Marketing Research in Practice: H&M, It's Marketing Environment and Product Life Cycle

Marketing research is a crucial management tool for helping businesses to discover whether or not the product or service that they are providing is actually desired by their customer base. It is a critical component when launching a product, trying to improve the existing service or just looking to be a step ahead of competitors. It provides them with all the information they need to make a better business decision. The purpose of this report is to do exactly that: to infer what I, as a marketing manager, can, from the data available and apply it towards making our company offer the best it can with the resources available.

H&M is an apparel and accessory store founded in 1947 in Sweden known for offering the latest fashion trends. H&M specializes in taking advantage of the season’s latest looks inspired by design houses around the world and providing women, men, and children contemporary clothing styles at low prices.

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• Product: H&M is a retail brand looking to provide customers with fashionable, high-quality clothing at affordable prices. They offer “fast- fashion” clothing.
• Target audience: The target customers for H&M is the youth. Even though H&M offers clothing and accessories for all ages for both men and women, their target market is women.
• Competitors: ZARA, Uniqlo, GAP, Cotton On, Abercrombie & Fitch, Forever 21, Mango etc.
• Strategies: Segmentation strategy, concentrated targeting strategy, cost leadership strategy, positioning strategy, social media marketing strategy etc. These have resulted in high entry barriers for the competitors.
• Organisational goal: leading change and encouraging innovation, having a circular, sustainable and climate positive approach, promoting inclusion and diversity both within and outside the organisation.

Marketing Environment

Peste Analysis

• Political factors: Since its expansion into different markets, being updated and aware of political changes in different countries has been prioritized. For example, H&M used to get their products made from Bangladesh due to cheap cost of production. After receiving backlash, they signed fire protection treaties and now work with factories who have proper equipment and safety measures implemented.
• Economic factors: H&M tries to keep the best prices by buying material in bulk and from markets which offer the best rates, in-house designing, and effective management system. However, to maintain competitive price strategy, they have to face economic shocks due to their market expansion. This make it hard for H&M to maintain their prices.
• Social-culture factors: H&M is one of the very few companies in the world who have 75% women in managerial roles and 50% women representation on the Board. International female labor has better wages and working conditions than those provided by most retail companies. This strategy of H&M also ensures that the women in undeveloped market are not exploited.
• Technological factors: For H&M, technology plays a big role in marketing and online shopping. To make the most profitable global expansion, H&M advertises through social media to appeal to the youth.
• Environmental factors: H&M is one of the biggest clothing retailers, so they are very careful with each action. They have to ensure that there are no environmental hazards involved in the making their products and the environment law of the country their factories are situated are followed. Since cotton is their main material, they are working towards creating a new sustainable cotton material by the end of the year.
• Legal factors: The laws in different countries can influence the business in various ways. There can be restrictions for advertising and tariffs for export and import. Like other companies, H&M has to change their marketing mix according to different markets.

SWOT Analysis

Strengths

• Leader in Global market (2nd)
• Leader in European market (1st)
• Affordable & high quality clothing
• Fast-fashion
• Throw-away fashion
• Strong presence in multiple markets (Women, Men, Kids…)
• Celebrity endorsements
• Strong social media presence
• Price does not affect quality
• Company website and blog
• E-retailing

Weaknesses

• Brand awareness of individual apparel brands sold in stores
• Brand loyalty
• Quality
• Product exclusivity
• Customer retainment
• Fit is not consistent due to variety of manufacturers and suppliers
• Customer service

Opportunities

• Promote current sustainability practices
• Increase word of mouth in both female & male audiences
• Online market including social media
• Mobile Marketing

Threats

• Strong competitors such as Zara, Mango, Forever 21.

Product Life Cycle

Services and products have an idea called the 'product life cycle' which is in 4 stages as: Introduction Stage, Growth Stage, Maturity Stage and Decline Stage. Because products don't last forever, it is important for the company to stay up to date with innovations or developments to keep a consumer interested. Some items might be a sample for marketing managers to test the life cycle or to possibly forecast the products for future references or strategies effectively for the particular product. Because H&M is a clothing company across many places on the globe, they don't have to focus so much on innovation for a completely new product. Simply, they can take one, change it around and make it better.

H&M has reached a mature point in its growth after over 70 years of being a popular retail destination: it doesn’t have much room for growth as it is already a very established company. However, they continue to offer trendy, relevant and in-style clothing and keep attempting to better their services so as not to lose their spot in the market.