H&M Marketing Mix and Strategy: A Comparative Analysis

Desklib provides solved assignments and past papers to help students succeed.

Marketing Essential

Table of Contents
Introduction......................................................................................................................................1
LO2 Compare the ways in which different organisations apply the marketing mix to the
marketing planning process to achieve business objectives............................................................2
LO3 Develop and evaluate a basic marketing plan.........................................................................6
Executive Summary.....................................................................................................................6
Situational Analysis.....................................................................................................................6
Marketing Objectives...................................................................................................................8
Segmentation, targeting, positioning (STP).................................................................................9
Marketing mix.............................................................................................................................9
Implementation..........................................................................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

LIST OF FIGURES
Figure 1: Comparative financial position of H&M.......................................................................11

Introduction
The fashion industry is growing at a rapid speed, and the unique marketing tactics and
approaches of H&M makes it one of the leader in the target market. The vision of the
organisation is to carry the business with social, economic, and sustainable methods. It offers a
wide range of products everything from basic everyday products to the latest classic and designer
clothes. The clothing collections are supplemented with nightwear, cosmetics, accessories, and
many more. The marketing mix strategy helps the organisation to attain sustainable growth with
a combination of 7Ps factors. The present report highlights the comparative marketing mix of
H&M and ZARA so that an effective marketing plan can be developed in relation to the
introduction of baby food products in the market.
1

LO2 Compare the ways in which different organisations apply the marketing
mix to the marketing planning process to achieve business objectives.
Following is the marketing mix strategy of H&M and its major competitor ZARA.
Basis H&M ZARA
Product This organisation offers its
following clothing brands in
different countries worldwide:
H&M brand provide the
products range of everything
which includes from basics
daily wear to designers, and
yoga wear.
& other stories offer women
wear in terms of shoes,
accessories, bags, ready to
wear, and cosmetics.
Cheap Monday brand is
integrated with pop culture
and music through denim and
relevant fashion collections
(Abhijeet Pratap, 2019).
Collection of style (COS)
brand offer designs to all
customer segments inspired by
classics, art, and technology.
It is worldwide known as the
Coca cola of the fashion. The
products it offers for different
customer segments like, men,
women, and children includes,
knitwear, skirts, jeans,
trousers, tops, bags, shoes, and
accessories. It believes in the
sustainable growth and
therefore it indulges in
reducing wastage with
recycling its security tags and
hangers. In addition, it sells its
products in biodegradable
plastic bags or papers to keep
environment safe from its
initiatives.
2

Monki brand cater the needs
of young women with on trend
lifestyle designs
Weekday brand is dedicated to
offer clothing of latest styles
for young adults.
Price In comparison to its major
rivals, it offers high quality
products at relatively low
prices. The main focus is on
cost minimisation with
reduced transportation and
manufacturing costs. In
comparison to ZARA, it has
more variety in products line
and therefore attracts large
number of youth with its low
pricing strategy (H&M
Marketing mix, 2019).
It also follows low pricing
strategy for its latest fashion
products available in the
international stores. This
strategy is supported with
minimum amount spent on
advertisement, promotion, and
raw material. However, it sets
the prices of products
according to the customer
market. For example, it sets
high process for the target
customers that are willing to
pay.
Place Around 4500 stores of H&M
are located in well known and
major cities in more than 60
countries. Most of its stores
are based on franchising
partnership. The excellent
supply chain of H&M helps
the organisation to deliver its
ZARA has more than 6400
outlets across the globe in
more than 80 countries. It also
offers its products at online
platform. The vertically
integrated approach of ZARA
makes it more efficient in
delivering new fashion trends
3

products and services as early
as possible.
in the shortest time as
possible.
Promotion It uses multi-channel
promotional strategy to cater
the needs of different
segments. Its promotional
activities include creative
advertisement on TV, unique
customer engagement
campaigns at you tube, e-
marketing with social media,
sponsorship, discounts and
offers (Huang and Sarigöllü,
2014). In addition it also
indulges in CSR activities,
like, education, planet, water,
etc
The marketing policy of
ZARA is based on a unique
concept of “Zero investment
in marketing”. The distinct
identity of its brand is based
on differentiation, exclusivity,
affordability, and experience.
It rely on the advertisement
based on word of mouth rather
than any other promotional
activity so that the saved
money can be invested in
more profitable initiatives.
People There is a modern working
culture in the organisation in
which staff is employed on a
rotational basis in different
departments. There are various
designers and specialists that
assist the organisation in
delivering products of latest
trends.
It focuses on the customer
satisfaction with effective
response to their queries and
issues. It spent huge amount
on imparting training to the
employees to ensure the
maximum customer satisfied
with its products as well as
from the services it offered.
Process It mainly focuses on customer
relationship and therefore
It provides a basic purchasing
process to the customers
4

employees are trained to serve
customers with quality
services and better offers. The
customer care team is
dedicated to resolve the
complaints and queries of
customers as soon as possible.
(Mintz, and Currim, 2013).
Staffs assist the customers in
selecting their products with
right size. The online
purchasing process is also
simple but fast delivery
process ensures high customer
base.
Physical evidence The different outlets of H&M
are lit with humble staff and
great ambience. It makes the
physical evidence more
attractive by inviting
celebrities to the launching of
its different outlets.
Well mannered and trained
staff of ZARA welcomes the
customers in their friendly
stores.
5

LO3 Develop and evaluate a basic marketing plan
Executive Summary
The increasing and dynamic fashion trends require H&M to introduce new
product line to attain long term and sustainable growth along with high
competitive position in the fashion market. The organisation is intending
to bring baby food products in the market with the varity of healthy and
organic food, like, Ragi, and almond cerelac, biscuits, breakfast products,
etc. The present task highlights the influence of internal and external
factors on the business functioning and marketing objectives are
discussed. In addition STP model and marketing mix strategy help the
organisation in attaining its strategic goals effectively (Kahn, 2014).
Situational Analysis
Internal Analysis: SWOT analysis of H&M helps to conduct the internal analysis of business
environment:
SWOT analysis
Strength
 Wide range of products including
cosmetics, shoes, accessories, apparels,
and many more for all ages of people.
In addition, it has home decorative
items, and other essentials that attract
most of the customers.
 The portfolio of brands, like, COS,
Monki, Weekday, etc caters the need of
different segments of target market that
Weaknesses
 It does not have own manufacturing
unit and therefore it depends on various
suppliers and designers for its products
 Affordable pricing strategy affects the
progt margin of H&M
 Low pricing may sometimes affect the
quality of different clothes and other
products.
6

make the unique identity of the
organisation (Hitesh Bhasin , 2019).
 Diversified presence in the global
market with its different outlets in
urban cities across 60 countries and 6
continents.
 Strong financial performance year by
year increases the confidence of
investors and offers the wide growth
opportunities to the organisation for
expansion and diversification.
Opportunities
 Focusing on expanding business with
different stores worldwide.
 Presence of H&M on e-commerce
platform will enhance the potential of
the organisation in attracting large
number of audience towards its
apparels and other products
 The apparel industry has high potential
to explore emerging markets and
establish brand to cater new demands
Threats
 Quick changes in the fashion industry
trends may leads to lagging behind in
the competitive market (Westwood,
2013).
 New entrants are also opting the e-
commerce platform for making their
brands popular.
 Increasing labour costs affect the
overall costs of H&M products that
affect its overall profitability and
revenue.
External Analysis
The external environment can be effectively analysed with the help of PEST analysis.
7

H&M has established its stores in different countries and therefore political instability in the
countries, like, Egypt, Turkey, Lebanon, etc. creates political risks on the organisation. In
addition, different regulatory provisions affect the business functioning of the organisation.
Instead of the negative impact of BREXIT on currencies, trade, and business practices across
Europe, H&M has reported a gradual rise of 7% in its overall sales in 2017 as a comparison to
2016. H&M is catering to the socio-cultural needs of people with the availability of different
trendy and luxurious apparels, cosmetics, and other products. In addition, it is releasing quarterly
updates of its CSR activities to fulfil the increasing demand of customers towards business
practices (H&M PESTEL analysis , 2019). H&M is continuously investing in its technological
improvements in its supply chain, logistics services, and customer services to attain high
customer satisfaction and improved productivity.
Financial Position of H&M
Figure 1: Comparative financial position of H&M
Marketing Objectives
• To increase the global presence of H&M with the introduction of baby food products
• To continuously add value in the existing products to gain a competitive edge
8

• To utilise e-marketing strategies to reach a huge number of audience
Segmentation, targeting, positioning (STP)
This model supports the H&M in analysing products, its prices and how it will communicate to
the large target audience about the product benefits so that effective positioning can be made. In
the first step of market segmentation, helps H&m in identifying the segmentation bases for the
baby food products, like, mature markets so that new customers can be attracted and delivered
quality and best services to them.
The market target is the next step in which target customers are identified based on past records,
customer feedback, views, and market research. For example, for the baby food products, H&M
is required to target the parents, grandparents and all the people that have babies and children
(Khan, 2013). The last step of positioning is an implementation process in which H&M create a
distinct identity in the market with its quality and organic baby food products and take advantage
of a highly competitive position.
Marketing mix
Product: H&M is required to offer all the products regarding baby food, like, cerelac, milk
products, biscuits, etc.
Price: H&M can provide its new product line at affordable prices featured with quality and
organic to attract a large number of customers. However, it is essential to consider the pricing
strategy and other policies of its rivals.
Place: The baby food products must be available online with fast and easy purchasing and
delivery process.
Promotions: Digital media, TV ads, campaigns, offers and discounts etc. can be used.
People: Employees must be efficient and trained to provide appropriate information to the
parents and other people with babies regarding baby food products (Londhe, 2014).
Physical Evidence: The maintenance of quality and organic content in the baby food products
Process: H&M must focus on customer relationship management to improve its processes
9