Comparative Analysis: Marketing Strategies of Zara and H&M - Report

This report provides a detailed analysis of the marketing strategies employed by two prominent brands in the retail industry, Zara and H&M. The study explores the significance of marketing in contemporary business, emphasizing its role in driving sales and attracting customers. It examines the ...Read More

Running head: Marketing Strategies
Marketing Strategies
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1Marketing Strategy
Introduction
In the contemporary business world, the role of marketing has taken a wide toll in the
organizations. Many modern organizations aims at developing new strategies and technique to
conquer the global market. A successful marketing strategy has immense power to increase the
sales of a business and draw the attention of the customer towards the business. The main aspect
of the retail industry is to present their products in the most effective way and attract the
customers. The retail industry faces the highest level of competition in the market and therefore,
they aim to develop new and innovative strategies in order to survive in the market. Therefore,
there are numerous studies based upon the same showing the success factors in the retail
industry. The current assignment contributes on the study of retail industry by analyzing two
brands Zara and H&M.
H&M and Zara are two well-known brands with global brand recognition which are
considered for the research (Agarwal and Wu 2018). The two brands have made their fame not
only in their domestic countries but also in the global markets. After reviewing the
organizational strategies of both the brands, a quiet differential strategy has been applied in order
to gain competitive advantage in the market. It is evident from their immense success that the
brands must have faced global challenges in the international market. Both the companies
adapted strategies in order to face and overcome those global challenges (Arrigo 2018). The
research paper aims at identifying the role of marketing strategies which has effectively
contributed in the success of these brands in the global market.
Rational of the Research

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The marketing activities are adopted by a company in order to promote its product and
service, but the strategy of the business which determines the success of the business. According
to research studies, in order to develop strategy the first step is to formulate the strategy and to
identify the main source of the revenue. The identification of the source is done through the
various operation, the business is into. In the case of Zara, the marketing department has
developed a strategy for the business that is gaining more number of customer by expanding
their business. The number of Zara stores has been observed to increase significantly. It is
evident from many research papers that expanding business in local and non-local areas helps to
increase brand recognition in the market. This approach has significantly contributed in the
enhancing the revenue of the business. According to the H&M marketing strategies, the business
has achieved immense success in the global market. The marketing strategies developed in the
companies depends upon the external and internal factors affecting the business. The H&M
business strategy is to follow cost leadership strategy from Porter’s generic model. This strategy
would gain customer attention and gain competitive advantage as well. The marketing strategies
are different which vastly depends upon the operation of the business, competition, demand of
the customer and financial position of the business. Marketing research is a vast area and
therefore, critical analysis and research has been reflected in this area.
Aim and Objective of the Research
The aim and objective of the research paper reflects the important aspects of the research and
helps to complete the research with desired outcome.
The main and objective of the research has been reflected below:
 To comprehend the significance and importance of marketing strategies in the business.

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 To recognize and understand how the marketing strategies are being formulated in the
case of both H7M and Zara.
 To identify other various advantage that might contribute with effective marketing
strategy with relation to H&M and Zara.
Statement of Problem
The statement of the problem is the factor which has compelled the researchers to undertake the
following research. The aspect of measuring the impact of marketing strategies is a matter of
difficulty as numerous success factors are involved. Therefore, the research aims to cover all the
details which would positively cover the aim and objective.
Research Questions
The research questions has been framed with respect with the problems that has been oriented by
the researcher with reference to both the brands Zara and H&M. The marketing strategies of the
both brands has been taken into consideration for the analysis part. The research questions are as
follows:
How the marketing strategies have the overall impact on the business operations of a business?
In what aspect the marketing strategies are formulated while considering the current marketing
trends in the organization?
What are the strategies developed and implemented in the brands of Zara and H&M in order to
enhance their sales revenue and brand recognition?
Literature Review

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The literature review provides all the relevant theories of marketing strategies and their
success factors that has been implemented in the companies. The brands Zara and H&M are
already established business in the market and further diversifying the business operations, both
the business has emerged into international markets (Ryan 2016). The diversifying strategy has
been found to be the main source of their revenue and global recognition. Both the brands aim at
penetrating in the global market through expansion of their products and opening stores in
different regions. The growth of the business also due to increase in demand of the fashion
industry. Moreover, the level of the competition is found to be increasing significantly which
makes the industries vulnerable to develop strategies (Kim, Lee and Lee 2016). The brands aims
at increasing and expanding their product line and aims at actively promoting their products in
the market. This above approaches increases the sales revenue of both the brands and help to
sustain in the market.
In case of Zara the business expanded its operations over the years which is identified
from the total number of stores opened world widely. It is observed that the company has
achieved 5% increase in its total revenue. As per the company data that is available in the year
2005, the business was able to achieve 82% increase in the selling area with respect to its
products. In addition to this the company has also achieved a significant increase in the return on
capital which is reflected to be 3% (Trivedi, Trivedi and Goswami 2018). The company’s
marketing strategy which is significantly followed by the business while penetrating in the whole
new market and strategically enter into the international markets. Further expanding its
operations with the helps its various franchise (Kumar and Pansari 2016). In this way the
business was able to create its reputation and attain brand recognition in the market. This above

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critical analysis reflects that the marketing strategies has been a acted as boon for the company
and has brought immense success for the company to sustain in the market.
In case of H&M the marketing strategies are quite different from Zara since it depends
upon the factors the company has been facing. The main goal of H&M is to connect with the
people and reflect the same in the fashion industry. This makes the customer to purchase
products from the H&M brand. The current strategy of the company, the company aims to
connect with the customer through the use of social media and therefore, it is observed that the
company is quiet active in social media (Haider et al., 2019). Moreover, for its business
operation the company believes in implementing cost leadership strategy. The cost leadership
strategy aims at reducing the overall cost of the business. This helps the business to enhance its
sales revenue and to gain competitive advantage. The cost leadership approach allows the
management of the business to cut cost off the shares of the intermediaries of the supply chain
business operations. Moreover, the approach help to cut cost of the products as well. The
company believe in offering the best quality to the customer in order to retain the potential
customer of the business (Leonidou et al., 2018). Therefore, the cost of the products are high
since, the company provide the best quality products and believes that customers would pay for
their products. Moreover, the brand offers variety to the customers and in different ranges of
products as available as well. Therefore, the company is reflected as the top brand in fashion
industry.
It is also observed that the company H&M is incorporating celebrity to advertise their
products in the market. The company tries to show celebrity values in order to effectively
promote their products in the international market and increase the sales revenue of the business.
According to the recent reports the company H&M has been working with David Beckham in

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order to promote their products (Youell 2013). This strategy has marked as the most effective
strategy as the customers as also evoked to purchase products by their favorite actors, sports
person and other personalities. The sales has been increased significantly due to this type of
strategies, the profit margin is increased and found to be very effective in the market. The other
promotional technique the business follows is provoking sustainability in the operations of the
business. This has enhanced the brand image of the business.
According to the analysis of both the brands that is H&M and Zara, the companies highly
rely on the marketing strategies for the success of the business. It is observed that one of the
main criteria both the companies follow with respect to the marketing strategies is to expand in
the global market that is the businesses are more focused on improving their brand recognition
and image (Mierzejewska 2017). The marketing strategies that were formulated by both the
brands always consider or focus to penetrate in the international market and target all the regions
of the economic world. In order to make out the difference in their strategies a comparative
analysis has been illustrated:

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Figure1: (Zara and H&M comparative analysis)
Source: (Uvic.ca. 2020).
The above data reflects the comparison between the marketing strategies of Zara and H&M the
respect to the above mentioned factors. The factors such as sales promotion, pricing strategy,
employees, marketing support in global market and many more other factors.
Research Methodology

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The main purpose of the research methodology is to reflect all the techniques that is used for
collecting the relevant data and also analyze the paper. The proposed methodology basically
answer the basic question, the way the data was collected and how the data was analyzed. It is
the most effective way to solve the problem and aids to understand the whole process. It also
reflect the source of the data collection. The research is basically based upon the analysis of the
marketing strategies which are effectively implemented in the business of Zara and H&M. The
research shall be descriptive in nature since the research would be including real case examples
of all the marketing strategies applied in the business operations. This would provide a brief idea
regarding the productivity and success of the business that is achieved by the business through
the marketing strategies. The descriptive analysis also aids the research study to identify and
find out all the relevant information of the brands and also reflect the current trend of the
business.
The data which is required for the research would be collected from the secondary source that is
through annual report of the companies and different research studies previously done on the
brands. The research would be highlighting the past strategies and the current strategies as well
in order to identify a relevant trend and analysis. In order to analyze the data, the research would
be enduring on statistical tools to find out a relevant conclusion. The past data would be
statistical and will be analyzed through success and revenue generated by both the business.
Qualitative data will be used for the analysis part. The data will be collected from the social
media as well, which would link with the research analysis and would provide relevant
justification to the research questions.
Research Limitations

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The research limitation is that the strategies which is implemented are quiet obvious and
transparent. The strategies might not be applicable for all the types of business hence the analysis
could be vague in nature. Further, time has always been a constraint and moreover, all the
information of the brands might not be available.

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Reference
Agarwal, J. and Wu, T., 2018. The Changing Nature of Global Marketing: A New Perspective.
In Emerging Issues in Global Marketing (pp. 3-11). Springer, Cham.
Arrigo, E., 2018. The key role of retail stores in fast fashion companies: The H&M case study.
In Contemporary Case Studies on Fashion Production, Marketing and Operations (pp. 121-137).
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Haider, A.A., Zafar, A., Khalid, A., Majid, A., Abdullah, M.A. and Sarwar, M.B., 2019.
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Kim, S.J., Lee, J.Y. and Lee, K.H., 2016. Global pricing strategy of the SPA brand: Comparison
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Kumar, V. and Pansari, A., 2016. Competitive advantage through engagement. Journal of
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Leonidou, L.C., Katsikeas, C.S., Samiee, S. and Aykol, B., 2018. Advances in Global Marketing.
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https://www.uvic.ca/gustavson/assets/docs/Research/student-research-engagement/COM-470-
Best-Business-Research-Papers-Vol7.pdf#page=108 [Accessed 5 Jan. 2020].
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