Pricing Strategy for Zara and H&M

Pricing Strategy
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Pricing Strategy 1
Zara, one of the well-renounced name in terms of clothing, accessories and more. In the
current scenario, the new generation is more inclined towards this brand because it keeps up
with its latest fashion with higher quality and yet it is affordable. At the initial stage, it
opened as a small store in Spain but later it expands its empire from a small town to many
countries (Du, Zhang and Hua 160-166).
Zara adopts the low pricing strategy under which the products are high on fashion and low on
prices. The prices of Zara products are affordable in comparison to international competitive
brands. The company adopts the low pricing strategy because of the low-cost budget of Zara
because they do not spend enough money on the promotions and raw material. The pricing of
the products of Zara is country specific. It adopts the market-based pricing strategy and tags
the product based on the purchasing power of the customers (Liu, Zhai and Chen 1-17).
The pricing strategy adopted by Zara delivers value to the customer at affordable prices.
Hence, all luxury brands have admitted that Zara has a strong position in the global market.
The current scenarios of the market states that Zara’s success in comparison to the other
brands is high because they majorly focus on pulling people in and not pushing products out
in which, Zara follows various marketing strategy, likewise, experience replace products,
exchange in new price, Evangelism is new promotion and in terms of place they put
customers at centre (Steenkamp).
In latest times, Zara has mastered the concept of exchange as it not the cheapest in the fast
fashion arena, but it consistently delivers the branded value of the trend- right product at very
appealing and affordable prices.
In terms of comparison with the other brand, H&M is also one of the well- known brands in
the clothing of the fashion industry which over time have generated millions of profits on an
annual basis. This brand is also famous in terms of building customers trust because they
offer fabulous fashion without the exorbitant prices tags (Zhou 144-156).
In terms of positioning Zara and H&M brand both come in a bit different category. If we talk
about Zara’s positioning it is very effective and also competes and maintain its strategic
advantage, the focus is more on quality than its price. Even in current time, Zara enjoys a
high level of appeal. Moreover, they also start investing in building a strong brand
positioning in an entire market as compared to the other brands (Chang and Tun-Min Jai
853-867).

Pricing Strategy 2
If we consider the H&M brand and its positioning aspect, it is also known for its sustainable
fashion and quality at low costs. Hence, in its current times, it is stated that H&M is high in
quality and low in prices in comparison to the other well-known brands such as Zara, Mango,
and forever21. Hence, the current market position of the brand it is clear that H&M has
developed its brand to own a functional benefit among the audience and it is viewed as being
constant in providing the promised values throughout its various products ranges (Mo, 217).
Zara and H&M pricing tactics highlight that H&M having a bigger online offering which
currently provides two thousand more options than Zara. On the other hand, Zara takes an
elegant route in which they have high product turnover and lower discounting which hence
reflects that brand communication with its customers is higher. Other than this, H&M is more
bullish in their discounting but having sophisticated replenishment strategies. Hence, their
positioning in the market with generation Y customers is normal who are driven by hype and
a lower price (Chuwiruch, Jhundra-Indra and Boonlua).
The pricing span of Zara lies between $5 -$322 and the pricing span of H&M lies between
$1-$291. The average pricing point of Zara is $48 and H&M is $21.40. It is analysed that
H&M provides equal weight to its product while Zara has a totally unbalanced spread of the
product line. H&M applies bullish discounting strategy and have provided 24.4% discounting