Price strategy marketing mix of H and M

The price strategy of H&M is designed predicated on their customers needs which is good deal and high fashion. In fact, this is the one of the biggest obstacles for H&M. If not causeing this to be happen, the special feature of H&M can't be came to the realization. How could they combine fashion and cheapness? This objective was attained by two steps: first, H&M outsources the development to countries where the labour cost is a lot lower. To control travelling cost, outsourcing was established according to different product. Those high fashion product which target at the Western european market were produced in Turkey, due to brief product life cycle. In addition, basic product are stated in Asia because they allow longer transportation time and keep lower risk. Second, the company also conduct stringent cost control plan. For example, very few executives have secretaries or have cell phone priviledge(Jobber, 2007). These two steps allow H&M to accomplish a low price fashion business.

Although H&M's low price is the foundation of success, I would argue that the low price also give H&M a image of bad quality. This image hinders H&M from keeping their customers. Whenever a young girl becomes to a middle-aged sweetheart or a school girl becomes a office girl, H&M might not exactly suits them. As a result, H&M face challenging of constantly appealing to new customers. This concern may demands more cost in campaign.


To develop an campaign strategy, a firm should first of all identify and understand target audience. (Jobber, 2007). H&M's focus on customers are young women who want more fashion towel at low price. Teenagers have plenty access to information. A multi-channel advertising strategy including advertising, internet promotion, sales promotion was adapted by H&M. These multi-channel strategy increases the coverage of H&M.

Further more, H&M's advertising strategy is highly regular with their entire marketing strategy. Relating to Jobber (2007), promotion is one element of marketing mix, so that it should adhere to the complete marketing mix. The product of H&M is good deal and high fashion which is based on their customer needs. The promotional activities of H&M give attention to both features. It is straightforward to find the posters of H&M are in elegant style and always with the price tag on the clothes. On H&M's website, price is put at clear position. Although Zara and Gap, H&M's main competition, put the purchase price online, they usually said small. On the other hand, advertising of H&M always highlights the reduced price to build knowing of their good deal.

Third, H&M conducts an eye-catching event campaign which is to invite top designer to design clothing to them, or cooperate with other companise from other domains, for example video games or car company. H&M has invited Karl Lagerfeld in 2004, Stella McCartney in 2005, and cooperated with Sims 2 in 2007. During the cooperation, mass advertising, abundant propaganda were utilised to create public awareness. This method not only improve the product but also enhance the brand image to be more fashion and upper-class. Which assistance again echoed the idea of fashion and quality. Assistance with other companies from different domains can catch the attention of customers form different groupings. For example, the sport produced by Sims and H&M propagate the trustworthiness of H&M among folks who are game players.

At previous, the campaign activities of H&M uncover a high capacity of quick response and overall concern. Because H&M outsource their creation in order to slice cost, they are really criticized for squeezing staff' payment. According to this criticism, H&M requires a series of action to act in response. They appoint watchdog to provide for the working condition, and carry out protection for environment to improve brand image. Those advertising activities are produced through conversation with customer or the whole society rather than just came up by themselves. So those solutions serve for different purposes.


The features for H&M logistics are simplicity, trustworthiness and transparency(H&M, 2010). H&M design clothes and outsource it. Basic goods are made in Asia, while classy goods are made in Turkey. Rather than getting factories, H&M chooses to own outlet stores. You can find over 2000 stores all around the globe. Merchandise produced in Asia are carried almost solely by ocean with regard to low cost. Within Europe, a lot of the goods are carried by rail. More than 90 percent of most transports are done via ocean, rail or street. Air is almost never used except faster deliveries are needed. The aim of these selections are to reduce cost. The realization of H&M's business ideas rely on the success of their syndication strategy. As Larenaudie(2004) asserts lightning turnaround 's the reason for the success of H&M.

H&M distribution route is direct distribution, from company to customers. By slicing middle transaction, it reduces cost and assures quick delivery, which echoes the idea of fastness and current economic climate. Jobber(2007) advised that channel selection is influenced by producer, product and competitive factors. H&M choose to market clothes and makeup in around 2, 000 stores which participate in H&M. Store selling, on one hand, assures basic usage of customers and helps the demand from head office go to outlet stores efficiently and appropriately. As the inventory for H&M is refreshed everyday(H&M website, 2010), direct command is important for correct adjustment in more than two thousand stores. Alternatively, handling so many stores provides go up to the managerial cost. Besides stores, H&M begins to unveiling online sale in several areas. It was suggested that well-known fashion sellers have advantages of their brand to entice customers(Marciniak and Bruce, 2004). It is therefore beneficial to take the initiative to launch online store. WHICH step could meet online customers and supplement the shortcomings of store sale.

The obstruction of marketing combination to H&M

Although marketing mix provide a basic and useful construction, it is still not enough for marketers to work through an in depth market strategy. This issue was perceived from two aspects. Firstly, marketing blend needs adjustment to particular business environment. Secondly, marketing blend is more like bones somewhat than fresh and blood which could provide clear and in depth suggestions. According to books, there are different ways to classify the the different parts of marketing blend, for example 4ps, 5ps, 7ps, etc. Those elements are not equivalently important in several business. For example, the inventory become less important in cosmetic business. Marketing blend does not straight notify what elements are worthy of special attention for a specific business(Jobber, 2007). So marketers should balance among those mix and concentrate on the most crucial ones. It is not enough to check out marketing combination exactly and actually. On the other hand, an organization has to combine marketing blend with its own situation. Meantime, marketers can not or, at least, feel hard to come up with creative and appropriate marketing approaches by only using marketing combination. For example, when decide price, marketers may need to consider competitrs' price, storability, chain positioning, deal consistency, offer elasticity, etc(Shankar and Bolton, ). But marketing mix rarely discuss at length. So marketing mixture must be enriched.

Marketing blend is inadequate to demand H&M in preserving interaction with customers. The relationship contribute to various aspects like better product design, better customer service and higher customer devotion. Although H&M conducts an observation system in their outlet stores to investigate which product is popular and which product have to be remove, there are still abundant complaint. There are perception cap between your desired brand image of the company and the perceived one of customers(Hines, Cheng and Dirt, 2007). Marketing blend, however, is not enough involving about the relationship with customer.

(Sorry, I have not finished, and still have questions. First, H&M launches franchise only in Middle East, nonetheless they have not do that when moved into other countries. I am still on the middle to find more materials, therefore i can understand deeply. )

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