Marketing Strategy Tips
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Introduction to Retail And Services Marketing
Hennes & Mauritz (H&M) is a Swedish multinational retail clothing company which is renown for its fast fashion clothing for people of all ages. At present, company exist in 55 countries with more than 3500 stores and in year 2013 provided employment to around 116000 people. Firstly H&M started its functioning from the high street of Vasteras, Sweden in 1947 (Kell, 2015). Further, company is ranked as the second largest global clothing retailing company after Spain based Inditex renown as parent company of ZARA.
Present research report illustrates retail marketing plan for H&M for expanding its business operations in the developing country Asia named as Bangladesh. .
H&M MARKETING STRATEGY
Operating in such competitive market it is very crucial for top level management of H&M to undertake appropriate and effective marketing strategies (Dumitrescu and Vinerean, 2010). Presently, H&M announced the plans to open 400 new stores in 2015 as company has achieved 17% leapt in profit from last year functioning (Kell, 2015). Current marketing strategy of H&M focuses on attracting consumers through a mobile promotional campaign for marketing latest collection. In regards to this, existing and potential customers of H&M receives SMS coupons along with this, mobile banners ads placed on major portals and media sites so that maximum audience can be reached. However, top level management of H&M has launched their first campaign in 2006 and still managers are using it as the channel to attract large population. The main purpose using this techniques is to promote latest seasonal clothing trends as well as influence people to take membership of the H&M club. In context to it, management has provided firm's website to the people where they can easily sign up for the same and become member of the company.
In addition to it, cited firm also uses celebrities to promote or market its products as well as this technique aids in improving brand image in target market. Furthermore, company is using corporate social responsibility as marketing tool. However, in recent past, specific collection consisting T-Shirts, tank tops, hoods and sweaters designed with Anti-Aids prints which featured with various popular celebrities. 25% of the total revenues generated through this campaign was donated to HIV/AIDS prevention projects (Završnik, 2007). Along with this use of social media is helping management to attract large audience from around the globe.
COMPETITORS MARKETING STRATEGY
The top competitor of H&M in existing market is ZARA which is constantly creating its brand image within market and attaining desired success. However, present marketing strategy of Zara is by setting up loyalty programs with the purpose of creating appropriate link between customers and the products (Kumar and Steenkamp, 2007). Furthermore, Zara mainly focuses on marketing its products and services to Euro-chic crowed who wants more fashionable clothes in constantly changing environment. Along with this, Zara concentrates on location for its retail establishment rather than advertising in order to attract customers (Zara's Secret To Success: The New Science Of Retailing, 2013). Company spends very little on marketing its products and services as compared to its competitors. Moreover, senior authorities are more concerned about finding the best suitable retail store for its products rather than spending high money on enticing customers to visit its respective stores.
Current Trends In Retail Clothing Industry
Clothing industry is the sector in which customers taste and preferences changes according to environment. There are various current trends that can be evaluated in order to support the entire course of businesses and satisfying consumers needs and wants. Looking at the constant advancement in the approaches of companies in retail clothing industry it has become essential for all the corporations to mould their functioning accordingly in order to attract large audience and generate higher sales. Some of the current trends are as follows:
• Shopper will get more personalized in store experience – Looking at the present marketing strategy will not ensure in attracting much customers and due to which retailers in clothing industry have started implementing personalize each customer's experience (Bhardwaj and Fairhurst, 2010). However, this services is being provided on websites from long ago, but for enhancing experience customers while shopping, entrepreneurs have started using this approach in brick and mortar stores also. The main purpose behind using this approach is to enhance the satisfaction level of the customers so that they can be retained as well as attracting new for future contingency.
• Digital menus for customers – It is one the Rising trends in retail clothing industry. However, the size of stores are constantly broadening which is making tough for customers to identify the products of their choice. The main purpose of using digital menus for the retail clothing stores is that it helps their customers in identifying and evaluating the place of their desired cloths as well as this technical equipments supports them in shopping easily. However, this approach was used by Burberry a retail luxury clothing company who invited its customers to live stream of Fashion week. In regards to the event, company provided iPad to all the visitors so that they can browse and purchase the items that they just saw during the live event (Mikyung, 2010).
Following is the marketing plan of H&M clothing retail company which consist of various sub-heads.
Market entry: In general terms, market entry strategy can be defined as the approach of delivering goods or services to a new target market and appropriately distributing them there. It is the responsibility of top level management to adapt right method or procedure to enter into a new market so that aims and purposes can be addressed. According to the present given scenario, Hennes & Mauritz retail clothing giant is planning to expand its business to another Asian country named as Bangladesh (Nguyen, 2011). With changing taste and preferences of people top level management is finding this as an opportunity to establish its brand name in such country. In regards to this, the most appropriate marketing strategy that Hennes & Mauritz Company can undertake is Franchising. In general terms, its is a method in which franchisor provides a licensed privilege to the franchisee in order to do business as well as provide various other assistance such as organising training, merchandising, advertising and marketing products in return for a monetary consideration.
- Specific – Looking at the growing clothing retail industry in Bangladesh, top level management can offer 5 to 8 number of franchise within the country.
- Measurable – It can be easily measurable as there are various competitors who are making entry in the market with similar approach (Kapferer, 2012).
- Achievable – On the basis of growing economic condition in Bangladesh, it can be stated that giving five or more than five franchise is achievable.
- Realistic – As growing fashion around the globe it is realistic to establish business in Bangladesh through the market entry strategy of franchising.
- Time – Management is forecasting to establish its business within one year of its start. However, being such a big brand in Swedish region it can be feasible for firm to generate appropriate return and create demand within the new market.
Marketing objectives: Objectives are the essential element of a marketing plan. It is the responsibility of top level management to make realistic and achievable objectives so that overall functioning can be managed and controlled accordingly (Grant, 2010). On the basis of present case, Hennes & Mauritz's management has decided on three basics objectives to include in the overall marketing plan. However, the three main aims and objectives are: To create brand name within the new target market of Bangladesh by using appropriate advertising and promotional tools and techniques. Secondly, constantly focusing on keeping the price of products lower than competitors to establish business and create space and demand within the people of mentioned country. Lastly, using economic condition of Bangladesh as an opportunity expand business on more low cost locations and enhance business functioning for future contingency (Keegan, 2001). On analysing the all three objectives different aspects can be illustrated such as: the main aim of focusing on enhancing brand image is that, presently company is the biggest buyer of Bangladesh in terms of clothing raw materials. Therefore, establishing business operations requires appropriate brand name as people are known by the company name. Second objective of Hennes & Mauritz Company is to focus on undertaking appropriate strategies and tactics regrading promoting and marketing products and services in Bangladesh. Advertisement approach of the H&M' cheap but still quality products will create better image within the teenagers in cited country (Wilson, 2010). The major population is generate less than disposable income therefore providing them quality of products at lower prices are the best for their comfort. Third objective of H&M marketing plan is to use economic condition of Bangladesh to a great extent and secure low cost location where management can easily and cheaply set up plant or factor as well a brick and mortar stores.
Marketing programmes: In general terms, a marketing program can be defined as the activities which are coordinated and designed thoughtfully to achieve the marketing objectives. Furthermore, it is the duty of top level management of Hennes & Mauritz company to undertake approach of segmentation, targeting and positioning to establish business within the market of Bangladesh.
Segmentation strategy – The main aim of using this strategy for H&M Company is that it will help them to divide its customer base into different groups and according to that provide them products and services. Further, this assist management in satisfying the needs and wants of target group in cost effective manner (Easey, 2009). On the basis of sector or industry in which Hennes & Mauritz Company operates, Demographic segmentation strategy would be feasible. This will assist managers in dividing range of clothing and fast fashion items into different categories such as age, marital status, gender, ethnicity, sexuality and occupation. Therefore, by the means of demographic segmentation approach, H&M will be able to establish its business in Bangladesh and create demand for its cheap yet quality of products.
Targeting – After segmentation, management should define its target market. According to the product line of H&M (Fast Fashion items) teenagers and young people are most likely the target segment. Therefore, this strategy provide feasible strategic direction to the management by the means of which company like H&M can establish its business in new market like Bangladesh.
Positioning – On the basis of economic condition in Bangladesh, Board of Directors of H&M are planning to position business in low cost areas where they can easily execute business functioning and attract large audience to generate higher revenues (Wood, 2007).
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In addition to five P's will play vital role for H&M and it is crucial to undertaken them while making marketing plan.
- Product – It is the physical identity of H&M in the new market of Bangladesh. However, firm is renown for its fast fashion items which are considered as quality products at cheaper prices.
- Price – It is one of the major performance boaster for H&M because their pricing strategy is to provide products at lower cost with aim of attaining competitive edge.
- Place – Place can be defined as where and when company will offer its products and services. However, it is important for top level management of H&M Company to ensure that they adopts best and appropriate means of distribution channel so that reach towards customers can be enhanced (Lynn, Bennett and Joines, 2009).
- Promotion – Nowadays, there are various effective promotional and marketing approach that can play vital role in creating awareness about company's products and services as well as create brand image within target market. Therefore, it is essential for top level management of H&M to undertake traditional as well as digital means of promoting products so that they can attract large audience.
- People – Human resource are the most significant aspect of the firm. However, being the biggest buyer of Bangladesh, Management should employee local people for developing clothes (Kapferer, 2012). The main advantage of adopting this approach of recruitment is that, this will help company to treat customers in their respective franchise stores appropriately.
Implementation: In general marketing without implementation is just like trying to score profits without taking essential or necessary shots or risks. In regards to this, implementation is one the biggest challenges that companies faces while expanding business in new market. According to present given scenario, management in order to implement above stated marketing plan has to undertake various effective approach. Operating in such a competitive sector it is crucial for marketing manager to ensure that he or she uses best possible approach to implement the plan. For instance, in order to promote products and services within the highly conservative market of Bangladesh, management has to use personal relation, direct mail, advertising, use of social media, traditional marketing in order to reach maximum number of people and influence them to purchase products and services of H&M Company (Bhardwaj and Fairhurst, 2010). On the other hand, selection process is another major issue for the management as they have to make sure that employee selected are from same ethnic background as the target market population so that easy functioning of selling products and services can be accomplished. Therefore, in this context implementation play a vital role success of marketing plan.
Budgeting and controlling: Budgets play a vital role in overall functioning of business enterprise. However, budgets are important but often overlooked aspect of operational excellence. The main aim of having budget is to compare actual performance with budget assumptions (Sheikh, 2008). It is very crucial for managers to understand the deviations so that potential measures can be undertaken for future contingency. Most importantly, budgeting provides appropriate guidance to the manager in regards to allocate funds effectively and adequately. According to the present case, H&M Company can invest high money in advertisement because there is nil establishment cost. Budget should meet different needs such as: objectives and forecasting have better sync, sets realistic and achievable targets etc (Nguyen, 2010). Therefore, using appropriate budgeting techniques and approaches will help managers to execute overall functioning feasibly.
Contingency plan can be defined as the process by the means of which company prepares to respond coherently to the future unplanned events. However, it is also refereed as the plan B, by the top level management which is undertaken when company is facing adverse situation. In the present case, contingency plan is prepare with the vision of lack of funds. In context to this, if top level management is unable to raise adequate funds for the promotional campaign in Bangladesh than, management will go for this contingency plan in which cost occurred is low as compared to actual marketing budget. Therefore, for this company is using low cost strategy with the help of which all the extra tools and techniques will be deducted and the most essential one will be followed in regards to market the products and services in the target market.
In conclusion to the above study, it can be stated that, H&M Company in order to accomplish its business in Bangladesh then have to alter some of the aspects which are used in Swedish market conditions. However, study illustrates the current marketing approach used by H&M in comparison to their competitors. In addition to it, report highlights latest trends and development that need to be undertaken for running business operations in retail clothing industry. Thereafter, marketing plan has been framed for the establishing business operation of H&M in Bangladesh.
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- Nguyen, H., 2011. Facebook Marketing for Fashion Industry. Journal of Retail fashion industry. 2(2). pp. 21 – 26.
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