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Marketing Process

Task 1 (LO 1)

a. Examine a few definitions (at least two) of marketing and explain the marketing process with example drawn from H&M.
b. Discuss the different kinds of marketing orientations and recommend the most suitable marketing orientation for H&M.

Task 2 (LO 2)

a. Analyse the macro and micro environmental factors that influence the marketing decisions of H&M.
b. Propose a new product for H&M and examine the concept of segmentation and recommend segmentation criteria and targeting strategy to be used for the newly developed product.
c. Identify factors that will influence buyer behavior and propose a new positioning strategy for your organisation and its newly developed product.

Task 3 (LO 3)

a. Using H&M as your chosen company, explain how the new product was developed to achieve sustainable competitive advantage.
b. Evaluate a range of distribution methods that H&M can use for the newly developed product to provide convenience to a target group of customers.
c. Discuss and critically evaluate the various pricing methods used by businesses and recommend pricing strategy that H&M can use for the newly developed product.
d. Explain the concept of integrated marketing communication and discuss the elements of promotional mix including extended the extended marketing mix as relevant to H&M's newly developed product.

Task 4 (LO 4)

a. Evaluate the marketing mix variables for two segments of the consumer market and discuss how different it would be for businessto-business services (B2B).
b. Assuming that H&M decides to enter the international market with the newly developed product, examine and discuss the differences between domestic marketing and international marketing.

The retail industries in the UK are developing its position gradually and competitor brands are emerging as well. The economic climate always posed a challenge to the changing lifestyle of the population during the economic recession.  The improved economic prospects help to strengthen consumer confidence. During 2013, it was posed that the economic recession was coming to an end (The Guardian, 2015). The macro economic factors helped to improve employment level, GDP and other disposable incomes of the nation (Gronroos, 2006).

In UK, the groceries dominate the retail sector (Ruddick, 2014). Tesco is the largest retailer in UK, followed by ASDA stores, Sainsbury and Morrison (BBC News, 2013). These supermarkets mainly focus on the drinks and food followed by a range of non grocery products as well. Because of the multi channel retailing availability it is possible to expand their business with wide range of products in the market.

According to AMA, Marketing can be defined as a set of activity and a process for communicating, creating, exchanging and delivering value to its clients, customers and society at large. This means that an organization can connect and communicate to the target audience to sell its products and services. This helps customers to build a strong relationship with the company as well (Pride, 2011).

Dr Philip Kotler defined marketing as “the art and science of exploring, creating and delivering value that can satisfy the needs of a target market for a profit”. Marketing is a process that measures, defines and quantifies the size of the identified market as well (Clulow and Reimers, 2009). Marketing is a process of management that includes 4Ps: Product, Price, Promotion and Place. It is based on thinking about the business in accordance to customer preferences and their satisfaction. In marketing selling plays an important role and this mainly concerns about how to make profit out of a business transaction.

Marketing Process:

The marketing process starts along when a strategic plan has been formulated and evaluated. The marketing process starts immediately after this.

The process of marketing begins with analyzing market opportunities, selecting the target market and to develop the marketing mix. The marketing process begins with analyzing the market opportunities. It is important to evaluate the long run opportunities as well to improve the business unit’s performance. This kind of extensive research also helps the company to gather information about their customers and also keep a view about the environmental changes and its competitors as well.

The next step is the selection of the target market. In this process the customers are delivered greater value and this allows deliberate analysis of consumers. Selection of target market includes deliberate analysis of consumers. It is important for the companies to satisfy all the consumers in a given market. It is also important to divide the total market and choose the best segments and strategies to implement them which are known as market positioning.

The next step is to develop the marketing mix which is a set of controllable marketing variables that helps to bring out the response from the target market. The marketing mix consists of 4Ps which are product, price, place and promotion. An effective marketing company aligns all the 4Ps together to achieve overall objectives of the company (Kahn, 2005).

The next step is to design and put into action the marketing mix that helps to achieve the overall objectives as well.

The last step is the market analysis part which involves analyzing company’s strength and weaknesses and also recommends other inputs to all the management functions as well.

Marketing process of H&M:

This process develops with the marketing mix of the company. H&M products are very fairly priced which is a big advantage in the UK market. Its fashion is also very trendy and updated. The company is also expanding its business in Europe as well. The company also spends a lot of money on promotional aspects including the advertising cost as well. Benetton is world’s largest fashion retailer but it could not provide latest fashion trends. This advantage was taken by H&M and it attracted the young shoppers (Robson and Katsikeas, 2005).

Production Orientation: This means that the business should give more importance to the production of goods and services so that it leads to economies of scale by maximizing profits and reducing costs thereby. Emphasis is given on the design and quality of the products.

Product Orientation: This lays emphasis to the functional features and high quality of the products. Such a company believes that if they have superior quality products then they can cater more customers.

Sales Orientation: the focus is simple here that is to produce the product and sell it to the market to make profits.

Market Orientation: This type of a company makes all types of businesses keeping in minds the choice and preferences of its customer. Feedback is also taken from them so that new ideas can be implemented thereof (Special issue on international marketing, strategic orientations and business success, 2010).

 H&M mainly focused on two types of orientations: One is product orientation and the other one is market orientation. The company focused on product orientation to cater to more number of customers and design new clothes which can attract young shoppers and it is according to the latest trend .And the other one is market orientation because H&M wanted to expand its business in Europe as well.

H&M is a Swedish retail company who main selling point is selling fashionable items at a cheaper price. H&M runs about 1800 shops today in more than 34 countries. The macro environmental factors affecting the marketing decisions of H&M are:

Political & Legal Factors: These include areas such as taxation policy, business legislations, etc. H&M is subordinated to various laws and policies because it is a public limited company. The company is also affected by International and Business law. A lot of plants are involved in the production process therefore it is difficult to adhere all international work standards as well.

H&M tries to fabricate their products by supplementing the working conditions as well. Child labor is also inhibited by the company and certain statutory provisions are strictly followed by H&M (Jensen, 2007).

Economic Factors: these include factors that help in determining purchasing power, economic growth, income distribution and industrial structure as well. The company is also influenced by the price and supply of imported goods.

Socio cultural factors: H&M connects to high quality of fashion with affordable prices so that it is affordable to everybody. It should update itself and adapt with the social trends as well.

Technological factors: new products are being developed constantly in accordance with latest technical support to expand permanently and reach the target.

Environmental factors: H&M have started awareness among its employers and suppliers not to use any product and sustain ecological and social matters as well.

The micro environmental factors are explained by the SWOT analysis.

Strength : H&M is one of the largest global fashion retailer. All the stores offer quality and trendy clothing at the same time. There are guest designers as well.

Weakness: The changing macro economic condition is one of the weaknesses that the company is facing. Also buying large volume may lead to overstocking (Ratnasingam, 2006).

Opportunity: H&M is focusing on to the online shopping and the company is also planning to expand its business.

Threat: Competitors like Zara, Forever 21 are posing threat to the company as a result the company may lose its target sample of population (Ä°ÅŸgören and Ayla, 2009).

H&M is a fashion oriented company which focuses to changing design processes. The company always focuses to meet the future needs and aspects of its target customers. With a strong design group it was proposed to H&M to draw inspiration from real fashion shows and design their clothes accordingly. H&M depends on product orientation to bring designer clothes at a low price. It is suggested to launch footwear section for men and women as this can give them an extra edge over clothing (Ratnasingam, 2006).

The market segmentation of H&M is that to build strong relationship marketing in line with the different levels offered to the company. H&M should mainly focus on psychographics segmentation catering the social class, personality variables and lifestyle maintained in different countries.

The company should target mainly the younger generation who are fashion freak and whose taste and preferences changes according to the fashion updated in the country (Quinn and Dibb, 2010).

The factors that will influence the buyer behavior are personal factors such as age, gender, lifestyle and income. Cultural factors involve language, beliefs, etc. Psychological factors involve perceptions and learning. Personal factors also play an important role because the company caters to youngsters.

According to the new product conceptualized most commonly used products used by females are tall heels catered to working class women. Positioning should be done according to the perception and understanding level from consumer’s point of view (Ji et al., 2014).

H&M developed its new product that is footwear in the market. It was necessary to anticipate such a change in the market to pose a tough competition to its competitor brands like Zara, Forever 21 etc because those brands only focused its production to the apparel segment. By developing this segment as their product line H&M thought that they could reposition its sales. Therefore H&M could sustain an extra advantage over its competitors.

Logistics and distribution channel plays an important role to get any product in the market. These channels act as an intermediary to the consumers and business. There can be direct distribution also where the producer directly supplies the product to the market. H&M can employ a team in its production offices who can give inspiration for the updated clothing trends. H&M must refine its distribution strategies and this can improve the flow of production. The retail stores are also located from geographic vicinity as well (Menzel, Harrysson and Ristinmaa, 2008).

The different types of pricing strategies are as follows:

Premium pricing: This indicates a price that is higher than the competitors. This is a good option to those companies who are penetrating a new market.

Penetration pricing: this strategy is established to enter a market with a low price to attract customers and raise awareness about the brand.

Economy pricing: This type of companies caters to a specific segment and is very price sensitive in approaching the market.

Price Skimming: this strategy is used to get maximum revenue compared to its competitors.

Psychological pricing: this strategy is used to establish their products in minds of its consumers.

H&M used Economy pricing strategy to bring and develop its new products in the market. Being a renounced brand name in UK, there was no need to enter any particular market as such and gain importance (Baule and Blonski, 2014).

Integrated Marketing Communication refers to combination of all the methods as how a brand can be developed to bring a product in the market among its target customers. In IMC, each and every aspect of marketing works together to maximize cost and level of production. We can also say that IMC is a strategic implementation tool which helps to provide clarity to the business (Cadogan, 2012).

Macro and Micro Environmental Factors

The promotional mix includes four elements: Advertising, Personal Selling, Sales Promotion and Public Relations.

H&M spends a lot of effort on promotional aspects that involves direct marketing and outdoor marketing as well.

Advertising: H&M can advertise its products through local newspapers, allowing discounts, through hoardings and billboards as well. The company can also go for online advertising in face book and twitter to bring the new product in the market.

Personal Selling: The Company cannot go for this approach as products are based in te retail stores itself.

Sales Promotion: H&M can widely use this form of promotional mix. The company has come up with the idea of online shopping and they have created their own website also from where customers can buy the products and choose from the available variety as well.

The extended marketing mix of H&M is explained below:

Product: H&M is known for developing low priced products at a cheaper price. The company focuses on fashionable designs and also caters to designer wear clothes for its consumers. Its product line includes jeans T-shirts, fashion shirts, cardigans, jewelry, purses dresses etc.

Price: H&M is known to have developed economical pricing strategy to provide high quality products at a lower price.

Place:  The Company mainly operates in North America, Asia, and Europe. The company is headquartered in Sweden and it is trying to develop and expand its business.

Promotion:  H&M uses mobile marketing and advertising through SMS. Company can broaden its location stores throughout USA. H&M can also cater face book for promotion and other chat websites (Dominici, 2009).

To answer the above question H&M Denis jeans wear and footwear is considered to see how it varies with individual age and income.

Price: H&M uses price as a signal to reach different segments. The company offers high end fashion at a reasonable price so that customers those having lower budgets can buy stylish products. Individuals who have high income and low age will prefer colored jeans or Capri’s along with high heeled shoes but those with average income and aged people will prefer light colored denims and flat shoes.

Product: H&M understands the dynamic change in fashion. Therefore the company should be focused more on its design. Customers who are young will prefer new designs but old people will give preference to the quality (Mathieson, 2010).

Place: H&M understands that location is an important factor. Here age plays an important role. Young people are more use to internet so they can go for online shopping but working professionals and others will prefer for a shopping with family in the weekend and visit the retail stores.

Promotion:  There should be new offers and deals coming up in the market so that H&M can cater to the younger generation.

Business to Business involves activities that buy in small quantities and one person makes this decision and product prices are fixed.

Domestic market is a term that sells its product in own country. It is very easy for any company to launch a product in the market. On the contrary International marketing offers global view of the market and helps the company to capture more market share. This also helps to earn more revenues for the company (Newton, Powell and Duncan, 2008).

New Product Proposal and Segmentation

Factors differentiating international market from domestic market are as followed in accordance to the company perspectives:

Size: H&M is a company that expanded internationally. The company has its business in Asia, Africa and North America as well. It deals with export business as well as foreign investments.

Benefits: International businesses cater to entertain with more benefits compared to domestic businesses. H&M was benefitted by way of earning foreign exchange and this led to more growth prospects and greater utilization of production services.

Market Fluctuations: H&M could withstand the marketing fluctuations by stabilizing their growth rate in accordance to current market situation.

Operations: H&M could expand its operations internationally by leveraging import and export of materials all over the world. Domestic market leads this type of expansion on a small scale.

Technology: Global exposure to H&M gave an international brand recognition which helped the company to sustain their growth and business at the same time (Special issue on international marketing, strategic orientations and business success, 2010).


From the above assignment it can be concluded that H&M did a lot of effort to accomplish its stability and growth all over the world. H&M maintained a strong brand preference over the youngsters because of its economy based pricing with latest trend s in fashion. H&M formed a strong brand recognition catering to have selective brand with a strong apparel line focusing more on its product line and how to develop it. H&M focused to introduce new product in the market and also wanted to make that product universally viable and sustainable to growth and high market sustainability. H&M focused on its Macro environmental factors as well and tried to focus on latest technology. The main principle of H&M was that it focused on building up high customer relations and has a good knowledge about what their customers prefer and design clothes accordingly.


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