Hennes and Mauritz is a Swedish company, which deals with clothing and is famous for fashionable and inexpensive offers. It was started in Sweden in 1947 by Erling Pearson where it sold women’s clothing and later expanded to supply of men’s clothing. This company is popular for quality and durability of clothes and its trendy fashion. The goal of the company is to offer innovative designs that satisfy needs and preferences of clients across the world. As a marketing executive of H&M Company, I intend to present this report by addressing the following issues:
The extent at which H & M is market oriented is evident when it organizes its products, services, and activities to satisfy the needs and wants of the customers. Concerning H&M, it is clear that the organization adheres to the philosophy of market orientation by focusing on what the customers require before manufacturing their products, and exhibiting on sale. Market orientation at H& M stores is also evident when the company identifies the continuing slump in world economy, which makes it hard for clients to purchase expensive fashion clothes. As a result, the company initiates the idea of marketing fashionable and trendy clothes, affordable for a common customer.
H&M Company accomplishes this strategy by putting their trust in the market orientation school of thought. For instance, the company holds strong business foundations across the US and Europe, although the manner in which they sell and market their products is different. In Europe, H&M is market oriented because it is more of a department store. On the other hand, in the US the company focuses on trendy and fashionable products that suit young women. Generally, H&M stores are market oriented when they keep consumers and their wants in mind while launching and designing new product line. Ann-Sofie Johansson, who works as a designer at H&M, acknowledges that the customer requirements are vital. She goes ahead and gives an example, which she asks individuals in the subway of ideas they fancy most concerning fashion.
This report also presents approaches which shed light to the public on account of H&M success and company through remaining competitive over years and becoming market oriented. The market orientation tactics of the company are evident when the company offers, and generates value that favors customers when compared to competitors. This approach further paves way for the company to become successful and grow. The market-oriented strategy of H&M focuses on the needs of buyers and seeks the best way of creating satisfaction in consumers.
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The first step of this market oriented strategy entails identification of specific target group in a given segment. The second step is that H& M stores focus their efforts in understanding the needs of the group and delivering their ordered value to meet the satisfaction of the clients. In using this approach in market orientation, the difficult part which the company encounters is when it comes to identifying needs of customers which in some circumstances they do not appear expressed and vary from obvious to subtle. As a result, the H&M marketers anticipate and go to extent of preparation to cater for needs which are not available a process that is also termed as creative marketing.
The market orientation of H&M is also evident when the company applies the approach of integrated marketing. This incorporates cooperation effort by all the working departments in the company which work towards a common objective of delivering the greatest value which satisfies the client. To accomplish this as a marketing executive and the entire team, we ensure that we allocate sufficient resources in the company, to achieve the goal of delivering value to the clients.
H&M exhibit their market oriented status when the company embraces the above stated principles, and investigates on concrete actions and practices. In a bid to be ahead of trends, the company sends trends potters such as Anne Sophie Johnson to the streets or even to the foreign countries to collect details about the preferences and tastes of individuals. The sense of market orientation of H& M is also affirmed through the quality of company managers who closely interact with the consumers by getting impressions on how they perceive the company products.
In my position as a marketing executive of H&M Company, I also wish to point out the bases for segmentation which the store adopts. Firstly, H&M avails its stores in different segments depending with the distinct wants and needs of clients. For instance, it avails fashion trends that suit the youth and the elderly, and the company ensures that its stores are present in different countries such as US and Europe. This base of segmentation is beneficial to the company because it concentrates force to subdividing and marketing energy to acquire competitive status within the segment. Through segmentation, it is easier for the marketer to understand the needs, and demands of the target market.
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As a result of segmentation, H&M extends its market share which increases profitability of the company. The benefits of market share to the company are effective through introducing the effective leadership strategy. The other base of segmentation adopted by H&M results from examination of Estonian clothing that involved retail market in the view of positioning the Madonna brand. Adoption of this market segmentation covers the current economic condition, competitors, customers, and the possibility of a business that is successful in the market. H&M also opened their pioneer stores in Baltic and Riga countries in 2012, which was beneficial in that it led to expansion of the states and granted H&M high competition level.
Consumer analysis is a base of segmentation which H&M adopts to target their market by identifying the products, which their clients appreciate hence; design and sell to them to meet their satisfaction. The company also adopts behavioral segmentation where marketers interact with the clients to know their views concerning the latest stock and ideas the company requires to attract more customers. H&M stores also adopt benefit segmentation which is evident when the company sells trendy and fashionable clothes at a lower price than other stores to meet the needs of a common person in society.
The benefit associated with practice of segmentation is evident when it offers improved matching needs to the customers. For instance, at H&M stores, needs of customers differ and it becomes beneficial to the company when it creates separate products for each segment. Benefit segmentation is, therefore, advantageous because it enhances profits for the company, especially in a situation when the sensitivity of customers to price varies. Market segmentation enables the business to raise average prices which results to subsequent profits.
In this company, market segmentation leads to better growth opportunities by building sales. H&M stores sell products at lower price to new clients to welcome them back again to the store. The practice of segmentation also leads to retention of customers through marketing products, which appeal to customers based on their preferences and social status. Market segmentation also results to targeting communications at the business place through spreading the business message to relevant customers. H&M applies this practice by ensuring that they reach the customers by selling products at lower cost.
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The risks associated with this practice of segmentation encounter creation of unfavorable impression about their brands. For instance, concentrating on price and sales and neglecting the brand image may pose a risk to the company. The sign of successful segmentation is when customers in a given segment associate the company brands with common products. The practice of market segmentation can also be risky when the company adopts poor marketing strategy, hence, fails to attract customers. This implies that the segmentation practice which companies such as H&M adopt can only become successful when all the stores in different countries employ marketing good tactics and avoid the risks of facing loses.
This report also incorporates marketing benefits to H&M of commissioning Karl Lagerfeld, Stella McCartney, and Matthew Williamson in designing limited-edition of clothing ranges. The designer Karl Lagerfeld benefits the company and its marketing strategy when he focuses in designing outfits which fit slim and slender people. Lagerfeld benefits the company by incorporating designer labels, which widens the brand awareness leading to alternate revenue streams during challenging times in the economy. Lagerfeld designs clothes which increase market benefits of the company, especially when his design capitalizes on what plenty of customers find a rare opportunity in purchasing products that usually are not affordable.
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Thus, the products created by Lagerfeld for the company increased its marketing benefits. These products were sold in a number of stores included those in Atlantic cities, London, Munich and Milan. This also hit the daily news where H&M was granted a status of the most famous and luxury company making exclusive clothes collections. The event took place in November 2004, and went ahead to market the name of the company across Europe leading to its financial success. During the time when H&M commissioned Lagerfeld the responsibility of designing clothes, the company saw the fourth quarter returns increasing to 22 percent.
Stella McCartney responded to the commissioning of H&M in 2005, and this enabled the designer to spread ethos in ethical fashion. For instance, her marketing benefits are evident to H&M through her organic cotton manufactured T-shirts. This further led to dedicating 25 percent of the sales to support charities related to animal welfare. McCartney collaboration with H&M attracted market benefits especially when her designs reached a large number of female customers, hence, increasing its popularity and sale of products. McCartney collaboration with the company led to a high profile when it came to campaigns in advertising. In addition, her design products lead to making use of a launch party, which promoted the collection and increased marketing strategy of the company. Her collections also increased sales of the company, and the range involved dresses which sold for 99.90 dollars. The marketing benefits that McCartney brought to H&M Company are confirmed by the fact that her collections were sold over 1,000 dollars over that time.
On the other hand, Mathew Williamson also contributed to market benefits at H&M by increasing popularity of the company, and the designs of the clothes he produced. Williamson created a signature style which became affordable to the large group of people. Mathew Williamson also earned H&M marketing benefits by extending less risky new product lines. Designer Williamson started from producing women’s wear before extending to men’s wear, which earned popularity for both the company and himself. Williamson collection to H&M was full of vibrant colors and nature inspired patterns which contributed to the increase in product marketing of the company. His exclusive design clothes embody the style and spirit of H&M. He brought marketing benefits to the company through the price range for shorts which went for 55 dollars, and dresses 400 dollars each.
The company encounters the marketing challenges, which it is likely to face in the future. These include: climate change, long term availability of natural resources, wages at supplier factories and working conditions. Starting with climate change, it will affect the H&M operation by interfering with the products distribution. The change in climate may threaten the natural resources, which will result to less manufacturing of products leading to a situation where the company fails to satisfy the needs of customers. This may occur when the stock reduces and the number of customers increases. On the other hand, climate change may cause marketing challenges when it leads to situations such as mass migrations, that is, when the potential customers move to places that are far from H&M stores, hence the company may experience reduction of sales.
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Working conditions might also pose marketing challenges at H&M stores because each year, the company increases the number of stores and new markets across the world. This implies that the company will be on the run to search for the new team members to expand its marketing strategies. H&M group employs approximately 104,000 workers to allocated in 2,800 stores on 40 markets. However, the issue of marketing challenges will rise because; with increased number of stores, the company will have trouble in adopting cultures of their clients in new places. The increase in expansion of stores will result in marketing challenges, since, unlike before, and in the present when the employees take the responsibility by appreciating the ideas of each customer as a vital part for improvement, in the future their concern may strictly be on sales.
Working conditions will also affect marketing strategies of the company when the company keeps changing job descriptions and positions in various cities. This implies that when there is frequent movement of employees, it affects interaction and the entire marketing process as customers have to meet different marketers. It is suitable for the customers to operate with constant employees to initiate familiarity in the business. Personality of the employees is another important matter to the company. In the future, when H&M will relocate employees to different cities and positions, it may result to a situation where some workers may not fulfill the needs of the clients due to bad conduct, hence, reduceing the number of customers.
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The long term availability of natural resources assists H&M company to enhance its sustainability and at same time maintain commitment of their customers. For instance, H&M uses cotton, and the plan of the company by 2020 is to ensure that the company receives cotton from sustainable places. This means that incase of shortage of the natural resources might affect the rate at which the company manufactures and markets its products. This, in its turn, may pose a challenge by failing to satisfy the requirements of customers and face stiff competition at the market. It is also clear that the company lacks direct means of sourcing raw materials which may contribute to scarcity of long term supply of raw materials. The wages at the supplier factories will also affect marketing at H&M stores in that if they are not sustainable and fair, it will affect the supply chain. Poor wages at the suppliers’ factories will also lead to a situation where it will affect the joint projects, which are vital to both H&M and the entire industry. This might affect the business concept of giving customers quality, and fashionable products as well as cause issues to the entire marketing process.
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The approach which H&M Company incorporates to boost its business is effective, since it ensures that a random customer can access the products which they sell. It is also evident that the products are fashionable and trendy which meets needs and preferences of all the customers. This makes the company to be competitive and ahead of others, hence, increases its marketing strategies across the world.