H&M
(Hennes and Mauritz)
Harmeen Khosa
Fashion Retail Market Characteristics Market Size ❖ ❖ ❖
large market with a variety of sectors multiple strong competitors extensive market of retail products ranging
from menswear, maternity wear, kids wear, everyday clothing, etc. Market Growth ❖ ❖ ❖
fashion is always changing = represents the market continuous ups and downs depending on seasons Brings European (sweden based) trends to other markets = room for leadership
Market Share Forever 21 24.4% Zara 21.6%
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H&M 19%
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Express 15.2%
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TopShop 13.8% NY&C 6%
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❖ Market Oriented -designs and fabricates clothes on the basis of the latest trends in the market -close involvement with consumers, eg: merchandise managers invest time to collect consumers’ impressions of the range of products that are available -buyers and designers tour stores in various countries to assess the results of sales to fulfill the objective of understanding variations in the performance of particular items
❖ Marketing Goods -Sells retail clothing and accessories -Collects profit -Doesn’t offer any services
Marketing Mix PRODUCT
PRICE
Modern retail clothing Affordable to slightly and accessories for above affordable. women, men, children, ($10-$200) plus sizes, maternity, etc. ranging from everyday to formal wear. PROMOTION
PLACE
Celebrity guest designers (David Beckham, Beyonce. Karl Lagerfeld), editorial campaigns, seasonal sales, coupons,
Around 2800 independent stores in 53 countries around the world.
Marketing Mix continued PROCESS
PEOPLE
Works with around 800 long term suppliers + invests significant resources into sustainability of processing --> customers can feel confident that products are designed and produced with
Employs approx 120,000 people worldwide w/ anti discrimination and global diversity policy Great promotional plans lead to more
PHYSICAL EVIDENCE/ PACKAGING Minimalist designs allow shopping bags/gift boxes/etc. to be reused Interior store designs and fitting rooms follow a well liked modern and simplistic
Marketing Audit THREATS
WEAKNESS ES -large variety (lines by gender, -mass production, lack of age, style, season) uniqueness/individuality -high product adaptability
-no online shopping internationally
-partnerships w/ well -limitations towards sizes, knows designers and celebrities (Karl Lagerfeld, David Beckham,sells only standard sizes Beyonce, Stella McCartney, etc)
-many competitors in the low to mid ranged fashion market -online -Forever 21: slightly lower shopping price (worldwide) range, larger variety -Zara: slightly higher price -emphasis on range, higher quality personal identity
-approach of new markets -produces in and countries -global presence, locations around the mass volumes = world often leads to -marketing opportunities excess supply through increased use of social media
STRENGT HS
OPPORTUNI TIES
Ethical Issues Pros ●
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uses more organic cotton than any other retailer (2013 - 17.6%, aims to have 100% sustainably sourced cotton by 2020) 71% management positions held by women donated >$4.5 million to “All for Children Project” through it’s partnership with the United Nations collects and reprocesses old clothes through “ICollect”
Cons ●
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Factory fire controversies- violation of basic fire codes in approx. ¼ of their factories in Bangladesh 850,000 textile workers in Bangladesh and Cambodia reported being paid below living wage Reported for stealing artists’ work for graphic designs on multiple occasions w/o compensation
H&M factory fires and protestsvideo
“Conscious Collection” ❖ launched in Spring 2013 following sustainability controversy ❖ made completely from sustainable materials: recycled polyester, polyamide, organic linen, organic hemp, tencel®
Questionnaire - Quality vs Quantity
Questionnaire - Quality vs Quantity H&M should find
a balance between cheaper, “disposable� clothes and higher quality, expensive and long lasting clothes.
Demograp Geographi Psychograp hics cs hics -Most age
groups + genders kids collections: newborns14yrs mens collections: teens-middle aged womens collections: teens-middle aged -Suits slightly
-Generally is Lifestyles: -The working located in larger European metropolitan areas, however they are starting to introduce more international flagship stores -Often designs stores around
woman/man: blazers, pencil skirts, dress shirts, structured handbags -Teenagers: jeans, loud graphic prints, oversized sweaters, hats -Athletes: Running shorts,
Positi on Map
High Price
High Quality
Low Quality
Low Price
Product Life Cycle H&M has reached a mature point after almost 70 years of being a popular retail destination. As they are already an extremely established company, they have no more room for growth. However, they continue to offer trendy, relevant and in style clothing so they are not yet proceeding to decline.
Branding No slogan but ads include product name and price- “products speak for themselves�
-Letters are equally distant, left side = thinner than right -Forms are rounded yet straight, symmetry within asymmetry -Meant to be psychologically/visually pleasing and calming
International Markets Entered foreign markets slowly, on a small scale, to reduce risk and have more time to gain information from the success and failure of other countries â—?
-founded in Sweden 1947 Expanded to North Europe (Norway/Denmark) within 20 years - Entered the UK market in 1976 and the North American Market approx 15 years later -Extended the business to Middle East/Asian Market only 7-8 years ago
ECommerce/Web Page ❖
Started eCommerce extremely late (2013) compared to it’s competitors Zara (2009) and Forever 21 (2008)
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website is easy to navigate and sleek
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offers helpful sizing charts
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no option to use a search bar to type in what you’re looking for = inconvenient and
depriving H&M of helpful demographic information ❖
only ships to parts of Europe (Sweden/Norway/Denmark/Finland/Germany/UK)
and the United States ❖
neither shipping or returns are free ($5.95 each) and you can’t return online purchases
in store vs. competitors Zara and ASOS offer free shipping and returns
Pricing Strategies ❖
Predatory Pricing: Changes prices around Christmas, end of seasons, etc. to compete w/ rivals (Zara, Asos)
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Psychological Pricing: Lists most products ending with .99 or .95 rather than . 00 to trick others into thinking the item is a good deal
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Price leadership: Brings new trends and innovative pieces to American markets from Europe (HQ), many other stores “follow the leader”
Sources ❖
"Equities." H & M Hennes & Mauritz AB, HM B:STO Summary. N.p., n.d. Web. 20 Mar. 2014. <http://markets.ft.com/research/Markets/Tearsheets/Summary?s=HM%20B: STO>.
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"H&M." Wikipedia. Wikimedia Foundation, 04 July 2014. Web. 24 Mar. 2014. <http: //en.wikipedia.org/wiki/H%26M>.
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"Hennes & Mauritz AB History." FundingUniverse. N.p., n.d. Web. 02 Apr. 2014. <http: //www.fundinguniverse.com/company-histories/hennes-mauritz-ab-history/>.
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"Hennes & Mauritz AB History." FundingUniverse. N.p., n.d. Web. 02 Apr. 2014. <http: //www.fundinguniverse.com/company-histories/hennes-mauritz-ab-history/>.