H&M

Marketing Plan- C19GM

Table of Contents

  1. Executive Summary
  2. The SOSTAC Planning Framework
  3. Objectives
    • Business (Corporate) objectives
    • Marketing objectives
  4. Strategic position
  5. Marketing plan
  6. Marketing mix
    • Product
    • Promotion
    • Price
    • Place
    • People
    • Physical Evidence
  7. Media and communication
  8. Conclusion
  9. References

Executive summary

This report is meticulously structured around the SOSTAC Planning framework encompassing all the stages of the plan which include, the situation analysis, objectives, strategic position, tactics, action, and control.

By aligning with this framework, the report provides a detailed marketing plan for H&M within the women’s clothing sector in the European market. The report has yielded the following findings.

Firstly, the market analysis provides an overview of the organization and includes the SWOT analysis, micro, and macro analyses.

Secondly, the corporate and marketing objectives outlined for the company are shaped by the SMART goals, based on the 5 Ss of Digital Marketing.

The strategic position analysis reveals that H&M follows a growth strategy and adopts cost leadership strategies throughout. Faced with stiff competition from Zara and other fast fashion retailers, H&M is attempting to strike a balance between expanding to new markets and optimizing its operations in the existing markets. This approach allows the company to capitalize on the opportunities while restructuring the business to improve efficiency and profits and achieve a strategic balance.

Furthermore, the tactics used by the company encapsulate the marketing mix elements along with the KPI’s to monitor and evaluate the performance based on the developed objectives.

Additionally, H&M uses push-and-pull digital marketing strategies (Burghate, 2021) by integrating traditional and digital media structured around the 4 Cs of communications. By leveraging storytelling, diverse advertisements, and interactive content across varied platforms, H&M aims to resonate with its target audience.

Ultimately, H&M aims to cultivate a positive sentiment around the brand among customers, striving to become a more sustainable brand and contribute to a circular economy.

The SOSTAC Planning Process

The structure of this report adheres to the SOSTAC Planning framework of strategic marketing. (Chaffey and Bosomworth, 2013; Irwanto, Murniati and Fauziyah, 2021)

Stage 1 of the process is conducting a situation analysis of H&M’s clothing sector in the European market. This includes an overview of the company along with a thorough market analysis of the company, which includes SWOT, micro and macro analyses among others as explored in the first assessment.

Stage 2 is centered on formulating the corporate and marketing objectives of the company for the next 1-3 years. These objectives have been developed using SMART goals and 5 Ss of Digital marketing.

Stage 3 talks about the strategic position the company will be adopting using the three grand strategies and Porter’s generic strategies.

Stage 4 refers to ‘tactics’ detailing a comprehensive marketing mix encompassing 5 P’s.

Stage 5- ‘Action’ delves into the different kinds of media- traditional and digital which is outlined and planned to maximize the impact of the company’s promotional efforts.

Stage 6- ‘Control’ is how the company plans to monitor and evaluate the performance based on the objectives laid out in Stage 2.

(Chaffey and Bosomworth, 2013)

Business level (Corporate) objectives

H&M’s corporate objectives center on strategic expansion, are outlined using the 5 Ss of Digital Marketing strategy as formulated by PR Smith in 2001 (Burghate, 2021), These objectives are structured following the SMART (Specific, Measurable, Achievable, Relevant, and Time Bound) framework to foster sustainability and inclusivity.

H&M’s goals are specific, targeting the launch of 100 new stores globally within the next fiscal year, focusing on emerging markets high-traffic urban areas (H&M, 2023) to increase market presence.

This strategic expansion is measurable by a 15% increase in annual revenue and acquiring an additional 2% market share. This will be achieved through H&M’s continuous commitment to integrating the physical and online channels to facilitate a seamless, holistic customer journey which is indicative of the goals being relevant.

The company’s goal is to scale smart mirror technology to 50% of all stores in major markets in the next three years making the objectives time-bound.

Moreover, these objectives encompass the 5 Ss of Digital marketing- Sell, Serve, Speak, Save, and Sizzle. H&M aims to ‘sell’ through new store openings, and ‘serve’ customers by providing a seamless holistic journey through the integration of different channels.

‘Speak’ through inclusive and engaging marketing campaigns, ‘save’ resources with the aim to achieve an 8% reduction of GHG emissions and reduce plastic packaging by 25% by the end of 2025 (H&M, 2023). The company also plans to reuse or recycle 100% of its packaging by the end of the next fiscal year.

H&M plans to ‘sizzle’ with innovative technology like the smart mirrors and through pop-up style store layouts and interactive displays to enhance in-store experience.

Lastly, H&M aims for a minimum of 30% diversity (Nationality and/or Ethnicity, Gender, and Age) in senior leadership teams by 2025 (H&M, 2021) and will be introducing the ‘Keep the Presence’ concept to major stores in all markets in the next three years.

Marketing Objectives

By the end of the next fiscal year, boost consumer perception of H&M as a sustainable brand by 30% through focused marketing campaigns that highlight sustainability initiatives like reduced GHG emissions, plastic packaging reduction, and commitment to diversity in leadership.

Aim for a 10% reduction in energy usage while emphasizing H&M’s commitment to energy efficiency by encouraging the use of solar power and LED lighting in all its stores through marketing initiatives (H&M, 2023).

Launch marketing campaigns for new store openings, aiming to generate buzz and excitement within local communities, resulting in a 20% increase in foot traffic during the opening week.

Create focused digital marketing efforts to boost online exposure and engagement emphasizing facilitating a seamless transition between digital and physical interactions, increasing website traffic by 25% and mobile app downloads by 15%.

Promote Smart Mirrors in major markets as a unique and interactive shopping experience, with a goal of increasing sales conversion rates by 15% by the end of the year.

Develop a marketing campaign highlighting H&M’s garment collection program which aims to increase the number of textiles collected by 10%.

Both the business and marketing objectives align with the company’s mission and vision statement as articulated in the initial assessment. (Jagasia et al., 2023).

Strategic position

Strategic theorists, Wheelen and Hunger, 2012, delineate three ‘grand strategies’- growth, stability, and retrenchment- which serve as foundational pillars and guide a company’s long-term planning and directional choices (West, Ford, and Ibrahim, 2022).   

H&M seems to be adopting a combination of growth and retrenchment strategies. The company is facing stagnant sales and experienced a 4% drop in its shares.

Facing stiff competition from fast fashion retailers like Zara, Shein, and Primark, H&M has been increasing its prices to achieve its “goal of a 10% operating margin in 2024” (Mannes, 2023). Despite a 6% rise in net sales, the company’s performance still fell short of the analysts’ expectations. 

Following the global pandemic, H&M announced plans to lay off employees due to formidable competition, and their inventory levels increasing more than ever (Mulier and Wilen, 2021).

Continuing these layoffs, H&M planned to cut 1500 jobs as part of a ‘cost-cutting drive’ (Jacobsen, 2022). Recently, H&M laid off 46 out of 450 workers from its Bangladesh office, drawing criticism for its timing coinciding with a significant festival. The employees voiced concerns placing emphasis on H&M’s sustainability initiatives contrasting with the violation of the foremost principle of sustainability by not taking care of the welfare of its employees. Industry insiders highlighted H&M’s substantial profits from inexpensive labor and called for responsibility advocating for emergency funds for workers during the crisis (Hossain, 2023).

In essence, these continued job layoffs underscore H&M’s implementation of a retrenchment strategy to cut back on costs.

According to H&M’s CEO, H&M plans to expand in markets with greater development potential, such as India, Russia, and Japan, and close several locations in matured markets, such as the United States and Europe (Mulier, T. and Wilen, A., 2021) while concurrently experiencing an increase in their operating profit (H&M, 2023).     

H&M is now focusing its “expansion on omnichannel growth- increasingly integrating our digital and physical channels so that they interact and strengthen each other, facilitating a seamless, holistic customer journey.” (H&M, 2023)

Michael Porter outlines 3 generic strategies- cost leadership, differentiation, and focus strategy which elucidate the firm’s behavior and allow organizations to gain a competitive edge (Islami, Mustafa, and Topuzovska, 2020).

H&M follows a cost leadership strategy as explored in the first assessment (Jagasia et al, 2023). Instead of owning factories, they make large-volume purchases from independent suppliers and achieve economies of scale by producing at large to lower their per-unit cost creating barriers for competitors (Youell, 2013).

They adapt their advertising strategies to local conditions and preferences, and do not focus on creating new campaigns for each market which helps minimize their advertising costs. H&M appeals to its cost- conscious customers by taking ideas from high fashion brands and incorporating those ideas into their designs (Youell, 2013).

Marketing Plan

S.no.StageElementStrategiesKey person/ department responsible
1.Situation AnalysisMarket research and environmental analysisSWOT ANALYSIS – PESTLE – MICRO- intermediaries, markets, and employeesMarketing, R&D, and strategy department.
2.Objectives5 Ss of Digital Marketing SMART objectivesCorporate goals – Marketing goals  Top management, strategy, and marketing department.
3.StrategyGrand strategies
Generic strategies		Grand- A combination of growth and retrenchment strategies
Generic- Cost leadership strategies		Marketing and strategy department.
4.TacticsMarketing mix  Product, price, place, promotion, people, and physical evidence.Product development, marketing, advertising, and sales.
5.ActionMediaTraditional and digital mediaMarketing, media planning department.
6.ControlMonitoring and evaluationKPI’s to be usedMarketing analytics, strategy, and sales team.

Marketing Mix

H&M’s marketing mix integrates the 5 Ps namely- product, promotion, people, price, place, and physical evidence to drive profitability and have an increased market presence. H&M strategically allocates its marketing budget of 100% across each of the elements.

Product

Product receives a quarter allocation to launch two exclusive collections focused on diversity, inclusivity, and sustainability. The company will be introducing an innovative ‘Keep the Presence’ concept across all major stores in emerging markets aligning with its objective of achieving omni-channel growth. The garment collecting program will reinforce H&M’s commitment to sustainability.

  • Recently, H&M has made Tess Holiday their Size and inclusivity consultant and together introduced a ‘curvy denim collection’. Most plus-size clothing is widely available online but not necessarily in physical stores. Introducing such collections in brick-and-mortar stores will make plus-size customers feel they can shop from stores just like any other customer and feel more included, based on customer insights (Edelson, 2023).
  • As researched in the first assessment, H&M had been critiqued for displaying a sustainable clothing line alongside a “predominantly non-sustainable fast fashion” collection contradicting their own claims which led to the company being accused of greenwashing [(Kaner, 2021) (Jagasia et al., 2023)]. Therefore, by introducing the new collection in a sustainable store, the company can avoid such accusations and target eco-conscious customers.
  • ‘Keep the presence’ is a new concept being tested in “H&M’s Market Street branch” in Manchester. “The concept will offer curated capsule collections in ‘pop-up style areas’, self-checkouts, click and collect lockers as well as a dedicated online activation area” (Morgan, 2023). This aligns with H&M’s goal of integrating digital and physical channels focused on omnichannel growth. It is currently only introduced in the UK and Ireland (Halliday, 2023).
  • H&M’s garment collecting program invites customers to drop their unwanted clothes or textiles by any brand in any condition into the boxes in one of the stores. The contents are then sorted as re-wear, reuse, or recycle (H&M, 2023).

Promotion

Promotion is allocated 20-25% each quarter, emphasizing hosting grand openings of new store launches, diverse advertisements, influencer collaborations, and user-generated content to engage customers.

Price

Price is allocated 15% each quarter allowing the brand to employ loyalty programs, promotions, and competitive yet profitable pricing strategies that enhance customer engagement.

Place

Place receives 15-20% of the budget each quarter allowing the company to expand through pop-up style store layouts, online platforms, and new store openings.

People

People receive 5% each quarter to feature diverse and size-inclusive models for their targeted advertisements and fashion shows and collaborate with influencers aligned with the brand’s values and commitment.

Physical evidence

Physical evidence is assigned 5% each quarter to enhance store layouts showcasing diversity and inclusivity while focusing on sustainable initiatives such as reduced plastic packaging reinforcing the brand’s dedication to sustainable practices and customer centricity.

Media and communications

H&M employs a combination of traditional and digital media to align with the 4 Cs of integrated marketing communication- Coherence, Consistency, Complementary, and Continuity (Stanford, 2020) given by Patrick and Broderick in 2001. This multi-faceted approach integrates storytelling, diverse advertisements, and interactive content to engage the customers and resonate with the target audience.

H&M uses traditional media channels such as Billboards, TV, and radio to display advertisements featuring models of diverse backgrounds and different sizes to promote their new collections and convey empowering messages. The company ensures ‘coherence’ by aligning the messages across all platforms.

The brand maintains ‘consistency’ by reinforcing its values across various digital platforms. H&M uses email marketing by sending out personalized emails based on purchasing history, customer preferences, and behaviors. In addition to this, it showcases new collections and incorporates user-generated content (UGC) and testimonials embracing diversity, inclusivity, and sustainability.

The company also features UGC on its website and app while displaying empowering messages. Search engine optimization and search engine marketing are used to optimize website content with diverse and inclusive keywords and launch campaigns targeting such keywords.

H&M creates ‘complementary’ messages that support each other through blog content centered around styling tips and publishing articles and stories from bloggers and influencers who share personal experiences with the brand. Paid targeted advertisements showcase adverts featuring varied models targeting diverse demographics. Articles and press releases are published supporting H&M’s initiatives by creating brand awareness.

Social media marketing leveraged to create content calendars with engaging content and posting consistently. Teasers and countdowns for upcoming store openings and engaging stories are posted across all platforms including Instagram, TikTok, LinkedIn, and Facebook. Video content is also developed and shared which includes behind-the-scenes footage, interviews, styling videos, and more. This ensures consistent communication across various platforms and emphasizes ‘continuity’ in the brand’s communication.

Conclusion

This report meticulously outlines H&M’s comprehensive marketing plan aligning with the strategic position and strategies adopted by the firm. The articulated objectives are finely attuned to the brand’s values and commitment towards diversity, inclusivity, and contributing to a more circular economy.

Utilizing the growth and cost leadership strategies along with the application of the marketing mix elements guides the company towards its objectives. The integration of both traditional and digital media along with the necessary communications will help increase market presence and bolster H&M’s foothold in such a competitive and dynamic environment.

This approach will not only drive the company’s growth and profitability but also cultivate trust and positive sentiment among the customers.

References