H&M Brand Extension: STP & PESTLE Analysis for H&M Home

This report examines H&M's brand extension into the home goods market, focusing on the H&M Home line. It employs secondary research to understand market dynamics and the rationale behind the extension. The report highlights H&M's brand values, which emphasize quality, sustainability, and customer satisfaction. It includes an analysis of H&M's segmentation, targeting, and positioning (STP) strategies, as well as a PESTLE analysis to assess the external factors influencing the brand's expansion into new markets like India. The report also discusses H&M's supply chain and competitive landscape, comparing it to ZARA. The conclusion emphasizes H&M's commitment to providing quality products and services while adapting to market dynamics through strategic brand extensions.

PRINCIPLE OF
MARKETING

Executive summary
The report aims towards H&M brand extension into H&M home. Secondary research
methods are used in order to find out the results. This research has been helpful in finding out the
market dynamics and identified the need of brand extension. The research has concluded that
H&M is brand that focuses on providing its customer with quality product with sustainable
development.

Table of Contents
Executive summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Methodology................................................................................................................................4
Findings.......................................................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
The aim of this report is to identify the brand values and the concept of brand extension
in H&M
H&M is a Swedish multinational company, that was establishes in 1974. it has over 5000
stores in 74 countries with over 120000 employees. And with net revenue of $24.8 billion.
This report shows the findings about the existing brand and brand values. It also shows
the STP analysis of H&M. And also helps in analysing the market dynamic by using pestle
analysis.
MAIN BODY
Methodology
Secondary method of research has been used in finding out the brand values and market
segmentation. Secondary research is a method, where data is collected on the basis of the
information that has been already researched and analysed. It was very helpful in identifying the
target market and positioning of H&M for the brand extension.
Findings
Existing brand and brand values
A brand is a name, symbol, term, or design that is given to the service or a product in a
way that it takes on identity by itself. The brand value of H&M is that they believe in people and
entrepreneurial spirit. With cost improvement and cost conscious products serving the needs of
its customers. In other words, it identifies one seller’s product as distinct from those of others.
The concept of brand extension refers to when an established brand creates a new category of
product to meet the requirements and needs of its customers. H&M is mainly known for its high
street fashion, however, they are extending their brand toward H&M home. Where it will sell
home products like pillows, lamps, towels etc. With successful brand extension
implementations, it helps the organisation in increasing its revenue and boosting its sales by
increasing the reach of new demographics.
Kapferer'e brand identity model is a well known marketing model. It is hexagonal prism
that shows the six key elements which makes the brand identity. The six elements of H&M are:
 Physique: trendy designs, durable, good quality, innovative.
 Personality: classy, trendy, confident.

 Relationship: empathy, personal touch.
 Culture: modern, outgoing, fashionable
 Reflection: outward, high status
 Self Image: unique, confident.
STP Analysis
Segmentation strategy:
H&M focuses on the segmentation strategy by aiming towards the people who love to
spice up their home and who wants that their homes are always modernised (Jan, 2019 ). It uses
demographics and psycho graphic segmentation to reach to its customers. That is, it targets many
culture, lifestyle and religion by segmenting into class, age, home and family life.
Targeting Strategy:
H&M targeted strategy involve customers that belongs to group of trendy and fashionable
consumers, who looks at shopping as a social activities that provides pleasure in daily life
(Kalam,, 2020). It targets the audience who wants to follow the trends but without spending lot
of money. It provides products for all ages, but especially targets the women as they are one who
shops for everyone. They are the one shaping the homes and lifestyle.
Positioning strategy:
H&M offers perfect combination of high class brand with modernised home amenities at
reasonable prices. And with the quality based positioning in the market it aims at providing
customers with utmost quality at affordable prices.
PESTLE analysis
It a framework that is imperative for companies like H&M, it helps them to understand
the market dynamics that helps in better implementation of the brand extension in the new
markets of India (Ortega and et.al, 2019). So that they can improve their business continuously.
The factors of pestle analysis:
Political Factors: India has been politically unstable. H&M uses strategy of franchising
in economies that are unstable and keeps their brands on toes all the times.
Economic Factors: The import laws and duties, currency fluctuations and inflation in
Indian economy lead to uncertainty for brand (Kairuz and et.al., 2020). H&M has to be cautious
with its pricing policies in Indian economy in order to get edge over its competitors.

Social Factors: H&M has been significantly successful in creating a sustainable
environment by giving recognition to CSR. It is also known for its efforts, in promoting gender
equality.
Technological Factors: H&M has been keen on improving its existing supply chain with
introduction of latest technology for entering into the new markets (Oishi, 2018). It has also tied
up with Hermes, as their logistic partner as Hermes has highly advance technology of Logistics.
Legal Factors: H&M strictly adheres to the world laws specially in countries that it
operates. It adheres to the Indian rules and regulation, so that there can be successful
implementation of its brand extension
Environmental Factors: H&M has been ranked the most sustainable consumer goods
company by Sweden. India is a country very there is high emission of carbon. H&M has adopted
various eco-friendly techniques with the goal of attaining 100% sustainability.
Brand extension
H&M is a well known brand that is mostly known for its high street fashion. However, to
increase their brand, they have stepped towards selling home items. That matches the essence of
the company that is being fashion forward in terms of home products. That is, it has extended its
brand, where they will sell home appliances and accessories such as pillows, towels, bed sheets
lamps etc. products that are low priced and high quality.
H&M has a packaging strategy that reduce, innovate and re-use its packaging. With the
extension of its brand. It uses the packaging strategy of replacing single use packaging into
reusable packaging and 100% of its packaging are recycles and are environmental friendly.
H&M Home is the brand name for the extension of the brand. It uses the quality based
market positioning that helps the company in developing its USP, giving the brand a distinctive
and a unique identity in the customer’s mind.
Competition
ZARA H&M
SUPPLY CHAIN Vertically integrated supply chain Dual supply chain
INSPIRATION Inspiration comes mainly from stores Inspiration comes from
designers and trends
OUTSOURCING Own production capacity but Fully outsourcing its

outsource sewing production to suppliers
PRODUCTION Production mainly in Portugal and
Spain
Fashionable clothes produced
in Europe
CONCLUSION
From the report, it can be concluded that the brand value of H&M is to provide its
customers with almost satisfaction by fulfilling their needs by providing them quality products
and services. Also, it analysis it market by using Pestle analysis that helps them in identifying the
market dynamic for implementation of brand extension.

REFERENCES
Books and journals
Jan, A.D.A. and Victor, S., 2019. Measuring the Effectiveness of Segmentation, Targeting and
Positioning Strategy of L’oreal Products in Kingdom of Saudi Arabia. IJO-International
Journal of Business Management. 2(09). pp.68-79.
Kalam, K.K., 2020. Market Segmentation, Targeting and Positioning Strategy Adaptation for the
Global Business of Vodafone Telecommunication Company. International Journal of
Research and Innovation in Social Science (IJRISS). 4.
Ortega and et.al, 2019. Pestel analysis based on neutrosophic cognitive maps and neutrosophic
numbers for the sinos river basin management. Infinite Study.
Kairuz and et.al., 2020. PESTEL analysis of environment state responsibility in
Ecuador. Neutrosophic Sets and Systems. 34. pp.70-78.
Oishi, A.H.A., 2018. Analysis of H&M home supply chain and implementing such in
Bangladeshi market of same arena.
Online references
A, B., 2018. [Online]. Available through <>
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