed. Others feared that the young would be unconvinced by the introduction, and loyal customers would be turned off by what they characterized as a ‘marketing u-turn’.


1. From a marketing perspective, what has Guinness done to ensure its longevity?

2. How would you characterize the Guinness brand?

3. What could Guinness do to attract younger drinkers? And to retain its older loyal customer base? Can both be done at the same time?

CASE: II The grey market


The over-50s market has long been ignored by advertising and marketing firms in favour of the market. The complexity of how to appeal to today’s mature customers, without targeting their age, has proved just too challenging for many companies. But this preoccupation with youth runs counter to demo-graphic changes. The over-50s represent the largest segment of the population, across western developed countries, due largely to the post-Second World War baby boom. The sheer size of this grey market, which will continue to grow as birth and mortality rates fall, coupled with its phenomenal spending power, presents enormous opportunities for business. However, successfully unleashing its potential will depend on companies truly understanding the attitudes, lifestyles and purchasing interests of this post-war generation.

Demographic forces

Following the Second World War many countries experienced a baby boom phenomenon as returning soldiers began families. This, coupled with a more positive outlook on the future, resulted in the baby boom generation, born between 1946 and 1964. Now beginning to enter retirement, this affluent group globally numbers approximately 532 million. In Western Europe they account for the largest proportion of the total population at 14.9%, followed closely by 14.2% in North America and 13.5 % in Australia.

Table 1: Global population aged 45-54 by region: baby boomers as a % of the total population 1990/2002

Baby boomers as a % total population 1990 2002 % point change
Western Europe
12.9 14.9 2.0
North America 9.9 14.2 4.3
Australasia 10.4 13.5 3.1
Eastern Europe 9.7 13.0 3.3
Asia-Pacific 7.8 9.8 2.0
Latin America 6.6 8.4 1.8
Africa/Middle East 2.6 2.3 20.3
WORLD 7.9 9.5 1.6

The grey market is big and getting bigger. Between 1990 and 2002 the global baby boomer population increased by 41%. The rate of growth is predicted to decrease to 35% between 2002 and 2015. Particularly noteworthy is the predicted increase in the proportion of baby boomers in many Western European countries, such as Austria, Spain, Germany, Italy, and the UK. In developed countries, according to the United Nations, the percentage of elderly people (60+) is forecast to rise from one-fifth of the population to one-third by 2050. The growth in the elderly population is exacerbated by falling fertility rates in many developed countries, coupled with a rise in human longevity.

The influences and buyer behaviour patterns of baby boomers

The members of the baby boomer generation are quite unlike their more conservative parents’ generation. They are the children of the rebellious ‘swinging sixties’, growing up on the sounds of the Beatles and the Rolling Stones. Better educated than their parents, in a time of greater prosperity, they indulged in more hedonistic lifestyle. It has been said that they were the first ‘me generation’. Now, in later life, they have retained their liberal, adventurous and youthful attitude to life. Aptly termed ‘younger older people’ they abhor antiquated stereotypes of elderly people, preferring to be defined by their attitude rather than their age.

Baby boomers are also tend to be very wealthy. Many are property owners and may have gained an inheritance from parents or other relatives. They have higher than average incomes or have retired with private pension plans. With their children having flown the nest they have greater financial freedom and more time to indulge themselves. Having worked all their lives, and educated their children, many baby boomers do not believe it is their responsibility to safeguard the financial future of their children by carefully protecting their children’s inheritance. They are instead liquidating their assets, intent on enjoying their later life to full, often through conspicuous consumption.

Based on research conducted by Euromonitor, the main areas of expenditure in the baby boomer market are financial services, tourism, food and drink, luxury cars, electrical/electronic goods, clothing, health products, and DIY and gardening.

Table 2: Global population aged 45-54 in thousands by country: developed countries 2002-2015

Country 2002 2010 2015 %change 2002/2015
Austria 1,059 1,277 1,371 29
Spain 4,921 5,741 6,189 26
Germany 10,991 12,963 13,508 26
Italy 7,684 8,591 9,347 23
UK 7,786 8,731 9,388 22
New Zealand 521 607 613 21
Ireland 474 529 555 18
Switzerland 997 1,120
1,159 17
Australia 2,661 3,006 3,057 16
Greece 1,359 1,476
1,559 15
Canada 4,505 5,320 5,122 15
Netherlands 2,301 2,492
2,604 14
Portugal 1,334 1,438 1,511 13
Norway 612 640 678 13
Denmark 745 761
802 11
USA 38,951 44,140 42,207 8
Belgium 1,423 1,549 1,526
Sweden 1,206 1,179 1,233 2
Japan 18,344 15,661 16,459 -10

Finland 820 749 718 -12
France 8,266 7,626 7,292 -12

Figure 1 Global Baby boomer market: % analysis by broad sector 2002 (% value)

Note: sectors valued on the basis of estimates by senior managers in major companies in each sector, consumer expenditure and industry sector data.

Unsurprisingly the financial sector is the largest in this market. Baby boomers are concerned with being financially secure in their retirement. An ageing population, coupled with a rise in human longevity, is giving rise to a pensions crisis across Western Europe. Baby boomers are therefore right to be preoccupied with how they will maintain their lifestyle over the long term. They are actively engaging in financial planning, both before and after retirement. Popular financial service products include endowments, life insurance, personal pensions, PEPs and ISAs.

Baby boomers have adventurous attitudes with a desire to see the world. In their retirement foreign travel is a key expenditure. Given their greater levels of sophistication and education, baby boomers are much more demanding of holidays that suit their lifestyles. This group is very diverse, with holiday interests ranging from action-packed adventures to culturally rich experiences.

Baby boomers want to maintain a youthful appearance in line with their youthful way of living. Fear of becoming invisible is a genuine concern among older generations. This image conciousness is reflected in their spending on clothing, cosmetics and anti-ageing products. Luxury cars also a key status symbols for this group.

The home is another area of expenditure. Once children have flown the nest, many baby boomers redecorate the home to suit their needs. Electrical and electronic purchases are key indulgences among these technologically savvy consumers. Gardening is another pastime enjoyed by older generations. Health is also a priority. Baby boomers invest in private health insurance and over-the-counter pharmaceutical products to maintain their healthy lives.

Business opportunities
The sheer size of the grey market, which is getting bigger in many countries—characterized by consumers with disposable income, ample free time, interest in travel, concern about financial security and health, awareness of youth culture and brands and desire for aspirational living—makes this market enormously attractive to many business sectors. Pharmaceuticals, health and beauty, technology, travel financial services, luxury cars, lavish food and entertainment are key growth sectors for the grey market. However, successfully tapping into this market will depend on companies truly understanding the attitudes, lifestyles and purchasing interests of this post-war generation. Communicating with this group is a tricky business, but, done right, it can be hugely rewarding.

When targeting the older consumer it is important to target their lifestyle and not their age. Older people do not want to be reminded, in a patronizing way, of their age or what they should be doing now they are a certain stage in life. With an interest in maintaining a youthful way of life these consumers are interested in similar brands to those that appeal to younger generations. The key for the companies is to find a way of making their brands also appeal to an older consumer without explicitly targeting their age. One tried-and tested method of targeting this group is to use nostalgia. Mercedes Benz used the Janis Joplin song ‘Oh Lord won’t you buy me a Mercedes Benz’ to great effect despite the obvious irony in that the song was written to highlight the dangers of materialism! Volkswagen’s new retro-style Beetle has also been popular among this group. In the tourism sector Saga Holidays, the leader in holidays for the over-50s, has changed its product offering to reflect changing trends among this group. In line with the more adventurous attitudes of many older consumers it now offers more action-packed adventure holidays to far-flung destinations.

More recently, Thomas Cook has rebranded it over-50s ‘Forever Young’ programme to reflect the diverse interest of its target customers. Its new primetime brochure targets five distinct groups with the following holiday types: ‘Discover’, ‘Learn’, ‘Relax’, ‘Active’ and ‘Enjoy Life’.

The over-50s represent the largest segment of the population across Western developed countries. This affluent market is big and getting bigger. Having ignored it for so long marketers are finally beginning to see the enormous opportunities presented by the grey market. But conquering this market will not be easy. The baby boomer generation is quite unlike its predecessors. With a youthful and adventuresome spirit these ‘younger older people’ want to be defined by their attitude and not by their age. Only time will tell whether today’s marketers are up to the challenge.

1. Why is the grey market so attractive to business?
2. Identify the influences on the purchasing behaviour of the over-50s consumer.
3. Discuss the challenges involved in targeting the grey market.

CASE: III Nivea: managing an umbrella brand

‘In many countries consumer are convinced that Nivea is a local brand, a mistake which Beiersdoft, the German makers, take as a compliment.’
(Quoted on leading brand consultancy Wolff-Olins’ website,

An ode to Nivea’s success
In May 2003, a survey of ‘Global Mega Brand Franchises’ revealed that the Nivea Cosmetics brand had presence in the maximum number of product categories and countries. The survey, conducted by US-based ACNielsen, aimed at identifying those brands that had ‘successfully evolved beyond their original product categories’. A key parameter was the presence of these brands in multiple product categories as well as countries.

Nivea’s performance in this study prompted a news article to name it the ‘Queen of Mega Brands’. This title was appropriate since the brand was present in over 14 product categories and was available in more than 150 countries. Nivea was the market leader in skin creams and lotions in 28 countries, in facial cleansing in 23 countries, in facial skin care in 18 countries, and in suntan products in 15 countries. In many of those countries, it was reportedly believed to be a brand of local origin—having been present in them for many decades. This fact went a long way in helping the brand attain leadership status in many categories and countries (see Table 3).

Table 3 Nivea: market positions

CATEGORY Skin care Baby care Sun protection Men’s care
Austria 1 1 2 1
Belgium 1 1 3 1
UK 1 3
- 1
Germany 1 1 3 1
France 1 1 1 3
Italy 1 1 5 1
ands 1 1 5 1
Spain 1 4 - 1
Switzerland 1 1 4 1

The study covered 200 consumer packaged goods brands from over 50 global manufacturers. The brands had to be available in at least 15 of the countries studied; the same name had to be used in at least three product categories and meet franchise in at least three of the five geographical regions.

In its home country Germany, too, many of Nivea’s products were the market leaders in their segments. This market leadership status translated into superior financial performance. Between 1991 and 2001, Nivea posted double-digit growth rates every year. For 2001, the brand generated revenues of €2.5 billion, amounting to 55 per cent of the parent company’s (Beiersdoft) total revenue for the year. The 120-year-old, Hamburg-based Beiersdoft has often been credited with meticulously building the Nivea brand into the world’s number one personal care brand. According to a survey conducted by ACNielsen in the late 1990s, the brand had a 15 per cent share in the global skin care products market. While Nivea had always been the company’s star performer, the 1990s were a period of phenomenal growth for the brand. By successfully extending what was essentially a ‘one-product wonder’ into many different product categories, Beiersdoft had silenced many critics of its umbrella branding decision.

The marketing game for Nivea

Millions of customers across the world have been familiar with the Nivea brand since their childhood. The visual (colour and packaging) and physical attributes (feel, smell) of the product stayed on in their minds. According to analysts, this led to the formation of a complex emotional bond between customers and the brand, a bond that had strong positive under-tones. According to a my article, Nivea’s blue colour denoted sympathy, harmony, friendship and loyalty. The white colour suggested external cleanliness as well as inner purity. Together, these colours gave Nivea the aura of an honest brand.

To customers, Nivea was more than a skin care product. They associated Nivea with good health, graceful ageing and better living. The company’s association Nivea with many sporting events, fashion events and other lifestyle-related events gave the brand a long-lasting appeal. In 2001, Franziska Schmiedebach, Beiersdoft’s Corporate Vice President (Face Care and Cosmetics), commented that Nivea’s success over the decades was built on the following pillars: innovation, brand extension and globalization (see Table 4 for the brand’s sales growth from 1995-2002)

Table 4 Nivea: worldwide sales growth (%)
Sales Growth 1995 1996 1997 1998 1999 2000 2001 2002
In Million € 1040 1166 1340 1542 1812 2101 2458 2628
In per cent 9.8 12.1 14.9 15.1 17.5 16.0 17.0 6.9

Innovation and brand extensions

Innovation and brand extensions went hand in hand for Nivea. Extensions had been made back in the 1930s and had continued in the 1960s when the face care range Nivea Visage was launched. However, the first major initiative to extend the brand to other products came in the 1970s. Naturally, the idea was to cash in on Nivea’s strong brand equity. The first major extension was launch of ‘Nivea For Men’ aftershave in the 1970s. Unlike the other aftershaves available in market, which caused the skin to burn on application, Nivea For Men soothed the skin. As a result, the product became a runaway success.

The positive experience with the aftershave extension inspired the company to further explore the possibilities of brand extensions. Moreover, Beiersdoft felt that Nivea’s unique identity, the values it represented (trustworthiness, simplicity, consistency, caring) could easily be used to make the transition to being an umbrella brand. The decision to diversify its product range was also believed to have influenced by intensifying competitive pressures. L’Oreal’s Plenitude range, Procter & Gamble’s Oil of Olay range, Unilever’s Pond’s range, and Johnson & Johnson’s Neutrogena range posed stiff competition to Nivea.

Though Nivea was the undisputed market leader in the mass-market face cream segment worldwide, its share was below Oil of Olay’s, Pond’s and Plenitude’s in the US market. While most of the competing brands had a wide product portfolio, the Nivea range was rather limited. To position Nivea as a competitor in a larger number of segments, the decision to offer a wider range inevitable.

Beiersdoft’s research centre—employing over 150 dermatological and cosmetics researchers, pharmacists and chemists—supported its thrust on innovations and brand extensions. During the 1990s, Beiersdoft launched many extensions, including men’s care products, deodorants (1991), Nivea Body (1995), and Nivea Soft (1997). Most of these brand extension decisions could be credited to Rolf Kunisch, who became Beiersdoft’s CEO in the early 1990s. Rolf Kunisch firmly believed in the company’s ‘twin strategy’ of extension and globalization.

By the beginning of the twenty-first century, the Nivea umbrella brand offered over 300 products in 14 separate segments of the health and beauty market (see Table 5 and Figure 2 for information on Nivea’s brand extensions). Commenting on Beiersdoft’s belief in umbrella branding, Schmiedebach said, ‘Focusing your energy and investment on one umbrella brand has strong synergetic effects and helps build leading market positions across categories.’ A noteworthy aspect of the brand extension strategy was the company’s ability to successfully translate the ‘skin care’ attributes of the original Nivea cream to the entire gamut of products.

Table 5 Nivea: brand portfolio

Category Products
Nivea Bath Care Shower gels, shower specialists, bath foams, bath specialists, soaps, kids’ products, intimate care
Nivea Sun (sun care) Sun protection lotion, anti-ageing sun cream, sensitive sun lotion, sun-spray, children’s sun protection, deep tan, after tan, self –tan, Nivea baby sun protection
Nivea Beaute (colour cosmetics) Face, eyes, lips, nails
Nivea For Men (men’s care) Shaving, after shaving, face care, face cleansing
Nivea Baby (baby care) Bottom cleansing, nappy rash protection, general cleansing, moisturizing, sun protection
Nivea Body (body care) Essential line, performance line, pleasure line
Nivea Crème Nivea crème
Nivea Deodorants Roll-ons, sprays, pump sprays, sticks, creams, wipes, compact
Nivea Hand (hand care) Hand care lotions and creams
Nivea Lip Care Basic care, special care, cosmetic care, extra protection care
Nivea Visage (face care) Daily cleaning, deep cleaning, facial masks (cleaning/care), make-up remover, active moisture care, advanced repair care, special care
Nivea Vital (mature skin care) Basic face care, specific face care, face cleansing products, body care
Nivea Soft Nivea soft moisturizing cream
Nivea Hair Care Hair care (shampoos, rinse, treatment, sun); hair styling (hairspray and lacquer, styling foams and specials, gels and specials)

Figure 2 Nivea Universe

The company ensured that each of its products addressed a specific need of consumers. Products in all the 14 categories were developed after being evaluated on two parameters with respect to the Nivea mother brand. First, the new product had to be based on the qualities that the mother brand stood for and, second, it ha to offer benefits that were consistent with those that the mother brand offered. Once a new product cleared the above test, it was evaluated for its ability to meet consumer needs and its scope for proving itself to be a leader in the future. For instance, a Nivea shampoo not only had to clean hair, it also had to be milder and gentler than other shampoos in the same range.

Beiersdoft developed a ‘Nivea Universe’ framework for streamlining and executing its brand extension efforts. This framework consisted of a central point, an inner circle of brands and an outer circle of brands (see Figure 2)
The centre of the model housed the ‘mother brand’, which represented the core values of trustworthiness, honesty and reliability. While the brands in the inner circle were closely related to the core values of the Nivea brand, the brands in the outer circle were seen as extensions of these core values. The inner-circle brands strengthened the existing beliefs and values associated with the Nivea brand. The outer circle brands, however, sought to add new dimensions to the brand’s personality, thereby opening up avenues, for future growth.

The ‘global-local’ strategy

The Nivea brand retained its strong German heritage and was treated as a global brand for many decades. In the early days, local managers believed that the needs of customers from their countries were significantly different from those of customers in other countries. As a result, Beiersdoft was forced to offer different product formulations an packaging, and different types of advertising support. Consequently, it incurred high costs.

It was only in the 1980s that Beiersdoft took a conscious decision to globalize the appeal of Nivea. The aim to achieve a common platform for the brand on a global scale and offer customers from different parts of the world a wider variety of product choices. This was radical departure from its earlier approach, in which product development and marketing efforts were largely focused on the German market. The new decision was not only expected to solve the problems of high costs, it was also expected to further build the core values of the brand.
To globalize the brand, the company formulated strategies with the help of a team of ‘international’ experts with ‘local expertise’. This team developed new products for all the markets. Their responsibilities included, among others, deciding about the way in which international advertising campaigns should be adapted at the local level. The idea was to leave the execution of strategic decisions to local partners. However, Beiersdoft monitored the execution to ensure that it remained in line with the global strategic plan.

This way, Beiersdoft ensured that the nuances of consumer behaviour at the local level understood and that their needs were addressed. Company sources claimed that by following the above approach, it was easy to transfer know-how between headquarters and the local offices. In addition, the motivation level of the local partners also remained on the higher side.

The company established a set of guidelines that regulated how the marketing mix of a new product/brand was to be developed. These guidelines stipulated norms with respect to product, pricing, promotion, packaging and other related issues. For instance, a guideline regarding advertising read, ‘Nivea advertising is about skin care. It should be present visually and verbally. Nivea advertising is simple, it is unpretentious and human.’

Thus all advertisements for any Nivea product depicted images related to ‘skin care’ and ‘unpretentious human life’ in one way or the other. The company consciously decided not to use supermodels to promote its products. The predominant colours in all campaigns remained blue and white. However, local issues were also kept in mind. For instance, in the Middle East, Nivea relied more on outdoor media as it worked out to be much more cost-effective. And since showing skin in the advertisements went against the region’s culture, the company devised ways of advertising skin without showing skin.

Many brand management experts have spoken of the perils of umbrella management, such as brand dilution and the lack of ‘change’ for consumers. However, the umbrella branding strategy worked for Beiersdoft. In fact, the company’s growth was the most dynamic since its inception during 1990s—the decade when the brand extension move picked up momentum. The strong yearly growth during the 1990s and the quadrupling of sales were attributed by company sources to the thrust on brand extension.


1. Discuss the reasons for the success of the Nivea range of products across the world. Why did Beiersdoft decide to extend the brand to different product categories? In the light of Beiersdoft’s brand extension of Nivea, critically comment on the pros and cons of adopting an umbrella branding strategy. Compare the use of such a strategy with the use of an independent branding strategy.

2. According to you, what are the core values of the Nivea brand? What type of brand extension framework did Beiersdoft develop to ensure that these core values id not get diluted? Do you think the company was able to protect these core values? Why/why not?

3. What were the essential components of Beiersdoft’s global expansion strategy for Nivea? Under what circumstances would a ‘global-strategy-local execution’ approach be beneficial for a company? When and why should this approach be avoided?

CASE: IV Pret a Manger: passionate about food


Pret a Manger (French for ‘ready to eat’) is a chain of coffee shops that sells a range of upmarket, healthy sandwiches and desserts as well as a variety o coffees to an increasingly discerning set of lunchtime customers. Started in London, England, in 1986 by two university graduates, Pret a Manger has more than 120 stores across the UK. In 2002 it sold 25 million sandwiches and 14 million cups of coffee, and had a turnover of over £100 million. Buckingham Palace reportedly orders more than £1000 worth of sandwiches a week and British Prime Minister Tony Blair has had Pret sandwiches delivered to number 10 Downing Street for working lunches. The company also has ambitious plans to expand further—it already has stores in New York, Hong Kong and Tokyo, and has set its sights on further international growth.

Background and company history

In 1986, Pret a Manger was founded with one shop, in central London, and a £17,000 loan, by two property law graduates, Julian Metcalf and Sinclair Beecham, who had been students together at the University of Westminster in the early 1980s. At that time the choice of lunchtime eating in London and other British cities was more limited than it is today. Traditionally, some ate in restaurants while many favoured that well-known British institution, the pub, as a choice for lunchtime eating and drinking. There was, however, a growing awareness among many people of the benefits of healthy eating and a healthy lifestyle, and lunchtime habits were changing. There was a general trend towards taking shorter lunch brakes and, among office workers, to take lunch at their desks. For those who wanted food to take away, the choice in fast food was dominated by the large chains such as McDonald’s, Burger King and Kentucky Fried Chicken (now KFC) while other types of carry-out food, such as pizzas, were also available.

Sandwiches also played an important part in British lunchtime eating. Named after its eighteenth-century inventor, the Earl of Sandwich, the humble sandwich had long been a popular British lunch choice, especially for those with little time to spare. Prior to Pret’s arrival on the scene, sandwiches were sold mainly either pre-packed in supermarkets and high-street variety chain stores such as Marks and Spencer and Boots, or in the many small sandwich bars that were to be found in the business districts of large cities like London, Sandwich bars were usually small, independently owned or family run shops that made sandwiches to order for customers who waited in a queue, often out on to the pavement outside.

Dissatisfied with the quality of both the food and service from traditional sandwich bars, Metcalf and Beecham decided that Pret a Manger should offer something different. They wanted Pret’s food to be high quality and healthy, and preservative and additive free. In the beginning, they shopped for the food themselves at local markets and returned to the store where they made the sandwiches each morning. Pret’s offering was based around premium-quality sandwiches and other health-orientated lunches including salads, sushi and a range of desserts, priced higher than at traditional sandwich bars, and sold pre-packed in attractive and convenient packaging ready to go. There was also a choice of different coffees, as well as some healthy alternatives. Service aimed to be fast and friendly go give customers a minimum of queuing time.

Pret a Manger: ‘Passionate about What We do’

Pret a Manger strongly emphasizes the quality of its products. Its promotional material and website claims that it is:
‘passionate about food, rejecting the use of obscure chemicals, additives and preservatives common in so much of the prepared and fast food on the market today…it there’s a secret to our success so far we like to think its determination to focus continually on quality—not just our food, but in every aspect of what we do’.

Great importance is also placed on freshness. Unlike those sold in high-street shops or supermarkets, Pret’s sandwiches are all hand-made by staff in each shop starting at 6.30 every morning, rather than being prepared and delivered by a supplier or from a central location. Metcalf and Beecham believe this gives their sandwiches a freshness and distinctiveness. All food that hasn’t been sold in the shops by the end of the day is given away free to local charities.

Careful sourcing of supplies for quality has also always been important. Genetically modified ingredients are banned and the tuna Pret buys, for example, must be ‘dolphin friendly’. There is also a drive for constant product improvement and innovation—the company claims that its chocolate brownie dessert has been improved 33 times over the last few years—and, on average, a new product is tried out in the stores every four days. Aware that some of its customers are increasingly health conscious, Pret’s website menu carefully lists not only what is available, but also the ingredients and nutritional values in terms of energy, protein, fats and dietary fibre for each item.

The level and quality of service from staff in the shop is a critical factor. The stores are self-service, with customers helping themselves to sandwiches and other products form the supermarket-style refrigerated cabinets. Staff at the counter at the back of the store then serve customers coffee and take payment. Service is friendly, smiling and efficient, in contrast to many retail and restaurant outlets in Britain where, historically, service quality has not always been high. Prêt puts an emphasis on human resource management issues such as effective recruitment and training so as to have frontline staff who can show the necessary enthusiasm and also remain fast and courteous under the pressure of a busy lunchtime sales period. These staff are usually young and enthusiastic, some are students, many are international. The pay they receive is above the fast-food industry average and staff turnover is 98 per cent a year, which sounds high—however, this is against an industry norm of around 150 per cent. In 2001, Pret had 55,000 applications for 1500 advertised vacancies.

Recently, Fortune magazine voted Pret one of the top 10 companies to work for in Europe. According to its own promotional recruitment material, Pret is an attractive and fun place to work: ‘We don’t work nights, we wear jeans, we party!’ Service quality is checked regularly by the use of mystery shoppers: if a shop receives a good report, then the staff there receive a 75p an hour bonus in the week of the visit. Head office managers also visit stores on a regular basis and every three or four months every one of these managers works as a ‘buddy’, where they spend a day making sandwiches and working on the floor in one of the shops to help them keep in touch with what is going on. Store employees work in teams and are briefed daily, often on the basis of customer responses that come in from in-store reply cards, telephone calls and the company website. The website, which, lists the names and phone numbers of its senior executives, actively invites customers to comment or complain about their experience with Pret, and encourages them to contact the company. Great importance is placed on this customer feed-back, both positive and negative, which is discussed at weekly management meetings.

The design of the stores is also distinctive. Prominently featuring the company logo, they are fitted out in a high-tech with metal cladding and interiors in Pret’s own corporate dark red colour. Each store plays music, helping to create a stylish and lively atmosphere. Although the shops mainly sell carry out food and coffee in the morning and through the lunchtime period, many also have tables and seating where customers can drink coffee and eat inside the store or, weather permitting, on the pavement outside.

Growth and competition

Three years after the first Pret shop was launched another was opened and, after that, the chain began to grow so that, by 1998, there were 65 throughout London. In the late 1990s stores were also opened in other British cities such as Bristol, Cambridge and Manchester. Although growth in the UK has been rapid—between 2000 and 2002 the company opened 40 new outlets and there are over 120 throughout Britain—Pret’s policy has always been to own and manage all its own stores and not to franchise to other operators. In 2002, £1 million was spent in launching an Internet service that enables customers to order sandwiches online.

Plans for international growth have been more cautious. In 2000 the company made its first move overseas when it opened a shop near Wall Street in New York. However, there were problems on several fronts in moving into the USA. Metcalf is quoted saying, ‘As a private company its very difficult to set up abroad. We didn’t know where to begin in New York—we ended up having all the equipment for the shop made here and shipped over.’ There were also staffing and service quality difficulties—Pret reportedly found it difficult to recruit people in New York who had the required friendliness to serve in the stores and had to import British staff. Despite these problems, several other shops in New York have followed and, in 2001, Pret opened its first outlet in Hong Kong.

During the 1990s, coffee shops boomed as the British developed a growing taste for drinking coffee in pavement cafes, and competition for Pret grew as other chains entered the fray. Rivals like Coffee Republic, Caffè Nero, Costa Coffee (now owned by leisure group Whitbread) Aroma (owned by McDonald’s) and American worldwide operator Starbucks all came into the market, as well as a number of smaller independents. All these chains offer a wide range of coffees but with varying product offerings in terms of food, pricing and style (Starbucks, for example, offers comfortable arm-chairs around tables, which encourage people to linger or work in a laptop in the store). In a London shopping street it is not uncommon to see three or four rival outlets next door to or within a few yards of each other. However, it quickly became clear that the sector was overcrowded and, apart from Starbucks, some of the other chains reportedly struggled to make a profit. In 2002 Coffee Republic was taken over by Caffè Nero, which also eventually acquired the ailing Aroma chain from McDonald’s. Costa Coffee was the largest chain overall with over 300 shops throughout Britain, while Starbucks was expanding aggressively and aimed to have an eventual 4000 stores worldwide.

The future
As work and lifestyles get busier, the demand for convenience and fast foods continues to grow. In 2000, some estimates put the total value of the fast-food market in Britain, excluding sandwiches, at over £6 billion and growing about £200-£300 million a year. While the growth in sales of some types of fast food, like burgers, was showing signs of slowing down, sandwiches continued to increase in popularity so that by 2002 sales wee an estimated £3 billion. Customers are also getting more health conscious and choosy about what they eat and, increasingly, want nutritional information about food from labelling and packaging.

In January 2001, in a surprise move, Pret’s two founders sold a 33 per cent stake in the company to fast-food giant McDonald’s for an estimated £25 million. They claim that McDonald’s will not have any influence over what Pret does or the products it sells, but that the investment by McDonald’s will help their plan for future development. According to Metcalf:

‘We’ll still be in charge—we’ll have the majority of shares. Pret will continue as it does… The deal wasn’t about money—we could have sold the shares for much more to other buyers but they wouldn’t have provided the support we need.’

After a long run of success, Pret has ambitious plans for the future. It hopes to open at least 20 new stores a year in the UK. In late 2002 it opened its first store in Tokyo, Japan, in partnership with McDonald’s. The menu there is described as being 75 per cent ‘classic Pret’ with the remaining 25 per cent designed more to please local tastes. In other international markets, the plan is to move cautiously—Pret’s first move will be to open more stores in New York and Hong Kong, where it has already been successful.


1. How has Pret a Manger positioned its brand?

2. Explain how the different elements of the services marketing mix support and contribute to the positioning of Pret a Manger.

Case V ‘Fast Fashion’: exploring how retailers get affordable fashion on to the high street

The term ‘fast fashion’ has become very much de rigueur within the fashion retailing industry. Retailers have to react quickly to changes in the market, possess lean manufacturing operations, and utilize responsive supply chains in order to get the latest fashions to the mass market. Stores such as H&M, Zara, Mango, Top Shop and Benetton have been tremendously successful in being responsive to the fashion needs of the market. Excellent logistical and marketing information systems are seen as key to the implementation of the ‘fast fashion’ concept. ‘Fast fashion’ is the emphasis of putting fashionable and affordable design concepts, which match consumer demand, on to the high street as quickly as possible. These retailers get sought-after fashions into stores in a matter of weeks, rather than the previous industry norm, which relied on production lead times ranging from six months to a year. The concept of ‘fast fashion’ relies of a number of central components: excellent marketing information systems, flexible production and logistics operations, excellent communications within the supply chain, and leveraging advanced IT systems. These components allow stores to track consumer demand, and deliver a rapid response to changes in the marketplace. The results are invigorating for fashion retailers, with ‘fast fashion’ retailers’ sales growing by 11 per cent, compared with the industry norm of 2 per cent.

Within the fashion industry a number of different levels exist, the exclusive haute couture ranges (made to measure), the designer ready-to-wear collections, and then copycat designs by mass-market retailers. Fashion has now gone to the high street, becoming more democratic for the mass market.
The traditional fashion- retailing model was seasonal, whereby retailers would typically launch two seasons: spring and autumn collections. Fashion retailers would buy for these collections from their supplier network a year in advance, and allow for between 20-30 per cent of their purchasing budgets open to specific fashion changes in the market. Typically, retailers would have perennial offerings that rarely change as well as catering to the whims of fashion, such as basic T-shirts and jeans.

Now, through the ‘fast fashion’ philosophy, new items are being stocked in stores more frequently. These newer product ranges stimulate shoppers into frequenting these stores on a more regular basis, in some cases weekly to see new fashion items. Savvy brand-loyal shoppers know when new stock is being delivered to their favourite store. Through increased stock replenishment of new, fashionable items, consumers are increasing their footfall to these stores, and furthermore these stores are developing brand images as cutting edge, trendy, and fashionable. This increased footfall, where shoppers regularly visit a store, eliminates the need for major expenditure on advertising and promotion. Also the concept of ‘fast fashion’ is helping to improve sales, conversion ratios within these stores. Due to the limited supply of designs available, this creates an aura of exclusivity for these garments, further enhancing the brands of these ‘fast fashion retailers’ as leading fashion brands.

Famous for ABBA, Volvos and IKEA, now Sweden has another international success story: H&M. The basic business premise behind H&M is ‘fashion and quality at the best price’. The company now has over 1068 stores in 21 countries. H&M sources 50 per cent of its goods in Europe and the remainder in low-cost Asian countries. Sourcing decisions are dependent on cost, quality, lead times and export regulations. The lead times for items can vary from a minuscule two weeks to six months, dependent on the item itself. H&M believes that having very short lead times can be beneficial in terms of stock control, however it is not the most important criteria for all items. Basic clothing garments can have lead times running into months, due to consistent demand. However, items that are more trend- and fashion-conscious require very short lead times, to match demand. H&M is now also in the process of teaming up with prestigious designers like Karl Lagerfeld to create affordable fashion ranges.

The firm utilizes close relationships with its network of production offices and 700 suppliers. Unlike some other clothing retailers, H&M outsources all of its production to independent suppliers. The dyeing of garments is postponed until as late as possible in the production process to allow greater flexibility and adaptation to the whims of the fashion buyer. Items from around the world are shipped to a centralized transit warehouse in Hamburg, Germany, where quality checks are undertaken, and the items are allocated to individual stores or placed in centralized storage. Items that are placed in this ‘call-off warehouse’ are allocated to stores where there is more demand for the particular item. For example, if pairs of a particular style of jeans are selling well in London, more jeans are shipped from Hamburg to H&M’s London stores.

Table 6: Some of the key players in apparel industry

H&M Next Benetton
Originated in Sweden Originated in the UK Originated in Italy
Chain has 1069 stores in 21 countries Has 380 stores in the UK and Ireland and has 80 franchise stores overseas Has a presence in 120 countries and uses a retail network o 5000 stores
Originally called Hennes & Mauritz, renamed as H&M. Sells women’s and men’s apparel. Doesn’t own any manufacturing resources. Motto—‘Fashion and quality at the best price’. Sells women’s wear, men’s wear and homeware. The firm has a very successful catalogue business. Targets the top end of the mass market, focusing on fashionable moderately priced clothing Sell under brand name such as Benetton, Playlife, Sisley and Killer Loop. Uses a network of franchises/partner stores. Established huge brand awareness through its infamous ad campaigns.
Zara Mango Arcadia
Originated in Spain Originated in Spain Originated in the UK
Chain has 729 Zara stores Chain has 770 stores in 70 countries Chain has over 2000 stores
Zara is the main part of the Spanish Inditex group and is valued at nearly €14 billion. Operates under the mantra of affordable fashion, and adopts the principle of market-driven supply. Operates a successful franchise operation (more than half are franchises). The company specializes exclusively in targeting the young female mid-market. Operates several different fascia, targeting different types of customer, with stores such as Burton, Dorothy Perkins, Evans, Wallis, Top Shop, Top Man, Miss Selfridge and Outfit. Owner Philip Green also owns BHS stores and Etam UK

Sourcing low-cost garments with quick response times is a vital element of the concept. Many of the ‘fast fashion’ retailers utilize a vast network of suppliers, so that their stores are replenished with latest designs. Some firms are entirely vertically integrated, where the retailer owns and controls the entire supply chain. For example, Zara buys its fabric from a company owned by its parent, Inditex, and buys dyes from another company also within the group. Retailers source their goods from countries such as China, North Africa, Turkey and low-cost eastern European countries. If cost were the sole basis for supplier selection, then the vast majority of products would be sourced from the Far East. However, the lead times for delivery of goods are quite substantial in comparison to sourcing garments in Eastern Europe (e.g. shipping goods from China can take sex weeks, whereas from Hungary takes two days). As a result of this, retailers are using a hybrid approach, sourcing closer to markets for more fashion-orientated lines. The drive towards reduced lead times is allowing companies to be more responsive to market changes. The benefits of such a quick response to market changes are reduced costs, lean inventories, faster merchandise flow and closer collaborative supply chain relationships.

The concept of ‘postponement’ is a key strategy used within the fashion retailing industry. It is the delayed configuration of a garment’s final design until the final market destination and/or customer requirement is known and, once this is known, the garment is assembled or customized. The material and styles are kept generic for a long as possible, before final customization. A classic illustration of the concept of postponement is its usage by Benetton. Colours can come in and out of fashion. Benetton delays when its garments are finally product differentiated, so that this matches what is selling. For example, a Benetton sweater would be stitched and assembled from its original grey yarn and then, based on feedback from Benetton’s distribution network as to what colours were selling, the sweater would be dyed at the very final stage of production. The concept of postponement allows greater inventory cost saving, and increased flexibility in matching actual demand.

The production and logistics facilities for these ‘fast fashion’ retailers are colossal in that each design may have several colour variants, and the retailer needs to produce an array of garments in a number of different sizes. The number of stock keeping units (SKUs) is therefore staggering. As a result, companies require a very reliable and sophisticated information system—for example, Zara has to deal with over 300,000 new SKUs every year. Benetton has a fully automated sorting and shipping system, managing over 110 million items a year, with a staff of only 24 employees in its centralized distribution centres. Mango, another successful Spanish fashion chain, also utilizes a high-tech distribution system, which can sort and pack 12,000 folded items an hour and 7000 hanging garments an hour.

Many in the industry see Zara as the classic illustration of the concept of ‘fast fashion’ in operation. The company can get a garment from design, through production and ultimately on to the shelf in a mere 15 days. The norm for the industry has typically run to several months. The group’s basic business philosophy is to seduce customers with the latest fashion at attractive prices. It has grown rapidly as a fashion retail powerhouse by adopting four central strategies: creativity and innovation; having an international presence; utilizing a multi-format strategy; and through vertically integrating its entire supply chain. For the ‘fast fashion’ concept to be successful, it requires close relationships between suppliers and retailers, information sharing and utilization of technology. Information is utilized along the entire supply chain, according to the demand. It controls design, production and the logistics elements of the business. Real-time demand feeds the production systems.

Zara is part of the Inditex group of fashion retail brands. This group adopts a multi-format strategy with different store brands targeting different types of customers. Zara is its key fashion-retailing brand. Zara opened its first store in 1975 in Spain and has now become a fashion powerhouse, operating in four continents, with 729 stores, located in over 54 countries. It has become very hip all over the world, for its value for money and stylish designs. The chain is building large numbers of brand devotees because of its fashionable designs, which are in tune with the very latest trends, and a very convincing price-quality offering. Each of the different store brands (outlined in Table- 7) needs to be strongly differentiated in order for the strategy to work effectively.

Table 7 Number of Inditex stores by fascia

Zara 729
Pull and Bear 373
Massimo Dutti 330
Bershka 305
Stradivarius 228
Oysho 106
Zara Home 63
Kiddy’s Class 131
TOTAL 2265

Figure 3 Zara’s market-led supply

Zara does not undertake any conventional advertising, except as a vehicle for announcing a new store opening, the start of sales of seasons. The company uses the stores themselves as its main promotional strategy, to convey its image. Zara tries to locate its stores in prime commercial areas. Deep inside the lairs of its corporate headquarters, 25 full-scale store windows are set up, whereby Zara window designers can experiment with design layouts and lighting. The approved design layouts are shipped out to all Zara’s stores, so that a Zara shop front in London will be the same as in Lisbon and throughout the entire chain. The store itself is the company’s main promotional vehicle.

One of Zara’s key philosophies was the realization that fashion, much like food, has a ‘best before’ date: that fashion trends change rapidly. What style consumers want this month may not be same in two months’ time. Fashion retailers have to adapt to what the marketplace wants for the here and now. The company is guilty of under-stocking garments, as it does not want to be left with obsolete or out-of-fashion items. The key driving force behind its success is to minimize inventory levels, getting product out on to the retail floor space, and by being responsive to the needs of the market. Zara uses its stores to find out what consumers really want, designs are selling, what colours are in demand, which items are hot sellers and which are complete flops. It uses a sophisticated marketing information system to provide feedback to headquarters and allow it to respond to what the marketplace wants. Similarly, Mango uses a computerized logistical system that allows the matching of clothes designs to particular stores based on personality traits and even climate variances (i.e. ‘It this garment suitable for the Mediterranean Summer?). This sophisticated IT infrastructure allows for more responsive market-led retailing, matching suitable clothing lines to compatible stores.

At the end of each day, Zara sales assistants report to the store manager using wireless headsets, to communicate inventory levels. The stores then report back to Zara&rsq

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