Strategic Marketing Analysis of H&M

What Are The Company’s Current Marketing Objectives?

How Does The Company Currently Segment The Market?

What Is The Company’s Competitive Advantage (If Any)?

What Are Their Core Competencies?

How Are The Company’s Products Positioned In The Marketplace?

How Are Their Products Placed In Terms Of Market Attractiveness And Company Strength (Portfolio Analysis)?

H&M is Swedish international company of fashion retailers for me, women and teenagers. It is on one of the recognized brands of fashion which has worldwide operations. The company runs their operations in 62 different countries. The business mission of the company is to invest in the living conditions of communities and bringing a positive change through the innovative ideas. The mission of the company is to lead the change with the renewable fashion industry in which the company makes attempts to engage with the customers with the innovative designs and techniques (H&M Group, 2020).

External marketing audit is the analysis of external factors that may affect the business and its operations. Following macro-environment factors are included in this:

It comprises of the environmental issues which are relevant to the business. For this, PEST analysis can be used. Firstly, there are political factors may have effect on the business operations of H&M. As the company has operations in different locations, it has created the urgency for the company to look for political stability in different countries. Particularly, due to instability of Turkey, Egypt and Lebanon, the company can make contingency plans for these countries. Further, economic factors are pertaining to the economic policies and the economic fluctuations that can affect the profits of the business. Particularly, there are economic fluctuations due to the introduction of Brexit and has dropped the profits of H&M business which can be seen from the fact that in 2015 the profits dropped from 6.45 billion to 5.36 billion Swedish Kronor ending on May 31 (Trade12, 2016). Further, social factors include the changing preferences of the customers which affects the business. Due to changing lifestyle, customers are preferring to go for the fashionable and branded products which can be the good opportunity for the company (Amatulli, et al., 2016). Further, technological factors particularly include the changes the automatized methods and information technology for meeting the diverse needs of the customers. H&M Group has made mobile applications for customers which has often act as competitive advantage for the competitors.

Market: The market size of H&M company has been growing rapidly and is estimated that the company has 4739 stores in 2017 around the world. The company has existence in 69 markets and has spread the online business in 43 countries. The growth trends include that the company has made the annual sales of 28 billion dollars and out of which 1.2 billion US dollars were generated in Sweden(Ridder, 2018). The company’s customers are segmented on the basis of income level, age and the lifestyle of the customers that will determine the customers and their attitudes. Moreover, the market needs to analyse the physical distribution that can help the company to reach the targeted customers.

External Marketing Audit

Competition: Uniqlo is the top competitor of H&M brand as it has been giving a stiff competition to the brand in terms of store’s experiences. Uniqlo has the marketing objective to give superior experiences in terms of quality and effective return policies that can make the customers satisfied(Zorn, 2017). The company has been taking the market share and giving the stiff competitors. There are entry barriers as well as the company has made a huge brand recognition which has created a barrier for the competitors.  

The operating results will be evaluated in terms of product, customer and geographic region. The product of the company is fashion clothes that fits for the teenagers and adults. For H&M business, the growth trends of the company have increased from a great pace in which the profits of 26% as the operating profit (Ridder, 2018). The geographic regions are concerned to be the international presence of the brand in which the company is estimated to have 4968 stores at the end of 2018.

Strategic issues are related with the company’s current approaches in terms of marketing. The marketing objective of H&M business has been to be the most recognizable brand into the fashion retailing market through investing into innovation and making experiments with the materials. The company have an established brand name which is proved to be the competitive advantage. The strength of the brand portfolio of the company is that the company strives to meet the fashionable trends which is proved to be the core competency of the company.

Marketing mix effectiveness is evaluated in terms of the product, price, place and promotion which are effective in meeting the strategic issues such as core competency, competitive advantage and competitive positioning. H&M business focuses on the fashion products to be available for the men, women and children. The company offers a premium price and targets the trendy customers. Place is determined by the fact that the company has different stores in different cities and also has online stores that can deliver the products to the doorsteps of the customers (Anthony, 2016). Promotion strategy is used by the company in terms of multi-channel technique in which TV advertisements and digital marketing for reaching the target customers. This relates to the strategic issues of the company in which it strives to maintain competitive advantage over the competitors.

Marketing structures and systems include the marketing efforts of the company and the way company manages the marketing operations, control and planning system. Moreover, H&M business has own advertising agency which regulates the marketing operations through multi-channel campaigns (H&M, 2020). The company attempts to make likeability in front of the customers that can make the business recognizable through the advertising materials.

Macro Environment

SWOT analysis will consist of the strength, weakness, opportunity and threats of the company. Strength of the company is that the company has strong international global networks and international brand awareness which has resulted in increased customer satisfaction. Weakness of the company includes that the company has higher dependence on the clothing factories. Further, H&M business have the opportunity of increasing the market share due to the increasing popularity of online stores and global market presence. Also, the company faces major threats due to the stiff competition against the competitors which can be seen from the fact that the company faces competition from Zara in terms of making profits and making brand presence (Tyler, 2018). Due to global presence, the company faces problems in dealing with the economic fluctuations in different countries.

After the strategic marketing audit and the SWOT analysis that can be base for setting marketing objectives. This can be set through the strategic thrust and strategic objectives.

Under strategic thrust, H&M company will determine the significant strategic area by which the company can make realization of the marketing objectives. Using ANSOF matrix, it can be determined that there are four strategic options can be used by the company.

Amongst the four options, the company can adopt the market development and product development strategies. Under the market development strategy, the company can concentrate on the new markets for serving their fashion product (Mbithi, et al., 2015). Secondly, the company can go for product development strategy in which the company can make efforts for the product marketing. In this, the company will choose a different product line for serving the existing markets and the company can get the greater chances of profits through the existing the brand recognition.

By developing the strategic objectives, the company can make the marketing objective of increasing the profits by 10% at the end of the year. As H&M business has the mission of making the communities more improved through the innovative ideas, the company can make the strategy of improving the profit margins through the investing more into innovative product for the target audiences (Nickols, 2016).

The company’s core strategy will be developed through analysing the target market and competitors and identification of competitive advantage to be used against the competitors.

Target market is determined by the segmentation of the market in which the company can target the customers. As per geographic segmentation, the company can target the people of urban areas. Further, under demographic segmentation, the company can target people between the age group 16-25 years and 26-35 years of men, women and children. Further, in psychographic segmentation, the company can target the trendy people with enhanced lifestyle and are of higher income group.

Micro Environment

The competitors of H&M company are Zara and Uniqlo that fashion products. Zara as the close competitor of H&M gets their profits from the loyal customers and it can be seen that brand gets 80% of sales from the loyal customers (Danziger, 2018). Thus, loyal customers can be the attractive market for H&M company. Further, the marketing strategy for Uniqlo is considered exceptional in which the company strives for the high quality and superior customer service which is considered to be the strength of the company. Thus, H&M company need to make the strategy that can be the competitive advantage through reaching the target customers by increasing the quality of the products.

Competitive advantage is concerned to be adding some special features to get the market share of the competitors. H&M business can get competitive advantage through making the superior quality clothing and also making the product’s prices affordable for the customers. In this way, the company can provide an additional value to the customers. Besides, the company’s online stores and the facilitation of the quality customer service can provide value to the customers and also can make them responding to the customer’s needs (Dishman, 2013).

Marketing mix decisions can be undertaken through the effective marketing strategy that can be helpful in delivering the right product at the right time.

This comprise of the product’s physical features and the quality of the product. Specifically, H&M can make their apparel in diverse categories through taking care of the quality of the product and meeting the fashionable needs of the customers. The company must provide additional services to the customers which might include the discounts and the customer service which might add to the value given to the customers (Datta, et al., 2017).

Promotion is an important part of marketing mix which is concerned with that activity of the company in making the product recognizable through the appropriate promotional tools. H&M company can promote their brand through TV advertisements for making their apparel recognizable into the market. Specifically, the company offers discounts into the products to attract their customers and also makes efforts for the promotion through the sponsorships that can spread awareness about the brand.

Price refers to the value of product which is paid by the customer. Price needs to be kept in such a way that it is appealing, affordable and competitive into the market. Moreover, H&M business must ensure that the prices for their apparels are not only affordable but also competitive in order to make greater sales with higher profits (Malviya, 2017). The company can adopt the medium pricing strategy by keeping the section of discount in which the products can be provided to the customers through various schemes.

Internal Marketing Audit

This is an important component of marketing mix that ensure the product delivery by using the appropriate channel of distribution. H&M company can maintain the appropriate supply networks in order to maintain the flow of products. Moreover, the company has expanded their retail outlets in many locations which has later helped the company to get the attention of maximum customers. Also, the company can adopt for the online stores which is accessible to every consumer and can be an effective marketing effort to be taken place (Coopen, 2019).

Physical evidence will relate to the company’s efforts to be made for the attracting the customers through the layout of and design of the product. Moreover, H&M company should take the feedback of the customers for the distinct packaging being used by the company. Also, the company should make efforts for improving the ambience of the store and providing the shopper-friendly environment for the customers (Coopen, 2019).

The company must adopt the appropriate way of delivering the services to the customers and using a method that can automate their business activities. Particularly, the company must innovate the business process and maintain cost efficiencies which are helpful in the facilitation of lower priced products to the customers.

Under this strategy, the company must make appropriate training of the people in order to make the people more competent for delivering the valuable services to the customers (H&M, 2020). This should be cooperated with the technique in which the company must be extra active for motivating their people through the financial incentives and must make efforts for hiring the people who are loyal to the company in every way.

The budget of the marketing plan is decided upon the cost associated with the marketing efforts of the company and also depends upon the marketing objective of the company. The budget of the marketing plan of the company is set through the simple calculation in which the total revenues of the company will be multiplied by the percentage of the marketing expenses (Ndungu, 2016). Moreover, the company must invest 20% into the marketing mix which would later be multiplied by the revenues of that particular year.

Organization and implementation of marketing plan will take place in form of the administrative roles that the company will decide upon. H&M business can make sure that the company the decided marketing plan is properly being communicated to the management structures and controlling the overall marketing activities. This specifically involves the brand positioning that might include the efforts of the company towards the organization of the marketing channels. Further, strategic implementation of the marketing efforts will also require the set timeline within which the plan would undertake. For H&M business, the marketing plan can be planned for 2 months within which the company can make the marketing efforts and can also ensure the success of the plan through effective control (Colla, et al., 2016).

Operating Results

Control refers to the monitoring of the activities and finding out the loop holes for ensuring the effectiveness of the goals being initiated. The company can control their marketing activities by evaluating the effectiveness of the business activities and also identifying the various areas that need improvement (Al Fahad, et al., 2015). The actual results of the marketing efforts are compared with the marketing objectives and goals in order to identify the areas that need the improvement. Also, the action plan is undertaken that can help in the reducing the errors and the loop holes identified by the company during the process of monitoring of marketing activities.

References

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