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The report presents the selected brand H&M (Hennes & Mauritz AB), a Swedish company that deals in retailing of clothing for men, women and children. The brand currently exists in more than 60 countries with around 3700 stores and 132,000 people under employment and ranked as second largest clothing retailer across the world. This brand is selected due to its high demand and commanding financial resources with gross profit $3,620 million in the financial year 2015.
Figure 1: graph of unit sales
(Source: H&M offers fashion and quality at the best price. 2016)
Currently the company is experiencing average increase in quarterly sales at an average rate of 20% and in units from 100,000 to 150,000. The organization has planned to expand its market internationally for all range of products. Since the company deals in the clothing for men, women and children, the management expects to globalize the brand and increase the business.
Singapore has been selected for the expansion of clothing market. The country is a developed and a global financial centre in Asia thus having the world’s most extensive market on the consumer goods and lifestyles. Singapore’s GDP was identified as 292 Billion US Dollars in the year 2015 awarding it with 38th ranking in the world GDP and 5th in Southeast Asia. According to the IMD World competitiveness center, Singapore is ranked as the fourth most competitive country in the world. The economy of Singapore is expected to grow virtuously since it grew at an average rate of 3.2% annually in previous year. Additionally, the political condition in Singapore is also stable, which is one of the major reasons that attract many entrepreneurs and organizations to operate their business (Refer to appendix 1).
Customer analysis is a significant segment of an organization’s business plan to increase its marketing for the products. The analysis involves the identification of target consumers, the needs of the consumers and ways to satisfy their needs. In the present economy, consumers are more empowered and associated with remarkable information at any moment and anywhere. Constant rising in their expectations and standard of living enhances their lifestyle and choices in buying products based on the optimistic interactions with the brands (Luxton, Reid & Mavondo, 2015). Similarly, in a country like Singapore consumers base are strong with respect to their lifestyle and demands for branded stuffs are increasing apart from the demand for the local stuffs. The customer analysis can be examined with respect to behavioral analysis and demographic analysis (Schlegelmilch, 2016).
Behavioral analysis of consumers is considered to identify the relative significance of the factors that customers use to select one product over other. These factors are often called as buying criteria and are very important to examine the choice of customers against the competitors’ products. Long-term location of the citizens of Singapore is high that indicates they are inclined towards long-term success. The key factors the consumers apply to give preference to buy the products are price, quality, expediency and reputation (Canel, Bejou & Khumawala, 2015).
Demographic analysis is another significant element of consumer analysis that is used to identify the target market for the selected range of products. Apart from the needs of the customers as a whole, individual segment requirements should also be identified to recognize and capitalize to capture the market. The demographic analysis is based on the consumers’ categories like age, gender, income level and lifestyle (Spiller & Tuten, 2015).
Since the clothing products of H&M are for men, women children as well as for teenagers, it is expected that buyers of different age group will be inclined to buy the products. On the other hand, the management of H&M targets both men and women gender for their products. On the observation and market research, the standard and style of living of consumers in Singapore ranging from moderate to high. Keeping this in mind the prices of the products should be charged along with the evaluation of average income level of the consumers in Singapore. Singaporeans are more likely to spend for branded clothes and consequently they make around 40.5% to spend on luxury clothing stuffs.
It is a presentation of the organization’s products and factors of comparison with those of the competitors. Products of H&M are known for the best quality and soaring fashion at low and affordable prices. There are some brands in the market, which provides great quality and trendy products but at higher prices. While H&M holds a position in the clothing industry for providing wide range of products for all age and gender group of consumers with ample of designs and collections. H&M also have products specially designed by guest designers to serve the consumers for different occasions along with the fast delivery period. Reports of H&M show that there has been constant increase in the sales of H&M over different locations at an average rate of 10- 25%.
Figure 2: graph of sales in different locations
(Source: H&M offers fashion and quality at the best price. 2016)
In the current market economy, Singapore is considered to be one of the fastest growing countries in Asia. Its stable political structure, emergence of free trade arrangements attracts the sellers and traders to expand their business in the country. Besides, the government of Singapore encourages the diversification of economy to increase the competitiveness among similar industries (Ijabadeniyi, Govender & Veerasamy, 2015). Consequently, the team of H&M structured the marketing plan with the objective of spreading awareness of the brand name to the society of Singapore, average sale price would be lower in compared to that of the competitors and to secure the locations having lower costs.
The previous marketing communication activities of H&M with respect to the sale of clothing in global market maintain the price, quality, placement and promotion of the products in several countries. H&M used advertisement through television networks, celebrity endorsements, as well internet advertisement via social media. H&M also maintained the public relation for its products by maintaining best quality fabrics and trendy designs for all range of outfits and accessories. H&M also promotes its business by offering various tie-up sales like “buy two and get one free or buy one and get fifty percent discount on another”. The company also used the strategy to increase the sales of products by incorporating offers of decent discount percentages on specified amount of bill or on specific products. There has been drastic increase in the sales of H&M with respect to units as well as amounts that resulted in profits increase at 20% in the year 2014 and 19% in the year 2013 while increase in stock in trade was more than 17%.
Figure 3: Profit graph
(Source: H&M offers fashion and quality at the best price. 2016)
Figure 4: stock in trade graph
(Source: H&M offers fashion and quality at the best price. 2016)
The strategies of H&M for the purpose of global marketing and communications to the target consumers are through online advertisement to promote the present trend of clothing. There will be several promotional offers to the prospect consumers in terms of first time purchase, discount coupons on purchasing a product of specified amount, free vouchers, gift items and other similar offers. The management will use 80% of its total marketing budget on existing ways of promotion and advertisement while 20% on new promoting methods as a trail and error approach.
Awareness of the brand is an essential factor to promote the products of H&M in the existing market of Singapore and attract the consumers. Therefore, the strategy of the management to increase the H&M clothing sales in Singapore is through spreading knowledge about the quality, designs and uniqueness of the products.
Figure5: Metrics for evaluation of business
(Source: Created by Author)
Low price structure by maintaining quality is a key to attract customers. Despite of trendy and designer stuffs, the management of H&M decided to quote lower price for all range of clothes. There will be exclusive offers for the consumers on the first three days of sale from the date of opening of stores. Further, there will be a facility of VAT refunds for the international consumers as tourism in Singapore holds a huge position in the present economy.
Promotion of products is also a significant approach for expansion of product marketing and communications in the existing market industry. H&M management took steps to promote their product through online and television advertising media. Promoting the product should be in such a way that maintains the customer loyalty and advocacy for the brand and its products.
Marketing communication is a technique of staying in touch with consumers and conveying the significant information about the organization and its products. The objective of marketing communication is to promote the products and create public relations that help in successful growth of business (Petersen, Kushwaha & Kumar, 2015). In view of this, there are basic elements of marketing communication that H&M need to consider to promote its products.
Figure 6: Elements of Marketing Communication
(Source: Created by Author)
Advertising is one of the key elements of the marketing communication that organizations have to consider. It should be attractive and informative to attract the consumers and spread knowledge about the products. H&M also focus on the advertisement through various social media, for its products to make it saleable in Singapore. H&M team plans to spread the awareness of the clothing for men, women and children so that the consumers inclined to buy the stuffs over other brands.
Public relation should be very strong between organizations and society for the purpose of growth and sustainability. Hence, one of the marketing communication objectives of H&M is to create and strengthen public relationship in Singapore so that there will be successful expansion of its business. It also creates customer loyalty, which is important to maintain the customer base strong and regular. H&M proposes to create and maintain public relations by launching designer clothing with best quality of fabric at low and affordable price.
Personal selling is another marketing communication strategy that many organizations are taking up in present era. Likewise, H&M is keen on adopting the strategy of personal selling that assists in building strong customer relationship thorough direct communication. It includes, taking up exhibition of clothing for various occasions and events or set up sales of products at local and commercial locations.
Promotion of sales is a critical and complex technique that organizations have to consider to promote their products. Promotion of sales can be done through online or offline mode. With the advancement of information technology, online promotion of products has become common and effective. Team of H&M also adopted social media, websites, and online advertisements to promote its product in Singapore.
Internet promotion nowadays has become very effective as most of the nations have advanced technology system and Singapore is one of the advanced and developed nations in Asia. Hence, H&M is actively taking up the source of internet to promote its product and expand the business to maximize the profitability.
Promotional methods are necessities for the organizations to boost up the sales of the products. The management of the companies should choose these methods wisely because growth of the organizations’ business depends largely on the promotional strategies. Accordingly, H&M team has selected certain active promotional methods to promote its products in Singapore.
Social Media is one of the fastest growing networks in the present scenario since almost entire society of the country is tech savvy. Singapore is one of the developed countries in Asia and residents are more inclined towards the advanced technology therefore social media is the best way to promote the products. Hence, H&M has taken up various Social Medias like Facebook, Twitter, Instagram, Youtube for online video etc. to promote its clothing for men, women and children. The company will use internet resource to get the research feedback from 60% of the respondents whereas 30% of the respondents through personal feedback (refer to appendix 2).
Advertisement through billboards, hoardings, banners, and endorsing celebrity guests also reflect great impact on promoting the products. Since, H&M deals with clothing specially designed by guests designers, the management planned to popularize its products in Singapore through these means. Newspaper advertising in Singapore country is still the highest with 425 million USD spent in 2015 (refer to appendix 3) hence, the management of the company is planning to spend 30% of its advertising budget in this mode.
H&M has taken step to implement the above- mentioned promotional methods by educating the consumers, communicating with the customers and online marketing facilities by offering special discounts. Many consumers find it feasible to do online shopping for various reasons and therefore it is one of the best ways to implement the promotion of products. H&M planned to spread awareness about the quality and designs of its products that helps in availing online shopping facility. The promotional shows and images will be familiar to the people so that they can relate in context to outfits suitable for different occasions.
In view of the marketing condition of Singapore, government regulations and political conditions are stable and favorable for organizations to expand the business. Hence, H&M selected Singapore which a developed country in Asia with respect to education system, income level and standard of living of the citizens. Additionally, the tourism in Singapore is also developed that increase the sales expectancy for the products. Sometimes, price of same brand products differ in countries due to various reasons like duties and taxes hence, international travelers seek to buy branded products at cheaper rates. This makes H&M management to select the country, Singapore to expand its clothing business. Further, all the group of Singapore citizens has also been considered because the company deals in clothing for men, women and children with respect to their choice, income level and efficiency to spend on buying the products. Hence, the global marketing and communication plan of H&M is feasible to expand its business.
Canel, C., Bejou, D., & Khumawala, B. M. (2015). An Application of Global Marketing Via International Locations. In Proceedings of the 1993 World Marketing Congress (pp. 203-207). Springer International Publishing.
H&M offers fashion and quality at the best price. (2016). H&M. Retrieved 3 August 2016, from http://www.hm.com
Ijabadeniyi, A., Govender, J. P., & Veerasamy, D. (2015). The Influence Of Cultural Diversity On Marketing Communication: A Case Of Africans And Indians In Durban, South Africa. International Business & Economics Research Journal (IBER), 14(6), 869-882.
Luxton, S., Reid, M., & Mavondo, F. (2015). Integrated marketing communication capability and brand performance. Journal of Advertising,44(1), 37-46.
Petersen, J. A., Kushwaha, T., & Kumar, V. (2015). Marketing communication strategies and consumer financial decision making: The role of national culture. Journal of Marketing, 79(1), 44-63.
Schlegelmilch, B. B. (2016). Global Marketing Ethics and CSR. In Global Marketing Strategy (pp. 195-220). Springer International Publishing.
Spiller, L., & Tuten, T. (2015). Integrating Metrics Across the Marketing Curriculum The Digital and Social Media Opportunity. Journal of Marketing Education, 37(2), 114-126.
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