Role Of Marketing In Organizations: A Case Study Of H&M
Marketing is said to be an activity or processes that are associated with creating, communicating, buying and selling by identifying the needs of customer and exchange the offerings with the help of advertising. The structures and operations of marketing department which also include the modern trends that are being explained here under in the newsletter. Various external environment factors which influence and affects the marketing activity of H&M are mentioned. H&M which deals in retail-clothing company known for its fast-fashion apparels and covers a major market in Europe. They have few stores in some 61 markets all over the world and online shopping in over 32 countries. This assignment is conclusive of discussion regarding the marketing mix and processes carried out in H&M and the roles played by marketing department to perform function for B2B and B2C (Mihm, 2010).
In report the comparability of elements of the extended marketing mix applied in the marketing planning process by H&M and other organisation with an intention to achieve organisational objectives. Lastly, playing a role of junior manager as directed by marketing manager an evidence based marketing plan has been produced by keeping in mind the marketing concepts and analysis of situations by using or applying strategically the extended marketing mix in varied contexts.
H&M which has become the retail clothing giant and marked their success in the international and European markets. It is known for its unique management style as their organisation structure is based on buyer’s coordination mechanism (Steenkamp, 2017). The product development model includes buyers as their fashion factors and the company gathers information and design or modify according to the needs. There are no barriers in communication and coordination channels so the access of data is made easy. This structure optimization helps in speeding up of operation processes which increases the efficiency of the marketing department. The timely use of information in coordinating mechanisms improve the process and structure of the organisation, it is known to be a strong point in success of H&M (Zeriti, et. al., 2014).
The operations in H&M has the large number of suppliers and store located around the world, such wide coverage differentiate the company in its offerings if compare to other big retailers. Company believes in updating their range of products frequently than its other competitors (Zhang, et. al., 2017). The supply activity carries advantage in reducing costs as H&M chooses to outsource its manufacturing to suppliers who have cost advantages which is of great importance. They have records of managing contracts and set up expertise across international market and have formed strong linkages with various department and maintain their relationships within different cultures and languages. If compare to Zara they have got trained professional designers and their organisational structure constantly change and buyers are the responsible personnel who affect the information, development, the orders, sales and processes. The whole process of organisation structure optimization is gathered in the years with the help of errors and trials they improved the development and became a strong support for their success unlike H&M.
The marketing process of H&M define and manage their brand by conducting marketing campaigns and produce promotional materials to promote their core products and designs which let them stand out in the global market (The Marketing Mix, 2017). Their company’s processes monitor and manage social media that significantly contributes to the advertising of their services and products. The main goal behind their marketing technique is to promote their seasonal trends in particular seasons with an intention to drive the customers in their way (Tan, et. al., 2017).
The marketing mix of H&M is consist of Products and services, price, promotion, place, presentation and people. H&M target market focuses on the customer service and to reduce the costs involves in the strategy, company has issued application where customers can sign up and use purchase information. The pricing strategy is providing the superior value to loyal customers to make them shop more so the loyalty program is introduced. Company has been engaged the target audience and developed a website and integrate varied social media channels and an open forum where consumers can talk about H&M apparels. Other mix of marketing place, process and presentation has been developed to engage loyal consumers all over the world by organizing campaigns to enlighten the audience. Whereas Zara consider the setup of loyalty programs to link with the customers and increase the number of customers who would visit stores.
- Steenkamp, J.B., (2017). Global Brand Strategy: World-wise Marketing in the Age of Branding. Springer.
- Tan, M., Wong, D., Day, O., Tan, M., Kang, H., Wong, D., Kang, H., Kang, H., Wong, D., Wong, D., Kang, H. and Thamayanthy, A. (2017). 7 Trends You Need to Know About the Changing HR Landscape. Attune Press. Available at: https://attunepress.com/2016/08/30/trends-hr-landscape/ [Accessed 24 Nov. 2017].
- The Marketing Mix. (2017). Marketing Mix Definition – 4Ps & 7Ps of the Marketing Mix. Available at: https://marketingmix.co.uk/ [Accessed 24 Nov. 2017].
- Zeriti, A., Robson, M.J., Spyropoulou, S. and Leonidou, C.N., 2014. Sustainable export marketing strategy fit and performance. Journal of International Marketing, 22(4), pp.44-66.
- Zhang, M., Hu, M., Guo, L. and Liu, W., 2017. Understanding relationships among customer experience, engagement, and word-of-mouth intention on online brand communities: The perspective of Service Ecosystem. Internet Research, (just-accepted), pp.00-00.
Marketing mix is all about putting the right product in the right place, at the right time in a fair and valuable price. The strategies formed to make this happen requires a keen knowledge about the aspects of business plan and process. Traditionally, the marketing mix was designed in a way that it gained popularity but a good customer service was ignored (Tan, 2017).The marketing mix is associated primarily with the 4P’s of marketing and the extended models of marketing mix known to be as 7P’s of marketing. In report the extended version of marketing mix has been compared with the marketing mix of other organisations to their marketing planning process which helps in achieving organisational goals (Armstrong, Kotler, Harker, and Brennan, 2015).
H&M is known to be a fast emerging industry in the fashion retail industry, there are few more big retailers who has emerged in the industry though they have different approaches towards the marketing mix in their marketing planning. H&M strategy of product and price is different from Zara, whereas the fashion cycle of Zara is shorter than that of H&M and the secret behind the success is of fast fashion (Pahl, and Mohring, 2008).They take lesser time of designing in reaching designer’s office. The global expansion of the company as of today has 4351 stores and has recorded a strong presence in the digital market as they are operational in about 65 markets with 35 markets operating in e-commerce, they have focused on sustainability which adds to the value to their brand (About.hm.com, 2017).
The elements of marketing mix is known as 4P’s of marketing and the extended version of marketing mix be 7P’s of marketing. These marketing mix help an organisation in achieving organisational objectives. The extended version of marketing mix includes service marketing, a type of intangible economic activity and it cannot be stored or owned. It provides the basis for 7P’s model of marketing mix. H&M also apply services marketing in their strategies to give a stiff competition to other fashion retailers and service marketing is the model of extended version of marketing mix which is the latest trend in the industry to reach and engage customers as much so that the taste and preferences in fashion can be known (Armstrong, Adam, Denize, and Kotler, 2014).
The seven p’s of marketing mix is the extended version of traditional marketing mix which includes the old 4 models of marketing mix providing the product at the right place, on the right time to the right customer and has extended those products that are services and intangible (Baaij, Mom, Van den Bosch, and Volberda, 2015).
Product Mix- H&M is one of the leading brand who offers a best quality and a quite sustainable fashion to its customer segment at a very affordable pricing. Their unique brand believes in fashion which stands out in market and long lasts which can be wearable year after year. They offer a wide range of products including sportswear, underwear, accessories, shoes and cosmetics. Added to the fact, they also offer decorative items and home textiles which ranges in fresh and up-to-date product offerings. Whereas Zara has applied the product mix in their market process aiming at differ styles for all ages, international styles, sells in-house brands, deals in modern styles which do not get easily outdated. Along with this, Zara has adopted certain unique techniques through which they influence their fashion trends from street style and youth subway culture (Glowik, and Smyczek, 2011).
Place Mix- The global expansion of H&M since its foundation, it has added 427 new stores in their line of stores which proves to be an eventful in the year 2016 for the brand. The extension of online stores has been seen in 11 new markets. Company has followed a strategy named Omni-channel in which the usage of channels, online and physical with an intention for growth reach in global market (LU, 2014). Such extended step towards growth has resulted in various opportunities of growth and revenue. The network of H&M has kept growing globally and planned the future to push their line of stores further (Grant, 2016). Zara has adopted the set of strategies through which they had been able to develop their effective place in the target market. Along with this, they had also developed certain unique techniques under which their stores are generally set up at the centralized locations of the target market. With the help of this strategy, organization becomes capable enough to gain adequate market share in the international fashion industry.
H&M Marketing Mix
Price Mix- H&M has a differ price strategy when compare to Zara, the main focus of Zara is on affordable pricing whereas H&M follow both roads by serving middle class and high fashion style to affluent customers. Cheap Monday also follows affordable pricing and other fashion retailers’ focus on every customer segment sells varying styles and designs at varying prices (Hollensen, 2015). Zara has also adopted the cost leadership strategy under which they provide unique varieties to various customer segments. This has leaded the company to gain a large customer base in comparison with its competitors.
Promotion Mix- H&M focused mainly on digital marketing with a sole purpose to reach maximum customer to their fashion network. The integration of physical and digital marketing is seen as the strategy of H&M, it is done so to attract more customers and provide them a unique shopping experience (The Marketing Mix, 2017). The online strategies include purchases and returns online, mobile payments, develop customer club to increase customer service. The use of social media for marketing and promote their brand on a big scale, the migration of customers from physical market to digital market has been seen (Steenkamp, 2017). While comparing the strategies used by Zara with H&M in relation with the promotion and marketing, it has been analyzed that most of the techniques used for the promoting their products in the international market are similar. They both uses fashion models for promoting their products along with the trending and advanced techniques of advertisement and promotion.
Other marketing mix is of service marketing includes people. H&M follows people mix strategy in order to increase the effective of the organization. For the same purpose, both companies i.e. H&M and Zara use training and development strategies in order to uplift their performance. This strategy is capable enough to train the employees in an effective manner in order to provide effective services to its target customers.
These services are intangible but do include physical elements somewhere or the other. H&M follows people mix and physical environment where they provide customer service and manage culture and employee altogether and an interface where facilities are provided to customers digitally through social media and mobile applications. Zara belongs to the same fashion industry as H&M belongs from, thus, their processes are quite similar from each other.
They have a well-tailored process to minimize their costs so that the ultimate price of the product can be affordable for customers and profits are gained by company. With the help of this strategy, organization is being able to uplift its performance in the international fashion industry. While comparing the strategies used by H&M and Zara in relation with physical evidences, they both companies invest a huge capital in the research and development department along with training and development department for providing adequate training measures to its staff members (Dua, Huangb, and Liu, 2015).
7P’s Model of Marketing
Marketing planning process is a systematic process which involves the valuation of opportunities of market and other resources. The planning includes identifying sources that are of competitive advantage focused on more of organized approach by setting up of organisational objectives with the help of marketing mix. There are series of steps which involves where an organisation is right now, where does they wants to be, how do they get there, the best way to get there and how it is ensured that they reach ultimate goal (Jones, and Robinson, 2012).
The step of getting there where an organisation wants to be involves marketing mix. As marketing mix is known to be a toolbox from which the marketers choose certain elements which can influence the target market and help reaching the organisational goals. The marketing mix is a set of 7P’s of marketing, a combination of digitalization and physical elements in the process lead to global coverage of market. These marketing strategies can be applied to achieve the set objectives of organisations (Palmatier, Stern, El-Ansary, and Anderson, 2016).
It is concluded that H&M apply the extended version of marketing strategies with a sole purpose of targeting larger customer segment. The brand focused on both the class of customer segment at affordable pricing and high end styling respectively. The global expansion in the various markets help achieving organisational goals with flying colors. The approach towards 7P’s models of marketing is differ from other big fashion retailers, comparison have been shown in the report. Marketing planning process which includes a systematic approach in planning or applying or implementing the 7P’s of models into their strategies to achieve their set targets.
The sole purpose of the marketing plan is to launch a new product line of the leading brand H&M. The new product is a designer knitted winter scarfs for men and women. In order to accommodate the market, there is a need to analyze the current strategies of marketing adopted by H&M and the marketers need to analyze those. The plan contains analyzing the key issues faced by the company in the environment in which they are operating. The strategies of the competitors of H&M is analyzed with the current situation of clothing in UK market. The study conducted and the methods used in the research and planning which is based on secondary research that are gathered from few online journals or articles, publications, various websites and case studies online.
A renowned market leader in fashion retail industry H&M, have achieved a place in the clothing industry with help of research and development. Their focus or the base of their mission is to provide quality in their products at its best with a fair pricing to all segments of customers (Oxford College of Marketing Blog, 2017). The main objective behind market plan is to launch a new product in the line of product, this product will be available online. The selling strategy will be the availability of this unique style knitted designer scarf is limited and to limited amount of people only which makes it exclusive and set apart from other leading brands (Farahmand, 2011).
The H&M Hennes & Mauritz group opened in Sweden 1947, is a global fashion retailer having stores in 68 markets and marked their presence in digital market strongly.
They deal in Men’s and Women’s general products ranging from apparels to bags
and accessories. The current marketing situation analysis shows a progressive and
rapid growth. Company had opened retail stores and introduced the online shopping
in UK. They have also developed few collaborations that resulted in increased sales.
There are some issues that the company faced and these issue created hurdles for the
growth of the company. The low prices of their products depicted by customers as of low quality this way company had a bad image. Adding to the fact company also faced competition at big level and make it hard enough for the brand to focus on attracting customers, as few customers perceived the products of low quality by looking over the prices. There were many supermarkets have set up and provide products at cheaper rates which affect H&M (Sandybayev, and Nicosia, 2015).
The internal and external analysis of H&M is conducted which includes SWOT analysis of the company therefore, strengths and weaknesses comes under internal analysis. Threats and opportunities are in external analysis. This SWOT analysis includes the global situation of H&M these are discussed below:
The leading brand offers each country the preferences exclusively as per their needs. This exclusive clothing also provided for online stores and few of the European countries like Austria, Finland, Denmark, Germany, Norway and Sweden. One of the strength of the company is its informational website where everything required is shown to make it convenient for customers to get the new designs of H&M and every useful information for every type of consumer. H&M provides varied fashion styles in clothing and accessories that can match up with the taste of customers and they get refreshed by the time being in. The idea behind home textile is to provide the clothing heritage where customers can add to their existing decor. The company has invested in organic cotton for a long term with a purpose of promoting organic cotton and development of greener process in the operations (Glowik, and Smyczek, 2011).
The business notion of the company is to offer high value fashion to the customer at a very best price. But when compare with the competitors the quality aspects are not as good as expected. The displaying of stock is on floor and provide no such backup for stock to customers and on the service part the speed is relatively low and the customer feel neglected. As H&M does not own factories of its own, instead buy goods from its global suppliers mainly in Asia and Europe so the issue here is not much control on the distribution network in order to get new products for their stores (Monden, 2017).
The global expansion of H&M carries various business opportunities, with the various experiments done by company in the past years they have managed to generate opportunities in fashion industries. The company provides an online platform for shopping in some European countries but made no such announcements of expanding in Asia, North America. There is a large market for the brand and a big opportunity for setting up the stores online in these countries. The edge with the various renowned designers have made a huge impact in fashion industry and make other designers to cooperate with H&M. The market of Japan also creates opportunities for the company because of their keen interest in fashion. The fashion market of Japan is at the maturity stage and gives a tough competition as they show trends of being very selective in merchandise so various shopping centers and malls give consumers varied choices. The change in structure of the market in Japan has created many opportunities for companies (Lin, Li, and You, 2012).
Threats for the company would be competition between other leading brands in the fashion sector namely Zara, Gap and Uniqlo. The changing buying patterns of consumers create hurdles in the growth of company as the idea of fast fashion is not adaptable for few shoppers (Gattorna, 2012). The fluctuations in the exchange rate affect the export quantities because of the competition having lot of stores all over the world and affect rate (Gallaughar, 2008).
The geographic segmentation aims for locating stores in the best business location in-spite of the size of the city or shopping center. It is a known principle of the company since the first opening of store. It is now present in some 24 countries and has more than sixty thousand employees all over the world and Germany be the biggest market having a numerous amount of stores. In terms of sales, Sweden is the second place which record high sales but UK has become the second largest market overcoming Sweden (Lam, and Harker, 2015).
In demographic segmentation, they have covered international market by the expansion and provide fashion for all ages including Women, Men, teenagers, youngsters, babies and children. Company interpret fashion trends and create the same while making accessible to all by targeting mostly middle income customers because most of the demographic is urban. Company claim to promote opinions, interest and values with spreading environmental awareness among employees and suppliers. They provide a simpler shopping experience but an exciting environment (Gebler, Uiterkamp, and Visser, 2014).
The target market for H&M are youth which impose young mindedness and groups that are fashion conscious. The styles and designs they create is growing season with season with a main focus on budget minded shopaholics by offering limited brands with a fresh look and impose a unique style statement (Jang, and Park, 2015).
H&M has positioned themselves in the market with new possible value differences and a competitive advantage. There tactics behind positioning are Loyalty cards, enhancing marketing, attractive games and awards. The statement of positioning by the company is to the fashion conscious and trendy consumers who actually enjoys shopping by providing best quality at an affordable price (Zeriti, Robson, Spyropoulou, and Leonidou, 2014).
The product mix of H&M consist of Children Wear, Teens Wear and adult wears. All garments of great quality are offered and the range is of 1000 of each style and sold online. The price of these knitted designer scarf is set to $25. The new product line can be promoted easily online as the season of winter is on the rage. The factors by which they promote are Coupons, Word of mouth, Ads and Press which includes various magazines. The place will be website for the same as the product is available online exclusively. Marketing mix is the tool through which organization could be able to promote its products and the services in the target market. Along with promoting the products in the target market, this strategy is also useful for developing an effective image in the target market. This strategy is useful for increasing the effectiveness along with developing a crucial place in the competitive business environment. Thus, it is required to add this tool in the business or marketing plan of the enterprise with the objective to attain its desired goals and the objectives. Other P’s of marketing includes process, physical evidence and people are service marketing where H&M decides the customer segment of every age and availability is online only (Zhang, Hu, Guo, and Liu, 2017).
The budget for introducing the new product line in the line of products is an expected net profit of nine million dollars in the year in which it is going to be launch and the budget for sales will be seventy thousand dollars.
In-store Promotion Activity: $30000
Ads in Magazine: $20000
Coupons and Pamphlets: $5000
The expenses incurred over the above techniques will help the organization to develop their effective position in the target market along with spreading the awareness amongst the public in relation with the company’s products and services. Promotional activities, advertisement practices and the pamphlets are necessary for informing the target customers in relation with the unique features of the product. This strategy is also helpful in order to uplift the organizational performance in the international fashion industry.
After implementing marketing plan and strategies the step of evaluation and control cannot be neglected. The process of monitoring and control while implementing such strategies in operations results in difference between what is actual performance in the instance and what was desired for the same. The performance element is the last stage and result of the activities performed. While the monitoring and control of marketing plan shows that the strategies implemented are in accordance what was planned and results showed mixed response. At some points company succeeded whereas at other aspects company failed to perform as desired in terms of attracting customers (Armstrong, and Taylor, 2014).
Task three is all about developing and evaluating the marketing plan for the purpose of launching a new product of the leading brand H&M and the product which the company is about to launch is a designer knitted scarf for both men and women. To launch this product marketer need to gather some knowledge and strategies of marketing to make the launch of product line successful and cover most of the customer segment. A brief summary has been given in the assignment to give an overview of the company that what it does and where it operates, how it operates. The marketing plan is made which consist of current situation analysis of the company and the factors affecting the current market situation of the company. Those factors are internal factors and external factors which include the basic SWOT analysis of H&M to get a better knowledge of the environment both inside and outside. The analysis also include STP (segmentation, targeting and positioning) to give a brief idea what company focus on and how they can improve their strategies. The budget is defined for the product and 7P’s of H&M marketing, lastly it is explained that how this marketing plan can be monitored and controlled to point out the errors if any and mitigate them while comparing it with standard performance. This whole study conducted on marketing strategies, the situation analysis (SWOT analysis), structures and the organisational objectives shows that the company carries a great potential to grow as it has already built a strong image in global market. There are strong competitors in the fashion industry so if company wants to stand out and perform well then it must put efforts by firming the competitive advantages.
About.hm.com. (2017). H&M group. Available at: https://about.hm.com/en.html [Accessed 24 Nov. 2017].
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson Australia.
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction, Pearson Education.
Armstrong, M., & Taylor, S. (2014). Armstrong’s handbook of human resource management practice. Kogan Page Publishers.
Baaij, M.G., Mom, T.J., Van den Bosch, F.A. and Volberda, H.W., 2015. Why do multinational corporations relocate core parts of their corporate headquarters abroad? Long Range Planning, 48(1), pp.46-58.
Dua, H., Huangb, Y. and Liu, Y., 2015. The Analysis of the SPA Apparel Company Strategy. In 2nd International Conference on Civil, Materials and Environmental Sciences. Atlantis Press.
Farahmand, N. F., 2011. Organisational marketing planning by management educated managers, African Journal of Marketing Management, 3(8), pp. 178-187
Gallaughar, (2008), Zara case: Fast Fashion from Savvy Systems, PhD Case, accessed on 12th October 2016 from https://www.flatworldknowledge.com/node/440129#web-621509
Gattorna, J., (2012), Challenges of global fast fashion supply chains, accessed on 12th October 2017 from https://www.supplychainmovement.com/challenges-of-global-fast-fashion-supply-chains-part-i/
Gebler, M., Uiterkamp, A. J. S., & Visser, C. (2014). A global sustainability perspective on 3D printing technologies. Energy Policy, 74, 158-167.
Glowik, M. & Smyczek, S., 2011. International Marketing Management: Strategies, Concepts and Cases in Europe, Page 301, (4th), And New York: Physica-Verlag
Glowik, M. & Smyczek, S., 2011Zara’s Agile Supply Chain Is the Source of Its Competitive Advantage, accessed on 12th October 2016 from https://www.digitalistmag.com/digital-supply-networks/2016/03/30/zaras-agile-supply-chain-is-source-of-competitive-advantage-04083335
Grant, R.M., 2016. Contemporary Strategy Analysis Text Only. John Wiley & Sons.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Jang, S. Y., & Park, J. K. (2015). The influence of global SPA brand value proposition on customer-brand relationship, brand attitude and brand loyalty. International Business Review, 19(1), 119-142
Jones, P. & Robinson, P., (2012). Operations Management, Oxford: Oxford University Press.
Lam, W. and Harker, M.J., 2015. Marketing and entrepreneurship: An integrated view from the entrepreneur’s perspective. International Small Business Journal, 33(3), pp.321-348.
Lin, S. J., Li, C. H., & You, C. S. (2012). Consumer behavior and perception of marketing strategy for amusement parks: A case study of Taiwan. African Journal of Business Management, 6(14), 4795.
LU, C., (2014). Zara supply chain analysis – the secret behind Zara’s retail success, accessed on 8th December 2016 from https://www.tradegecko.com/blog/zara-supply-chain-its-secret-to-retail-success.
Mihm, (2010). Fast Fashion in a Flat World: Global Sourcing Strategies. International Business & Economics Research Journal, 9 (6) pp 55-63.
Monden, A., 2017. Marketing Strategy of Rent and Space Allocation for Dominant Retailer in Shopping Center. Journal of Logistics Management, 6(2), pp.35-40.
Oxford College of Marketing Blog. (2017). The Marketing Planning Processes | Oxford College of Marketing Blog. Available at: https://blog.oxfordcollegeofmarketing.com/2012/11/29/marketing-planning-the-importance-of-planning-and-the-planning-processes/ [Accessed 24 Nov. 2017].
Pahl, N. and Mohring, W., 2008. Successful Business Models in the Fashion Retail Industry. Strategic Audit of H&M compared to ZARA.
Palmatier, R., Stern, L., El-Ansary, A. and Anderson, E., 2016. Marketing channel strategy. Routledge.
Sandybayev, A. and Nicosia, N.C., (2015). Competing in Volatile Markets through Analysis of Agile Supply Chain. Case of H&M. Journal of Human and Social Science Research; Vol, 6(02), pp.059-066.
Steenkamp, J.B., (2017). Global Brand Strategy: World-wise Marketing in the Age of Branding. Springer.
Tan, M., Wong, D., Day, O., Tan, M., Kang, H., Wong, D., Kang, H., Kang, H., Wong, D., Wong, D., Kang, H. and Thamayanthy, A. (2017). 7 Trends You Need to Know About the Changing HR Landscape. Attune Press. Available at: https://attunepress.com/2016/08/30/trends-hr-landscape/ [Accessed 24 Nov. 2017].
The Marketing Mix. (2017). Marketing Mix Definition – 4Ps & 7Ps of the Marketing Mix. Available at: https://marketingmix.co.uk/ [Accessed 24 Nov. 2017].
Zeriti, A., Robson, M.J., Spyropoulou, S. and Leonidou, C.N., 2014. Sustainable export marketing strategy fit and performance. Journal of International Marketing, 22(4), pp.44-66.
Zhang, M., Hu, M., Guo, L. and Liu, W., 2017. Understanding relationships among customer experience, engagement, and word-of-mouth intention on online brand communities: The perspective of Service Ecosystem. Internet Research, (just-accepted), pp.00-00.