H&M Company Analysis and Expansion

This assignment delves into a comprehensive analysis of the H&M company, focusing on its organizational structure, ethical practices, and management style. It examines H&M's marketing strategies, including branding tactics, target customers, and distribution channels. The analysis also explores H&M's financial performance, highlighting their expansion plans and self-financing model. Additionally, the assignment evaluates H&M's competitive landscape by identifying primary and secondary competitors through a SWOT analysis.

MARKETING ESSENTIALS OF HENNES AND MAURITZ

Table of contents
Introduction:....................................................................................................................................2
Task 1 - LO1....................................................................................................................................2
P 1 Key roles and responsibilities of the marketing function in relation with H&M:.....................2
P 2 The roles and responsibilities of marketing relate to H&M:.....................................................3
M 1. Analysis of the role and responsibilities of marketing with the context of marketing
environment relate to H&M:...........................................................................................................4
M 2 The significance of interrelationships between marketing and other functional units within
H&M with the reference of case study:...........................................................................................5
Task 2 -LO2.....................................................................................................................................5
Elements of the marketing mix to achieve overall business objectives:.........................................5
P 3 Comparison of the ways in which H&M and Zara apply the marketing mix to the marketing
planning process to achieve business objectives:............................................................................6
M 3 Evaluation of the different tactics as a marketing assistant that applied by H&M and Zara to
achieve business objective:..............................................................................................................7
Task 3-LO3......................................................................................................................................7
P4 Evaluation of a basic marketing plan for H&M:........................................................................7
D 2 Design a strategic marketing plan with the use of 7Ps to achieve overall marketing objectives
for H&M:.........................................................................................................................................8
Conclusion:......................................................................................................................................8
Reference list:..................................................................................................................................9
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Introduction:
H&M Hennes & Mauritz is a clothing retail company founded by Erling Persson, in Sweden.
The company is famous for its fast-fashion clothing for men, women, teenagers and children. It
has an association with 62 other countries with over 4,000 stores. H&M is the second largest
global clothing retailer. The online appearance of this company, covering 32 countries made it
very popular brand among the mass. It has an expansion in European countries and the company
has a strong online catalogue in 2008 for the selling of home furnishings. Following the
expansion in Middle East and Asia, H&M also launched some of the concept stores, with the
prestige of most valuable global brand.
Task 1 - LO1
P 1 Key roles and responsibilities of the marketing function in relation with
H&M:
H&M being a popular brand for the customers creates the brand value in the unique way so that
the customer purchase from the brand. Marketing planning and strategy is the main triggering
point for the brand to be globally popular and determine effective objectives of the code of
Ethics. The company H&M has a transaction in all other countries so maintaining the good
relation with the suppliers and the business partner can drive the business in the positive way.
Collaboration with the stakeholders is the process of strong communication that the marketers
follow with regular meetings, dedicated surveys and the active participation in several multi
stakeholders’ initiatives. For the creation of the long-term relation and bonding with the
customers, the markets of H&M also check the products and services along with the delivery
channels, for future benefit of the company. Internal marketing is a sales technique of the
company to maintain a harmony with the employees to treat them as customer and make them
understood all the business functions (Gummesson et al. 2014). H&M believes in the same
technique and they create value for the company to manage the employees very well. The
segmentation and lead generation of the market gives the company a clear view about the
company that how they can operate the stores in various places. The most essential plan in the
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marketing function is keeping an eye on the customer experience and service (Ehret et al. 2013).
The marketing head decides the entire marketing component related to the customer of the H&M
Company to match up with the customer preferences and delivering the high fashion things with
time. As the business of the company operated in the open market, the marketing team promotes
it through direct marketing. With the consideration of the trading rules H&M uses inside market
information to get the knowledge about the significant effect on the trading price of the H&M
share. For the employee appreciation, and to generate the progression of work the marketing
team of the company creates employee incentive program.
P 2 The roles and responsibilities of marketing relate to H&M:
H&M has a clear strategy in the business concept to serve the best quality fashion at the very
best price for the customers. The company believes in sustainability and keeps that in mind they
are growing ahead in the global retail business criteria. The marketing strategy of any Company
should value driven, customer-oriented, and responsible to maintain the brand value and believes
in creativity (Schmidt et al. 2014). The marketing team has planned the company growth and
productivity in different manner. The roles and responsibilities of the marketing team in H&M
includes create appropriate customer base, deliver quality design and products with the standard
of the market, meet customers need, long term cooperation with other suppliers and business
partners. The marketing team is deeply in the brand management to exaggerate the brand value.
Believing in the sustainability theory the targeted customer of this brand is Men, women and
children with the basics of modern and high fashion. The marketing director with the sheer
concentration of the market creates an overall strategy to compete with other global brands with
the help of advertising online, through magazine along with the media and the agency
relationship. The responsibilities includes insight in the market, apply innovative strategy of
promotion, use project management initiatives through new platforms by get to know customer
preferences and new fashion in the market. The marketing involves liaison with sales of the
products, sales in different stores, effective pricing of the products so that the customer can feel
of buying things, a broad market research about other competitors, production- consumption
possibility, and distribution of the product, public relations, most effective events management to
catch the attention of the customer.
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M 1. Analysis of the role and responsibilities of marketing with the context of
marketing environment relate to H&M:
The marketing environment is the foremost important thing for any company to operate in the
global market (Perreault et al. 2013). H&M Company believes to create appropriate marketing
environment to bring growth in and outside the company. The marketing environment is the
forces and factors that affect the organization to build a successful market position for the
company itself and for the customers (Gbadamosi et al. 2013). The marketing team with the
concern of the macro and micro environment related to the internal and national factors that is
small factors within the company that effects the customer base and ability to serve the customer
and the larger societal forces that affect the microenvironment includes finance, operations,
development, purchasing. The targeted customer of the company will get full satisfaction with
the best product deliverance in proper time. The marketing environment of the H&M Company
focuses on the demographic, cultural, economic and technological aspects because the company
has a greater expansion in various countries and all the places and the customers are
differentiated from each other in fashion sense, purchase behavior and consumption pattern. The
company suppliers, competitors, publics, customers and intermediaries play a vital role to create
the effective marketing environment because the suppliers of the product decides the smart way
of transport the product through the help of best supply chain that can work in fastest way. The
technological marketing environment of the H&M brand indicates towards the better
communication in and outside the company. Inside the company, it uses advance technology
with bar codes for the product scanning, inventory management in technical way and in-house
brand transfer in minimum time. With the global aspect of the environmental marketing H&M
focuses on better trade agreement, analysis of the competitors, future opportunities in the market
and managing all the fashion trends to deliver the best things to the customer.
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M 2 The significance of interrelationships between marketing and other
functional units within H&M with the reference of case study:
The marketing and the other functional units of the organization is correlates with each other to
create an effective management structure (Balmer, 2013).The H&M marketing team believes
working with collaboration with other areas of the company to bring out the best in terms of
customer satisfaction and company growth. The company’s value chain needs to maintain by the
coordination of the other departments as well. Marketing alone cannot produce a superior value
for the customers so the other functional area must work to complete the whole task (Kohli et al.
2014). The marketing team is now operating with the help of the inside store process, the recent
launched chain called Collection of Style or COS merges the high fashion with extremely
competitive pricing is the example of that correlation. The in-store design displays the store
ambiance and the marketing display of the store from outside creates to grab the attention of the
customer. The store displays are designed for the customers to find the best fashion according to
their choice matching with the own style irrespective of any occasion with the help of the in-
store fashion consultants and staffs. The company now thriving on creating the product mixes
with the help of the best buyers and the suppliers. The product of the H&M to market, acquires a
big support from the UN programs, the Designers against Aids initiative and campaigns to
increase the use of organic cotton, to reduce the usage of chemicals and the implementation of
the more energy efficient transportation and it is a big support from the functional unit to the
marketing team (D1). The insiders of the total operation in the store along with the marketing
team through proper market penetration go for the diversification of the market as well as for the
products.
Task 2 -LO2
Elements of the marketing mix to achieve overall business objectives:
As H&M is operating globally with an insight to achieve best market place the business
environment for the company need to achieve in a strategic and planned way. In this prospect the
marketing mix, that includes product, price, place, promotion, process, people, and physical
environment. The product needs to meet the customer demand in continually evolving marketing
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space in accordance with the customer expectation (Huang and Sarigöllü, 2014). The products
and merchandise of the H&M brand needs to available in all the places where the targeted
customers can easily find the merchandise. The merchandise of the company is a good
representation of good value for money; the customers get the desired product with an effective
pricing. H&M brand uses the advertising, online promotion, personal selling, and social media as
a most strong communication channel for the effective branding to be informative to the
customers and to appeal perfectly to them. The company is reliant to the people working in the
organization because the perfect people can cater the business essentials. The processes of the
organization involve the delivery of service in time for what the customer is paying for. H&M
company believe in delivering the customer the tangible products that has a physical evidence to
gain the customer reliability.
P 3 Comparison of the ways in which H&M and Zara apply the marketing
mix to the marketing planning process to achieve business objectives:
Marketing mix has predominated association with every marketing plan, to chalk out all the
plans very effectively (Khan, 2014). Zara and H&M working in the same segment of the market
are very much concentrated with the marketing mix. In H&M, it uses the marketing mix through
creating a brand value by delivering the high fashion to the customer. Each and every fashion
trend come in the market H&M tries to cater the same trend to the customer sot the customer can
follow the high fashion sense and can initially get the look of the high fashion. When to consider
Zara in this matter, the brand believes in fast fashion and in the Zara store the fashion that enters
in the shop stays only for 15 days and after that the total stock of the merchandise get changed.
In the pricing system, H&M sells the merchandise in lower price to catch the attention of the
customers and in Zara the prices of the merchandise is higher for the people who only follows
fashion without price sensitivity. H&M provides the justified look-book and the company has a
mission to cater everyone their own fashion style from the collection of the merchandise. In
product, H&M has more product range and segmentation than Zara because H&M believes in
the ‘everyday low price product’ strategy with the offering of sportswear, lingerie, cosmetics and
home department. H&M has a strategy to open the stores in the well- known and popular
shopping streets but Zara does not have any this kind of specifications. Zara does not have any
online selling criteria; Zara has a website just to inform the customer about the upcoming
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merchandise. On the other hand, H&M sells products through the online channel and they have a
convenience to browse any products, interact with the seller support and taking any kind of
selling support from the associates. H&M Company spends a lot of time with the strategic
consideration of the promotion. Through the outdoor promotion, advertising, press, blogging,
print media and direct media H&M concentrate more on the promotional activity to catch the
market and the customer as well.
M 3 Evaluation of the different tactics as a marketing assistant that applied by
H&M and Zara to achieve business objective:
As a marketing assistance, the tactics applied for the H&M and the Zara has a wide difference to
achieve the business objectives. The multiple approaches for the marketing is create the base for
the ample number of customer (Flint, 2016). H&M focuses on the close range marketing style to
get to know the customers with close proximity but here Zara follows the direct marketing style
though Zara does not believe in core marketing. Zara has a base for the transactional marketing
that is constantly sell the products in high volume to customers in order to be in the demands of
the investors and other retailers but H&M differs in this aspect. H&M concentrates on the
scarcity marketing so to use the merchandise in an optimal way. They specified how much
product is available at one time and that can fulfill the demand of how many customers,
merchandise allocation is very important for the brand.
Task 3-LO3
P4 Evaluation of a basic marketing plan for H&M:
For the H&M brand marketing is the most effective component to stay in the market, serve the
customer, and reach out to their desirability level. The company focuses on the employees along
with the customers. The merchandise of the company has quality with the warranty and usage of
organic cotton makes it comfortable. It has a product line that differentiates all products and
shows variety. The pricing strategy of H&M brand is reasonable with the discounts and payment
terms along with the financing options it undeniably catches the attention of the customer.
Distribution channel of this company such as direct, retail, suppliers, distributors and
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intermediates pathways creates a motivating channel for the distribution margin with the
evaluation of distributors (M4). The logistic system is another success factor for the H&M
Company, this includes warehousing, transportation and order fulfillment.
D 2 Design a strategic marketing plan with the use of 7Ps to achieve overall
marketing objectives for H&M:
With the operational and managerial processing strategic plan create and implement the business
value in the market (Koku, 2014). H&M Company’s vision is to run operations in a way that will
economically, socially and environmentally sustainable, keep that in mind the business model
with perfect acquisitions, licenses and partnerships the company grow in the international
market. The company measures the barriers it has in the market and after judging the
competitors, they invent alternative strategies to act in long run. With market segmentations and
identification of target market H&M will get all the customer conformation related to the
merchandise. The company also judges the competitive environment by identifying the primary
and secondary competitors by SWOT analysis. H&M sells high fashion merchandise so they
prioritize the customers with pricing strategy delivering the sustainable fashion. The sales force
channel has followed the timeframe and milestone along with the sales matrices and incentives to
drive the growth of the company.
Conclusion:
H&M Company follows the organizational structure to maintain the culture, ethics and absolute
management style. The company is expanding the product range with an upscale version of the
current stores. One of the most striking points about the H&M Company expansion entirely self-
financed with an increase of sale by 72% and earnings per share by 183%. The company is
progressing with new marketing approaches to cater the customer’s best merchandise that will
fashionable, high quality by using affordable prices and effective distribution system.
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Perreault Jr, W.D., Cannon, J.P. and McCarthy, E.J., (2013). BASIC MARKETING: A
Marketing Strategy Planning Approach,-19/E.
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