Internationalization Fast Fashion Retailers -Myassignmenthelp.Com

Question: Discuss About The Internationalization Fast Fashion Retailers? Answer: Introducation Marketing mix is nothing but a set of combination of several elements that go along with the marketing strategy for any company. It enables company to achieve the marketing objectives, goals, mission and vision of the company (Armstrong, 2016). This mix helps to identify the needs and clearly differentiate between the products from its competitors. It is also defined as a set of actions or tactics used by a company to promote and advertise its brand and product in the market. Basically, there are 7ps of marketing that cover the marketing mix of a company. Here, 7ps of marketing mix will be further explained using a reputed clothing brand H M. Price: Price is the total cost of value that is used for the sale of the product. It also depends on the cost of the production, targeted segments, ability of the market to be pay, supply and demand of the product in the market, and some other direct and indirect factors. Here, pricing strategy of HM is set and designed according to the needs of the customers and the needs of the customers is low price with high fashion demands. In fact, this has become one of the biggest challenges faced by the brand because it is very difficult to manage the combination of high fashion with low price. But HM successfully aimed to achieve such objective using two major steps (Pratap, 2017). First one is outsourcing the production of the products to many countries where the labour cost was very low. It helped them to achieve low cost for the product. Moreover, outsourcing of product was arranged according to different product. The high fashion products which used to target European market were mainly produced in Turkey because of the short life cycle of the product. Major products were produced in Asia because they provide long transportation time and cover reduced risk (Zozi, 2014). Second one is it conduct strict cost to control its plan. For an example. Very few top-level executives have secretaries and have mobile phone privilege which helps to incur low cost for the company. So, these were the two major steps followed by HM that helped them to achieve a low fashion business in the trending market (Shen, 2014). HM has successfully adopted a pricing strategy that has the broader pricing range which will best be suited for the customers. To maintain a median pricing strategy, they keep a lot of products with a heavy discount in it. This helps them to increase the sales volume of the product which results in creating the larger revenue for the company as well. Sometimes, it also offers discounts on its fresh stocks and proved itself as the leader in cutting costs at each possible corner. Place: Place is defined as the area where the company or the brand sells its products to its customers. HM is the ranked as the second clothing retailer across the whole world that serves the network in an around fifty-five countries. The head office of the company takes care of every aspects of the products from the production department and the planning of the merchandise. The products of this brand are made in nearly eight hundred factories which are established in Asia and Europe (MBA, 2017). Today the outlets of HM are easily available and convenient because customers are able to shop many products at one single store. The company has also expanded its locations with a very reasonable price which is easily affordable by every customer. It has also established its locations at very high-profile areas. The very first HM outlet was opened in `947 and today it manages 3500 stores across the world. It purchases raw materials directly from its suppliers and then after the preparation, sells its products directly to the retail outlets. It has also offered online digital platform to its potential customers where customers can go through all the products in their leisure time and buy the desired products ordering via internet. HM logistics are simple, reliable and transparent (Mo, 2015). Basic products are made in Asia while fashionable products are made in turkey. The products that are produced in Asia are transported by ocean to incur low cost. While in Europe, all the goods ar e transported by railway. So, 90% of the transportation are done via rail or ocean. Air is very rarely used because it charges a lot to bear the cost. HM uses direct distribution channel for the sell of its goods i.e. from producers to customers. It does not involve any intermediaries and aims at cutting the middle transaction. It also aims at ensuring at delivering its products with a quicker time. Since, HM refreshes its product on daily basis, it assures basic access to its customers and manages the command from headquarter to the outlets effectively (Kotabe, 2014). Promotion: Identifying and understanding the target audience is basic rule to develop the promotional strategy by any company. HM target audience are very young women who are fashion obsessed and who wants more fashion cloth at low price. Promotional strategy includes advertising, internet promotion, and sales promotion. Moreover, HM promotional strategy is highly consistent with the whole marketing strategy (Mastro, 2017). Today, customers need high fashion with low price which is offered by HM. basically, the promotional actions of HM focuses on major two factors i.e. It is quite easy to find the posters and hoarding of HM which are available in fashionable style and price tagged always with the clothes. If we see the price tagged in Zara or Gap, they are always seen small but HM always focuses on putting the price at the very obvious position which can easily be seen and observed by the customers (Biew, 2017). HM also aims at conducting an eye catching promotional events where they invite famous fashion designers who design clothes for them. For example, HM had invited Karl Lagerfeld in 2004, McCartney in 2005 and many more. This helped them to create the brand image and generate public awareness in the mind of every customers. Promotional activities of HM have been successfully revealed high ability to gain quick response from its customers. HM has also appointed watchdog who will look after the working condition of the place and conduct protection which will increase the brand image (Lu, 2014). Product: HM is one of the most reputed and trusted clothing brand with thousands of retail outlets across the world. The core varieties of products under this brand are clothing and accessories for both women and men. Those sections include dresses, basic jumpers, vests, pants, jeans shirts, shoes, purses and jewellery. The brand focuses on both the quality as well as maintaining low price. They launch new product lines in regular intervals which enables the customers to get fresh product. At least 25% of the stock in the company includes fast fashion products and younger generation finds the reasonable price with latest fashion trends (HM, 2011). They basically focus on the young range of segments which results in the huge amount of sales of products. Special designers design the clothes for the company with increase the brand image. HM also sells home textile sand decorative products which is refreshed and updates time to time. HM has also launched beauty product line in it in 2015 which sells both beauty and makeup products (Bhasin, 2017). Cheap Monday: it serves both sexes in terms of fashion and style. It influences street fashion style and encourages youth to buy its products. The core product of this brand is denim rage which is sold at reasonable price. Monki: IT aims at targeting at young women but sells fashion clothes for all ages. The products of this brand are found inspiring and innovative in todays era. People: In order to get success in the market, HM has places its customers on the first priority. Customers must be served first to achieve success. Customers should be satisfied and they should be taken into highest consideration. HM have managed to conduct several training programs to train their staffs who deals with the customers. They are well trained to act and behave the customers wants them to behave. The service team needs to be fully aware about the latest technologies and keeps themselves updated. They should help HM how to penetrate the market and gain the maximum profit. If customers will be ill treated or if they will not be entertained, they will avoid demanding the particular brand and slowly and gradually the image of the brand will diminish in the market. So, it is vey important to makes the customers happy and satisfied with the products they buy (Campaign, 2015). Since HM aims at focusing on the low price with fashion clothes, it assures to create more number of happy customers towards it. Physical Evidence: Physical evidence is nothing but the way of presenting the goods which are available for sale purpose. The presentation of goods plays a very vital role because it is the only way a customer sis attracted towards the product and gives a choice of purchasing it. Majority of people judge the product by the way they are displayed or the way the shop is arranged. If the display of the goods is attractive, they will automatically buy the goods. Likewise, they also make sure to present their staff in a well-mannered. HM have well trained their staffs so they are quite representable and well behaved. Since, HM is providing the online digital platform, it is also very important that the website looks nice and all the required information must be presented on the website clearly. Customers who would prefer online shopping must not find any difficulties in shopping online and should get all the required information on the website only. Process: The process of HM brand is very simple, realistic and transparent. It basically focuses on the customer services. The process of the HM is highly involved in the research and development. It is also highly involved in the IT team which constantly supports the team and provides assistance (Ho, 2017). It aims at keeping all the website updated and managed and focuses on gaining the attention of the maximum customers. The process chain of the HM does not involve any middle person because it manufactures the product and sells directly to the retail outlets. It uses railways and ships for the transportation because it causes minimum cost as compared to other modes of transportation (Hansson, 2011). Partnerships: There are basically two major owners of the brand HM i.e. foreign owners and Swedish owners. Foreign owners 23.8%of shares and remaining 76.2% of shares are owned by Swedish owners. The major shareholders of this brand are The Stefan Person family and related companies, The Lottie Tham family and related companies, STATE STREET BANK AND TRUST OMNIBUS, Didner Gerge Fonder Aktiebolag and many more (HM, 2018). Major issues of marketing mix involved in HM brand Although marketing mix is the way of providing a basic and important framework, it is not enough to work according and gain detailed marketing strategy. Sometimes it creates several problems. The problem in HM is found majorly in two aspects. First, marketing mix requires adjustments in particular business environment and the second one is it is nothing but more like a backbone instead of blood to the company because it provide clear and suggestions in more detailed format. From the given above analysis there are 7ps which helps to identify the components of marketing mix of the brand HM. But it is again not important that these 7ps will work for every organization in the similar way i.e. they might not be equally important in different business. For an example, the stock of inventory is least important in the cosmetic business (Harrison, 2011). Here in the case of the famous brand HM, the marketing mix is insufficient in managing and maintaining interaction with its customers. The interaction with the customers include contribution to various factors like better product design or better customer services or better customer satisfaction or better involvement in solving the queries of the customers. It failed to interact with its customers and the customers were dissatisfied with the product offered by the brand. Moreover, HM has faced a major issue in the advertising technique used by them.it was a racist advertising campaign which was really offending among the customers and around the world. It created lots of obstacle and degraded the image of brand in the minds of customers. While advertising the product, the brand used a young black child who was wearing a hoodie printed coolest monkey in the jungle (Blow, 2018). People started reacting on it and raised their voice against it. The quote represented that it was tone deaf and filled with lots of racist undertones which was not totally accepted by the customers. HM apologized for it and worked for it to remove the advertising form the internet. They also worked on proving that it was not done intentionally neither it was done to focus any racism segments or target any of the color but it didnt work out. They were deeply sorry for the product image presented (ABC, 2018). The other main issue related to the brand was the low price. The customers who are fashion obsessed and who go for the quality products will definitely not think before investing more rather than buying the cheap products. HM offers products at low price though the products are fashionable. The HM has huge variety of products sold at a very reasonable price which are easily affordable by the middle segments of customers. The major competitors of HM are Zara and mango. Since they are luxury brand, they offer products with higher price and higher quality as compare to HM. customers who would be given choice between HM and Zara will but obvious choose Zara because of the quality they offer. Here, price will be the second priority when it comes to fashion. Customers today will look for good quality and is happy to pay for it. So, keeping these things in mind, HM should aim at focusing on the quality issue because the quality offered by it is low with low price. Likewise, other issues involves promotions and advertising. Since, there was a major issue involved due to racism, the online digital marketing of the brand has been reduced. The online platform is less preferable by the customers which has already decreased the sale of the products offered by them through internet. Similarly, HM has very low advertising and promotions campaigns involved in it (Pasquarelli, 2018). It promote its products but needs to work ore on it. It should focus more on the several campaigns and create more public awareness programs so that customers will be more aware about the product and will be more inspired to buy the product. Other issue involved is process issues. HM uses ocean and railways for the transportation of its products. Ocean and railways are used as the modes of transportation because it reduces the cost incurred in the logistics. The cost incurred in railway and ocean are very low as compared to the cost involved in other means of transportation. It takes lots of time to get the products delivered via railway and ocean. The delivery time taken to reach the product from the factory to the retail outlet is very high which creates issues in the overall process of the brand. The stock will not reach the destination at the allocate time and will result in low availability of the products as well. Recommendations Since, the target customers for the brand is from 18-24 that only represent the young male and female. It does not target other segments of people. So, it is recommended that it should start targeting audience of all the ages and start launching the products for all ages. It should offer products that will be available for kids as well as middle aged persons. Other major recommendation is related to price. HM offers product with low price which targets middle income people. The people whose income is average will definitely prefer such brand but what about the people who prefer high quality and happy to pay high amount for it. The major competitors of HM are Zara, Mango and Forever 21. They offer high quality products with high price and most of the people prefer it. But when it comes to HM, it offers low price which does not target people with high income. So, it should start targeting people with higher income and manage in producing the product with high quality and higher price range. The modes of transportation involved in HM are railway and ocean. It takes long delivery time to reach its products from the factory to the retail outlets. So, in order to reach product on time, it should start using other modes of transportation as well to reduce the delivery time. The above mentioned recommendations if followed can help in building a strong relationship with its potential customers. It will also help HM to create a positive image in the minds of customers and increase the overall sales of the company as well. Conclusion Thus, it can be concluded that HM has successfully maintained its sustainability in the market as well as in the minds of the customers. Today customers are happy with the brand and their likes are increasing on daily basis. They have proved themselves in providing the fashion trends to the customers with a very reasonable price. Moreover one of the great thing offered by this brand is that it offers the same product and operations in all of their markets which enables them to provide more sustainable future References ABC, (2018), HM issues new apology over 'Coolest monkey in the jungle' hoodie with black child, viewed on 1st February, 2018. Available on: abc13.com/society/h-m-apologizes-for-using-black-child-in-slogan-about-monkey/2913043/ Armstrong, G., Kotler, P., Harker, M. and Brennan, R., (2015). Marketing: an introduction. Pearson Education. Bhasin. H, (2017), Marketing mix of HM HM Marketing mix, viewed on 1st February, 2018. Available on: https://www.marketing91.com/marketing-mix-hm/ Biew. K, (2017), HM Promotion strategy, viewed on 1st February, 2018. Available on: https://heroinandmoss.blogspot.in/p/h-promotion-strategy.htm Blow. C, (2018), HM issues apology after using image of black child wearing 'monkey' hoodie, viewed on 1st February, 2018. Available on: https://www.thejournal.ie/hm-apology-racist-image-3787769-Jan2018/ Campaign, C.C., (2015). 10 ways HM is spinning the facts on worker safety. Campaign, C.C., (2015). Clean Clothes Campaign response to agreement between HM and IndustriALL. HM group, (2018), investors, viewed on 1st February, 2018. Available on: https://about.hm.com/en/about-us.html HM, (2011), product strategy, viewed on 1st February, 2018. Available on: https://heroinandmoss.blogspot.in/p/product-strategy.html Hansson, M., (2011). What impact has a fast fashion strategy on fashion companies supply chain management? Harrison, R.L. and Reilly, T.M., (2011). Mixed methods designs in marketing research. Qualitative Market Research: An International Journal, 14(1), pp.7-26. Ho, D.C., (2014). A case study of HMs strategy and practices of corporate environmental sustainability. In Logistics Operations, Supply Chain Management and Sustainability (pp. 241-254). Springer, Cham. Kotabe, M. and Helsen, K., (2014). Global marketing management. Lu. C, (2014), HM Supply Chain Strategy - Successful Retail Inventory Control, viewed on 1st February, 2018. Available on: https://www.tradegecko.com/blog/hm-retail-inventory-control Mastro. S, (2017), Advertising Promotion - HM, viewed on 1st February, 2018. Available on: https://prezi.com/rnp2bclugxwu/advertising-promotion-hm/ MBAskool, (2017), HM Marketing Mix, viewed on 1st February, 2018. Available on:https://www.mbaskool.com/marketing-mix/services/16924-h-and-m.html Mo, Z., (2015). Internationalization process of fast fashion retailers: evidence of HM and Zara. International Journal of Business and Management, 10(3), p.217. Pasquarelli. A, (2018), HM apologizes after accusations of racist ad, reviews 'internal routines', viewed on 1st February, 2018. Available on: https://www.adageindia.in/marketing/cmo-strategy/hm-apologizes-after-accusations-of-racist-ad-reviews-internal-routines/articleshow/62420186.cms Pratap. A, (2017), HM Marketing Mix 4Ps, viewed on 1st February, 2018. Available on: https://www.cheshnotes.com/2017/09/hm-marketing-mix-4ps/ Shen, B., (2014). Sustainable fashion supply chain: Lessons from HM. Sustainability, 6(9), pp.6236-6249. Zozi, J. and Janicic, R., (2014). CREATIVE MARKETING STRATEGIES HM VS ZARA. INCITING PHYSICAL ACTIVITY AMONGST YOUTH USING MODERN TECHNOLOGIES 1729, p.1766.