Marketing Management: Analysis of H&M's STP Strategy and Marketing Mix

This report evaluates the STP strategy of H&M and marketing mix 4Ps which H&M has to reach the customers. It also analyzes H&M's relationship marketing strategy and provides recommendations for improving H&M's marketing strategy.

Marketing
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
1. STP analysis of H&M..............................................................................................................2
2. Marketing mix of H&M...........................................................................................................4
3. Analysis of H&M relationship marketing strategy..................................................................7
4. Recommendations for improving H&M marketing strategy...................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
1

INTRODUCTION
The marketing management is used to execute all the activities related to marketing
function. Marketing function also identifies the opportunities and establishes the strategies to
explore those opportunities in effective manner. The marketing management involves decision-
making, planning before doing any operation in the market. H&M is an international retailer of
clothing in the world founded by Erling (Deepak and Jeyakumar, 2019). Famous for its rapid-
fashion in man, women as well as kids. H&M is second largest retailer in the entire world having
various stores in different countries they also sell their products online. H&M first store is at
Sweden. The company provide a premium quality of product at a affordable pricing to
customers. This report will evaluate the STP strategy of H&M and marketing mix 4Ps which
H&M has to reach the customers. This will further evaluate the relationship market strategy with
actual plan of action and the recommendation of marketing strategy to improve the marketing of
H&M (Haider and et. al., 2017).
MAIN BODY
1. STP analysis of H&M
STP stands for segmentation, targeting and position of business. This model is of three
stage help to develop the marketing strategically activities. As H&M is offering its potential and
fresh customer's inspiring buying experience from past long time. H&M use to positioned on airy
outlook on being ahead in the market trend giving the fresh styles at affordable price.
Segmentation strategy of H&M
With this strategy the H&M subdivide the market and customers into segment they make
groups of similar characteristic (Chen and et. al., 2017). The psycho graphic and
Demographics segments are made by H&M to reach all the potential and fresh customers. As
the company is operating throughout the globe so H&M is targeting different religion, their
cultures and way of living hence, the people and their living style is different so marketing is also
done differently in different areas.
Segmentation by class : H&M is targetting teenagers, normal class peoples and students because
the company is offering trendy style with affordable price and teenagers and students are likely
attracted with this only.
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Segmentation by age: H&M company is well aware of the women's buying ability to buy the
products. The company know popular segment of women age between 20 and 30 are having high
desire to buy the products for themselves, for their children and husband.
Segmentation by home: According to H&M the popular segment of women is static living in
their house or student dorm or in first home in urban area so their preference of products also
depends on that (Bai and et. al., 2020).
Segmentation by habits: Generally the habits of all the similar age group are same, and they are
doing their habitual things like., an individual needs sports clothes for performing its habitual
activities and an individual having habit of tracking needed the respects dress so the H&M is
focusing on this and producing goods for them.
Effects: Personal, social, religion which is result in better lifestyle and individual personality
development. H&M is providing low price fashion at its every shop in the world for their
customers who use shopping as social work, and they get joy by performing this in their day-to-
day lives. H&M pricing and high quality of clothing attracts the people very much and this
differ the brand from its competitors.
Targeting strategy of H&M
H&M has selected their current customer's to be more important because they have to sell
their product and services to them. The market which H&M has chosen is a collection
fashionable and new trend market customers and the shopping gives them a different kind of
pleasure. Basically companies target market is society’s younger peoples. Yet H&M is offers
clothing and accessory for all age group but women are generally the target market of H&M.
According to H&M women uses to shop more than others because they buy for their children as
well as their husband. H&M targetted middle and working class women because the general
preference of such women is to be fashionable and trendy with time. The middle class women
preference also depends on the price of product so H&M is offering low price product for
reaching maximum customer's of society (Saputra and Suwandi, 2019). The customers are
generally not stick to a particular brand instead of this they are in search of new fashionable
products in the market. H&M know the customer attraction is normally higher than their loyalty
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towards the brand so H&M uses to focus on trend and fashion or than other elements (Bolon and
et. al., 2018).
Positioning strategy of H&M
It refers to the space that H&M is having of its brand in the mind of potential customers
and how it is differed from others in the respective market. H&M is having its specificness with
the fresh trendy product and services at a affordable price. The company is continuous working
to make their products so premium that more and more customers get attracted towards the
products with using this strategy the H&M occupied a huge share in the global market. H&M is
second largest retailer in the world of clothing, accessories and footwear. They offer rapid-
fashion clothes to the potential and fresh customer's. H&M is also sold and having good
positioning in the online market as they sell their commodities online with their attractive
website. H&M is using eco-friendly techniques in their production. They are minimizing there
carbon exploitation with improved technology. Customers get attracted with its quality, pricing
and way of producing clothes and accessories this is the positioning strategy of H&M.
2. Marketing mix of H&M
Marketing mix is collection of equipments that H&M uses to follow its commerce
objectives in the targeted market. H&M is an international brand so it’s marketing also done
globally. H&M have many sub-brands having their particular identity in the trendy market. The
company provides products of all age categories that are in middle and working class. H&M try
to provide a trendy fashion at a affordable price so the customer's get maximum satisfaction with
the brand. Marketing approaches will help H&M to achieve its business objectives in effective
manner (El Gaml, Hasouna and Farouk, 2018). The 4Ps are below:
H&M product strategy: H&M is a second largest retailer in clothing in the world that uses to
provide a premium quality and fashion at a low cost. The brand is offering clothes in different
nations in the world.
 H&M is producing all clothes weather it is designer collaborating or it can be a basic
daily wear cloth H&M offer all types of clothing with low cost and top fashions.
 With the cloths H&M also produce accessories, footwear and the beauty products as
women are there targetted market, so they need to have beauty and cosmetics.
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 H&M try to launch new arrivals on a regular basis so that potential and fresh customers
get attracted towards the brand.
 H&M 20-25% stocks are consisted of fresh arrivals, fast fashion products and trendy
products.
 The products are made with art and technology keeping in minds the tradition and the
lifestyle of different countries peoples. By which the customer's get attracted towards the
products and willing to buy them.
 They design clothes for young and aware the immature adults to check it out.
This, also lead to high sales of clothing and other products of H&M. Which makes the H&M the
most fast-fashion and affordable clothing brand over it competitors.
H&M Price strategy: As the company is providing high quality of products at a premium price
in the global market.
 H&M is having median pricing strategy. The brand uses to keep a large amount of stock
in discount slot to attract the customers by which sell is expand rapidly and ultimately increase in
revenue occurs.
 H&M provide different seasonal discounts and offers to the potential and fresh customers
to buy more from the regular and new stocks by this there stock get clear easily, and they restore
that with new fashions and trends.
 H&M have different sub-brands and having their different customers, sub-brands have
vary of prices mist of the products are at affordable prices and some are relatively expensive this
all depends on the region in which H&M is selling their goods as some region have high addition
of taxes.
 Brand is trying to minimize its product price in every point which makes H&M more
affordable brand than its rivals which lead to increase in sell (HR and Aithal, 2020).
H&M place strategy: As H&M is second largest retailer in the world with a great network
covering approx fifty-five nations of the world. It have headquarter is in Sweden.
 H&M opened its first store in 1947 Sweden and now they have covered majority of
countries in the world.
 The brand is having there major store at cities centre, large cities and shopping centre.
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 H&M is trying to open more and more store in the world. The company has expanded
very much in past few years.
 H&M have a nice place in the mind of customer's. Peoples view the brand as most
affordable, fashionable and trendy brand of all time.
 H&M has opened various new store and also extended there online stores in new
markets, H&M is using both physical and online store to grow its business and customers.
 Customer gets convenient with H&M store because different variety of products at a
single store.
 H&M is buy their raw materials direct from the supplier and sell the furnished goods to
retailer so that there is not middle cost charged in this process. H&M uses to manufacture its product in those nations where labour cost is comparatively
low so that they can minimize their product cost (Al-Qaim, Mussa and Yuzir, 2018).
H&M Promotion strategy: The promotional activities are normally different in different
according to their needs. H&M know the power of promotion, so they do additional activities for
making promotional activities more effective.
 H&M use TV advertisement in creative way, showing their quality and affordable
pricing. The ads are shown on any regular basis so that H&M potential and fresh customer gets
aware about the product range and new arrivals as well.
 H&M have their channel on you tube where the brand is come with various unique ad to
attract the customer's.
 H&M also include big celebrities to promote their product in international market by this
the youth get attracted and buy the product of H&M.
 Social media is also a get way to promote the H&M in the market. The company’s
executive is maintaining H&M account on daily basis and posting different clothes of the
brand to aware peoples.
 H&M is using digital marketing to influence people to buy their brand product, as digital
marketing is very effective manner to increase the sale of any commodity.
 H&M brand is offering various discount and promo code in the end of year so that the
stock get clear and new stock can be restored (Warrink, 2018).
 CSR activities also done by the company that lead to increase the brand value and brand.
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3. Analysis of H&M relationship marketing strategy
Relationship marketing refers to the strategy which is planned to promote customer
loyalty, interaction and long term engagement. H&M designs this strategy to build strong
connections with its customers by giving them with information which directly suits their need
and interest and by fostering open communication. In simple terms, relationship marketing can
be defined as the brand’s ability to develop and emotional connection with its customers. By
building good relationships with customers, can help H&M in increasing their customer life time
value or help in retaining the customers and will also reduce the marketing costs. H&M also
believes that increase in 5% customer retention can increase its business profitability upto 75%.
H&M is always committed to deliver fashion and quality at the affordable and best price.
Customers are the H&M prime focus that is why the company always strives to make their
designs and shopping experience of customers exclusive (Hollensen, 2019). H&M believes in
providing high quality to everyone so that the customers are confident and get the best deal from
the company while shopping. Currently, H&M invests a good amount of budget in the Enterprise
resource planning and Customer relationship management which works in enhancing the
customer service and customer retention. Through the help of this technology, company gets to
know its top customers and proactively gets the information that is required for serving the
customers their best. This technology enables the support staff in analysing the customer’s
history and get to know their buying patterns, follow up with who are facing any issues, and get
the appropriate score leads. H&M implements this strategy, by purchasing the subscription based
cloud solutions that is the most versatile tool available. After the setup of this solution, technical
staff of H&M helps the marketing department to make the notes about the customer, consult
information of customers and contact the customers who have high scoring. Another relationship
strategy that H&M is focusing on these days because of the immense competition in the clothing
industry is to boost its loyalty and customer referral programs. Company feels that by creating
and offering reward programs makes the customer come back to them (Adomah and Maloreh,
2018). H&M regularly tracks for loyalty, referral programs and rewards. It test out new strategies
and programs in certain markets by offering different forms of rewards such as 20% off
discounts, freebies, points after the shopping and promote all the loyal and reward programs
through their websites and pages on social media platform. By doing these programs, company
analysed that in UK majority of its customers look for the reward and loyalty programs before
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they commit to a purchase, less amount of customers looks for promotions while shopping.
Company came up with this strategy because these referral and reward programs depicts
customers that H&M care about them and appreciate their support as they does mouth-of-word
for the company, helps in gaining more customers (Bonilla, del Olmo Arriaga and Andreu,
2019). H&M with the help of its highly talented professionals comes-up with innovative
relationship marketing strategies which helps developing brand value of its company and better
relations with the customers by serving them and satisfying their needs.
4. Recommendations for improving H&M marketing strategy
There is huge competition in this retail clothing industry, where H&M faces the tough
competition from its competitor like Zara, Marks & Spencer etc. It is essential for H&M to come
up with such innovative marketing strategy that not only gives it a competitive advantage but
also differentiate it from its rivals. Here are few recommendations that can help H&M to
improving their marketing strategies –
The way of advertising is changing regularly with the time, H&M needs to pay more attention on
the changing advertisement trends if it wants to attract the potential customers. With the heavy
budget advertising, company has can advertise with the help of digital marketing professionals
on social media platforms like Facebook, Instagram as these platforms have huge traffic these
days.
It is crucial to consider the expectations of customers while marketing but H&M should now
think above the customers’ expectations and come up with something which creates it brand
value and leave an impression on everyone.
To increase its sales in online business, H&M brings in leads from various multiple sources.
Company with the help of its marketing professionals should look on lead generation techniques
which are sometimes overlooked (Kassirer and et.al., 2019). This will really influence the sales
number of H&M.
H&M should hire more social media professional who can manage their social media content as
well as formulate amazing innovative strategies like posting different posts, video, stories which
can attract the potential traffic and inform them about the amazing offers and discounts that
H&M everytime come up with. H&M can also use the smart marketers tools offered by the
social media websites which will provide company regular insights about their customers.
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H&M follows the e-mail marketing like many others business, but company can send post
purchase e-mails to their customers which will help in building the loyal customer base. If
someone has shopped for the good amount company can give reward or voucher as surprise to its
customers through e-mail for their next shopping. This strategy will also help company in getting
and retaining the loyal customers (ARABSKA, 2017).
Today social media is suffering with lot of trust issues, it is very essential for the company to
keep the customer data privacy, otherwise there are high chances that customer may lose faith in
the company. H&M needs to ensure that while marketing and collecting information for their
purpose, data needs to be secure.
While marketing about its products, prices, offers, discounts etc. company can advertise on
various sources about the initiatives it has taken for the sustainability and corporate social
responsibility as this makes the customers more brand aware and give H&M and upper edge
from its rivals and in gaining more customers.
CONCLUSION
This report is concluded that marketing management is generally collection of all the work
related to marketing function, marketing management find the opportunities for organization and
make effective work to accomplish them. H&M is having STP strategy which is every effective
in market. H&M is having demographics and psycho graphic segmentation to make its segments
or class to inter react with in business, the company uses to focus on these segments and make
their decision effective. H&M is having younger and mainly women as target market because
this people have maximum desire to buy the products according to H&M and the brand is having
good position in market as well as in the mind of its customer's. Further, conclude that the
marketing mix 4Ps product, price, place and promotion are made in a very effective way that
more and more customers get attracted to the H&M because the brand leading in improving
lifestyle and living of peoples.
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