Marketing

Management
Assignment

Submitted by:-
Sruthi Ramachandran
Roll no: b2356
MBA-B
 Introduction

Definition of Marketing Mix

The marketing mix (the set of actions, or tactics, that a company uses to

promote its brand or product in the market) is a crucial tool to help

understand what the product or service can offer and how to plan for a

successful product offering. The marketing mix is most commonly

executed through the 4 P's of marketing: Price, Product, Promotion, and

Place
Product

The product is either a tangible good or an intangible service that is seem to

meet a specific customer need or demand. All products follow a logical product life
cycle and it is vital for marketers to understand and plan for the various stages and their
unique challenges. It is key to understand those problems that the product is attempting
to solve. The benefits offered by the product and all its features need to be understood
and the unique selling proposition of the product need to be studied. In addition, the
potential buyers of the product need to be identified and understood.

Price
Price covers the actual amount the end user is expected to pay for a product.
How a product is priced will directly affect how it sells. This is linked to what the
perceived value of the product is to the customer rather than an objective costing of the
product on offer. If a product is priced higher or lower than its perceived value, then it will
not sell. This is why it is imperative to understand how a customer sees what you are
selling. If there is a positive customer value, than a product may be successfully priced
higher than its objective monetary value. Conversely, if a product has little value in the
eyes of the consumer, then it may need to be underpriced to sell. Price may also be
affected by distribution plans, value chain costs and mark-ups and how competitors price
a rival product.

Promotion
The marketing communication strategies and techniques all fall under the
promotion heading. These may include advertising, sales promotions, special offers and
public relations. Whatever the channel used, it is necessary for it to be suitable for the
product, the price and the end user it is being marketed to. It is important to differentiate
between marketing and promotion. Promotion is just the communication aspect of the
entire marketing function.

Place
Place or placement has to do with how the product will be provided to the
customer. Distribution is a key element of placement. The placement strategy will help
assess what channel is the most suited to a product. How a product is accessed by the
end user also needs to compliment the rest of the product strategy.
Hennes & Mauritz

Product:

H&M is a Swedish multinational clothing-retail company

known for its fast-fashion clothing for men, women, teenagers

and children. H&M and its associated companies operate in 62

countries with over 4,500 stores and as of 2015 employed

around 132,000 people. It is the second-largest global clothing

retailer, just behind Spain-based Inditex (parent company

of Zara). The company has a significant on-line presence, with

on-line shopping available in 33 countries.

At present, the Swedish multinational clothing retail company with

headquarters in Stockholm, which entered India 25 months ago, has

been doing well. Its products are also sold hot in various city

headquarters where it has already opened its retail outlets

Products of H&M entered the country through a 100 per cent FDI

approval for Single Brand Trade route. It has a long-term plan to grow

to 50 stores and invest over €100 million in India. It has production

offices in Delhi and Bangalore and employs 1,200, of whom 40 per

cent are women. He felt India offers huge potential going by the

performance of H&M in the past 18 months and the market feedback.

The implementation of GST and the saturation in Chinese textile

market along with the problems facing Bangladesh should hold out

big promise for the Indian textile sector growth.

Price

Price strategy marketing mix of H and MPRINT REFERENCE

THIS The price strategy of H&M is based on its customer needs

which is low price and high fashion. In fact, this is the one of the

biggest challenges for H&M: without making this happen, the special

feature of H&M could not be realized. This objective was achieved by

two steps: first, H&M outsources the production to countries where

the labour cost is much lower. To control transportation cost,

outsourcing was arranged according to different product. Those high

fashion products which target the European market were produced in

Turkey, because of the short product life cycle. In addition, basic

products are produced in Asia because they allow longer

transportation time and bear lower risk. Second, the company also

conduct strict cost control plan. For example, very few executives

have secretaries or have cell phone privilege. These two steps allow

H&M to achieve a low price fashion business.

Promotion

To develop a suitable promotion strategy, a company should

firstly identify and understand target audience. H&M's target

customers are young women who want more fashion cloth at low

price. Young fashion savvy people have plenty access to information

network. Hence a multi-channel promotion strategy including,

internet, TV advertising was adapted for sales promotion by H&M.

These multi-channel strategies is expected to increase its market share

Promotion is one of the core elements of marketing mix, so it should

comply with the whole marketing mix. The product of H&M is low

price and high fashion which is based on their customer needs. The

promotional actions of H&M focus on these two features- low

Price and High fashion. On H&M's website, we find the fashion

details along with the price put at obvious position unlike many that

hesitate to divulge the price in public to let them compare the price

with that of competitors.

Third, H&M conducts an eye-catching event promotion which is to

invite top fashion designer to design clothing for them, or cooperate

with other companies from other fields, for example computer games

or automobile company. H&M has collaborated with many stalwarts

in the field of fashion like Karl Lagerfeld and Stella McCartney for

global promotional activities. During the cooperation, mass

advertisements, abundant propaganda were utilised to generate public

awareness.

This method has not only improved the product quality but also

enhanced the brand image to be the cynosure of fashion among the

upper-class H&Ms. Cooperation with other companies from different

fields can attract customers from different groups. For example, the

game developed by Sims, which spread the reputation of H&M

among young people who are addicted to video games.

At last, the promotional activities of H&M invite a high appreciation,

quick response and immediate results. Since H&M outsource their

production in order to cut cost, they are criticized for squeezing

workers' payment. According to this criticism, H&M has taken series

of actions to mitigate such negative vibes not to tarnish the company’s

image and reputation. They have appointed a strong team to look after

the working condition, and take charge of the brand image. Those

promotion activities are generated through interaction with customers

or the entire society.

Place

The features for H&M logistics are simplicity, reliability and

transparency .H&M has its own exclusive design centres and even

outsources it. Basic goods are made in Asia, while fashionable goods

are made in Turkey. Instead of owning factories, H&M chooses to

open its own outlets. There are over 2000 stores all over the world.

Merchandise produced in Asia are transported almost exclusively by

sea for the sake reducing cost of production. Within Europe, most of

the goods are transported by rail. More than 90 percent of all

transports are done via sea, rail or by road. Air transport is rarely used

except to meet emergency deliveries. These policy is aimed to reduce

cost. The realization of H&M's business ideas rely on the success of

their distribution strategy. As a marketing expert asserts that lightning

turnaround is the reason for the success of H&M.

H&M distribution channel is direct distribution, from producer to

customers. By cutting middlemen it reduces cost further and assures

quick delivery, which echoes the concept of fastness and economy..

H&M choose to sell clothes and cosmetics in around 2,000 stores

which belong to H&M. Store selling, on one hand, assure basic access

to customers. Since the inventory for H&M is refreshed every day,

direct contacts with two thousand stores have become inevitable. On

the other hand, controlling so many stores gives rise to the managerial

cost. Besides stores, H&M has launched online sale in several areas.

It was suggested that well-known fashion retailers have the advantage

to attract customers. Therefore it was beneficial to take the initiative

to launch online shop. And this step could definitely satisfy online

customers and complement the shortcomings of store sale.

The obstruction of marketing mix to H&M

Although marketing mix provides a basic and useful framework, it is

still not enough for marketers to work out a detailed market strategy.

This problem was perceived from two aspects. Firstly, marketing mix

needs adjustment to particular business environment. Secondly,

marketing mix is more like bones rather than fresh and blood which

could provide clear and detailed suggestions. According to literature,

there are different ways to classify the components of marketing mix,

for example 4ps, 5ps, 7ps, etc. Those elements are not equally

important in different business. For example, the inventories become

less important in cosmetic business. Marketing mix does not directly

tell what elements deserve special attention for a specific business. So

marketers should balance among those mix and focus on the most

important ones. It is not enough to follow marketing mix exactly and

literally. On the contrary, an organization has to combine marketing

mix with its own situation. Meantime, marketers cannot or, at least,

feel hard to come up with creative and suitable marketing approaches

by only using marketing mix. For example, when we decide the price,

marketers may need to consider competitors’ price, storage facility,

chain positioning, deal frequency, deal elasticity, But marketing mix

rarely discuss these aspects in detail.

Marketing mix is insufficient to insist H&M in maintaining

interaction with customers. The interaction contributes to various

aspects like better product design, better customer service and higher
customer loyalty. Although H&M conducts an observation system in

their outlets to analyze which product is popular and which product

needs to be removed, there is still scope for improvement.