Analysis of H&M's Digital Marketing Strategy: PESTEL and Ethics

This report provides a comprehensive analysis of H&M's digital marketing strategy, examining the impact of PESTEL factors, key legal and ethical issues, and the benefits of social media platforms. It evaluates the effectiveness of the social web in building brands, highlighting H&M's use of platforms like Facebook and Instagram. The report also addresses challenges related to data privacy, internet fraud, marketing to children, digital divides, and social exclusion. Ultimately, the analysis aims to provide insights into how H&M can optimize its digital marketing efforts while adhering to legal and ethical standards, enhancing customer engagement, and fostering sustainable growth. Desklib offers similar solved assignments for students.

Digital Marketing
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
PESTEL Analysis of H&M..........................................................................................................3
TASK 2............................................................................................................................................5
Evaluation of key legal and ethical issues of the company..........................................................5
TASK 3............................................................................................................................................7
Evaluation of benefits Social Media platforms for the organisation...........................................7
TASK 4............................................................................................................................................9
Evaluation of effectiveness of social web on building brands Social web platforms..................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
Books and Journals....................................................................................................................12

INTRODUCTION
Digital marketing is a technique used by many organisations to promote their products
and services through online media at a global level. The companies consider social media
platforms, electronic devices and many more to reach their customers. More than 48%
consumers enquire about the product with different search engines. Digital marketing is the
fastest growing technique which has captured the market in a short duration. Digital marketing
involves the use of Facebook, twitter and other media which are currently used by many of the
customers to predict their preferences. This will help the company in developing the products
accordingly (Anjum, Thomas and Prakash, 2020). This report mainly focuses on digital
marketing campaign opted by H&M in the competitive external environment. Hennes & Mauritz
AB i.e. H&M is a Swedish multinational company which deals in clothing products of various
brands. It was founded by Erling Pearson in 1947 which was headquartered in Stockholm,
Sweden. The company spends large amount of their profit share in digital marketing. This report
will covers the effect of PESTEL factors on the digital marketing techniques of the company.
Furthermore, it considers the effectiveness of social web in building brands. It also covers the
advantages of social media in linking businesses with the customers. Lastly, it explains legal
issues in digital marketing.
MAIN BODY
TASK 1
PESTEL Analysis of H&M
PESTEL analysis is the framework developed with the aim of evaluating the external
environment of the organisation. Since, the company is operating in Sweden so this analysis will
evaluate the political, economical, environmental, social, technological and legal factors of
Sweden. After the slowdown of economic conditions of the world due to the pandemic attack,
the economy of Sweden is also affected. Their will be an expected decrease in the economy by
3.8% in 2020 which has impacted the small businesses the most. The overview of PESTEL
framework in context with H&M is explained below:
 Political Factors: These factors consider the geographical instability, terrorism and other
political conditions prevailing in the external environment of the company. H&M takes
the decision of digital marketing campaigns on the basis of current political condition

prevailing in the particular country as the company deals their operations in various
countries (Devasakthi and Nagajothi, 2019). The company uses Facebook pages and
different commerce sites for their digital marketing strategy as this will enhance the
interest of the customers. The Brexit also impacts the sale and revenue of the company by
affecting the digital marketing campaign. The adoption of new regulation due to Brexit
affects the growth prospects of the company in the external environment. Sometimes the
countries ban the internet access whenever any serious political condition arises which
affects the digital marketing campaigns. These factors can be configured as threat for the
company as they are unpredictable.
 Economic Factors: These factors include the macro environmental factors which are
uncontrollable by the companies. These factors include the changes in the interest rate of
the economy, effect of inflation and the unemployment rates. The inflation affects the
purchasing power of the buyer which ultimately impacts the industry growth, It affects
both the individual and the working environment of the organisation. H&M spends their
share of the profit in advertising campaigns but due to slowdown of the economy this
decision will affect the budget of the company. The effect of this factor is considered as
the threat of the company as the company is operating in the dynamic economy.
 Social Factors: These are the factors which directly impacts the customers taste and
preferences. The company tries to avoid these factors by satisfying the customers by
providing them quality products. H&M develops the marketing strategy according to the
social network and taste of the consumer which helps in getting greater reach by the
company. This factor can be consider as an opportunity for the company as they will get
the information about the customers desires and needs which will enhance their customer
base (Blazheska, Ristovska and Gramatnikovski, 2020).
 Technological Factors: These factors involve the impact of technology on the
company’s operations. This factor is the strength of the company as they will be able to
use latest technology in their marketing campaign which will be easy for them to connect
with their employees. H&M designs their banners and ads with the help of latest
technology which enhances their designs and creativity which will attract the loyal
potential customers towards the brand.

 Environmental factors: These factors consider the environment of the industry and the
company both. The company focuses on maintaining their carbon footprints to enhance
their brand recognition (Gebrmicheal, 2019). Digital marketing strategy aims at reducing
the use of paper to ensure environment protection which will save trees from cutting
down. It makes the environment of the company eco-friendly.
 Legal Factors: These factors involve the legal laws prevailing in the countries where the
company is pursuing their operations. Every country has different set of laws which are
developed by the government authorities. These laws include the discrimination law,
equality law, employment laws, consumer protection law and many more. H&M has
faced problems due to these laws due to which they have suffered loss of many billions.
The company focuses on maintaining the integrity of these laws to ensure the government
support for their business operations. This Data Protection Act affects the performance of
the digital marketing campaign. This act imposes conditions for the campaign to maintain
the privacy of the consumer information.
Hence, this is the analysis of the PESTEL factors of the external environment of the
company. Also, these factors can be classified on the basis of their strength, opportunity and
thereat for the company. These factors have both positive and negative impact on the country and
the industry both.
Recommendations: From the above decision it can also be evaluated that PESTEL
framework is necessary for the company and its external environment. This will help the
company in developing an effective digital media campaign for the promotion of their brand’s
product and services. H&M must adopt this framework correctly as this will ensure the future
growth prospects for the company in the external environment.
TASK 2
Evaluation of key legal and ethical issues of the company.
Digital marketing sometimes faces some of the legal and ethical issues. The legal issues deals
with the method opted by the company must be legal in context of digital marketing. The
company focuses on maintaining good relations with the government and for that they try to
avoid illegal ways of reaching their customers. Also, the ethical ways defines what is right and

what is wrong (Grubor and Jakša, 2018). H&M faces some of the legal and ethical issue in
implementing their digital marketing strategies. These legal issues can be explained as follows:
 Data privacy and Protection: It is important for the company to protect their data.
Online marketing requires the company’s product information to be published on the
internet to promote their products. So, it is necessary for the company to protect their data
from mishandling and misusing. H&M have developed many measures to protect their
data information so that they can enhance their customer base. The company has
designed the Oracle software to protect the information of the consumers and updates that
information on a regular basis.
 Fraud on the internet: The Company must prevent their websites from online frauds in
the external environment. H&M have adopted many tactics in order to avoid online
frauds by recording every transaction details. The company have developed strong
networking system that ensures their data is safe and maintains the integrity of their data.
In relation with H&M, the company have developed their Management information
system in such a way that it avoids the misuse of the consumer information by the third
party.
 Cloud storage: For implementing a digital marketing campaign, the company needs
effective cloud storage which stores and secure maximum data. The company collects
customer’s data and stores them to ensure their product development. For this the
company must ensure their customers that their data is in safe hands (Kanten and Darma,
2017). H&M uses SSL mechanism to create a link between their website and the
customer browser. This will enhance the trust of the customer towards their brand.
Hence these are the legal issues faced by the company in protecting their data. Furthermore,
the company faces some ethical issues in digital marketing campaign as they are opposed by the
society. If the company doesn’t follow societal laws and ethical laws then the customers oppose
their campaign and give negative feedback about it. Some of the ethical issues faced by H&M
are as follows:
 Marketing to Children: H&M uses Instagram for launching their digital marketing
campaign. In today’ scenario children’s use Instagram page and if the company showcase
their products image of short dresses then it will impact the psychology of children. The
company must adopt those ways which are ethical which will enhance their growth

opportunities. The marketing apps of the company affect the purchasing behaviour of
children which is due to the make-in app purchase conditions.
 Digital Divide: The Company must segment the customers in smaller groups to serve
them in a better way. H&M must divide the customers on the basis of their age group so
that they can devise the strategies accordingly (Liu, Perry and Gadzinski, 2019). It can
also be referred as a gap between the persons who are benefiting through internet and
those who are not. The company must target the customers who use the internet and have
effective knowledge about its that they can understand the product. The digital divide is
an issue due to diversified segments and their dynamic expectations from the company.
 Social exclusion: It is also an issue that affects the digital marketing strategy of the
company. It is another form of discrimination which affects the society and psychology
of the customers. H&M must avoid social exclusion and try to improve this issue which
will ensure development of society. This issue will affect the rights of the customer group
and tries to keep them distant from social media.
Hence, these are the various issues faced by H&M in the development of their business
operations across the globe. The company must use effective tactics towards the attainment of
organisational goals by achieving higher level of satisfaction.
TASK 3
Evaluation of benefits Social Media platforms for the organisation.
Social media platforms play a major role in enhancing the image of the brand. The
customers always check the social media before purchasing the product. This era is captured by
the digital media and every person is trying to be in limelight by purchasing famous brands.
Social media is created for the purpose of sharing the information and now a days the customers
enquire about the products review on it (McLean, 2019). It plays a major role for the company as
their enhancement of customer base depends on the review of the social media. H&M has
focused on use of Facebook, Twitter, and other social platforms.
Facebook: H&M uses Facebook platform to showcase the beauty of their products to engage the
customers. The customers who are satisfied or those who are unsatisfied both communicate with
the brand through Facebook page. The company also uses Facebook for regional marketing and
branding. The company posts their product information on the Facebook page to enhance their

customer attention towards the new launch. This will enhance their followers on the digital
platform which will promote their brand. The company also participates in different events
which enhances their customer prospects. The brand provides the video and pictures of their
store to attract the customers towards their latest fashion style.
Twitter: H&M uses Twitter as an effective tool to brand their products in different markets. This
platform is used by the company to showcase large size images and videos of their product. This
platform helps the brand in enhancing their competitive edge in the dynamic industry
(Slijepčević and Radojević, 2018). This will also help in serving their customers and reaching the
potential customers. The twitter feeds creates a flow of customer engagement by informing them
about the brand and its products. This platform is used by the company to communicate with the
customers regarding their issues and experiences with the brand.
Instagram: it is the most famous platform for attracting the customers on a regular basis. Today
the youth generation is busy on posting their pictures on the Instagram account to enhance their
popularity. H&M also uses the platform for promoting their product (Melović and Dudic, 2020).
The company has made 3761 posts on the Instagram which has enhance their followers to 22.9
million. This reflects the success of their digital marketing strategy across the globe.
Advantage of social media marketing
 Wider Reach: This platform provides the company a wider scope to reach and engage
their customers. The company uses different strategy to attract their customers. H&M has
engaged largest audience on social media which helps in brand recognition of the
company.
 Direct Connection: The social media creates a direct connection with the social media as
the company will get to know about the preferences of their customer base. This will help
them in serving their customers in an effective manner. H&M focuses on studying the
latest trends and customers preferences which helps them in developing their products
accordingly.
 Paid advertising services: The social media platforms provide an access to the company
for paid advertising of their range of products. The company ensures that their products
are promoted in an innovative way which will attract the customers immediately. H&M
uses these platforms for showcasing their products for an immediate purchase. The

customer’s will get quality products in affordable prices which will satisfy them to a
greater extent (Paulino, 2019).
Hence, these are the benefits of the use of different social media platforms for the company
in studying the trends and customer preferences. This will help them in enhancing their growth
opportunities.
Disadvantages of social media marketing
 Negative feedback: Sometimes the company receives negative reviews about their
products or its features. This impacts their image in a negative way. The customers of
H&M tag the company in their feedback of negative experience of their product. This
tarnishes their brand's image and also affects the customer base.
 Time requirement for the campaigns: Designing a campaign is not easy for the
company. It requires a lot of time for developing and designing the strategy for social
media marketing. This is a time consuming process and the company requires
experienced personnel for that. The social media platform is the reflection of the
company so it must be clear and effective to attract the customers.
 Budget: It is another disadvantage of these platforms. The company requires a lot of
budget and financial security to launch a digital marketing campaign. This campaign does
not show results in short period of time but it affects the time scale of the workload of the
company (Rosário and Cruz, 2019). It also requires lots of attention from the company
and also the customers are able to connect with the campaign to ensure its success.
Hence, these are the disadvantages of the social media platforms for the company. As they
have to work in a dynamic platform.
TASK 4
Evaluation of effectiveness of social web on building brands Social web platforms
Social web platforms are an effective and powerful way of connecting to their targeted
group of customers. This approach is considered to be dynamic and practical for branding and
marketing the products of the company. Social web is the fastest ways to reconnect the
customers who have leaved their products. H&M is a famous clothing brand that provides
quality range of products to their customers. The company focuses on enhancing the satisfaction
of their customers. The company have used social web to enter 11 new markets and enhance
their market share in a short period of time. The marketing strategy for the social web is

developed by the efficient personnel’s of the company (Ristova, 2019). The company use these
platforms for enhancing their brand awareness and digital marketing of their launched products.
In relation with H&M, the company uses different social media platforms for marketing
their products online. This is a way which requires creative ideas for digital campaigns which
will enhance the brand effectiveness in front of their customers. The company mainly focuses on
targeting their customer’s social life and networks which helps them in understanding their
preferences briefly. The brand adopts this strategy in order to make sure that they achieve the
topical authority. The company also focuses on their existing customers and try to devise
effective strategies to retain them for longer duration. Feedback play an important role in the use
of social web as this provides a base for improvements in their current offerings to ensure that
they will achieve a way of success.
Evaluate and explain how H&M is using social web to create the brand awareness and
maintaining the brand loyalty.
H&M uses Facebook, Pinterest, Instagram, Twitter and many other social platforms to
reach their potential customers. This also enhances their knowledge about the current market
situation and the practices opted by its competitors in retaining their customers. Furthermore, the
brand focuses on innovation design, affordable prices and effective quality of their products. The
company always try maintaining these three factors in their products offerings. The company
have also used music and fashion in their social media marketing strategy to attract the youth
generation towards their products (Riedler, 2020). Also, the brand posts visual videos of their
products on Pinterest and google plus which helps the customers in better understanding of their
product features.
Comparison of Zara and H&M to analyse their effectiveness on social web.
Zara is the biggest competitor of H&M and the company always keep an eye on the
strategies of its competitor. H&M tries to make use of the weaknesses of Zara brand in their
favour to enhance their customer base. For increasing their market share Zara adopts the strategy
of social listening which have got positive publicity from their customers. Also the company
make use of social media platforms for posting their products information regularly to enhance
their customer engagement. On the other hand, H&M uses traditional marketing mix for

enhancing their growth prospects. This will help the company in getting the customers who had
disappointed from their brand.
In view of the dynamic environment, Zara make effective use of social web by designing a
website namely; “Zara people” On which the customer posts their pictures while using the
brands products. On the other hand, H&M have designed a marketing campaign to enhance their
loyal customer’s base which will help them in regaining and maintaining the customer trust. Zara
is an enormous player of market due to their adoption of modern ways to connect with their
customers (Seng, 2016). On the other hand, H&M is using social media marketing tool as a way
to reach the customers heart and persuade them for immediate purchase.

CONCLUSION
From the above mentioned report it can be concluded that social media is a way to reach
the customers in a fast and effective way without wastage of resources of the company. The
company always develop Innovative strategies to attract their customers and retain them to
achieve success in the future ahead. Moreover, the companies try to provide a new experience to
their customers on every new day to achieve a leading market position. There are both the ways
either the traditional or the modern way to reach the target audience. It depends on the company
requirements and the current situation which affects their decision. The company have developed
a future strategy of transformation of their 100℅ products into recyclable form. Also, the
company focuses on collaboration of technology with local traditional culture of the country to
attract the customers. The customers will sense a feel of connect if the products are designed
with ideas of culture and religion.