How H&M and Gap use marketing mix to achieve business objectives

This document discusses the marketing mix strategy of H&M and Gap to achieve their business objectives. It covers their product, price, place, promotion, people, process and physical evidence. The document also includes a marketing plan for H&M and their target audience. The content is relevant for students studying marketing and business courses.

Briefing Paper

Table of Contents
LO2 How H&M and Gap use marketing mix to achieve business objectives.............................................................................................................3
LO3 Marketing Plan...................................................................................................................................................................................................16

LO2 How H&M and Gap use marketing mix to achieve business objectives
OBJECTIVES

H&M has three major goals and consider those as
prime responsibility. The main objectives are:
1. Lead the change in the fashion industry
2. Products are 100% renewable and circular
thereby promoting sustainability within its
business strategy.
3. Commit to 100% fair and equality among its
consumers as well as its workplace.
The main business objectives of Gap are:
1. Create emotional connections with customers
around the world.
2. Produce inspiring product design, compelling
marketing, and unique store experiences.
3. To make it easier for the customer to express
their personal style through their fashion.

PRODUCT
Similarities
Differences
H&M, as well as GAP, are both clothing retail brands offering the best fashion clothes to their customers. Well, both
of the brands have products for men, women and children. They both also offer a very wide range of products starting
from designer clothes to daily wearing clothes to yoga or sports wears ( Mierzejewska, 2017). Besides the clothes both
H&M and GAP also offers other accessories such as shoes, bags and other fashion collection as well as accessories for
men and women. Both companies have their own impact on the global market and offer their products in various
countries around the world. Both H&M and GAP is known to carry inexpensive basics. They are also known to be
quiet trendy and they provide the latest trends of clothing and accessories for their respective customers which makes
them both popular brands among the fashion or clothing industry.
Each of the individual companies has their own array of products to attract customers. While the products sold by
H&M are considered to be fashionable and comfortable on the other hand the products from GAP are considered to be

cool and trendy. Some of the unique products under H&M are sleeved jersey dresses, jumpers, fashion shirts,
cardigans and their whole variety of collection of underwear. While the USP of the products sold in GAP is T-shirts,
jeans jackets, sweatshirts for daily use and their sunglasses (Dickson, 2017). The products offered by H&M are mainly
offered to the comparative rich class or a group of fashionable and trendy customers for them shopping is an activity
that gives them pleasure. Whereas the GAP has a very wide range of products to offer high class and fashionable
customers to even the lower middle and middle class or so-called working class of the society.
PRICE

Similarities
Differences
Both the clothing brands are providing premium quality of production at the lowest price possible in order to attract
more customers. Pricing the products is a very important factor for the marketing mix of each organization and both
the companies chose to optimize the price of their premium products. Both H&M & GAP had chosen to widen the
variety of products allowing them to have clothes of a wide range of prices to ensure more profits to their business
(McDonald and Wilson, 2016). Another tactic that was behind the plan of reducing their prices was attracting more
youth to their stores. So after reducing the prices both H&M and GAP was able to attract more young generation and
in return was able to increase the sales for their companies. There is another similarity in pricing strategy of these two
companies that is they both have discounts and offers on products which further reduces the price of the clothes and
helps to attract more customers thus increasing the sales of the respective companies.
Both H&M and GAP is famous for selling their products at an affordable price to the customers but still, there are
some differences in pricing the products. H&M has proven themselves to be relentless zeal in cutting costs at every
possible stem in order to reduce their selling prices much lower as compared to their competitors. Whereas GAP is
considered to be a leader in the US market and to maintain their stature they innovated on widening the variety of
products (Chaiwong and Pokpermdee, 2016). This helped them to bring out products of wider price range and GAP
increased their sales by reaching out every segment of the society. H&M reduced the costs by getting supplies at lower
costs and GAP reduced their price by localizing their inventory of its retail stores.

PLACE
Similarities
Differences
Both H&M and GAP sells their products with the help of their exclusive stores that are located in all the major cities
around the world. With the advancement in technology and online shopping both H&M and GAP has started selling
their products online which is seen to have increased the sales for both the brands (Warrink, 2015). According to the
policies of each of the bands their stores are open for seven days in all the places of the world thus both of the brands
offer customers to buy the products in their desired times.
H&M has almost 4135 stores in almost all the major cities around the world and the number is counting. Whereas the
GAP has approx. 3721 company-operated and franchise stores located in the major cities of the world. H&M has its
own online shopping medium where they sell their products and deliver them at the door steps of the customers
(Fingalsson et al. 2015). But GAP in their online shopping portal not only sells its own brand of products but also

other brands. Similarly, the products of GAP is available in other online shopping sites such as Amazon whereas H&M
only sells their products through the official site.
PROMOTION
Similarities Both H&M and GAP understood the importance of promoting their products to increase the sales of each of the
brands. They both started their promotions with advertisements in boards and hoardings and with the help of electronic
media they started advertisements on televisions and sponsoring different TV episodes (Bollinger and Hartmann,
2017). They also have contracts with models and celebrities to promote their brands, for example, David Beckham was
the model for H&M to showcase their range of men underwear. Similarly, Justin Bieber used to promote GAP and was
their model. Now in the 21 century, the ideology of promotion has shifted from the electronic media to the online

Differences
world. Both H&M and GAP is using online media such as Twitter, Facebook and Instagram to promote their brands
and draw the attention of the customers of all age bracket. Each of the brands has their official page which helps them
to promote offers and discounts to thousands of customers at the same time.
During the promotions of the products of H&M they mainly focused on the image of their apparels that is the quality
of products with relatively very much reasonable price. Whereas GAP has used the tactics of viral marketing in a
controversial manner to promote their brand. H&M has associated themselves with various famous celebrities in order
to promote their products such as Jimmy Choo, Alexander Wang and many others (Kivinummi 2016). They also offer
to clothe to the celebrities for their public appearance such as H&M provided a dress to Rhianna before her
performance. Whereas GAP has totally shifted from promoting celebrities instead they have tie-ups with the famous
fashion magazines to promote their products. Similarly to grab the attention of the customer's GAP has unique
competitions and events where they provide free GAP merchandise to the winners or also provide them gift cards to
encourage them shopping from their stores.

PEOPLE
Similarities
Differences
H&M and GAP both engage into multi segmenting type of positioning their customer by the means of certain
characteristics and exploits more than one customer segment. The customer segment of both the brands are
easy going, trendy and follows the fast fashion trends.
GAP sometime uses imitative positioning style unlike H&M by imitating the luxury design of clothing brands like
Versace, Ralph Lauren, Louis Vuitton and others. Moreover GAP also provides platforms for other leading
brands to market along with them at the same store unlike H&M who have a personal store for its own brand.

PHYSICAL EVIDENCE
Similarities
Differences
Both H&M and GAP is a very famous brand in the fashion world and as a result, their stores represent the stature.
Each of the stores of H&M and GAP has ample amount of space with very attractive ambiance as well as humble
staffs. On visiting the stores of each brand the staffs are always there to provide their assistance to the customers
(Salehzadeh et al. 2017). It is also seen that now in the 21st century the physical appearance of these brands in the
online world is also spectacular and providing complete assistance and support to the customers in need.
H&M has always been known to create a buzz while entering a market and they often do this by inviting celebrities for
the inauguration of their stores and engages the customers in PR activities. But GAP is more into creating a bonding

with the customers and providing them with offers and discounts to grab their attention (Kuhnen et al. 2017). Unlike
H&M they don’t invite celebrities but organize events in their stores to create the buzz in the stores and engage the
customers with the brand and its products.
PROCESS
Similarities Each of the brands has a huge network of suppliers to get the raw materials for the products to the production firms
where the products are made. They both have connections all around the world which makes it possible for them to
manufacture products from customers located globally (Hikmawati et al. 2018). Similarly, it is seen that most of the
manufacturing plants of H&M and GAP are located in Asia as it offers them lower labor cost as compared to Europe
and helping them to reduce the selling coats of their products and helping the brands to earn more revenues.

Differences H&M has a close relation with their suppliers and has 160 in house designers who work with the pattern makers to
produce clothes for the brand. But GAP has thousands of employees working together throughout the world in order to
produce the best clothing for their customers. Whereas H&M works seldom with the middlemen and their production
facilities are located very close to their supplier chains. Whereas the supply chain at GAP starts at designing and
merchandising phrase (Salehzadeh et al. 2017). Then after the quality check, the merchandise is sent from the selected
manufacturing plants to the GAP distribution centers and then distributed to the stores.

LO3 Marketing Plan
Executive
Summary
Being appointed as the new marketing executive of H&M, a
new marketing plan is presented in this section for addressing
the leading competition in the market and effectively meet its
business objectives. The report plan has outlined the major
marketing goals of H&M which are launching a couture
collection that will attract young adults and a teen group of
people for its popularity among popular celebrities. Next, it will
lay the groundwork in the digital platform and exploit the
internet platform for reaching a larger number of customers and
maximize its sales profit. The marketing plan is expressed in
each term of 7P which would make it easier to implement.
Finally, few on the monitoring process are also pointed out for
measuring and evaluating the progress of the marketing goals
and objectives.
Marketing Goals H&M is planning to shift its marketing strategy in a unique way
to gain a greater market share around the world. The company is
planning to launch a couture collection that will be based on the
celebrity dress and use customer data for customizing the
products in individual stores. H&M is popularly known for its
fast fashion however the new marketing goals are focusing upon
high fashion as the company is sponsoring some leading
actresses. Next, the marketing goals will employ algorithms to
analyze store receipts, loyalty card and returns information from
4200 stores around the world to customize the stocks and
minimize markdowns (Hadiwidjojo and Bernardus, 2016).

Further H&M is experiencing a tough competition due to the
rise in online stores and new styles are rolling out quickly. The
current marketing goal is focused upon laying the groundwork
for the future by integrating physical stores with digital ones. It
is likely to invest in analytics that helps in responding to the
changing customer needs quickly and collaborate with online
stores in different countries.
Target Audience H&M is always particular while selecting their potential
customers. For the present marketing goals, the company is
planning to target customers who belong to a group of trendy
and fashionable consumers. According to Enerson et al. (2016),
these people perceive shopping as a social activity as well as
meet their pleasures. They follow the trend without investing a
huge amount of money. The main age group of people is teens
and young adults. Even H&M produces fashion for all ages and
genders, the present marketing goals are focusing on women as
the brand is being promoted by some popular celebrities.
Further, the target audience is not loyal to any brands. The
consumers shop from multiple retailers depending upon the
latest trendy fashion as an affordable price. Moreover, as the
young generation is more engaged in the online platform the
company is expecting to gain a higher customer attractiveness.
Marketing Mix Product
The target market of H&M is found to be more satisfied when
customer service is added up in the shopping experience.
Therefore for adding value to the customer service and keep

employee costs low, the loyalty card program can be enhanced.
The loyalty program is likely to introduce point earning deals,
consumer cards, and tiers. Further, the consumers will be given
an opportunity to sign up within the online official website of
H&M with the help of mobile application (Kivinummi, 2016).
The consumers will be provided with a simple quiz to know
about their preferences and also ask basic demographic
information. This can be utilized by H&M for knowing their
shopping experiences and what are the opportunities to meet
their expectations.
Price
H&M have planned to roll out products with superior price as
the consumers will be able to recognize the offer is a
combination of price, quality, availability, and service which
will be far superior to their expectations and also surpass the
competitor's proposition. By encouraging the customer for
shopping more, the enhanced loyalty program will comprise of
the habits that will be purely based on their shopping pattern in
this brand (Enerson et al. 2016). Furthermore, the customer will
be revaluated every 6 months for determining if certain
customers can be moved to privileged sections. Next, the
company has a lesser budget and reputation towards promoting
their brand as a result certain price will be sanctioned within a
multi-channel promotion strategy as discussed in the following.
Promotion
After H&M identifies and understands the target audience a
promotion strategy is been established. The major target
audience for the marketing goals is young women who are
continuously engaged in an internet platform and are looking for
trendy fashionable clothes at a reasonable price. Budgets are too
sanctioned for multi-channel promotion strategy which includes
internet promotion, and advertising thereby increasing the

exposure of H&M.
Additionally, for engaging the target audience H&M aims at
developing a new page on their official website which would
integrate different social media channels (Fadahunsi and
Kargwell, 2015). It will be termed as a community forum and
connected with major social media sites like Facebook and
Twitter. The company blog and the company's social media
channels will be also utilized for promoting their latest trends in
fashion.
Place
The main feature of the places for H&M is its reliability,
simplicity, and transparency. Instead of owning factories H&M
chooses to own outlets at prime location. However, unlike other
leading fashion retailers, this company is lagging behind in
various trending online platforms. The products are therefore
planned to be made available at online retail giants like Amazon
and other leading platforms of a different country (Jackson and
Ahuja, 2017). The company has also planned to expand the
distribution system so as to create chances for reaching the
target customers at an urban location.
Process
The process for the outlined marketing strategy as per the
marketing goals are expected to be achieved by the end of six
months. The tactics that are going to be implemented within the
campaign will also create opportunities in creating future
marketing campaigns. Within its distribution channel, H&M
will cut out the middle transaction thereby enabling direct
distribution that is formed producer to customers (Kivinummi,
2016). The inventory is planned to be refreshed periodically and
launch online sales in trending areas.

Positioning
As discussed within the promotional strategy of H&M, the
brand will be positioned among the online selling platforms. By
engaging a community forum and connecting it to Twitter and
Facebook the company is expected to achieve high brand
awareness and increase their customer database.
People
The main people that are going to be addressed within the
marketing strategy are mainly women among the young adults
and the teen group of people.
Monitoring After implementing the marketing strategy it is necessary to
evaluate its effectiveness which can be done by considering the
following factors:
 Monitor how external factors are responding: The
marketing plan is not the only factors that affect the
outcomes. Mierzejewska (2017) stated that by
monitoring competitor moves, economic shifts and the
general trajectory of the fashion industry it will be
essential for H&M to act accordingly.
 Monitor the cost benefits: By evaluating the
effectiveness of the cost spent over the marketing plan
H&M can get a real perspective of its profits
(Hadiwidjojo and Bernardus, 2016). By comparing the
internal costs and the costs generated from the consumer
after implementing the marketing plan will state if the
company is going in the right direction or not.
 Open to valuable feedback: As the community forum is
promoted along with its presence over major social
media platforms, the company should be open to every
kind of criticizes and appreciation (Kuhnen et al. 2015).

By following the customer perception over the company
marketing strategy the effectiveness can be tracked
down and also improvement can be made down the line
if pointed out by loyal customers.

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