International Marketing Report: H&M's Global Expansion Strategy

This report provides a comprehensive analysis of H&M's international marketing strategies. It begins with an introduction to international marketing concepts and the rationale for expansion. The report then delves into key aspects such as market selection criteria, including international market objectives and various screening processes. It explores different market entry strategies like direct and indirect exports, outlining their advantages and disadvantages. The report also examines the global versus local debate, considering products, pricing, distribution, and promotional approaches. Furthermore, it analyzes international marketing approaches that organizations adopt and compares home and international orientations, including competitor assessments. The report concludes with a summary of the key findings and insights into H&M's global marketing approach.

Unit 40 - International Marketing

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
LO1..................................................................................................................................................4
P1 Explain the role and key concepts of international marketing International markets leads to
peace among Nations:.................................................................................................................4
P2 Rationale for an organization to expand into international market........................................6
LO2..................................................................................................................................................7
P3 Key criteria and selection process to be used considering to enter international market......7
P4 Market entry strategies including the advantages and disadvantages of each.......................8
LO3................................................................................................................................................10
P5 Overview of key arguments in global versus local debate..................................................10
LO4................................................................................................................................................12
P7 :Explain and analyses the various international marketing approaches your client organization
can adopt........................................................................................................................................12
P8 :Compare home and international orientation and ways to assess competitors outlining the
implications of each approach...................................................................................................13
CONCLUSION:.............................................................................................................................14
REFERENCE.................................................................................................................................16

INTRODUCTION
International marketing is basically the marketing principles through which the
organizations market their products overseas or across the national border and thus capture their
market share. In short, international marketing helps the organizations to expand in the wider
geographies by focusing on the specific target segment of particular market. It is basically
multinational process of the planning as well as execution of pricing, promotion, distribution and
other attributes.
H&M refers to Hennes and Mauritz which is a multinational clothing brand known for its
fast fashion clothings for men, women and children. H&M operates in more than 62 countries
with over 4500 stores worldwide. H&M provides employment to 132000 people worldwide. It is
the second largest clothing company after Inditex. They have a significant presence of online
shopping which is available in 33 countries. It was founded by Erling Persson in year19747.
Its total revenue generation is around$2.106 billion.
The report addresses the scope as well as concepts in international marketing, Rationale
for expansion and the routes taken, key criteria and selection process used for expansion, Various
market entry strategies along with advantages and disadvantages, Global vs Local debate,
products, pricing, distribution a swell as promotional approaches within organization,
International marketing approaches which organizations adopt and comparison between home
and international orientation.
MAIN BODY
LO1
P1 Explain the role and key concepts of international marketing International markets leads to
peace among Nations:
all the activities in business comprises of development, production and marketing in case of the
development of the products which aims to gather people around the world developing a course
to work together as a community. As companies which develop the high end products where
people interact and share opinions which creates peace among various organization and
workers( Lee and Griffith, 2019).
Global market reduces risks and open opportunities

As a global market invites every traders and businessman, which opens up the market and invites
to trade internationally. Like china produces many of the products which are sold out globally.
This creates a better development and creates openness for others. Many of the global brands like
Nike, Jordan, Zara etc. creates openness and creates global business opportunities(Alanen,
2016).
Major types of business which opens scope and development in the global market are:
Imports: this is the easiest form of international marketing a company can imply. This is done
through importing goods and products from international market and selling it in domestic
markets. This takes a hike where there is a demand of imported goods in the market.
Export: this refers to developing of products and selling it to the international markets or expand
their ventures into international markets this enables expansion in the international market and
expanding the market at the global level(Artugyan and Urdea, 2016).
Contractual agreement: as the business moves out of the global market it exposes a greater
chance of expansion of business. As the consumer base expands and profits are generated there is
a chance of extending hands with the business partners which can help in the development of the
business there arises a case in extending hands which leads in agreement.
Join ventures: whenever two brands expands out in the same potential market they agree in the
terms of a join venture. This is done on a legal agreements including profit, losses , expenses
which are pre decided in terms of both value and time period. For expansion it is necessary to for
a company to enter a join venture for a scope of expanding into the international market which
results as a barrier in the new entrance in international market(Flynn and Interantional, 2016). A
local partners can be useful to expand the business as business terms are shared and the
expansion is made to flourish, business not only expands but helps in understanding the domestic
market and market dynamics.
Fully owned Manufacturing: for a bigger firm it is easier to expand its root to a newer soil.
They are able to take up the new venture independently adjusting international norms and
conditions. As an international manager they can either sell the products in the local market or in
international market, owning their own manufacturing units which help in maintaining the
quality of the company(.Kaiser, Kragulj and Grisold, 2016).
Orientation and sales in foreign trade: orientation is the key concept of the sales in the
foreign market. Every country has a set of rules which help the organization to expand overseas

and help company to do international market. There are certain set of rules in the international
market which forms guidelines for the mew entrance.
P2 Rationale for an organization to expand into international market
There are several reasons for H&M to expand international market as:
 it will increase the profitability and sales of H&M with the expansion in the global
market.
 It will create various job opportunities for the locals as the expansion will provide better
sales and marketing strategy which helps in the development of the firm.
 Expansion to international market will increase the sales and working structure for H&M.
 This will help in boosting up the sales and production pace of H&M, this will overcome
the crisis and growth of H&M will increase in rapid rate(Kim, Chiou and Calantone,
2018).
 With the expansion and increased popularity of the firm there will be an increase in the
sales and rapid expansion of the firm with the use of internet as many of the online
purchase will be made easier and the production is increased.
 This will allow to explore the untapped market which can make people more aware about
brands. This will lead to the generation of the economy with the expansion of the
production scale in international market which will help in the expansion of the large
customer base this will increase the competitive base for the company and help to cope
up wide competition.
 Various international roots for the market will expand and the sales will increase.
This expansion in the market will be done with the help of:
Selling Wholesale: In this approach H&M can outsource its product and increase the sales
which can sell the product which can be done through selling or outsourcing the product to
international market as a wholesale depending on the demand of the international market. Selling
in mass and volume can help in the increase in the selling ratio of H&M(Kindt, 2017).
Distance selling:
Distance selling can be selling done by various online and offline means which can be done in
order to increase the direct sales and services. This method can help in the expansion of the sales
and working strategy this can be done by various methods like online sales strategies, use of
social media platform can help in selling and advertising.

Online selling: this can be done by selling products on the online platforms and online markets.
Which helps in the growth and development of the sales and services. This can be done by online
market like from online official sites and various other platforms. this can provide easy access to
the buyers and helps in making purchase easier(Kropp, Lindsay and Shoham, 2018).
Combination of Channels: in this approach an accomodity is passed over through various
international market routes which aims in fulfilling the market needs of the customers. This can
be sent by indirect means to the customers which can help in the easy sales and the customers
gets satisfied.
Various challenges faced by the H&M are the marketing practices carried out in the
expansion due to previously established market. Distance selling can be another challenge as the
promotions and the needs of the market cannot be determined which can not be evaluated exactly
what changes needs to be done. Establishment and earlier sales can be the challenge for the firm
as establishment in the market is quiet difficult. Market strategy developed can fail in the new
market which can lead to financial loss.
Various opportunities can be focusing on particular segment and attracting the crowd
and gathering the customer base. New market leads to new entity which can be changed and the
growth and development can be made. Joining with ventures and combining various challenges
can be done to increase the sales and opportunities.
LO2
P3 Key criteria and selection process to be used considering to enter international market
Criteria which is required to be followed in selection of international market can be:
International market objectives: The key element in the market selection process undertaken
by H&M in expansion of global venture is to determine the need of a venture in the particular
market and identification of this market objectives to evaluate the key tools used for the
identification of the need of expansion of a particular market. This must ensure that the market
strategies and identification serves the particular market objectives that are needed to achieve
international marketing objectives.
Parameters of selection: for market evaluation H&M needs to decide various parameters as
objectives which needs to be selected for the various selection criteria for the evaluation before
expanding hands in the market. H&M select various places by the selection of criteria made by

making situations and challenging them by evaluating it out and finding the best
solutions(Landsiedel and et.al., 2017).
Preliminary Screening: This section is used by H&M which is used in eliminate the market and
various sources which are not potential. The parameters used cab vary from product to product
and service to service. Screening involves various parameters like size population, per capita
income structure of the economy, political conditions and various other facilities can be
evaluated.
Short Listing of Market: preliminary screening enables in elimination of a large market which
can be used to evaluate the conditions that are not considered to meet the outset. There may be a
vast market left for the evaluation of the market for H&M. This is done for the evaluations of the
market elimination is done and the market that fulfils the criteria are selected to work upon.
Evaluation and Selection: The short listed places are evaluated and selected for the
development. With the various criteria like cost benefit analysis, feasibility study for the
development of the study. They are listen of the selected criteria to choose the best one. Then the
best one are chosen and are carried forward in selecting the place for company's resource and
external environment(Lobo and et.al., 2019).
Test marketing: market testing is done by H&M on a smaller scale and launching the products
which is a part of team building strategy. This provides the feedback to the procedures about
market. It helps the procedure in assessing overall response of the customer from a specific
market, tested and production is done on massive scale.
Commercial Production: as a final part the company goes ahead and mass production is done
with mass production. This aims in the bulk production and helps in the increase in the sales and
increase the productivity.
P4 Market entry strategies including the advantages and disadvantages of each
There are basically two types of market entry strategies are their such as direct exports
and indirect export strategy:
Direct export strategy
The direct export is the strategy of exporting the good made by a company, by
capitalizing on scale of economies in production at the home country and affording distributing
towards the oversea country. This type of exporting technique is suited good when the volume of

exporting product is less., but as soon as volume increases the exporting may trigger
protectionism. This mode of export technique generally has no intermediaries.
There are basically two types of direct exports i.e. sales representatives as well as importing
distributors(Mirzaei, Micheels and Boecker, 2016).
Advantages
 greater sale potentials which eventually resulting in greater profit earnings than indirect
exporting.
 Better protections to intangible property, goodwill, patents as well as trademarks.
 good informations of feedbacks through the desired audience which ultimately brings
better relationship between buyer and consumer.
 this strategy has complete control over its foreign market as well as its foreign
representative.
Disadvantages
 requirements of greater informations
 this strategy generally required more time of investment, resources and more
organisational changes
 this requires generally higher cost of start-ups.
Indirect export strategy
in this type of exporting strategy the process of export is done domestically through export
intermediaries. In such type the exporter of the commodity has no control over its commodity in
the oversea market or at the foreign markets(Mtigwe, 2015).

There are basically five types of indirect export strategies i.e. export trading company, export
management company, export merchants, confirming houses as well as non conforming
purchasing agents.
Advantages
 no direct handling of exporting process
 concentrate towards resources for production
 has faster market access
Disadvantages
This method has comparatively lower sale than that of direct exporting. Any mistake by
distributor will lead to the lowering the reputation of the complete success of the company in the
international market, a very less or no control in the distributing, selling as well as marketing of
the product like direct exporting.
Key criteria to international market can be:
Development of a game plan which can increase the market entering strategy which can
be used to evaluate the market and increase the sales as a new entrance. Identifying and strategic
development the need of the market which can increase the sales. Development of the export
plan to increase the sales online. Before entering a new segment there must be a market analysis
carried out which can help in the improvement of the sales which can help in the market strategic
planning.
Evaluating international market can be done which can be done on the basis of
conducting the market analysis which can be used to evaluate the market which can be done on
the basis of the feedbacks and online marketing which can be done to evaluate the market before
entering. Competitions are evaluated and the studied carried out are made and strategic
development is carried out which can help to increase the market image.

LO3
P5 Overview of key arguments in global versus local debate
The principle of local marketing is simple i.e. in local marketing the commodity
produced at one location is utilized by the people of same geographical dimension. Therefore
such companies tends to fulfil the needs and demands of the the consumers situated at the local
level. They have local differences like a better understanding can be achieved by the local
people. Conduct of company has been studied in the foreign market. In local market right
stakeholders can be chosen which can help the company to progress and flourish. Recruiting in
the global market can be easier and trustworthy as compare to global market. Similarities and
differences can be affected. As a local market is same and stricken which provides a reserved
way of development of the firm. As the risk-holders are selected and the right authority is
defined.
Defining a right audience is necessary which can define the path we are able to work in
the right direction. Selection of the right audience must be done in order to define a procedure
which can be done in order to deliver to the audience a proper management must be done in
order to improve the quality of the services(Šályová, and et.al., 2015.).
The principles of global marketing suggests that the commodities produced at one
location is not only designed or produced for the local reach, such commoditise are produced for
the customer base situated at the global level. Thus, companies which are producing for the
global market, keep in mind the demands of the people situated overseas or at some foreign
market.
For international market marketing strategies needs to be build and the various expansion
in the international market creates job opportunities for many locals which help in the growth of
locals. With the global expansion there arises the benefit for the firm to increase the sales and
services of the firm at the global level there arises the rapid expansion of the growth and
development with the involvement in the wider market.
P6 Investigating product, price, place and promotions for distributional approach in variety of
context
Product:

H&M provides its basic marketing of the product and service which aims to target the
marketing demands,. But while considering this aim to fulfil the needs in the international market
there needs to be determination of various criteria which fulfils the global market. There are
various factors which needs to consider different backgrounds like religions, beliefs, culture
buying habits as well as source of income. Ton increase the productivity there are many
marketing strategies which needs to be considered as there are various market with different
market demands which can be used to adapt the working and the change in cultural beliefs must
be considered in order to satisfy customers with different beliefs and backgrounds.
Therefore by standardization and customization the products can work well. An
appropriate approach can be used by organization depends upon selection and adaption of
foreign market, strength of H&M depends upon the product and strategy developed by the
organizations(Mukiibi,, 2018).
Pricing:
In an international market pricing scale is an complex tasks. Pricing is always dependent
on the fixed and variable costing dependent on the change in marketing trend. Change in
competitor as well as target groups can change the pricing strategy. There are many factors
which affects the marketing strategy are:
Economic conditions of the country, its currency which evaluates growth, level of income
and affordability of the people of that area, fluctuation of exchange rate, affordability, cost of
transportation, currency they wanted to be paid in, general income situations needs to be
considered and ways how it will affect the economy of the country. Internet has created further
challenges as global pricing strategy is clearly visible for the customers. Around the world. This
has aroused the competition level with the peer pricing pressure.
Place:
Place refers to the distribution of the product or the services that are provided to
customers, at given specific time. This explains the movement of goods and services.
Involvement of various distribution of services and class of people involved which can increase
the pricing strategy of the product. Place refers to the interference of the distributions service of
the various places including distribution chains in the country they operate. H&M needs to
develop various strategies which can be used for a particular operations which needs to be
fulfilled for a particular set of distributional facility which needs to be developed for the better