GRIN - Evaluation of ZARA and H&M. Marketing Mix, PR, Corporate Finance Strategy and CSR (2024)

Table of contents

Product Strategy

Pricing Strategy

Place & Distribution Strategy

Promotion & Advertising Strategy

MARKET SEGMENT

PUBLIC RELATIONS

INCOME STATEMENTS AND BALANCE SHEET

CORPORATE SOCIAL RESPONSIBILITY

REFERENCES

MARKETING MIX

Marketing Mix of Zara and H&M analyses the brand covers 4Ps (Product, Price, Place, Promotion) and explains their marketing strategy. Marketing strategy helps companies achieve business goals & objectives, and marketing mix (4Ps) is the widely used framework to define the strategies.

Product Strategy:

Zara is one of the leading luxury fashion labels in the world. Zara’s offer products for men, women and children. It offers jeans, trousers, tops, skirts, knitwear, T-shirts, shoes, bags and accessories. All these are the product strategy in the marketing mix of Zara. It is a one stop solution for everyone whether you want to buy formals or causals.

H&M is a clothing retail company. It offers fast fashion clothing for men, women and children. H&M offers following clothing brands in various countries across the globe: The range includes everything from designer collaborations to everyday basics and yoga wear.

Pricing Strategy:

Zara’s products are high on fashion and low on prices. It provides latest fashion at much lower prices in all its international stores as compared to other competing international brands. Zara follows low pricing strategy. It can afford to do that as it doesn’t spend enormous amount of money on advertisem*nts and raw material. It has an overall low cost structure compared to its competitors.

H&M offers high quality clothes at a premium price. As compared to both of these brands, H&M products are prices relatively lower as a part of it marketing mix pricing strategy. These is due to lower cost of manufacturing and transportation costs by H&M (Main focus is given on cost minimization). As compared to Zara H&M offers more variety of products. On an average H&M products are prices at $25 whereas that of Zara are $45. High quality and considerably lower prices attract the youth and hence leads to increase in sales for the company.

Place & Distribution Strategy:

Zara has enormous reach with stores in 88 countries, with over 6500 outlets. Zara also sells through its online store. Zara’s supply chain is what provides them a competitive advantage. It uses its unique business model to bring new products and fashion to the market in shortest time possible. Store managers send orders to the headquarters twice a week based on the sales data of the store and the shoppers’ preferences.

H&M sells its products through its exclusive stores located in major cities across the globe (4135 stores). In some countries due to regulatory norms, H&M offers its products through franchising partners. It also offers its products through online stores from where the customer can choose from the list of available products and purchase them through online payment. The products are delivered at your stated address. The products are manufactured in countries where cheap labor is available in order to reduce costs. The clothes are designed by H&M and its other brands according to segment they are targeting.

Promotion & Advertising Strategy:

Zara barely spends any money on advertising. Unlike its competitors, Zara doesn’t engage in any flashy campaigns. This is the reason why Zara’s advertisem*nts are not visible on television. Zara’s unique selling proposition is its short processing time, a large variety of styles and affordable pricing. It relies on word of mouth promotion and social media rather than expensive marketing tools. Zara’s social media reach is quite exceptional.

Since H&M group has a wide range of product portfolio catering to different segments, it uses multi-channel promotional strategy in its marketing mix. H&M comes with creative ads which focus on its latest innovative designs. Each brand handles its own marketing decisions. The ads are telecasted at regular intervals and on channels mainly watched by youth, to increase its awareness.

MARKET SEGMENT

H&M designers design fashionable and trendy apparel products that are of respectable quality. Their product line includes t-shirts, fashion shirts, cardigans, jeans, pants, undergarments, dresses, jackets, shoes, purses, jewelry, and other fashionable trendy accessories. H&M is able to offer their consumers fine quality apparel at an economically friendly price. Hennes & Maurtiz is able to provide superb quality products for a low price due to their 16 reduction of a middle man who buys the material for the company and sells the material for a higher margin. H&M buys their apparel fabrics in bulk straight from the suppliers (H&M Clothing, 2009). According to the Reference USA company report (2009), H&M mainly operates in North America, Europe, and Asia and the company’s headquarters is located in Stockholm, Sweden. H&M stationed its stores in highly profitable cities around the world in order to achieve the most benefits of the company. Hennes & Mauritzs’ promotional strategy includes mobile marketing through SMS text messaging, celebrities, charities, and popular music artists (Butcher, 2009). For our group’s marketing plan for H&M, we all noticed that their advertising is minimal. For this, our group decided that H&M should incorporate more of their company budget into more advertising; advertising in more teen and early twenties targeted magazines, Facebook, as well as teen crazed chat websites. With these advertisem*nts, the company’s main focus point should be their pricing to get consumers interested in the brand. Our group also decided that the company should broaden its location stores throughout the USA. For the products being sold throughout the United States, there should be a small selection in each store dedicated to a fashion collection. This way it keeps the consumers interested in new items as well as persuades them to become more interested in the brand itself by perhaps checking out the company website to see if they can get more fashionable items. As of now, there are almost twice as many stores in Europe as well as an online store while the USA only has select few stores over the west and east coast. H&M has proven itself to be quite successful so far in the United States however could be far more successful with an online store. Opening an online website to Americans would have a large impact on sales and brand image.

Zara belongs to the Inditex group. It is known for its perfect combination of high end, chic clothing at affordable prices. It is this quality of the brand that makes it a go-to fashion brand for everyone. Zara is an eco-friendly company. It is one of the few brands known to produce 100% toxic free clothes. Zara is known for introducing latest fashion trends in the market. Zara gives fast response to customer’s desires and changing preferences. It has introduced the concept of “fast fashion”. Their mission is to adapt to what the customers want as quickly as possible, offering them sustainable fashion. Inditex's vision is to offer products of the highest quality to all its customers at the same time as striving to develop a business that is sustainable. Zara has built its strategy around consumer trends and therefore, it is able to quickly adapt to the changing tastes of its customers. To this end and, as explained throughout the report, the Spanish brand has developed a very efficient supply chain that allows the marketing of new fashions as soon as the trend is created. In short, Zara's strategy is based on speed and flexibility. Zara, however, spent little money on advertising. Its stores are the major advertising claim together with word of mouth technique, key to its expansion throughout the world. It also has a different pricing strategy depending on the country.

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