group 2 project assignment mkt101 1

Information H&M is a global fashion brand, the second-largest fashion retailer in the world after Spain''''s Inditex the parent company of Zara, founded by Erling Persson with its first sto

GROUP ASSIGNMENT MARKETING PRINCIPLES MKT101 –

Academic year: SPRING SEMESTER 2023 –

Assignment: GROUP Submission mode: Online STUDENT INFORMATION

Task: As a Team member of a BA Agency, an expert in Marketing Services, your CEO asks you to prepare the marketing report to improve the client company's marketing effectiveness In the report, you are asked to identify any marketing issues existing in client’s company

You need to use relevant information to analyze and suggest recommendations to convince the client and put this plan into practice (you are free to adjust the structure/content)

I Introduction

1 Information

H&M is a global fashion brand, the second-largest fashion retailer in the world after Spain's Inditex (the parent company of Zara), founded by Erling Persson with its first store established in Västerås, Sweden The business’s original name was “Hennes” because the store at the time only sold women's clothing It wasn't until 1968, that Persson bought the brand and changed its name to Hennes & Mauritz to bring menswear to the line Immediately after the merger and officially rebranded to abbreviated H&M, the company's expansion gradually began

to expand beyond the Swedish borders Today, H&M is one of the largest fashion brands in the world, with more than 5,000 stores in more than 70 countries The head of Marketing at H&M is Pascal Brun, Global Head of Marketing Pascal Brun manages H&M's marketing activities globally, including advertising, communication, customer connection and brand development strategies Pascal Brun joined H&M in 2015 and before that he worked at other big companies like Burberry and Louis Vuitton H&M is known for its fast fashion offering, with many new products being updated on a seasonal basis HM has a total of 800 large and small factories, 3,500 stores and nearly 100,000 employees (Minh, 2017) A company listed on the Stockholm Stock Exchange and part of the OMX Stockholm 30 index For the financial year ending November

2021, H&M reported sales of over 192 billion SEK (approximately $21 billion) and a net profit

of more than SEK 4.6 billion (approximately $506 million) This brand is growing and expanding rapidly Currently, H&M is increasingly entering the Asian market In 2015, H&M focused most

on India In Vietnam, H&M has also opened up to 8 stores after just over 2 years of entering (Interesting information about famous brand H&M, 2022) H&M is truly a global brand with diverse designs that create youthfulness and freshness for customers' experiences With only a very affordable price, consumers can own the most trendy outfits that we only see from luxury brands Cheap, beautiful, and trend-catching are probably the three words that most accurately

describe fast fashion (Minh, Things you may not know about the H&M affordable fashion brand., 2017)

2 Reasons of your selection

As a fashion brand with extremely high information coverage, many people are interested

in reaching many different customers A famous fast fashion brand in the world in general and Vietnam in particular, we will find this to be a fashion brand worth choosing The vision of a fashion playground always creates leading fashion trends that are environmentally friendly, fair and respectful of differences Learn how their ideas work and how their direction is going towards consumers The business mission is to create sustainable positive change and improve lives by investing in people, communities and groundbreaking ideas.” Along with the

development of fast fashion, H&M is still applying this strategy in all of its production and business activities, however, in the face of increasing criticism about the unpredictable harmful effects of fast fashion, the company has now made the most drastic changes specified in the communication message Not only are there strong communication strategies, but translations have meaning and goals Since a large fashion store will not be immune to communication mistakes, let's explore the strengths and weaknesses of marketing with H&M

II Market research

1 The H&M SWOT Analysis

a Strengths of H&M

Effective Strategies Fashion retail business relies on effective sales strategies to increase merchandise sales H&M uses fast fashion to provide design panels with the latest fashion trends This strategy allows for the rapid movement of goods from the design desk to the showroom floor H&M offers its products in 5,076 stores in 74 markets spread across 6 continents From Europe to North America, Asia, Australia, Africa, and Latin America, the company's global operations help reduce risk and enhance sustainability and stability Price matters no matter what the product is The company strives to be the most sustainable fashion

retailer by harnessing the flexibility and cost-effectiveness of the fast fashion model to offer high-quality products at cheaper prices The variety of products attracts more consumers from clothes to cosmetics, shoes, boiled eggs, blankets, pots, candle holders, etc., the company's unique brands such as Cheap Monday, H&M Home and ARKET offer a wide range of products Since its inception, H&M has adopted a customer-centric approach to its business This has allowed the company to build a valuable brand In 2019, it was ranked 58th most valuable brand in the world In the digital age, companies that accept and exploit the internet more efficiently will have a huge advantage H&M has a strong online presence with a large audience across multiple platforms, tailored to drive sales through eCommerce Global companies require an efficient supply chain to connect with suppliers and consumers more efficiently, H&M's NextGen supply chain is very successful Focusing on the interests of the community is an effective way to build a sustainable business H&M has closed stores in the

US to support the protesters and is also focused on helping communities affected by the pandemic in Bangladesh (Bhasin, 2019)

b Weaknesses of H&M

Relying too heavily on Outsourcing, instead of manufacturing itself, H&M

outsources most of its manufacturing to more than 900 independent suppliers in Europe and Asia Although this strategy contributed to the company's success, it placed the company in dependence on suppliers There are many controversial products, in 2018 customers worldwide boycotted H&M products for promoting racism The company used a black child

to model a hoodie that featured the phrase 'Coolest monkey in the jungle' The problem with H&M's fast fashion model is its reliance on fashion trends set by major designer brands This

is a major weakness because fashionistas are attracted to new and radical designs rather than existing fashion trends, boring times (Bhasin, 2019)

c Opportunity of H&M

Retailers offer a steady variety of products and earn more H&M can improve its bottom line by diversifying its offerings to include sportswear Compared to other fashion retailers like Zara, H&M is far behind in terms of exploiting e-commerce channels and revenue from online sales As more consumers shop online, the company can benefit from getting the most out of E-Commerce Always focused on emerging markets from Asia to Africa, the growing middle class in emerging markets offers fashion retailers like H&M the greatest growth potential At the same time, by expanding through Acquisitions and Mergers,

to overcome barriers to entry in some markets, companies exploit the benefits of mergers and acquisitions H&M may expand into related markets such as second-hand clothing through an acquisition or merger with a market competitor (Bhasin, 2019)

d Threat of H&M

Although clothing is a necessity, trendy clothes, shoes, and underwear are luxuries

As Europe and other regions fall into recession, fashion retailers like H&M will experience sharp declines in sales and profits or may even go bankrupt H&M is facing stiff competition from new and old brands like Zara, Macy's, Gap, Boohoo, etc Competitors are all looking to increase market share and reduce demand for H&M products The fashion industry has the largest number of counterfeit goods With the growing global trade in counterfeit goods, profits from H&M's high-end designer brands could decline in the future Globally, retailers' margins are dwindling due to rising labor and raw material costs Rising operating and production costs threaten H&M's profitability H&M outsources a large portion of its manufacturing to Asia, which is a perfect target for tariffs As a Swedish company, H&M could be a target for the UK in the aftermath of Brexit The success of global companies like H&M depends on an uninterrupted flow of raw materials and finished products Lockdowns and quarantines in the event of another future global pandemic could disrupt flows and reduce H&M's revenue and profits (Bhasin, 2019)

2 Market research

a The company

H&M produces and sells fashion products, accessories, and underwear for both men and women The group also owns and manages other brands including COS, Weekday, Cheap Monday, Monki, and ARKET Since 2004, H&M has implemented sustainable and ethical policies in production and supply of products, including commitments to use recycled fabrics and materials, reduce emissions and wastewater in production, create fair employment opportunities, and improve conditions for manufacturers in developing countries They have also made commitments to achieve sustainable goals in the future, including using 100% sustainable and recycled fabrics and materials by 2030, and reducing emissions throughout their supply chain (icheck, 2022)

b Suppliers

H&M is an international corporation, so their suppliers come from all over the world However, H&M understands that clothing production can have negative impacts on the environment and the health of workers if not done properly Therefore, H&M has established strict standards for their suppliers, ensuring that all products are produced according to sustainable and ethical standards Specifically, H&M regularly monitors and evaluates their suppliers, ensuring that they comply with human rights standards, protect the environment, and ensure the health and safety of workers To achieve this, H&M has established a system

of checks and evaluations of their suppliers, including regular inspections, monitoring of production, ensuring worker safety, and implementing measures to minimize the impact of products on the environment Additionally, H&M implements training programs for their suppliers, helping them improve product quality and improve ethical and sustainable standards in production H&M also makes clear commitments to sustainability and ethics in production, while striving to achieve its goals of protecting the environment, society, and the economy They do business with over 602 commercial product suppliers producing products for their brands at over 1,519 tier one factories in Europe, Asia, and Africa (hmgroup, 2023)

c Marketing intermediaries

Marketing intermediaries, also known as "marketing intermediaries", are companies

or organizations that make a company's products more accessible to customers With H&M, their marketing intermediaries include: First, retailers are one of the most important ways for customers to access H&M products H&M has more than 5,000 stores worldwide, including outlet stores, stores and online sales channels These stores are designed to create an enjoyable and convenient shopping experience for customers H&M also offers a wide range

of products, from men's, women's, and children's clothing to accessories, to meet the needs of

a wide range of customers Second, distributors also play an important role in helping to bring H&M products to stores around the world H&M has an extensive distribution network to get their products to different points of sale quickly and efficiently H&M distributors help bring products to stores around the world and ensure that products are always available for purchase Third, H&M often uses advertising partners to introduce their products to customers These partners include advertising agencies, media and celebrities to create effective advertising campaigns for their products H&M often uses creative and interesting advertising campaigns to attract customers' attention These campaigns often use diverse media channels such as television, magazines, websites and social networks Manufacturers are one of H&M's most important marketing intermediaries As H&M is a large fashion retailer, they have a great demand for fashion products and accessories They need to align with manufacturers to meet the needs of customers in the most efficient way

d Customers

H&M's customers are fashion enthusiasts and want to buy high-quality fashion products at reasonable prices H&M's customers come from all over the world, with a diversity of ages, cultures and styles For young people, H&M is a popular fashion brand because they always update the latest products and match the trends of young people They offer a wide range of fashion products from clothes, shoes to accessories, with a variety of

designs and colors With prices suitable for students and young people, H&M is a top choice for young people when shopping for fashion H&M is also focused on value consumers, with high quality products offered at affordable prices The brand has been known for its fast fashion, allowing consumers to shop for the latest fashions at reasonable prices H&M also creates meaningful and sustainable fashion products, using natural materials and cutting-edge manufacturing technology to minimize its environmental impact Customers interested in environmental protection and humanitarian standards are also an important customer group for H&M The brand is committed to environmental and humane standards and policies, including the use of sustainable materials and advanced manufacturing technology to minimize its impact on the environment H&M also focuses on eco-friendly product lines, including products made from recycled materials and other eco-friendly products With an extensive sales network with more than 5,000 stores worldwide and the goal of serving global customers H&M offers a wide range of fashion products that suit the culture and style of each country, from Europe and America to Asia and Africa To create access to global customers, H&M invests heavily in market research and trend analysis to meet the needs of each local market As a result, this brand has become one of the most loved and trusted fashion brands in the world, attracting the attention of millions of customers from all over the world

e Competitors

H&M operates in the fashion and accessories industry However, as mentioned above, the fashion and accessories market is a fiercely competitive industry H&M faces many competitors in the same industry, with the biggest ones being Zara, Fast Retailing, Gap Inc., Primark, and Forever 21 Zara is one of H&M's biggest competitors and is also a famous global fashion brand Zara is known for the high quality of its products, fast product updates, and unique design style It also focuses on creating uniqueness with distinctive products and expressing the fashion style of each customer Fast Retailing is the conglomerate that owns

the Uniqlo brand, also one of H&M's largest competitors Uniqlo is known for its high-quality and affordable fashion products, especially their high-high-quality jackets Gap Inc is one

of the most popular fashion brands in the US, providing products from clothing to

accessories Gap focuses on creating simplicity and modernity for their fashion products Primark is an Irish fast fashion brand, famous for its cheap but quality fashion products Primark focuses on fashion products that suit customer trends and tastes Forever 21 is a US fast fashion brand, also providing fashion products with diverse styles and affordable prices

It is particularly suitable for young customers who love unique fashion These brands all directly compete with H&M in providing fashion products at prices that meet customer needs

f Publics

H&M is an international fashion conglomerate with a mission to create diverse and sustainable fashion outfits for customers worldwide To achieve this goal, H&M has developed a range of public communication activities to enhance brand awareness and promote products to customers One of H&M's public communication activities is television advertising The company regularly launches television advertising campaigns to introduce new products and build its brand image on global television channels These campaigns are often designed with creative and diverse content to attract customer attention and create a strong impression of the brand H&M also invests heavily in online advertising, including advertising on websites, social networks, and email marketing They use diverse

communication content such as images, videos, and promotion programs to enhance interaction with customers In addition, H&M collaborates with many famous fashion designers to create exclusive fashion products, which can help the company differentiate its products and increase their attractiveness to customers

III Target market

H&M is one of the leading fashion brands globally However, to better understand H&M's market, we need to analyze each demographic factor H&M's target audience includes children and the elderly, however, the majority of their customers are young people, between the ages of 18-35 This is the age group that is considered especially important for the fashion industry, as they are constantly on the lookout for the latest trends and are willing to spend a lot to shop In addition, H&M also has a strong presence in the children's market, with a wide range of children's fashion products In terms of gender, H&M serves both men and women, however, the majority of their customers are female This can be explained because most of H&M's products are women's fashion, with a variety of designs and colors to suit many tastes and styles In terms of income level, H&M serves middle- and upper-middle income customers For the international market, H&M is considered a low-cost brand, suitable for the lower and middle income customer segments However, when it comes to H&M's customer segment in Vietnam, due to the lower level of economic development and people's income in Vietnam compared to other developed countries, H&M can be considered a a somewhat high-end fashion brand for the majority of customers in Vietnam But with good product quality, H&M has attracted many Vietnamese customers, especially young people Geographically, H&M has a global presence, with more than 4,900 stores in 74 different countries They are present in developed markets such as Europe, USA, Japan, Korea and China,

as well as emerging markets such as India, Russia and Brazil This shows that H&M is having a global development strategy and is focusing on expanding into new markets In general, H&M's market is a diversified market, with many different types of customers (maneki, 2021)

H&M is one of the largest fashion brands in the world with a wide and diverse clientele In particular, customers' preferences and shopping habits are also important factors to evaluate the market of H&M In terms of preferences, H&M's customers tend to love fashion and want to stay up to date with the latest trends They want to create their own style instead of following uniform fashion trends H&M offers its customers a wide range of products in a variety of designs and styles to suit individual customer preferences Regarding shopping habits, H&M always updates new and diverse products to attract customers to shop regularly H&M's prices are also considered affordable, which supports the regular