Comparative Study of

ZARA and H&M

1
Full Name :H&M
Founded :1947
Founder :Erling Persson 
CEO :Karl-Johan Persson
Industry :Fashion&Retail
Sector :Public
Country :Sweden
Website :www.hm.com

H & M Hennes & Mauritz AB is a Sweden-based company active in the clothing industry. It operates under such
brand names, as H&M, H&M Home, COS, Monki, Weekday, Cheap Monday and & Other Stories. It is engaged in
the design, manufacture and marketing of clothing items and related accessories. The Company’s product range
comprises clothing, including underwear and sportswear, for men, women, children and teenagers, as well as
cosmetic products, accessories, footwear and home textiles. The Company offers its products in a number of
branded stores spread across over 40 markets. Additionally, the Company offers online and catalogue sales in
Sweden, Norway, Denmark, Finland, the Netherlands, Germany, Austria and the United Kingdom, among others.
3
 PESTLE Analysis

The political and legal factors that influence the apparel and retail industry are geopolitical instability, Brexit,
terrorism etc., and for a company that is operating in more than 66 countries globally and having across 44
online markets worldwide summons a lot of political and legal influence. In early 2018, H&M was under a
massive political controversy of racism and hurting sentiments of Africans, for which the company later
apologized. However this controversy led to celebrities boycotting the partnership with the company and the
stores in Africa being looted by localities. 

H&M products are widely accepted due to its affordable pricing and good quality. Whilst this is one of the
strengths of the company it can be reversed under influence of economic factors like increasing labour cost,
rising maintenance cost, fluctuating currency rate, inflation rates, interest rates, and taxes. 
Political Factors
As a global brand operating a number of stores across the globe, the monitoring of
political risk is increasingly important for H&M. The organisation has franchised outlets
in a number of markets and countries that are increasingly politically unstable,
including Turkey, Egypt and Lebanon, and state that they monitor any changes closely
and have contingency plans in place to deal with any political instability as
advantageously as feasible for both the stakeholders of the company and the company
itself.
Due to regulatory reasons, H&M has to collaborate with franchising partners to operate their brands in
United Arab Emirates, Kuwait, Qatar, Saudi Arabia, Egypt, Oman, Bahrain, Lebanon, Israel, Morocco,
Indonesia, Jordan and Thailand, despite franchising not being a part of the firm’s general expansion strategy
(H&M, 2017b).

US vs China Trade war is also a major concern not only for H&M but for the entire industry. Its impact
results in increasing the prices of textile products. The workers demand has been growing ever since. They
demand fair working conditions, safe work place and improved wages. The developing countries with a
stable government change the labour laws such that the minimum wages which has to be provided shoots
up the overall production cost. Brexit has also resulted in a difficult political scenario to operate in. The
overall impact most of the times is that the goods manufactured become costly and thus the customers5find
 Economic Factors
Changed tax systems in Asian markets With the introduction of new tax systems in countries like India
(GST), the market could become a little unstable for international companies as there will be shift in tax
regime. Also, there is an overall a shift in the geo-political dynamics across the world. Value added tax
or VAT is going to be introduced in the UAE and Kingdom of Saudi Arabia in 2018. Namibia and Serbia
are working on improvements in digital technology and trying to convert their economy into a digital
one. China is not far behind when changes are considered and is working not only on converting its tax
procedure into digital but is also working on changing the culture of tax authority and way it interacts
with the taxpayers.
The economies of scale are also shifting back from once developing counties to other regions. The cost
of labour, production, operations along with marketing and sales pose several challenges to the
company. Many services which were earlier highly tradable due to exclusivity are now becoming
obsolete. Also, economies are becoming much more volatile in the present scenario. There is a
worldwide movement against sweatshops and thus, a lot of dynamics have changed in the current
Social
world Factors
system.
Clothing is a field where people are directly influenced by social media and celebrities. They relate more with
the brand that their favourite celebrity star promotes. Thus, promoting the products through social media
and creating the buzz around the channels is important. The attitude of buyers is changing. They prefer
designer clothes these days and thus the demand for the same is rising more than ever before. This changing
trend in attitude, buying behaviour has to be analysed so that no social group is left untargeted. 
Technological Factors

The third-party logistics provider utilised by H&M in the UK, Hermes, has a strong reputation for
technological advancement, and has an extensive network of supply chain technology to track all
logistics operations, aiding the service provided by the firm (H&M, 2017a).

The era of mobile phone has arrived. People are no more interested in going to the store and buying the
clothes merchandise when they can do the same via mobile application. The technology gives the
customer the ease of ordering from their workplace/home/anywhere. The firms including H&M have to
keep up with this technological advancements and related changing behaviour. Reward points either
directly in the application which is used to order or in the form of discounts are a nice strategy mixed
with technology to increase the customer base. Along with ordering applications H&M has also tied up
with Hermes as its logistic partner which is highly advanced in technology of logistics. Artificial
intelligence, analytics can be used to design merchandise, observe and study the customer to provide
them with suitable services/products.

7
 Legal Factors
Stricter norms and regulation for foreign companies in some countries With changing geo-political scenario in
terms of immigration and emigration, H&M has to pay utmost attention to the underlying dynamics. Also, it has
to check the favourable markets to sustain its business and profits. It should thoroughly access and weigh its
options before taking a decision. It should make informed decision rather than uncalculated risks. H&M has to
also take care about the change in various laws that happen across the countries with changing the political and
social system. It should consider the various FDI rules and regulation that are specific to location and geography.
Also, it should abide by local laws and regulation pertaining to various aspects. They should also maintain an
ethical and healthy work place environment and abide by international laws and guidelines that are to be
followed by all companies. Labour laws and labour unions should be dealt carefully. It should always seek legal
advice before venturing into any unknown territory. It should follow ILO guidelines and take into consideration
interest of its stakeholders before any crucial decision is implemented.

Environmental Factors
H&M aim to be 100 per cent circular and renewable by 2030, meaning that all products will be generated from
old products of the firm, and that only recycled and durable materials will be used for products (Pergrankvist,
2017).
Textile industry as a whole is the second most polluting industry after oil and petroleum industry. The high
amount of water waste which is generated pollutes the water bodies. The population living nearby to those
water bodies suffers from various deadly diseases. Air gets polluted which manufacturing the clothes
merchandise. There are government norms for regulating these emissions into the air but still the damage can
never be controlled cent percent. H&M has a goal which is to be use completely recycled clothes material for
8 its
Political Economical

1. De-globalization surge across the globe 1. Changed tax systems in Asian markets
2. Economic instability due to trade restrictions in 2. Changing economies of scale 
North America 3. Changing labor laws
3. Changing leaders in USA, Europe, Asia 4. Increasing disposable income in emerging markets

Social Technological

1. Changing choices of customer 1. Innovative technologies such as data analytics and

2. Social Media emerging as a storefront for AI to improve efficiency
fashion retailers 2. Increasing importance of online channels

Legal Environmental

1. Stricter norms and regulations for foreign 1. Demand for eco-friendly products
companies in some countries 2. Climatic conditions influencing apparel choices
9
Strengths SWOT Analysis of H&M
A wide range of products: H&M has a wide range of product offerings including apparels, cosmetics, shoes and
accessories for a wide range of customers.  H&M group also have products such as blankets, the collection of vases
and pots; candle and candle holders etc.
Unique Identity for all brands: H&M sells its product portfolio through many different brands such as H&M, COS,
Weekday etc. All its brands have a unique identity depending on customer target  group.
Diversified global presence: H&M has a strong and diversified presence geographically across the globe. H&M has
stores in over 60 countries across 6 continents. H&M has expanded in the recent years in potential markets such as
Asia and Africa. Strong global presence enables the company to minimise business risks.
Strong financial performance: H&M has reflected strong financial performance in the previous financial years. In FY
2015, H&M showed a growth in revenue of 19.4% over the FY 2014. A strong financial performance increases
investor’s confidence and provides financial flexibility to the company.

Weaknesses
High online growth and emerging markets have enabled the main competitor of H&M, Zara owner Inditex, to
outpace H&M. Inditex remains the world’s largest clothing retailer, and has consistently outperformed H&M over
the past few years.
Inditex has been quicker than H&M to diversify into brands which are higher-priced, meaning that H&M have
already missed out on a significant proportion of market share and will have to provide a unique service proposition
in its higher priced brands such as & Other Stories or Cos in order to gain market share. The firm recently reversed
upon its intended strategy of increasing its store count from 10% to 15%, instead opting to increase its sales
10 by the
Opportunities
Focus on expansion to improve profitability  H&M has been focusing constantly on expanding its store base across
the globe. The company added 400 new stores in FY 2016. Such expansion plans can help H&M improve its
bottom-line as well as the top-line.
E-commerce as a platform: H&M is also present on E-commerce in various countries. H&M needs to expand in the
E-Commerce platform as well to serve to a larger market. E-commerce can be the future of the apparel industry
and H&M needs to make use of the platform to its potential.
Expand in emerging markets: The emerging markets in the world possess a great potential as far as the apparel
industry is concerned. H&M needs to explore the emerging markets like Asia and Africa in order to capitalise on
the new demand created.
Improving Lifestyle: The purchasing  power and the lifestyle of people are improving across the globe. People are
more brand-conscious and thus it provides an opportunity for brands like H&M to capitalise on the need
11
generated.
Threats
Evolving fashion trends: Apparel industry is subject to quick changes as trends keep changing quickly. Social
media has also played a part in quickening the process of changing trends.  H&M has to deliver according to
the new trends in the market or else it can lag behind in the industry.
E-Commerce allows new entrants: E-commerce is an advantage as well as a threat for the popular brands as
E-commerce allows newer brands to be present on the same platform as the popular brands and hence such
new entrants could affect the business of brands like H&M.
Intense competition: The apparel industry is subject to intense competition from local as well as global
brands. Each company has to be aware of the competition in order to be on par with the new trends and
fashion.
Rising labour costs in developed countries: Rising labour costs affect the cost of production for the industry.
Such increasing costs affect profitability for the company.
A risk of foreign exchange fluctuations: H&M group’s reporting currency is Swedish Krona but most of its
sales come from developed economies such as Europe and the US. The threat of foreign exchange rate with
respect to the powerful currencies can affect the profitability.

12
 ZARA

Full Name :Zara

Founded :1974
Founder :Amancio Ortega Gaona
CEO :Oscar Perez Marcote
Industry :Fashion & Retail
Sector :Public
Country :Spain
Website :www.zara.com

Zara is a Spanish clothes and accessories brand, it is the flagship brand of the Inditex group. Few clothing
brands keep up with the latest fashion, are of high quality and yet, affordable. It is probably the amalgamation
of all these qualities that made Zara, the Spanish clothing brand become the go-to fashion brand for all.
13
14
 ZARA
PESTLE Analysis
Zara’s popularity has kept growing during the past few years. It is one of the most known names in the world of
fast fashion known for excellent designs and affordable prices.  Another important attraction of Zara are its faster
fashion cycles. Instead of two or three, it brings several cycles an year. The fast rising fashion brand has seen a lot
of success in the recent years and is moving fast and expanding internationally. In several countries it is selling
online and in several more it is still to grow its online presence and sales. The continuously rising popularity of
Zara is a result of its focus on customers’ happiness.  The result is visible. The crowd inside Zara stores has kept
increasing. The flagship brand of the Inditex group is geared for greatness and the threat is being felt across the
market by the other brands both big and small. However, this does not mean that Zara has made it possible
without any efforts and just by serving a luxury cheaper.

Political Factors
Zara is a Spanish brand, so it enjoys all of the benefits of operating a business out of the European Union. In a
political context, one of the biggest pros of running a company in the EU is the country’s extensive trade
agreements. Not only does this make it incredibly easy to import raw materials and export finished products
within the European Union, but it also means that Zara can send its merchandise across the world with little effort
and for a low cost. Overall, the EU’s free-trade policies are massively beneficial for Zara.
15
Economic Factors

Spain’s fast-growing economic environment has favoured Zara’s sales and overall sales of the clothing retail
industry. This is because with Spain’s astonishing high levels of unemployment and high population, the cost of
labour is low leading to low production costs and high-quality products with reduced prices which in turn
attracts more customers.

However, the British exit from the European Union has resulted in pound depreciation leading to high inflation
rates and increased costs of living with less disposable income for consumers (Blanchflower 2017). Therefore,
Britons have slashed their spending on new clothes resulting to decrease in Zara product sales and overall
profitability of the apparel and clothing industry.

Zara is a well-recognized brand, so those less familiar with its products might think they’re quite expensive. On
the contrary, Zara is considered a relatively affordable brand in comparison to other European Highstreet fashion
names. This allows the company to thrive even in poorer countries; for example, despite Spain’s slow economy,
Zara is still one of the most popular clothing brands in the country. Indeed, Zara has some more expensive
products, but what’s most important is that it can cater to the majority of shoppers with the rest of its clothing
lineup.
16
 Social
Despite its affordability, Zara is a fashionable Factors
name for most shoppers. This is where you can only praise the
company for its hard work. Zara delivers a good-quality product for not a lot of money. And thanks to the brand’s
clever marketing efforts, it feels rather exclusive for buyers.
In addition, since Zara operates in many countries around the globe catering for diverse cultures, it researches new
markets and cultures and makes products specific for the different cultures. For example, Zara’s lungi skirt is high
street style for men particularly in South Asia.Although clothes shopping might not be the best fit for the web,
consumers now want to order their garments with the tap of a button, and from the comfort of their own homes.
This isn’t necessarily a bad thing for Zara, since they already have a popular web shop. However, Zara will have to
pay close attention to the performance of its online store, since consumer’s preferred channels are definitely
changing.
Technological Factors
Zara is one of many brands looking to use technology to expand its reach. As one of the world’s most popular
fashion retailers, the company has both the money and the audience needed to get the most out of data. As a
result, Zara is looking to big data — the study of analysing huge data sets — to find better ways to reach and appeal
to consumers. With both online and in-person customer touchpoints, this isn’t a straightforward task. Technological
efficiency has become a mark of effectiveness in 21st century. Whether it is inventory management or customer
service, technology reduces the pressure on companies and increases their reach and efficiency. ZARA has also
implemented an RFID system for tracking inventory along its value chain. It enables the store employees to track
inventory in the other stores or on ZARA website and improve customer experience. This has improved ZARA’s entire
inventory management process. RFID has streamlined the replenishment order operations and increased the pace
of inventory counting.  17
Technology has influenced the development of a new augmented reality technology by Zara which will allow
customers to see how models wear specified pieces of clothing whenever they approach a sensor with a
smartphone somewhere in their stores. Customers can then click on the product and purchase it if they desire. The
technology will also be incorporated with online orders with a sensor on the order’s packaging and if the consumer
uses a sensor, he/she will immediately be presented with a wide range of other outfits. This technology is mainly
meant to target young customers

Legal Factors
Big fashion retailers like Zara, H & M need to strongly enforce copyright laws so that when their products are
launched, they can not be reproduced at local shops at lower prices but rather only marketed through their brand
names and trademarks. For example, Target clothing company is being Sued for infringing Burberry’s genuine scarfs
which could cost it a lot of time and money in fines and penalties (Hanbury 2018).
ZARA’s focus is also on ethics and sustainability across its business and its supply chain. There are several laws that
18
businesses are required to comply with. 
Environmental Factors
The world of fast fashion is often associated with wastefulness. Many fast fashion products simply aren’t
designed to last; instead, they’re supposed to be affordable garments that look good in the changing rooms.
What’s more, fast fashion is said to encourage shoppers to quickly jump on trends, throwing away clothing just
to stay with whatever is hot. Some might classify Zara as a fast fashion brand, so they might be accused of this
wastefulness. With shoppers becoming more and more eco-conscious, this could have a negative effect on the
brand if it doesn’t begin to take sustainability more seriously.
As governments strive to create a greener environment, Zara’s parent company Inditex has pledged to make its
stores eco-friendly by 2020 and has invested over $7.5B in sustainability targets which include production of
sustainable clothes prepared from organic material using sustainable energy and equipping its stores with
energy efficient and regulatory features (Scarano 2017).

19
Strengths
SWOT Analysis of ZARA
As one of the leading companies in its industry, Zara has numerous strengths that help it to thrive in the market
place. These strengths not only help it to protect the market share in existing markets but also help in penetrating
new markets. some of the strengths of Zara are – 
•Strong Brand Portfolio – Over the years Zara has invested in building a strong brand portfolio. The SWOT analysis of
Zara just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into
new product categories. 
•Highly successful at Go To Market strategies for its products. 
•Strong distribution network – Over the years Zara has built a reliable distribution network that can reach majority
of its potential market. 
•Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote
company’s products but also invest in training the sales team to explain to the customer how he/she can extract the
maximum benefits out of the products. 
•Good Returns on Capital Expenditure – Zara is relatively successful at execution of new projects and generated
good returns on capital expenditure by building new revenue streams. 
•Highly skilled workforce through successful training and learning programs. Zara is investing huge resources in
training and development of its employees resulting in a workforce that is not only highly skilled but also motivated
to achieve more. 
•Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully
integrated number of technology companies in the past few years to streamline its operations and to build a reliable
supply chain.
•Superb Performance in New Markets – Zara has built expertise at entering new markets and making success 20 of
Weaknesses

Generalised collection – Zara does not specialise in anything and has everything for
everyone. One of the reasons that a customer shifts to a competitor is when the
competitor is focused on one thing. It might be shirts, it might be pants, it might be
dresses or party wear or whatever. Such immediate focus is lacking in Zara and it is good
for the day to day wear or trendy wear.
Lack of advertising – While it may lead to a cost advantage and cost is one of the
strengths of Zara, the lack of advertising is a weakness because the brand can double its
profit and its turnover by advertising its collection. It is known to be a trendy fashion outlet
and it can easily pull in more customers with advertising which will generate a lot of
positive word of mouth for the brand.
Low safety stock – A regret which Zara stores have is that stocks which are fast moving
rarely have a safety buffer behind it. Low inventory is kept at Zara as a strategy to keep
customers walking into the stores to check out the latest items. But it also means that if a
particular design is a hit with the customers, it wont reach its potential because there is no
safety stock or buffer for this design.
21
Opportunities
Online E-commerce – Zara can definitely take advantage of the online buying trend and make its clothes available
not only in its own stores but also on other E-commerce stores as well thereby bringing a hike in sale.
Backing some flagship designs – One of the common traits of top brands is that they have some designs which are
flagship designs of their stores. This is lacking in Zara and hence, there should be some designs which should always
be sold from a Zara store, bringing in great demand for these designs and building even more brand identity for the
brand.
Growing market potential – Wherever Zara is currently existing, he brand is becoming more and more popular,
thereby resulting in growing market potential. A rise in earning potential of consumers results in rise in demand for
status symbols. Zara is one such status symbol in clothing industry which consumers love to wear. Hence,
Zara needs to capitalize on the growing market potential of existing markets.
Market expansion – New markets will always give new business and potentially profitable business to Zara. It needs
to keep a constant eye on emerging markets, where the spending power is rising and where people can spend on a
semi premium brand like Zara so that they can wear better and more stylish clothing. Such market expansion insures
the clothing brand against saturation in developed countries where the competition is too high.
Threats
Low advertising – Zara needs to ask this question to itself. Looking back, will Zara think that it made a mistake by not
advertising its unique brand proposition from the start? The way that Zara keeps rotating design, it can rope in a lot
more consumers if it advertises the fact that you will get the latest in designs from Zara. But maybe, if its consumer
base increases tremendously, coming up with new designs and differentiating itself will become more and more
difficult. So, the debate of whether Zara should advertising or not, will be going on in the management room 22 of Zara
MARKETING MIX ZARA

23
 ouble in the near future.
n India, Zara started its operations in 2010. Ever since its debut, it has been on
continuous rise and has crossed 500 crore milestone recently. Zara is known
s the Coca Cola of fashion. Such is the craze of this brand among the fashion
nthusiasts. One of the major strength of the company is that it is able to
espond very quickly to the changing needs of the customers.
he company does not outsource its manufacturing process, making it fully in
ontrol of the products it produces. Its unique selling preposition is to create
he latest trends. In most cases, new styles are normally available on the sales
tores within two weeks, four weeks maximum. If a product is not selling in the
tores, it is immediately pulled from the stores.
owever, when it comes to India, it has a few problems to sort out, prominent
mong those being the lack of seasonal variations in their range. Secondly, it
eeds to tackle and cope up with the cultural needs of the local people which
a big challenge and Zara is working to reach out local people by coming up
with designs that integrate modernism with local traditions. 24
 he concept of Zara is to provide its products at a reasonable price to its
ustomers, it follows that customers find its prices quite affordable. However, w
ave to know that we are referring to the cream customers who would compar
ara with Hugo Boss or others. Some Zara stores might be very premium
whereas others will be very much affordable. But mostly Zara has a premium
ricing strategy. The pricing is made possible by optimizing development and
raining costs.
25
 essence, the company relies heavily on the word of mouth advertising mor
an anything else does. The products target population in age group 18-40 tha
ve in the cities. This is because; this group is the most fashion conscious, mor
an any other group. Specifically, the market segment comprises of wome
5%), men (25%) and children (15%) all of them being fashion consciou
ducated and fall in the middle class category.
heir commitment is clearly visible in the attention they pay to each and ever
etail of their showrooms. The elegance with which the windows are laid ou
nd the way the shop attendants are groomed, everything is worked ou
ccording to a plan that is very precise. Every store manager has free access t
lk to their counterparts at Spain regarding the marketing and improvemen
rategies.
mall and regular product shipments are designed to keep the inventory scarc
nd fresh; compelling customers to buy urgently and frequently visit the store t
heck what is new. Bar coding, online shopping and computer, aided purchase
e all measures designed to increase sales and make it a global brand. 26
ventures of franchises. This means that customers experience the sam
environment when entering one of the Zara stores be it they are in London
New York, Paris, Rio de Janeiro, New Delhi etc.: the stores are spacious, well-li
modern and predominantly whiter and walled with mirrors.
Most people say Zara’s real strength lies in its culture, something that ca
never be replaced for anything. One of the things it does is that it hires youn
designers and trains them to make quick decisions. In other words, while goo
decisions are encouraged, bad decisions are not severely punished. Facin
several problems related to rent space, every mall owner in India is ready t
provide free space to Zara, which speaks volumes about the popularity of th
brand in urban areas and the long way it has traveled.
It is unbelievable but the fact is Zara comes out with at least 500 or more new
designs per month. This, coupled with the brand name Zara enjoys, helps t
price their products according to their will and wish, as new trends tend to be
bit costly. However, the people at Zara are sensible enough as pricing is quit
27
competitive with the brands like Pantaloons, and Phoenix etc in India as well a
28
 sic jumpers, vests, cardigans, pants, jeans, fashion shirts, undergarments, jack
welry, shoes, purses and T-shirts.
e focus of the brand has been on quality as well as latest fashion and that to
asonable prices and hence they are able to launch newer product lines at reg
ervals. At least twenty five percent of the company’s stock includes fast-fash
oducts and the newer generation of teens find them to be reasonably priced
ell as trendy and chic.
nce, they appeal to the young segment and result in higher sales of product
ecial team of designers designs all the products of the company. Some of t
mous designers are Isabel Marant, Mathew Williamson and Jimmy Choo.
e product strategy and mix in H&M marketing strategy can be explained
lows:
&M is a clothing retail company. It offers fast fashion clothing for men, women
ildren. H&M offers following clothing brands in various countries across the glo
H&M: The range includes everything from designer collaborations to every29
Fig 4.1a

30
shop for different products at one store. The company has expanded at quite
faster rate on locations that are easily accessible as well as which ar
reasonably priced. They have also taken the advantage of slower economy t
secure some high profile and advantageous locations at very realistic prices.
The first H&M retail outlet was opened in the year 1947 at Vasteras in Swede
and at present, the no of exclusive stores has gone up to nearly three thousan
and five hundred stores. For its product distribution channel the company ha
followed the policy of direct purchase of raw materials from the suppliers an
selling the finished items directly to the retail outlets. It also has set up a wid
network for online sales. The consumer can go through all the products at the
leisure and order via internet. This has resulted in huge amount of sales.

31
Price in the Marketing mix of H&M
• H&M has adopted a pricing strategy that has broader pricing range to suit every
sphere of buyer and merchandiser. In order to maintain a median pricing strategy
they have kept a lot of their stock in discounted section. Under this scheme, the
volume of their sales will keep on increasing resulting in larger revenues.
• The company also offers various discounts and schemes on their core and fresh
stocks. It is an obvious fact that the costing for these articles was economical and
hence the company was able to afford the discounted price. This also allows the
company to keep on restocking their products to current and latest fashions.
• The company has proved relentless in its zeal of cutting costs at every possible corner
and so their average selling prices are much lower than their competitors are. The
executives in the company are also directed to make purchases at the lowest possible
rates to maintain low overheads.
• One of the most important facts is that H&M has been able to supply quality items at
lower price ranges because of their strategy of reducing the part of intermediary in all
transactions. Earlier this intermediary used to purchase and sell the raw materials for
the company at high margins. With their exit, the company has started buying directly
from the supplier in bulk amount. This has helped in reduction of cost prices and thus
in lower selling prices.

32
• H&M has always realized the potential of promotion and marketing and hence has taken special care of all
its promotional activities. Their advertisements focus on the apparel image that is qualitative as well as
reasonably priced. They have utilized the electronic media of television beautifully by sponsoring many hit
and trendy shows like MTV.
• Many high profile celebrities like Robert Cavalli and Jimmy Choo have been associated with this brand
taking it to its present position. Internet has also played a crucial role in the international expansion plans
of this highly sought-out brand. Their ads have appeared on famous magazines like Vogue Netherlands,
British Vogue and British GQ.
• H&M have been using some exceptional strategies for the marketing of its products. They have been
associating with a wide range of This Swedish and global brand have had alliances with the likes of Karl
Lagerfeld, David Beckham and recently Alexander Wang. In another amazing marketing strategy, they
decided to tweet about their exclusive designers who in themselves are a unique marketing brand.
Collection in parts along with Instagram pictures. They also sent some of their clothes to celebrities and at
one event, the famous singer Rihanna decided to wear this outfit.
• Currently, the company has decided on a new marketing plan for their latest collection through the mobile
phones. Under this distinctive strategy, the clients receive SMS that are treated as coupons and which they
can cash at any H&M retail outlet.
• The company has been utilizing the services of ad companies called Mobiento and its sister company
Adiento for this purpose. Specialized ads have been posted on various portals and major media sites. In a
recent show models like Edie Campbell, Gigi Hadid and Kendal Jenner have represented the company
H&M.

33
• 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.
• • TV advertisements: H&M comes with creative ads which focus on its latest innovative designs. Each brand handles its own marketing decisions. The ads are
telecasted at regular intervals and on channels mainly watched by youth, to increase its awareness.
• • 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.
• • Sponsorships: H&M signed deal with The Weeknd, sponsors Caitlyn Jenner, sponsors Musee Des Arts Decoratifs, Creative collaborations with high end
designers and style icons, Collaborations with pop stars and sport stars
• • CSR: Water, Planet, Education, Equality

34
Comparative Study of
Marketing Mix
of
Zara and H & M

35
•Zara is known as the Coca Cola of fashion. Such is the
craze of this brand among the fashion enthusiasts. One of
the major strength of the company is that it is able to
respond very quickly to the changing needs of the
customers.
H&M: The range includes everything from designe
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.
• Monki: On-trend lifestyle collections for young women.
• Weekday: It makes clothing for young and style aware
young adults.
36
Zara is very unique and one of the things
that make it a stand out brand is the fact
that it is a vertically integrated retailer.
What this means is that it designs,
manufactures and distributes the products
itself. This approach seems to be working
for it because it has managed to establish
itself as one of the leading Spanish fashion
stores globally. Zara is present in over 30
different countries including India and its
expansion is ongoing. Therefore, you will
soon be seeing more Zara stores in more
countries.
The consumers find the H&M retail outlets
very convenient, as they are able to shop
for different products at one store. The
company has expanded at quite a faster
rate on locations that are easily accessible
as well as which are reasonably priced
They have also taken the advantage o
slower economy to secure some high
profile and advantageous locations at very
realistic prices.
37
The concept of Zara is to provide its
products at a reasonable price to its
customers, it follows that customers find
its prices quite affordable. However, we
have to know that we are referring to the
cream customers who would compare
Zara with Hugo Boss or others. Some Zara
stores might be very premium whereas
others will be very much affordable. But
mostly Zara has a premium pricing
strategy. The pricing is made possible by
optimizing development and training
costs.
H&M has adopted a pricing strategy tha
has broader pricing range to suit every
sphere of buyer and merchandiser. In
order to maintain a median pricing
strategy they have kept a lot of their stock
in discounted section. Under this scheme
the volume of their sales will keep on
increasing resulting in larger revenues.
38
Zara has a unique marketing policy of
“Zero investment in marketing”. Instead,
the company uses the money it would
have used to advertise in opening new
stores. The striking thing about Zara is that
it has found differences that matter to the
consumers and used that to differentiate
itself from the rest of the competition. In
other words, its key marketing strategy is
based on exclusivity, experience,
differentiation and affordability.
•H&M has always realized the potential o
promotion and marketing and hence has
taken special care of all its promotiona
activities. Their advertisements focus on
the apparel image that is qualitative as
well as reasonably priced. They have
utilized the electronic media of television
beautifully by sponsoring many hit and
trendy shows like MTV.
•Many high profile celebrities like Robert
Cavalli and Jimmy Choo have been
associated with this brand taking it to its
present position. Internet has also played
a crucial role in the internationa
39
expansion plans of this highly sought-ou
 BIBLIOGRAPHY

• https://www.marketing91.com/swot-analysis-/(Accessed on 05/03/2020)

• http://fernfortuniversity.com/term-papers/swot/1433/1094-.php(Accessed on 05/03/2020)

• https://businessteacher.org.uk/pestel/hm.php(Accessed on 05/03/2020)

• https://www.mbaskool.com/pestle-analysis/companies/17954-h-and-m.html(Accessed on 05/03/2020)

• https://www.swotandpestle.com/hennes-mauritz-hm/(Accessed on 05/03/2020)

• https://notesmatic.com/2018/12/-swot-analysis/(Accessed on 05/03/2020)

• H& M group Annual Report 2018 -

https://about.hm.com/content/dam/hmgroup/groupsite/documents/masterlanguage/Annual%20Report/Ann
ual%20Report%202018.pdf
(Accessed on 05/03/2020)

• H& M group | History - https://about.hm.com/en/about-us/history.html(Accessed on 03/03/2020)

• https://www.inditex.com/about-us/our-brands/zara(Accessed on 03/03/2020)

• https://www.inditex.com/about-us/our-story(Accessed on 03/03/2020)

• https://www.mirror.co.uk/3am/style/celebrity-fashion/secrets-zaras-success-fast-fashion-13211849 (Accessed
on 03/03/2020)
• H&M. (2017a) ‘About Us.’ [Online] (Accessed on 03/03/2020)
• https://about.hm.com/en/about-us/markets-and-expansion.html 40