Analyzing H&M's Marketing Strategies and Competitive Advantage

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“H&M”s Marketing Processes
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Executive summary
This report highlights the marketing processes of Swedish cloth retailing company H&M.
The company is best known for the fast fashion clothes for men, women, children and
teenagers. The marketing mix of the organization is discussed in this report along with the
competition analysis on the same context. The marketing plan reveals the strategy and macro
and micro influential factors. The STP analysis supported the company in attaining the
marketing objectives of the organization.
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Table of Contents
Introduction................................................................................................................................4
Task 2.........................................................................................................................................4
LO2 Contrast the practices of marketing mix elements (7ps) by the organization for
accomplishment of organizational goals....................................................................................4
P3: Compare ways where H&M and Next applies market mix to market plan process to attain
the business objectives...............................................................................................................4
LO3 Develop and assess a basic strategy for marketing............................................................9
P4: Evaluate a basic market plan for H&M...............................................................................9
Overview of the company..........................................................................................................9
PESTEL analysis........................................................................................................................9
SWOT Analysis.......................................................................................................................11
Marketing objectives................................................................................................................12
Marketing strategies.................................................................................................................12
Conclusion................................................................................................................................14
Reference list............................................................................................................................15
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Introduction
The purpose of this report is to discuss different marketing processes of a Swedish clothing
retail company Hennes & Mauritz AB that is popularly known by its acronym H&M.
Primarily the report will discuss the marketing mix of the company using the 7Ps of
marketing along with a comparison with its competitors Next. The marketing mix of H&M
aims at achieving its business objectives effectively in this competitive business environment.
After that the discussion is headed towards the development of the business marketing plan of
H&M. A marketing plan basically outlines the marketing strategy of an organization for the
purpose of meeting the organizational goals. The marketing plan of H&M includes the
analysis of the macro environmental and micro environmental factors in order to align the
marketing objectives of the organization with the marketing strategies that will be applied to
the target customers of the business.
Task 2
LO2 Contrast the practices of marketing mix elements (7ps) by the organization for
accomplishment of organizational goals.
P3: Compare ways where H&M and Next applies market mix to market plan process to
attain the business objectives.
As opined by Kotler and Armstrong (2013), marketing mix is considered as the concept that
aims at combining the tactics and strategies of the organization in order to implement the
marketing plan effectively with reference to the factors like product, price, place and
promotion which is also termed as 4Ps of marketing. This has now extended into 7Ps of
marketing which includes people, physical evidence and process. However, the marketing
mix of H&M along with its competitor Next is compared which is summarized in the
following section.
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Marketing mix
Variables
H&M Next
1. Product The multinational clothing brand
offers wide range of products
ranging from clothes, accessories
to shoes at an affordable range
which is inspired by the latest
trends of catwalk. The products
that are offered by the company
are of the reasonable quality.
However the product concept that
is followed by the company is
“EDLP” that is Everyday Low-
Price Product. Along with the
usual range of products the
organization also offers
sportswear, cosmetics, lingerie,
and home department (H&M,
2019).
Next PLC is a UK based brand
that offers the customers with
wide range of collections
ranging from clothing to foot
wear and other home products.
The target group of the
organization is the middle class
families with an age that ranges
from 25-45.in short it can be
said that the organization
provides high quality
fashionable products to its
customers (Nextplc.co.uk,
2019)
.
2. Price H&M follows cost based pricing
strategy which signifies that if the
manufacturing cost is low in any
particular country then the selling
price of the product will also be
less. The organization adopts this
Next PLC neither follows
penetrating strategy nor does the
skimming strategy rather it
occupies a neutral zone which
depicts that the price of a
product depends upon the
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strategy in order to gain
competitive advantage in the
global markets and hence it
emphasize on the cost reduction.
quality and design that suit the
best to the target customers.
3. Place H&M offers its products through
the exclusives stores and
departments that are located in the
prime locations of the major
cities. The company also operates
its business in online mode in
order to provide access to wide
range of products and services
that are offered by them and
hence the customers conveniently
can avail the products and
services of the company
irrespective of any time and
locations (Kotler and Armstrong,
2018).
Next PLC adopts the multi-
channel retail strategy wherein
the products and services of the
organization is provided in
several avenues whereby the
customers can conveniently
make purchase of the products.
4. Promotion H&M spends large scale amount
along with time in promoting its
products, services and activities
and hence follows multi-channel
strategy of promotion. The
promotional strategies includes:
The promotional strategy of
Next PLC is basically limited to
advertising only in recent years
because the company emphasize
more on the small campaigns. In
other words it can be said that
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 Advertisements
 Digital marketing
 YouTube
 Sponsorships
 Public relations
 CSR
the promotional strategy of Next
PLC is more inclined towards
online interactions which
includes advertising and
promotional activities on the
website of the company.
5. Physical
evidence
The stores have great ambience
with humble staffs and the
arrangement of the apparels gives
an outstanding look which attracts
the customers.
The physical evidence of the
organization is evident in both
the offline and online mode that
is in other words it can be said
that the logo of the organization
is the physical evidence that is
aligned with the type of services
provided by the organization.
6. People The workforce of H&M at every
level are trained efficiently and
the work culture of the
organization supports and
encourages the employees to
innovate best designs cloth wear.
As the organization is operating
globally the diversified workforce
are catered with the personal and
professional development
programs.
Next PLC is a multinational
company that has 700 stores
worldwide out of which 500 are
in the domestic country and the
rest are across Asia, Middle
East and Europe. The
diversified workforce in the
organization are considered as
the success factor for the
business (Huang and Sarigöllü,
2014).
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7. Process The importance is given to the
management of customer
relationship. The employees of the
organizations are trained well in
order to provide quality products
and services to the customers. The
staffs of H&M outlets assist the
customers to select the suitable
merchandise which ensures the
reduced delivery time (Khan,
2014).
The technological
advancements in the business
process are considered as the
profitable factor to the business.
The organization has business
process like manufacturing,
marketing and sales which aims
at enhancing the quality of the
products and services.
Table 1: Marketing mix of H&M which is compared with its competitor Next PLC
Source: Created by learner
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LO3 Develop and assess a basic strategy for marketing
P4: Evaluate a basic market plan for H&M
Overview of the company
H&M is a multinational cloth retailing company which is headquartered at Stockholm,
Sweden and was inaugurated in the year of 1947. The company is best known for its fast
fashion range of collections for men, women, children and teenagers (H&M, 2019). The
company operates for more than sixty two countries and is ranked in the second position as
the global cloth retailer after Zara. The organization has significant presence in the online
mode and hence it aims at serving the customers with their wide range of products and
services. In other words it can be said that the online presence of the organization in more
than thirty three countries enables the customers to shop conveniently irrespective of any
location and time.
PESTEL analysis
Factors Impact
Political  H&M is a global brand that operates in several
countries and hence the company is directly
exposed to the political risk. The company operates
in some politically unstable locations like Egypt,
Turkey and Lebanon that impacts the business of
the organization.
 Franchising is not the direct expansion strategy of
H&M but due to some political uncertainty the
organization had to expand in many countries like
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UAE, Kuwait, Qatar, Indonesia and many other
locations through collaboration with its franchising
partners (Virtala, 2018).
Economic  The Breixt impacted the exchange rates and hence
the companies that are operating globally are
exposed to the currency risk. This tends to impact
the organizations negatively but the H&M report of
2017 states that the sales margin of the company
has enhanced by 7 percent and when converted in
the Swedish currency it enhanced by 10 percent.
Social  The consumers are demanding transparency from
the organizations that is it can be said that the
customers wants justification for their investment.
H&M caters this demand of the customers and
hence publish quarterly updates and CSR reports
online.
 H&M are more inclined to the designer fashion
items because the customers are influenced by the
celebrity fashion (Omololu, 2013).
Technological  The technological advancements in H&M includes
the development of mobile app which will allow
the customers convenient shopping.
 The organization also utilize the third party
logistics provider (Dimitrakopoulou, 2015).
Legal  H&M regarding infringement has been involved in
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several legal issues which impact the profit margin
of the business because the organization had to
invest funds in order to cover up the dispute.
Environmental  The organization is inclined towards organic means
of production and hence it aims to utilize recycled
materials for their products (Kaisar, 2016).
Table 2: PESTLE analysis of H&M
Source: Created by learner
SWOT Analysis
Strengths
 Strong financial performance
 Diversified presence across the
world
 Wide range of product portfolio
(Cortez et al., 2014)
Weaknesses
 The quality gets hampered due to the
affordable pricing strategy
 Following the trends that is no
innovation in the designs (Youell,
2013)
Opportunities
 Expansion of the E-commerce
platform
 Emphasize business expansion
 Improved lifestyle that is inclination
of the customers towards brands
Threats
 Change in the trends
 Intensified competition
 Increase in the operating cost due to
the increase in the labour cost
 Foreign exchange risks
(Mierzejewska, J., 2017)
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Table 3: SWOT analysis of H&M
Source: Created by learner
Marketing objectives
The marketing objectives of H&M are discussed below:
 Expanding the business along with the varied range of products
 Meeting the expectations of the customers with the quality of the products at an
affordable price range
 Using circular approach of production utilizing the recycled materials
(About.hm.com, 2019)
.
Marketing strategies
The marketing strategy of H&M includes a mission and vision statements and STP analysis.
Mission and vision statements of H&M
The vision of H&M is to operate the business in such a way that will benefit the economy,
society and environment and at the same time meeting the organizational objectives. The size
and scale of the organization is utilized in order to the lead sustainable fashion. The mission
or strategy of H&M includes the following (About.hm.com, 2019):
 Leading the change
 Equality
 Circular approach of production that supports usage of recycled materials
Segmentation, Targeting and Positioning (STP ANALYSIS)
Segmentation
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