ACKNOWLEDGEMENT

We would like to express our deepest appreciation to all those who provided us the
possibility to complete this report.
A special gratitude we give to our professors, Dr. Rishikesh Kumar and Dr. Vikas Kumar,
whose contribution in stimulating suggestions and encouragement, helped us to coordinate
our project especially in writing this report. We would also like to thank them for investing
their full efforts in guiding the team in achieving the goal.
The completion of this undertaking could not have been possible without the participation
and assistance of so many people whose names may not all be enumerated. Their
contributions are deeply appreciated and gratefully acknowledged.
INTRODUCTION
Hennes & Mauritz (H&M) is a Swedish multinational clothing-retail company known for
its fast-fashion clothing for men, women, teenagers and children. The Swedish Company was
founded in 1947 by Erling Persson, who opened the first store in Vasteras as Hennes
(Swedish word for “hers”), offering fashionable women’s wear. In 1968, he acquired Mauritz
Wildforss, a hunting and fishing equipment store located in Stockholm and began the
extension of men and children’s clothing lines. H&M then diversified over the years and
progressively expanded its product width to include accessories, shoes, top-to-toe beauty care
products and cosmetics and home furnishing collections.
It is the second-largest global clothing retailer, just behind Spain-based Inditex (parent
company of Zara). Since its inception, H&M has rapidly grown into the global markets with
over 5,000 stores under the various company brands, spread in 74 countries (as of November,
2019). H&M entered India in October, 2015. The H&M group includes eight clearly defined
brands – H&M, COS, Monki, Weekday, & Other Stories, Cheap Monday, H&M Home and
ARKET.

CONSUMER BUYING BEHAVIOUR

Consumer buying behaviour is the study of individuals, groups, or organizations and the
processes they use to select, secure, use, and dispose of products, services, experiences, or
ideas to satisfy needs and the impacts that these processes have on the consumer and society.
Marketing success or failure of a company depends on target consumers’ individual and
group reactions expressed in the form of buying patterns. Since customer is the reason why
any organization exists, it is necessary to understand the customer and study the pattern of his
buying behaviour.
According to Frederick Webster - “Consumer buying behaviour is all psychological, social
and physical behaviour of potential customers as they become aware of, evaluate, purchase,
consume and tell other people about products and services.”
It may be viewed as an orderly process whereby the individual interacts with his environment
for the purpose of making market decisions on products and services. To achieve a better
understanding of the consumer behaviour, study of such disciplines like economics,
sociology, psychology, and anthropology is required.
Economics explains consumer behaviour in relation to economic factors. Sociology and
cultural anthropology supply explanations concerning the influences of family and group
behaviour upon individual behaviour, the diffusion of new products and ideas (innovation)
among various groups, and the impact of culture on its members.
Psychology explains the motivation that underlines buying behaviour, the perceptions
individuals have of themselves and the products they buy. The internal and external forces
and influences interact in highly complex ways, affecting the individual’s total pattern of
behaviour as well as his buying behaviour.
FACTORS INFLUENCING CONSUMER BUYING BEHAVIOUR
The factors that jointly shape consumer behaviour are as follows:

social and cultral

factors
Personal factors Psychological Factors

Groups Age Motivation

cultre&subculture Economic situation Perception
Social class Occupation Learning
Self image Beliefs and Attitudes

We did a survey on customer satisfaction and buying behaviour of brand H&M. There were
21 questions in the questionnaire (See Appendix 1), and 112 respondents in total. And the
questionnaire was conducted through google forms. Each question has its purpose in order to
analyse. Some questions served dual purpose.

SOCIAL FACTORS

The human beings live in a complex social environment wherein they are surrounded by
several people who have different buying behaviours. Since the man is a social animal who
likes to be acceptable by all, tries to imitate the behaviours that are socially acceptable.
Hence, the social factors influence the buying behaviour of an individual to a great extent.
Some of the social factors are:

 Groups

 Roles and status

 Family

GROUP INFLUENCE

Reference Groups

A reference group may be a person or a group to which an individual looks up as a frame of

reference for his general and specific acts of behaviour, values, opinions, attitudes etc. The
reference person or the reference group exercises tremendous influence on an individual. This
is true for consumer behaviour as well. A consumer always has with him in his conscious and
sub-conscious state, a person or a group that he looks up to as a reference point.
 H&M' S CO N S UME R S ' S O URCE S T O GE T IN FO RMA TIO N A B O UT T HE
BRA N D

76

64

48

32

20

16
P EOP L E MAGAZI NE & SOC I AL MED I A B I L L BOAR D S TV C EL EB R I TI ES
AROUND YOU NEW SP AP ER C OMMER C I AL S

Consumer actually look up to reference groups because:

a) He desires information before he actually decides to go in for the purchase of a product
and service offering. As reference groups are regarded as impartial and have no hidden
agenda like salespersons, consumers trust the former more than the latter.
b) He wants social approval for the product/services purchased or the brands bought, and he
feels that once he has this approval from the reference group, he would not face any kind of
social embarrassment.
c) He feels that he would be much at ease if he does something that others approve of.

Since fashion is an important method to show one’s self-concept, the consuming motivation
for self-identity or social acceptance tends to be stronger than other product categories. So
people may be influenced more by reference groups in fashion consuming behaviour
because their desire to “fit-in” certain groups.

To find out what kinds of group influence are working on H&M consumers, we begin with
the question: what are H&M consumers’ sources to get information about the brand?
From the survey we got the answer that most reference sources is people around them,
then also media sources like magazines, newspapers, internet, billboards and television (see
figure below).

Primary Reference Group: Such group(s) with which a person has a direct (face-to-face)
contact and where a direct influence occurs, is known as a primary reference group(s). For
example, family, friends, neighbours, superiors, peers, colleagues etc.
Number of H&M’s Consumers are influenced by their family, friends, neighbours, peers, etc.
Since they have a direct contact and engage in various discussions regarding products and
brands, they influence their purchase decisions.
Secondary Reference Group: such group(s) with which a person has an indirect contact and
where an indirect influence occurs, is known as a secondary reference group. For example,
movie stars and celebrities, sportsmen, successful business men, political leaders, religious
leaders etc.
Internet becomes one of the popular ways where people can get and even exchange
information. It offers a platform for virtual communities of consumption, which are
collections of people whose online interactions are based on shared enthusiasm for and
knowledge of a specific consumption activity (Solomon & Rabolt 2009, p. 424).

The website Lookbook.nu is ‘the internet's largest source of fashion inspiration from real
people around the world according to its description, people upload their daily fashion
styles any time tagged with the brand’s name of each item they wear, others can comment
on them or just click “hype” to add one score to them, very visually, without too much
words, efficiently. The fashion fans can search others’ style inspiration by key words of
colors, categories, materials, patterns, locations or brands. To make sure the Lookbook.nu
members are reliable and fashion-forward people, the registration of a membership is by
invitation only, otherwise personal blog/site, note and picture are in need.

Magazines and newspapers can update every week or every day, but these kinds of virtual
communities’ information can update every minute, besides their readership are increasing
dramatically. So it is a kind of reference group that influence widely and significantly on
individual

Lookbook.nu- source of fashion inspiration from real people around the world
Source: https://lookbook.nu/look/9258838-H&M-Underbust-Sunshine-Cactus-Golden-Hour-Neutrals
HMxME
Word-of-Mouth Influence and Opinion Leadership
As mentioned previously, the questionnaire result shows that the most reference source for

fast fashion is people around. Any information transmitted by individuals to individuals

that is product related is engaged in word-of-mouth communication (WOM). WOM
sometimes plays a decisive role in consumers’ purchasing decision making, studies in both
industrial and consumer purchase settings underscore the idea that while information from
impersonal sources is important for creating brand awareness, personal sources and word of
mouth are relied on in the later stages of evaluation and adoption (Martilla 1971, p. 173-
178).

Through the exchange of ideas, people get influenced, and the more positive information a
consumer gets about a product from peers, the more likely he or she will adopt the product
(Arndt 1967, p. 291-295).

From the survey, it shows that about 73% of the respondents in total like or sometimes like
to talk about H&M with their friends.
 In
W h a t k i n d o f i n fo r ma ti o n o r a d v i c e fr o m y o u r fr i en d s wo u l d y o u
l i st en t o a b o u t H&M? 

54
40
33
22

H & M’ s n ew H & M’ s so c i al H& M’s c l ot hi ng S o m e p i ec es o f d r ess

c o l l e c ti o n r esp o n si b l e w o r k q u al i t y o f H & M t h ey st r o n gl y
r ec o m m en d y o u

respect of what kind of information or advice they would like to get, as shown in figure
given below, our investigation finds that popular information or advice is recommendation
of some specific pieces of dress and a brand’s clothing quality, which is followed by
information of a brand’s new fashion collection (see figure below).

Opinion leaders are individuals who are knowledgeable about products and whose advice
is taken seriously by others, they are frequently able to influence others’ attitudes or
behaviours. Fashion opinion leaders are thought of as those who buy fashion early in the
fashion season. (Solomon & Rabolt 2009, p. 444-445). The opinion leader usually takes the
risk to try innovative fashion items, so in fast fashion’s life cycle, opinion leader tends to
adopt a new fashion at a very beginning position of its life cycle, that will definitely before
the general acceptance, and should be even at the beginning or before of acceleration stage.

Since H&M is a fast fashion brand its consumers are highly influenced by opinion leaders
and their suggestions.

REFERENCE GROUP APPEALS:

Style Icons: Madonna, Kylie Minogue, David Beckham, Beyoncé, etc.
Source:https://beyondcelebrity.com/2013/01/29/best-hm-celebrities-and-designers-
collaborations-over-the-years/

Brands
 Maison Martin Margiela with H&M (filmed by British artist Sam Taylor-Wood).
 The collaboration with Maison Martin Margiela is a series of re-editions of iconic
Maison Martin Margiela garments and accessories for men and women. Each piece is
labelled with a tag indicating the season from which it originated, dating back to the
first collection in 1989.
Alexander Wang
 Includes gloves (boxing and otherwise), beanies, and duffels in the mix—all replete
with standout WANG branding.
 Creating the Buzz: In April at Coachella, H&M announced collaboration with
Alexander Wang for upcoming line. The full Alexander Wang X H&M collection was
unveiled at a celebrity packed runway show on November 4, 2014 in New York City.
Magazines such as Glamour Magazine, Vogue, and NY Magazine have already done
covers of the upcoming line.

Other Appeals
 H&M X Jeff Koons Collaboration Party for Flagship Opening on Fifth Ave in NYC
 Posters that read “Artified by Jeff Koons” Done at the same time as very-
popular Whitney exhibit for Jeff Koons: A Retrospective.
 Attempting to combine art and fashion Lady Gaga Art Pop Album Release: Lady
Gaga’s album was released at opening of H&M store in Times Square, combining
fashion and music.
Benefits:
Associations with high-end models and luxury brands helps promulgate image of ‘cool’
‘popular’, ‘quality’, and ‘high fashion.’
Associations with up-coming and trendy artists, musicians, actors, and film directors creates
buzz for H&M as a ‘cool and trendy’ brand.
Shows H&M is willing to push boundaries and set a platform for creativity.

CULTURAL FACTORS
Consumer behaviour is deeply influenced by cultural factors such as:
 Culture & Subculture
 Social class

Culture & Subculture

Basically, culture is the part of every society and is the important cause of person wants and
behaviour. The influence of culture on buying behaviour varies from country to country
therefore marketers have to be very careful in analysing the culture of different groups,
regions or even countries.
Each culture contains different subcultures such as religions, nationalities, geographic
regions, racial groups etc. Marketers can use these groups by segmenting the market into
various small portions. For example marketers can design products according to the needs of
a particular geographic group.
H&M has begun to pivot from low-cost fast fashion, rebranding itself instead as a leader in
sustainability. The company’s new “circular” approach steers customers towards eco-friendly
shopping habits, with a focus on clothing that’s either recyclable, more durable, or both. No
longer dedicated solely to low prices, H&M is less afraid to charge more per item, while
urging shoppers to buy fewer items overall.

No matter the gender or ethnicity, everyone shops at H&M.

H&M has garnered much acclaim for the inclusivity of its advertising, as its campaigns
regularly showcase a vast spectrum of ethnicities, ages, religious affiliations, body types,
gender expressions and more. “Close the Loop,” one of the company’s most notable
campaigns, inspired customers to think “circular” by repurposing their clothing in non-
traditional ways. The short film featured a diverse cast of models, all while narrated by punk
icon Iggy Pop. Sister brand & Other Stories released a transgender-focused campaign in
2015, while H&M’s autumn campaign the following year celebrated a stunning range of
women.

Social Class
Every society possesses some form of social class which influences the buying behaviour of
people in a given social class. In this way marketing activities are tailored according to
different social classes. Here we should note that social class is not only determined by
income but there are various other factors as well such as: wealth, education, occupation etc.
H&M’s consumers mostly belong to lower middle class and upper middle class.

PERSONAL FACTORS
The Personal Factors are the individual factors to the consumers that strongly influences
their buying behaviours. These factors vary from person to person that results in a different
set of perceptions, attitudes and behaviour towards certain goods and services.
 AGE
Age and life-cycle have potential impact on the consumer buying behaviour. It is obvious that
the consumers change the purchase of goods and services with the passage of time.
H&M offers clothing and accessories for all ages.

It depends on the sub-brands. H&M kids category extends from new-borns up to 14-year
olds. Divided is targeted to the younger community, i.e. teenagers and young adults. Modern
classics are for business women and men and 40 years or more usually. Everyday clothing is
suitable for everyone, but it targets the late 20's and above. L.O.G.G. (Label of Graded
Goods) is for everyone who loves comfortable clothing and good fabric. However, the main
consumers of H&M are between 15 and 30 years commonly known as generation Y,
ambitious with high buying power.

 ECONOMIC SITUATION
A consumer’s economic situation has great influence on his buying behaviour. If the income
and savings of a customer is high, then he will purchase more expensive products. On the
other hand, a person with low income and savings will purchase inexpensive products.
“Fashion and quality at the best price” is what H&M offers its customers. Low-Cost apparel
and accessories that are trendy and fashion-forward attracts a majority of H&M’s customers
who belongs to lower middle class. They want to follow the trends without investing a lot of
money. Moreover, H&M working with high profile fashion designers such as Moschino, Karl
Lagerfled, and Stella McCartney to create designer capsule collections at affordable prices,
has generated huge interest and demand with consumers who couldn’t otherwise afford
pieces from these top designers.
On the other hand, people with good economic resource may allocate more spend on more
expensive brands.
In India, H&M has the halo of being a foreign brand and hence, lot of upper middle class
people are its customers.

 OCCUPATION
The occupation of an individual plays a significant role in influencing his/her buying
decision. An individual’s nature of job has a direct influence on the products and brands he
picks for himself/herself.
An individual’s designation and his nature of work influence his buying decisions. You
would never find a low-level worker purchasing business suits, ties for himself. An individual
working on the shop floor can’t afford to wear premium brands every day to work.
H&M offers both trendy and basic/classic, which are worn by mostly students, typical college
to graduate students, who are on a strict budget and are motivated to shop at H&M because
they can afford it. College goers and students would prefer casuals as compared to
professionals who would be more interested in buying formal shirts and trousers. Though
H&M offers ‘professional or work clothes’ at an affordable price, a senior professional can
never afford to wear cheap labels to work. He/she has to wear something really elegant and
unique for others to look up to him, and most of H&M products look almost exactly the same
as designs by luxury labels. H&M’s office wears are for those professionals who need and
can afford when they just enter the workforce.

 SELF-CONCEPT
Self-concept refers to the beliefs a person holds about his or her attributes and how he or she
evaluates these qualities. Products such as car, furniture and jewellery help determine the
perceived self, and in some way ‘we are what we have’ (Belk 1988, p. 139-168). Especially
culture symbols such as fashion and the act of appearance management can function to
express one’s self-esteem. That is why clothing is a very important method of announcement
 How significant is H&M brand for your self-
image?

of one’s
identity Very important or important
Less important but have a
29% 25% certain influence
Not important

46%

Self-
image

Brand-
image
Consumers'
Brand-
image

(Solomon & Rabolt 2009, p. 157-164).

Fashion can be the most external and direct way to show other one’s self-image. When
purchasing the fashion products, a consumer will consider ‘if they suit my real self or if they
can meet my ideal self.’ So, it will be much easier to attract the consumers if a brand does
well to stress the match between consumers’ self-image and brand image. Thus, only when
the three images: the brand’s target consumers’ self-image, the brand image that the brand is
building, and the brand image that consumers regard, matched each other, the brand can get
the maximum benefit from individuals’ self-concept term.
 Three “Images” Work Together
The question ‘How significant is H&M brand for your self-image?’ is included in the survey
to find out how the perceived personal importance of fast fashion products is to an individual.
The result shows 75% respondents in total hold negative-tendency attitude toward the
importance of H&M to themselves, from which 46% respondents regard it less important but
have a certain influence to self-image, and 29% think it not important; only 25% respondents
consider H&M is important or very important for their self-image.
Those fast fashion consumers whose styles are “fashion-forward” and “trendy”, shopping
H&M seems more frequently, and those whose fashion style is more “sport” or “elegant”,
they shop H&M less than the others. Even though the contrast is not obvious, probably due to
fast fashion tends to be used more often for basic wear than for showing self-image, which
can also be found from the result of question no.7, 75% respondents in total hold negative-
tendency attitudes toward the significance of H&M to their self-images.
H&M has already built some clear brand images in some ways. In term of brand’s
collections’ styles, they are generally fashion-forward and trendy, and their consumers’
fashion styles are also mostly fashion forward, trendy and fun-loving. And also, H&M has
delivered well to their consumers what their brand images are, as the figure below shows
what kind of images H&M wants to transmit and what image the consumers receive and hold.
 Brand-image Matches between Brand and Consumers of H&M

BRAND IMAGES OF H&M

GAP MODEL OF SERVICE QUALITY

The Gap Model of Service Quality is a framework which can help us to understand customer
satisfaction.
The model shows the five major satisfaction gaps that organizations must address when
seeking to meet customer expectations. The model was first proposed by A. Parasuraman,
Valarie Zeithaml and Leonard L. Berry in 1985. 
In the Gap Model of Service Quality, customer satisfaction is largely a function of
perception. If the customer perceives that the service meets their expectations then they
will be satisfied. If not, they’ll be dissatisfied. If they are dissatisfied then it will be because
of one of the five customer service “gaps” shown below.
GAP 1: KNOWLEDGE GAP
The knowledge gap is the difference between the customer’s expectations of the service and the
company’s provision of that service.

Essentially, this gap arises because management doesn’t know exactly what customers
expect.

There are a number of reasons this could happen, including:

 Inadequate marketing research orientation

o Insufficient marketing research.

o Research not focus on service quality.

o Inadequate use of market research.

 Lack of upward communication.

o Lack of interaction between management and customers.

o Insufficient communication between contact employees and managers.

o Too many layers between contact personnel and top management.

 Insufficient relationship focus

o Lack of market segmentation.

o Focus on transaction rather than relationship.

o Focus on new customers rather than relationship customers.

 Inadequate service recovery.

 o Lack of encouragement to listen customer complaints.

o Failure to make amends when things go wrong.

o No appropriate recovery mechanisms in place for service failures

KNOWLEDGE GAP IN H&M

CUSTOMER’S EXPECTATION FOR MORE VARIATION

H&M is more about clothing essentials. They have a wide range in elevated basics that
usually remains the same in almost all fashion seasons and customer is expecting more
options and design in their collections

The cut at H&M is poor, that is because they chose to do it this way. H&M mostly specialize
basic street style in their collections but as the trend goes on customer expectations are
increasing. Now they are expecting more variations in style.
LOOKING MORE CHOICES FOR MEN’S COLLECTION

Their men’s selection to be pretty basic and unadventurous. Customer are looking for better
stuff for man collections.

Customers are not getting more choices in shirt, t-shirt, sportswear, jackets, formal wear and
accessories.

Customers are looking for more collections for men’s wear which are recent in trends like
bold suits, patterned pants and classy formal wear.

AVERAGE RETURN POLICY

Their return policy states 30 days being given from a purchase date to when a return will no
longer be accepted. While there are stores who have policies much longer and shorter than
this, their policy falls right in the middle of the road as far as valuable return policies are
concerned. If we talk about GAP, they offer 45 days return policy to their customers.

Another unfortunate feature is you can’t return items purchased online in the physical store
nor can you mail in store items in order to get a refund. This makes the return process
frustrating for some customers.

Items such as swimwear, underwear, pierced earrings and cosmetics cannot be exchanged

& refunded due to hygiene reasons. Customers are expecting new refund policy from H&M
where they can get refund on these products also.
H&M OFFER FREE SHIPPING AFTER A MINIMUM PURCHASE

Customers can get free shipping in all online order of $40 or more but customers are
expecting free shipping in less than this purchasing amount.

H&M has clearly decided that covering costs is more important, and its delivery costs may
deter some customers. When rival fast-fashion retailers like Zalando are offering free
delivery and returns, with no minimum order rule. H&M’s delivery offering will lack appeal
for many price-conscious shoppers.

GAP 2. THE POLICY GAP: THE GAP BETWEEN MANAGEMENT

PERCEPTION AND SERVICE QUALITY SPECIFICATION

According to Kasper, this gap reflects management’s incorrect translation of the service
policy into rules and guidelines for employees. Some companies experience difficulties
translating consumer expectation into specific service quality delivery. This can include poor
service design, failure to maintain and continually update their provision of good customer
service or simply a lack of standardisation. This gap may see consumers seek a similar
product with better service elsewhere.

There are a number of reasons this could happen, including:

 Poor service design

o Unsystematic new service development process

o Vague, undefined service design
o Failure to connect service design to service positioning.
 Absence of customer- driven standards.
o Lack of customer-driven service standards.
o Absence of process management focus on customer requirements.
o Absence of formal process for setting service quality goals.
 Inappropriate physical evidence and services cape.
o Failure to develop tangibles in line with customer expectations.
o Services cape design that does not meet customer and employee needs.
 o Inadequate maintenance and updating of the services cape.

POLICY GAP IN H&M

USER EXPERIENCE NEEDS SOME IMPROVEMENT IN ONLINE SHOPPING

To be competitive online, H&M needs to match and even beat its rivals for user experience.

Mobile is especially important, as H&M’s target market of under 25s are heavy mobile users.

H&M’s mobile site is usable, but there are a few areas for improvement. For example, the
navigation is sometimes confusing.  

H&M’s previous landing pages, when we selected ‘men’ from the home page, and would
expect to see some other navigational options for product categories – shirts, jeans etc.
Instead, we found this page with no obvious way to find products.

NOT PROPER DETAIL ABOUT DELIVERY AND PAYMENT

Information on product pages of H&M can be relatively sparse. People will be expecting
some detail on delivery costs and timescales, as this impacts on their decision to buy or not.
In case of H&M this doesn’t help at all, and customers have to add items to their basket
before finding out costs and options.

Around two-thirds of consumers consider poor delivery standards to be the worst thing that
can go wrong with online shopping. Most customers use e-commerce services for ease, but if
deliveries are late or inaccurate it may prevent them returning to buy more, damaging trust
and impacting on reputation.

Recently, it looks as though H&M has made some positive changes to their mobile site,
including more links on home pages and delivery FAQs. However, after navigating to
‘Ladies’ customers are now presented with an extensive list of different products laid out in
one long list. And although there are some good FAQs for delivery, finding them can be
tricky as customer have to navigate to the ‘Customer Service’ area which is a much smaller
option in the main menu. 

SLOW PAGE SPEED

A look at Google’s Page Speed Insights tool shows that the retailer needs to work on the
mobile experience.

The H&M UK mobile site scores just 20% for mobile load speed. Page speed affects both
user experience and search rankings, so this is an area H&M needs to address. Fashion
shoppers, more than any other retail sector, tend to shop via smartphones, so H&M really
needs to ensure its target audience can browse and buy easily on mobile.

CUSTOMERS ARE EXPECTING MORE SUSTAINAIBLITY & BETTER QUALITY

H&M group are assessed on the basis of sustainability objectives, which are just as important
as any other benchmark. But they are entirely dependent on their partnerships with experts
from other fields to really drive our sustainability work forward.

H&M probably talks about sustainability more than any other fast-fashion brand. It
produces a Conscious collection made using sustainable and recycled materials, creates
glossy ad campaigns to encourage garment recycling, and has a voucher program offering
discounts to those who donate their old clothes at its stores.
 H&M staggering to consider: The quantity of cheap t-shirts, jeans, dresses, jackets, and
everything else it produced and sold reached about $25 billion in global sales in 2015. To
grow the materials, dye and finish them with chemicals, manufacture, and ship all those
clothes puts a tremendous strain on the environment and consumes vast resources. That
volume is the primary sustainability challenge H&M faces.

57% of H&M products confirmed as sustainable and recycled but Customers are now
expecting more sustainable and better quality products from this brand.
 RETAIL MARKETING

Retail marketing is the process of bringing a product directly to customers in

a retail store. It involves the planning, promotion, and presentation of a product. The
four gold standards of retail marketing are product, price, place, and promotion.

Retail marketing refers to the range of activities undertaken in the retail store by the
retailers as well as the brand to promote the products to the customers in order to
generate awareness, interest, and sales.

In simple words, everything from the interior and exterior of the retail store, to in-store
advertisements, product placements, offers and promotions, and the behavior of store
representatives comes under retail marketing.

The 6 P’s of Retailing

TRADITIONAL MARKETING MIX (4PS)

PRODUCT PRICE PROMOTION PLACE

RETAIL
MARKETING
MIX

PERSONNEL PRESENTATION
Retailers perform several marketing functions such as sales promotion, advertising and
point of purchase display. They induce customers to buy products of reputed companies.

Retail Marketing Strategies

Different retail marketing strategies can be planned and employed for different types of
retail outlets. The elements which should be considered while crafting a retail marketing
strategy are:

Target Market: The market segment which the retail outlet caters to.

Retail Format: It’s the retail mix of the retailer and the type of the store (ownership-
based, franchise-based, discount-store, etc.)

Sustainable Competitive Advantage: An advantage over the competitors.

The main objective of the retail marketing strategy is to differentiate the retail store from
the competition by setting up and promoting a sustainable competitive advantage which
leads to increased sales.

The contours of the retail marketing strategy include:

Retail Branding

Setting up a good brand name, logo, and positioning of the retail store is among the

topmost priorities of a retail marketer. Customers are more motivated to buy a product
from a branded retail store than an unbranded one.

Price Drops

A great way to attract customers is to provide the same quality (and quantity) of goods at
a lesser price than the competition.

Limited Period Discounts & Offers

Limited period discounts and offers increase the sales temporarily and can help in word
of mouth marketing and getting more customers (and returning customers).
Strategic Placements

Strategically placing items to where the customers are most likely to buy them is a great
strategy to increase the sales. A perfect example is the placement of small inexpensive
products (also called parasites) at the billing counter.

Strategic Store Design

The store design is the first touch point for the customers. The store designed for the
people it serves to perform better than the one which isn’t. A colorful and kids-friendly
products placement suits a toy shop while classy look and colors suit a store selling
men’s suits.

Visual Merchandising

The better it looks in the store, the more chances are that the customer will buy it. Smart
visual merchandising strategies help increase sales substantially.

Loyalty Programs

Loyalty programs are designed for better company-customer relationships. These

programs involve exclusive discounts and offers for regular customers.

Strategic In-Store Advertisements

People often prefer the advertised brand over the non-advertised brand in the store.
Strategic placements of such advertisements can substantially increase the sale of a
specific brand or a product.

Training Employees to Be Smarter

Retail store employees play a very important role in the decision-making process of
customers. They can make or break a product decision of the customer with the help of
their relationship and selling skills.

Retail Marketing Importance

The traditional dependency of retailers on manufacturers has been reversed. Today’s
retailers have their own brand, their own loyal customers, and even have the power to
sell, to upsell, to cross-sell, or to down sell any product using smart retail marketing
strategies.

Smart retail marketing strategies help the retailers enhance the customer’s journey in a
retail store and make him perceive that his money is spent on the right products.

 A good retail shopping experience motivates the customers to buy a product even
when they have no intention to do so.

 Shopping from a branded retail store generates a feeling of satisfaction and

confidence among the customers.

 Strategic placements and strategic store design improves the customer’s

experience and help the retailers sell the products which provide them with the
most profits.

 Purchasing during limited period offers make the customers feel they have
achieved a great feat by saving money.

SALES STRATEGY

A sales strategy is a plan by a business or individual on how to go about selling products

and services and increasing profits.  

A sales strategy is defined as a documented plan for positioning and selling your product

or service to qualified buyers in a way that differentiates your solution from your
competitors. Sales strategies are meant to provide clear objectives and guidance to
your sales organization.  Sales strategies are typically developed by a company's
administration, along with its sales, marketing and advertising managers.

A sales strategy – unlike one for marketing or product – narrows your focus on one
very important aspect of your startup success: making the sale. While
marketing strategy focuses on increasing your visibility, a well-defined sales
strategy helps you make real quantifiable profits.
IMPORTANCE

A carefully-crafted sales strategy is critical to the survival and growth of your company.
Many business owners hyper focus on product development and forging their marketing
plan, leaving little room for the development and refinement of a sales strategy plan.
This is a costly mistake.

To understand why, let’s first establish the difference between a marketing strategy and a
sales strategy. The former is designed to increase your visibility, while the latter
concentrates on actually making the sale. A sales strategy is concerned about generating
real, quantifiable profits. No matter how good your product or marketing plan is, it will
be for nothing if your sales process can’t produce results. To get to the level where you
can consistently generate desired results, you need a well-defined sales strategy that also
covers your marketing plan.

In essence, the importance of your sales strategy goes way beyond the bottom line. It
helps you modify who your customers are and how you approach them as well as fine-
tune your sales tactics, and find the right people for your team.

There are two primary types of sales strategies: 

Inbound and outbound.

In outbound sales — the legacy system of most sales teams — companies base their
sales strategy on seller actions. They rely on manually-entered data to monitor the sales
pipeline and coach their salespeople, and they run sales and marketing  independently,
creating a disjointed experience for buyers.

In inbound sales — the modern methodology for sales teams — companies base their
sales process on buyer actions. They automatically capture seller and buyer data to
monitor the pipeline and coach salespeople, and they align sales and marketing, creating
a seamless experience for buyers.

CURRENT RETAIL MARKETING AND SALES STRATEGIES FOLLOWED BY

H&M
Marketing strategy helps companies achieve business goals & objectives. These are the
current strategies followed by H&M:-

H&M Product Strategy:

The product strategy and mix in H&M marketing strategy can be explained as follows:

H&M is a clothing retail company. It offers fast fashion clothing for men, women and
children. H&M offers following clothing brands in various countries across the globe:

 H&M: The range includes everything from designer collaborations to everyday

basics and yoga wear.
 Other Stories: Women wear: shoes, bags, accessories, beauty, ready to wear
 Cheap Monday: Denim, fashion collections and accessories for men and women.
The brand is connected with music and pop culture.
 COS: Classics and wardrobe essentials for men, women and children. The brand
had designs inspired by art and technology from across the world.
 Weekday: It makes clothing for young and style aware young adults.

H&M Price/Pricing Strategy:

Below is the pricing strategy in H&M marketing strategy:

H&M offers high quality clothes at a premium price. The major competitors of H&M are
GAP and Zara. As compared to both of these brands, H&M products are prices relatively
lower as a part of it marketing mix pricing strategy. These is due to lower cost of
manufacturing and transportation costs by H&M. As compared to Zara H&M offers more
variety of products. On an average H&M products are prices at $25 whereas that of Zara
are $45. High quality and considerably lower prices attract the youth and hence leads to
increase in sales for the company.

H&M Place & Distribution Strategy:

Following is the distribution strategy of H&M:

H&M sells its products through its exclusive stores located in major cities across the
globe (4135 stores). In some countries due to regulatory norms, H&M offers its products
through franchising partners. It also offers its products through online stores from where
the customer can choose from the list of available products and purchase them through
online payment. The products are delivered at your stated address. Cheap Monday is sold
through selected retailers worldwide and through standalone stores including its flagship
store in London.

The products are manufactured in countries where cheap labour is available in order to
reduce costs. The clothes are designed by H&M and its other brands according to
segment they are targeting. H&M has developed an excellent supply chain over the
years. The delivery time is instant and the transportation costs are kept at a minimum.

H&M Promotion & Advertising Strategy:

The promotional and advertising strategy in the H&M marketing strategy is as follows:

Since H&M group has a wide range of product portfolio catering to different segments, it
uses multi-channel promotional strategy in its marketing mix.

 YouTube: H&M has its own YouTube channel where it comes up with unique ad
campaigns to engage with the customers.
 Digital Marketing: It indulges in excessive search engine marketing and social
media marketing to convert the potential buyers into consumers.
 Promo codes and discounts: Promo codes and discounts are offered during the
end of season sale. The discounts are offered on both online and retail stores.
 PR: Parineeti Chopra opened the first H&M outlet in India. Such stunts generate
quick publicity for the company.
 CSR: Water, Planet, Education, Equality

People:

The employees at H&M are trained well at every level. The work culture is very modern
and employees are on a rotation basis at every department and are motivated to innovate
and come up with the best clothing wear. H&M also tie up with many clothing designers
throughout the world to make latest trends in fashion. Employees come from diverse
backgrounds having special skills. Personal and Professional development of employees
is highly promoted.
Process:

High importance is given to customer relationship management. Employees are trained

to retain highly profitable customers by giving them better service and offers. In case of
any complaints the staff at H&M puts in every effort to resolve them at the earliest.
There is a customer care number through which the customer queries are resolved. Staff
at H&M outlets help the customers in selecting the best merchandise for them. Thus the
service and delivery time is very quick thus gaining satisfied customers.

Physical Evidence:

H&M stores are appropriately lit with great ambience and humble staff. The apparel is
arranged to have a decent look which appeals to the customers. The merchandise is of
excellent quality and latest trends. H&M is diversifying its portfolio and entering into
more international markets. To create a Buzz in the market, it engages in PR activities.
For example, celebrities were invited during its launch which created a Buzz in the
market. User stories and recommendations are always welcomed by the brand which also
helps in customer engagement with the brand.

H&M STP Analysis

Segmentation Strategy:

These are approaches to subdivision of a market or population into segments with

defined similar characteristics. Demographics and psychographic segmentation are used
for H&M to reach all their customers. H&M is spread throughout the world. This means
that the company targets many religions, culture and lifestyle. Therefore, their marketing
has to be done differently in different areas.

 Segments by class: H&M strategy is offering high fashion at low prices,

typically targeting working class, lower middle class and students.

 Segments by class/home: The most popular segment is women aging

between 15 and 30 years, either still living at home, in student dorms, or in
their first house in urban regions
  Segments by age: The most popular segment is women aging between 15
and 30 years commonly known as generation Y, ambitious with high
buying power.

 Segments by family life: Typical college to graduate females life at home

single, on their own in dorms or in their first home, either single or as a
young couple without children.

Influences: Cultural, social, personal and psychological influences result in a lifestyle

and personality. This group is looking for affordable fashion and typically shop at more
than one store. They are fashionable consumers who’s shopping as a social activity
providing pleasure in their daily lives. They buy clothes each season, want to follow
trends and are very up-to-date.

According to Maslow’s hierarchy of needs, they would fit perfectly in the social part:
belongingness/love.

Targeting Strategy:

The selection of potential customers to whom a business wishes to sell products or

services. The target customers of H&M belong to the group of fashionable and trendy
consumers who see shopping as a social activity provide pleasure in their daily life, who
wants to follow the trends without investing a lot of money. The target market for H&M
is for younger people. Even though H&M offers clothing and accessories for all ages,
their target market is women. Women usually shop more for them, but also buy all their
children’s clothing and often their husbands as well. With their low prices H&M targets
woman in the lower middle class and working class, this is a concentrated targeting
strategy. Because their focus is to sell a fashionable product for a low price they target
married to single woman, mothers and daughters. Many single young women who
always want to stay on top of the fashion trends are constantly upgrading their closets
with H&Ms new affordable items. The consumers are not highly brand loyal; rather they
shop at multiple retailers in search for the perfect fashion pieces. They shop anywhere
from four to six stores on average. Customer attractiveness is high, customer loyalty is
low.
Positioning Strategy:

Is a marketing strategy that aims to make a brand occupy a distinct position, relative to
competing brands, in the mind of the customers? H&M is a retailer that is looking to
provide consumers with fashionable, high-quality clothing at the best price possible.
They offer “fast-fashion” clothing, in other words from runway to racks in record time,
and sell European influenced clothing in the American market. Additionally, H&M
carries clothing in a variety of categories including women’s casual, men’s business,
children’s wear, footwear and accessories. The company is the second largest clothing
retailer in the world, the largest in Europe and actively engages in E-retailing. H&M is
also economically, socially, and environmentally sustainable

Social Media Marketing by H&M

Facebook:

H&M has attracted more than 14m fans to its Facebook page and posts several updates a
day except on weekends. Most of the updates focus solely on promoting its products, but
in among the blog standard “buy these trousers” posts there are some really neat
promotional ideas. For example, the retailer clearly does a lot of blogger outreach and
often links to third-party blog posts and articles on its H&M Life site. Similarly, H&M
has run several competitions recently that require fans to submit their own photos for a
chance to win, which is a great way to encourage engagement that is relevant to the
brand and more meaningful than just asking for a ‘like’ or re tweet.

 Twitter:
H&M has created separate Twitter feeds for each of the local markets in which it
operates, but each one uses the same background and header image so the branding is
obviously closely controlled. The feeds appear to be equally poor at responding to other
users, with each tending to churn out marketing messages rather than answering queries
or @mentions. Looking at the main corporate account for example, it tweets a number of

product images, links to blogs and competition promos each day, but generally responds
to fewer than 10 @mentions. One noteworthy Twitter campaign by H&M recently was a
Q&A with brand ambassador David Beckham.

H&M Campaign to promote sustainability initiatives

H&M is running its first campaign to promote its clothes recycling scheme as the retailer
looks to raise awareness of its sustainability efforts and encourage more shoppers to
donate unwanted items of clothing.
The ads, which run in The Evening Standard and Metro, focus on H&M’s “Conscious”
range of sustainable clothes, as well as highlighting its collection service which offers
customers a £5 discount voucher for every bag of clothes they take into stores.

After doing GAP analysis we found there are many gaps lying between BRAND and
CUSTOMER. So, now we are making strategies to fulfill all the GAPS. That will
help the brand to increase its sales.

 CUSTOMERS EXPECTATIONS FOR MORE VARIATIONS AND DESIGNS

H&M provides many options and designs but now a day’s people became trendier and
started expecting more options and designs in their collections. As they want to change
their wardrobe with the change in trend.

So, H&M should start manufacturing more options and designs in their collection.
They should also include more variations in there style. So, they can meet the demand of
customer and fulfill their needs. Ultimately this will help in increasing their profit and
companies growth.

 FOCUS ON MEN’S COLLECTION

H&M have less men’s collection as compare to women’s collection. Male customer are
not satisfied because they find limited options for themselves.

So, H&M should focus on their men’s collection and start manufacturing more options
for their male customer to make them satisfy. That will increase their male customer.
 FREE SHIPPING

There is certain restrictions in shipping charges.

Free Standard Shipping over $25 (5-9 Business Days)

For orders below $25, the $3.99 shipping and handling cost will be applied. Your order
will be delivered within 5 to 9 business days following the order confirmation.
Additional business days may be required for delivery during peak selling periods.

Because of these restrictions, customer don’t feel comfortable while shopping online.

So, H&M should provide free shipping and free delivery for all items.

 SPEED OF IT’S WEBSITE

H&M web page server has speed problem. Because of this problem customer who prefer
online shopping have to many face problems like while making payment their money got
cut down but the message pop up shows transaction failed which makes them not to go
for online platform for shopping.

So, H&M has to re-build their web page to increase its speed. By doing this customer

SOURCE - https://www2.hm.com/en_us/customer-service/delivery.html

will not have to face problem and they will go for online shopping without any fear.

 SIZES OF OUTFIT
H&M has a size chart on their official website which is not clearly defined in their
stores. So, it creates problem for those customer who uses online website for choosing
any outfit and prefer stores for purchase. Because the size shown in the website is not the
in the store. So customers have to face lots of problems regarding their perfect size, they
are unable to find out their perfect size.

So, H&M can focus on the sizes provided online and the same should be there in the
store. They can put correct label of size on the garment and even the same size chart
should be available online. Which can help customer to find out their correct size
without any confusion.

 APPROPRIATE ADVERTISEMENT FOR BETTER COMMUNICATION

Consumer expectations are highly influenced by the statements made by company’s

advertisements. There expectations increases because of the over promising
advertisements done by H&M. which misleads the customer and create a communication
gap between the customer and the brand.

To avoid this communication gap H&M should focus on their advertisements. Which
will not mislead the customers also fulfill their demands.

 POLICY OF RETURNS AND EXCHANGE OF GARMENT

The return policy of H&M is of 30 days from the purchase date to the date when it has to
be return and after that will not be accepted but their competitive brand like GAP offers
45 days of return policy to their customers. So more are getting attracted towards the
brand GAP. This will decrease the customers of H&M.

So, H&M should focus on their return policy. There are many product like swim wear,
earrings, and cosmetics cannot be exchanged. So customer avoid shopping these items
from H&M.

So, H&M should provide better policies for exchanging the product. This will increase
their customer.
 SPREADING AWARENESS AMONG CUSTOMERS THROUGH
TELEVISION COMMERCIALS

H&M focuses more on social media marketing or campaigns for the promotion of their
products. It hardly focuses on television commercials. So there is lack of awareness
among people. There are many people who don’t have any idea about the brand.

So, H&M should equally focus on social media marketing and television commercials as
well.

 PROPER COMMUNICATION BETWEEN SALESPERSON AND

CUSTOMER

It is very important to have a well-trained salesperson in every H&M store. Because

salesperson are those who directly interact with customers. Sales person should have
each and every detail of the product that is placed in the store, which will help them to
make the customer aware and informative about the brand.

So H&M should recruit knowledgeable person, those who have to ability to handle the
problems of customers. In every 6 months there should be a training program conducted
for salesperson to enhance their skill and capabilities.

They should also be trained with the change in technology and trends. By doing this
salesperson can have the ability to lure the customer easily and also they can provide
information about any product that customer want. The effort of salesperson can
influence the customer and they will end up buying something form the store.