BFT/18/529 Apparel Merchandising: H&M Brand Analysis Report

This report provides a detailed analysis of the apparel brand H&M, examining its vision and mission statements, color assortment, and introduction to the company's history and global presence. It delves into H&M's price strategy, segmentation, targeting, and positioning strategies, focusing on its 'fast-fashion' model and target market of young, fashion-conscious consumers. The report further explores H&M's marketing efforts, including its social media presence on Facebook and Twitter, and its co-branding initiatives with luxury designers, highlighting the benefits of these collaborations. It also covers H&M's sustainability campaigns and concludes with a SWOT analysis, outlining the brand's strengths, weaknesses, and competitive advantages. This analysis offers a comprehensive overview of H&M's business and marketing strategies within the fashion industry.

APPAREL MERCHANDISING
TOPIC:APPAREL BRANDS AND THEIR PRICE POINT, FIT,STYLE,MATERIALS & COLOUR
(ASSIGNMENT-1)
SUBMITTED TO: SUBMITTED BY:
MR. PRABHAT KUMAR AMRITA RAY (BFT/18/529)
MEHELI DAS (BFT/18/505)
RUMJHUM (BFT/18/480)
SAYANTANI GHOSH (BFT/18/494)
PRANAV PRIYADARSHI (BFT/18/1035)

VISION STATEMENT &MISSION STATEMENT
VISION STATEMENT
 H&M VISION STATEMENT IS“TO LEAD THE CHANGE
TOWARDS CIRCULAR AND RENEWABLE FASHION WHILE
BEING A FAIR AND EQUAL COMPANY.”
MISSION STATEMENT
 H&M’s mission statement is“to drive long-lasting
positive change and improve living conditions by
investing in people, communities, and innovative
ideas.”
 H&M offers the largest amount of products but shows
little variations throughout the year.

Colour Assortment
 Let’s take a look at colors. H&M offers more color options with 2,1% colors,
on average,H&M offers more color diversity with significant proportions for
blue, pink and grey.

INTRODUCTION TO H&M
 As the globe’s second largest retailer in the fashion industry, Hennes and Mauritz (H&M) has
done well in establishing and maintaining customers’trust since 1947. The Swedish Company
was founded by Erling Persson, who opened the first store in Västerås as Hennes (Swedish word
for “hers”), offering fashionable women’s wear. In 1968, he acquired Mauritz Wildforss, a hunting
and fishing equipment store located in Stockholm and began the extension of men and
children’s clothing lines. H&M then diversified over the years and progressively expanded its
product width to include accessories, shoes, top-to-toe beauty care products and cosmetics
and home furnishing collections.
 Since its inception, H&M has rapidly grown into the global markets with more than 3924 stores
spread in 61 countries (Cruz, 2012) and more than 148,000 employees (Hm.com, 2015). H&M has
made Singapore its 5th Southeast Asian debut in 2011 after Hong Kong, Shanghai, Japan, Korea
and has robustly expanded across the island and opened ten stores within five years after
entering the market.

Price strategy
 The price strategy of H&M is designed based on their customers needs
which is low price and high fashion. In fact, this is the one of the biggest
challenges for H&M. If not making this happen, the special feature of H&M
cannot be realized. How could they combine fashion and cheapness? This
objective was achieved by two steps: first, H&M outsources the production
to countries where the labour cost is much lower. To control transportation
cost, outsourcing was arranged according to different product. Those high
fashion product which target at the European market were produced in
Turkey, because of the short product life cycle. In addition, basic product
are produced in Asia because they allow longer transportation time and
bear lower risk. Second, the company also conduct strict cost control plan.
For example,very few executives have secretaries or have cellphone
priviledge(Jobber, 2007).

H&M STP Analysis
 Segments by class: H&M strategy is offering high fashion at low prices, typically
targeting working class, lower middle class and students.
 Segments by class/home: The most popular segment is women aging between
15 and 30 years, either still living at home, in student dorms, or in their first house
in urban regions
 Segments by age: The most popular segment is women aging between 15 and
30 years commonly known as generation Y, ambitious with high buying power.
 Segments by family life: Typical college to graduate females life at home single,
on their own in dorms or in their first home, either single or as a young couple
without children

Targeting Strategy:
The selection of potential customers to whom a business wishes to sell products or services.
The target customers of H&M belong to the group of fashionable and trendy consumers who
see shopping as a social activity provide pleasure in their daily life, who wants to follow the
trends without investing a lot of money. The target market for H&M is for younger people.
Even though H&M offers clothing and accessories for all ages, their target market is women.
Women usually shop more for them, but also buy all their children’s clothing and often their
husbands as well. With their low prices H&M targets woman in the lower middle class and
working class, this is a concentrated targeting strategy. Because their focus is to sell a
fashionable product for a low price they target married to single woman, mothers and
daughters. Many single young women who always want to stay on top of the fashion trends are
constantly upgrading their closets with H&Ms new affordable items. The consumers are not
highly brand loyal; rather they shop at multiple retailers in search for the perfect fashion
pieces. They shop anywhere from four to six stores on average. Customer attractiveness is
high, customer loyalty is low. According to dancehall dilemma theory, these are targets for
conversion, attractive enough to be worth chasing.

Positioning Strategy:
 Is a marketing strategy that aims to make a brand occupy a distinct
position, relative to competing brands, in the mind of the customers? H&M
is a retailer that is looking to provide consumers with fashionable, high-
quality clothing at the best price possible. They offer“fast-fashion” clothing,
in other words from runway to racks in record time, and sell European
influenced clothing in the American market. Additionally, H&M carries
clothing in a variety of categories including women’s casual, men’s
business, children’s wear, footwear and accessories. The company is the
second largest clothing retailer in the world, the largest in Europe and
actively engages in E-retailing. H&M is also economically, socially, and
environmentally sustainable.

Marketing by H&M
Facebook:
 H&M has attracted more than 14m fans to its Facebook page and posts several
updates a day except on weekends. Most of the updates focus solely on promoting
its products, but in among the blog standard“buy these trousers” posts there are
some really neat promotional ideas. For example, the retailer clearly does a lot of
blogger outreach and often links to third-party blog posts and articles on its H&M Life
site. Similarly, H&M has run several competitions recently that require fans to submit
their own photos for a chance to win, which is a great way to encourage
engagement that is relevant to the brand and more meaningful than just asking for a
‘like ’or re tweet. One example offered fans the chance to win tickets to Coachella
by posting photos of their festival style on Tumblr using the hashtag #HMCoachella,
while another asked entrants to post photos of their best‘bike style image’on
Instagram using the hashtag #HMBikeStyle for the chance to win clothes from the
H&M Brick Lane Bikes collection.

Marketing by H&M
Twitter:
 H&M has created separate Twitter feeds for each of the local markets in which it operates,
but each one uses the same background and header image so the branding is obviously
closely controlled. The feeds appear to be equally poor at responding to other users, with
each tending to churn out marketing messages rather than answering queries or @mentions.
Looking at the main corporate account for example, it tweets a number of product images,
links to blogs and competition promos each day, but generally responds to fewer than 10
@mentions. And most of the responses tend to simply be messages directing the query to
the dedicated customer service feed.
 One noteworthy Twitter campaign by H&M recently was a Q&A with brand ambassador
David Beckham.

Marketing by H&M
H&M Co-Branding
 H&M initiated its collaboration with designers with Karl Lagerfeld in 2004 and
collaborations in subsequent years include Stella McCartney, Viktor &
Rolf, Primadonna SpA, Roberto Cavali, Comme Des Garçons, Matthew
Williamson, Jimmy Choo, Sonia Rykiel, Lanvin, Versace, and Marni.
 H&M co-brands receive a high media exposure and co-branded items become most
sought-after. The whole collection of Marnifor H&M was sold out by lunchtime of the
first day of opening in London in March 2012. By collaborating with a luxury designer
fashion brand, a fast fashion brand like H&M can increase its brand equity as well as
its brand image. Collaborations between fast fashion and designer fashion brands,
which is recognized as‘fast fashion co-branding’, has shown an incredible market
response across countries as it can create a win-win situation for the brands involved.

 Co-branding between two brands is about making a joint effort such as creating
marketing synergy to appeal to brand loyalists and consumers new to either brand. This
is particularly important for the fashion industry because a brand name or logo provides
a key function for business operations and is an important means to attract consumers
for building a relationship with the brand.
 Consumer perceptions of luxury brands can vary among consumers, but consumption
of luxury products appears to have a strong social function. The social dimension
of luxury value perception refers to the perceived utility that consumers acquire by
consuming products or services recognized within their own social groups. Such utility
may confer conspicuousness and prestige value, which can affect consumers’
evaluation and propensity to purchase luxury brands..
 Fast fashion brands are driven by consumers’desire for newness of which products are
quickly changing and available only for a short time frame. Fast fashion co-brands are
then positioned to combine the strategies adopted by their parent brands. Fast fashion
co-brands usually available in the form of a limited collection, which will be
discontinued after a short period of time and they emphasize trendiness and newness
like fast fashion brands/products

H&M Campaign to promote sustainability
initiatives
 H&M is running its first campaign to
promote its clothes recycling scheme as
the retailer looks to raise awareness of its
sustainability efforts and encourage more
shoppers to donate unwanted items of
clothing.
 The ads, which run in The Evening Standard
and Metro, focus on H&M’s “Conscious”
range of sustainable clothes, as well as
highlighting its collection service which
offers customers a £5 discount voucher for
every bag of clothes they take into stores.

SWOT Analysis
H&M’s Strengths
 Effective Strategy: Fashion retail business relies on effective of selling strategies for higher merchandise turnover. H&M uses th
fashion model that supplies designer tables with the latest fashion trends. This strategy allows for the fast delivery of merchandi
from the designer table to the showroom floor.
 Global Presence: H&M offers its products in 5,076 stores in 74 markets spread across all 6 continents. From Europe to North Am
Asia, Australia, Africa, and Latin America, the company’s global operation reduces risk and enhances sustainability and stability.
 Competitive Pricing: Price matters regardless of the product. The company strives to become the most sustainable fashion r
exploiting the flexibility and cost-effectiveness of the fast fashion model to offer high-quality products at a cheaper price.
 Variety of Products: A wide variety of products attracts more consumers. From apparel to cosmetics, shoes, boiled eggs, blanke
pots, candle holders, and so on, the company’s unique brands like Cheap Monday, H&M Home, and ARKET offer a variety of
products.
 Valuable brand: Since its founding, H&M has adopted a customer-centric approach in the running of the business. This has enab
the company to build a valuable brand. In 2019, it was ranked the 58th most valuable brand in the world.
 Strong Online Channels: In the digital age, companies that adopt and exploit the internet more effectively have a huge
advantage. H&M has a strong online presence with a large audience across numerous platforms, which is funneled to drive sales
via eCommerce.
 Efficient Supply Chain: Global companies require an efficient supply chain to connect with suppliers and consumers more
effectively. H&M’s NextGen supply chain is highly efficient.
 Community-Centered Approach: Taking the interest of communities at heart is an effective way to build a sustainable business
closed its stores in the US in support of protesters and is also focused on helping communities affected by the pandemic in
Bangladesh.

H&M’s Weaknesses
 Overdependence on Outsourcing: Instead of manufacturing in-house, H&M outsources
most of its production to over 900 independent suppliers in Europe and Asia. While this
strategy has contributed to its success, it puts the company at the mercy of the suppliers.
 Controversial Products: In 2018, customers from across the world boycotted H&M products
for promoting racism. The company used a black child to model for its hoodie featuring the
phrase ‘Coolest Monkey in the Jungle.’
 Uninspired Fashion: The issue with H&M’s fast fashion model is the reliance on fashion trends
set by major designer brands. This is a major weakness since fashionistas are drawn to new
and radical designs but not existing fashion trends.

H&M’s Opportunities
 Diversify Products: Retailers offering a wide variety of products are stable and earn more.
H&M can improve its bottom-line by diversifying offerings to include sports apparel.
 Exploit e-Commerce Fully: Compared to other fashion retailers like Zara, H&M is far behind in
terms of the exploitation of e-Commerce channels and revenue from online sales. As more
consumers shop online, the company can benefit from the maximum exploitation of e-
Commerce.
 Focus on Emerging Markets: From Asia to Africa, the growing middle-class in emerging
markets presents fashion retailers like H&M with the greatest potential for growth.
 Expand through Acquisition and Mergers: To circumvent barriers of entry into some markets
companies exploit the benefits of mergers and acquisitions. H&M can expand into related
markets like secondhand clothes through acquisition or merger with a player in the marke

H&M’s Threats
 Impending Recession: Even though clothing is a necessity, trendy designer clothes, footwear, and underw
are luxuries. As Europe and other regions slide into recession, fashion retailers like H&M will experienc
decline in sales and profits or can even go under.
 Intense Competition: H&M is facing stiff competition from new and old brands like Zara, Macy’s, Gap,
Boohoo, and so on. Competitors are all seeking to increase market share and reduce demand for H&M’s
products.
 Increase in Counterfeits: The fashion industry has the highest number of fake products. With the eve
increasing trade in fake products globally, profits from H&M’s premium designer brands can decrease in the
future.
 Rising Operation Costs: Globally, profits for retailers are decreasing gradually with an increase in the c
labor and raw materials. Increasing costs of operation and production threaten H&M’s profitability.
 Trade Tariffs: H&M outsources a large portion of its production from Asia, which makes a perfect target fo
tariffs. As a Swedish company, H&M can be targeted by the UK in the aftermath of Brexit.
 Global Pandemic: The success of global companies like H&M depends on the uninterrupted flow of raw
materials and finished products. Lockdowns and quarantine in the event of another global pandemic in the
future can interrupt the flow and reduce H&M’s sales and profits.

Marketing Mix (4Ps) Strategy
 H&M Product Strategy:
 The product strategy and mix in H&M marketing strategy can be explained as follows:
 H&M is a clothing retail company. It offers fast fashion clothing for men, women and children. H&M offers
following clothing brands in various countries across the globe:
 • H&M: The range includes everything from designer collaborations to everyday basics and yoga wear.
 • & Other Stories: Women wear: shoes, bags, accessories, beauty, ready to wear
 • Cheap Monday: Denim, fashion collections and accessories for men and women. The brand is
connected with music and pop culture.
 • COS: Classics and wardrobe essentials for men, women and children. The brand had designs inspired
by art and technology from across the world.
 • Monki: On-trend lifestyle collections for young women.
 • Weekday: It makes clothing for young and style aware young adults.
 All these cover the product strategy in the marketing mix of H&M.

H&M Price/Pricing Strategy:
 Below is the pricing strategy in H&M marketing strategy:
 H&M offers high quality clothes at a premium price.
 The major competitors of H&M are GAP and Zara. As compared to both of these brands, H&M
products are prices relatively lower as a part of it marketing mix pricing strategy. These is due to
lower cost of manufacturing and transportation costs by H&M (Main focus is given on cost
minimization). As compared to Zara H&M offers more variety of products. On an average H&M
products are prices at $25 whereas that of Zara are $45. High quality and considerably lower
prices attract the youth and hence leads to increase in sales for the company.

H&M Place & Distribution Strategy:
 Following is the distribution strategy of H&M:
 H&M sells its products through its exclusive stores located in major cities across the globe (4135
stores). In some countries due to regulatory norms, H&M offers its products through franchising
partners. It also offers its products through online stores from where the customer can choose
from the list of available products and purchase them through online payment. The products are
delivered at your stated address. Cheap Monday is sold through selected retailers worldwide and
through standalone stores including its flagship store in London.
 The products are manufactured in countries where cheap labour is available in order to reduce
costs. The clothes are designed by H&M and its other brands according to segment they are
targeting. H&M has developed an excellent supply chain over the years. The delivery time is
instant and the transportation costs are kept at a minimum.
 The manufactured clothes are transported to the warehouse from where they are distributed to
various stores.

H&M Promotion & Advertising Strategy:
 The promotional and advertising strategy in the H&M marketing strategy is as follows:
 Since H&M group has a wide range of product portfolio catering to different segments, it uses multi-channel promotional strategy
in its marketing mix.
 • TV advertisements: H&M comes with creative ads which focus on its latest innovative designs. Each brand handles its own
marketing decisions. The ads are telecasted at regular intervals and on channels mainly watched by youth, to increase its
awareness.
 • YouTube: H&M has its own YouTube channel where it comes up with unique ad campaigns to engage with the customers.
 • Digital Marketing: It indulges in excessive search engine marketing and social media marketing to convert the potential buyers
into consumers.
 • Promo codes and discounts: Promo codes and discounts are offered during the end of season sale. The discounts are offered on
both online and retail stores.
 • PR: Parineeti Chopra opened the first H&M outlet in India. Such stunts generate quick publicity for the company.
 • Sponsorships: H&M signed deal with The Weeknd, sponsors Caitlyn Jenner, sponsors Musee Des Arts Decoratifs, Creative
collaborations with high end designers and style icons, Collaborations with pop stars and sport stars
 • CSR: Water, Planet, Education, Equality
 Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of H&M.

People:
 The employees at H&M are trained well at every level. The work culture is very modern and
employees are on a rotation basis at every department and are motivated to innovate and
come up with the best clothing wear. H&M also tie up with many clothing designers throughout
the world to make latest trends in fashion. Employees come from diverse backgrounds having
special skills. Personal and Professional development of employees is highly promoted.
Process:
 High importance is given to customer relationship management. Employees are trained to
retain highly profitable customers by giving them better service and offers. In case of any
complaints the staff at H&M puts in every effort to resolve them at the earliest. There is a
customer care number through which the customer queries are resolved. Staff at H&M outlets
help the customers in selecting the best merchandise for them. Thus the service and delivery
time is very quick thus gaining satisfied customers.

Physical Evidence:
 H&M stores are appropriately lit with great
ambience and humble staff. The apparel is
arranged to have a decent look which
appeals to the customers. The merchandise is
of excellent quality and latest trends. H&M is
diversifying its portfolio and entering into more
international markets. To create a Buzz in the
market, it engages in PR activities. For
example, celebrities were invited during its
launch which created a Buzz in the market.
User stories and recommendations are always
welcomed by the brand which also helps in
customer engagement with the brand.
Hence, this completes the H&M marketing
mix.

CONCLUSION
 H&M have from their establishment in 1947 developed from a little Swedish attire organization to
one of the greatest on the planet with regards to shabby and popular garments. H&M have
possessed the capacity to build up a solid and practical brand name where the item is all
around adjusted to the necessities and needs of the clients. They have demonstrated the
market that form doesn’t need to be costly and you don’t need to gain a considerable
measure of cash to have the capacity to dress elegantly. This idea is for the most part extremely
alluring for more youthful individuals that still don’t have such a high pay since they are in the
start of their vocation or they are yet considering. H&M has effectively imparted their vision to
their clients and made a solid brand name, and in this manner possessed the capacity to pick
up a place in the psyche of the clients, which is essential in a focused point of view. Amid the
most recent decade the opposition between organizations that offer shabby and popular
garments has expanded, which will drive H&M to never quit creating and enhance their
business. Their showcasing methodologies must be focused and in the meantime moral to draw
in and keep clients

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