Marketing Communication – Promotion

Comparing with H&M, or other similar companies, Zara does not spend much money on promotion. It spends 0.3 per cent of sales on advertising compared to average of 3.5 per cent of competitors. Zara thinks that the store windows and the content is the most necessary advertising for them.

All H&M’s advertisements are produced centrally at the head office in Stockholm. This means that the advertisements are largely the same in all markets, but the media mix is adapted to local needs and circumstances. The centralized, organizational structure ensures a uniform branding of H&M in all markets. This means that customers will get the same H&M experience whether they enter a store in Stockholm, Paris or Hong Kong.

Community websites

To promote H&M and its product, H&M will use video advertisements, print advertisements and the concept of e-marketing. These promotion and communication strategy will tend to meet the consumers form different places everywhere, especially those target markets or the consumers in the working place. H&M engages consistently with consumers on Facebook, You Tube and Twitter to drive traffic to its online stores as well as the physical stores which continue to be H&M’s most important channel of communication as they give customers an immediate sense of what H&M is all about. H&M uses its online media more and more to communication its activities externally.

In different industries have been tried to use the internet as their part of marking strategy. H&M may invite some famous bloggers to update the fashion blog every day, and show the latest fashion news around the world. However, they are not the reporters. The fashion news is typing by their preference. It may attract more subscribers or fans and bring more real feedback from the customers. 

On the other hand, Zara also has taken advantage of this low cost advertising. They have a Facebook, a Twitter, and a Youtube channel account. The posts are about the photos of their merchandise, look books and activities. They focus on fashion, current trend and its new products. In 2012, Zara was ranked the 18th most liked Facebook company by business insider, which is slightly more than H&M which has 11 million.

Mobile Apps

Nowadays, mobile phone become the new channel of marketing promotion. Mobile Apps may help to get close with the customers and company. The customers can easily to touch their new products when they are launched. Moreover, it can be collected the updated feedback from customers.

Zara launched an App for Iphone, Android phone and Tablet. It can be founded the Zara’s latest fashion items, as well as the contents from Zara website. In addition, customers can purchase the product through the App. In the other words, people can purchase their products wherever and whenever. 

Current strategies of H&M also are marketing to its customers through a mobile marketing campaign. For this mobile marketing strategy, customers may receive SMS coupons, some mobile banner ads will places on major portals and media sites. H&M is using Mobiento to market this strategy and its sister company Adiento, which is an ad network. H&M launched their first campaign in 2006 and is still continuing to use this channel to cover a wide range of consumers. The main goal for this marketing technique is to promote the latest seasonal trends for that particular season and to drive membership of the H&M Club.

Moreover, H&M combines the mobile marketing strategy and social media website, to hold some marketing campaigns. Customers are encouraged to use their mobile phone to photograph examples of fashion items they find and like and unload them to the H&M Facebook site. Then, the customers can review the “hunted” items and vote for it by using the “like” function in Facebook. The items with the most votes will get the H&M’s prize. At the same time, H&M has direct access to everyone who has unloaded photos and voted, they have highly targeted and engaged audience to promote the suitable products to. It is essentially for customers to tell H&M what they want and then H&M sell it to them correctly. 

Marketing Communication – Strategy

H&M and Zara, are well known reputed fashion designing and manufacturing companies in fashion industry. They are two of the world’s largest fashion retailers and engaging in fast fashion market.

Fashion product may have a shorter product life-cycle and fickle consumer preferences. And the fast fashion market is the market closest to the latest trends. The process time of products, which from design to manufacture and on sell, is shorter and products can be sold at a relative low price. Fast fashion targets the mainstream consumers who want to be able to buy the things celebrities are wearing or be able to buy into trends that may see from the catwalk as soon as possible. H&M and Zara are typically fast fashion brand.

ZARA

Zara has spread a common concept of fast fashion. New style ranges are frequently introduced in market and thus Zara is moving parallel to market trends. Zara has an efficient and continuous communication system with its customers and thus changes in markets and streets flow directly to the designers and this information is depicted to be used in next range of designs.

Such rapid and fast paced response has created competitive advantage and other companies that take six months to take a design from idea to realization form are now moving towards this continuous and consistent communication with market. The basic concept behind this strategy was to stay in contact with the customers, the real target of a company, taking their feedback and then changing the products according to the demands. Zara is successful in creating an edge for itself and dominating its competitors as no other firm can reach this level of fast delivery of inventory in store. Zara has focused customers with short term needs and the reason behind was to minimize the operating capital.

What sets Zara apart from many of its competitors is what it has done to its business information and business process. Rather than concentrating on forecasting accurately, it has developed its business around reacting swiftly. As far as finished garments are concerned, rather than forecasting, it just quickly produces the least amount possible of what is hot with consumers, and moves to the next hot style fast. With its range of clothes constantly being updated, one or two slow-selling items are unlikely to hurt profits. Customers are also more likely to visit its shops regularly to see new stock.

H&M

H&M offers two main collections each year, one in spring and one in fall. Within each season, there are several sub-collections so there are always new products in the stores.  The main collections are the traditional long-lead items, and the sub-collections are the trendier items with short lead times. It relies on understanding what their customers want and have built systems for identifying consumer preferences.

Zara may have a slightly faster lead time, but H&M uses a different strategy. Apart from the fast fashion product, some products with long-lasting and ongoing styles have not yet tried by the company and are a domain where customers are still willing to pay. There is a market segment that needs stylish fashionable clothes over a longer period of time. That is same style, with a brand name and renowned design of that particular brand. So, introducing some designs that change over a period of a year or six months and that remain available throughout the year can open a new dimension for business.

Around one quarter of their stock is made up of fast-fashion items, but they also keep a large inventory of basic, everyday items sourced from cheap overseas, mainly Asian, factories. For this reason, we feel that H&M will be more appealing to the masses in the teen and young adult segment. Some consumers might be afraid to go too fashion-forward, so those that have a more reserved style may also find something at H&M.

ZARA vs. H&M, BMS model

Although ZARA and H&M are both in the fast fashion industry, the perception of ZARA and H&M are different. To understand the differences between these two global brands, we use BMS models to analyze.

Stage 1: awareness & quality

H&M and ZARA both dedicate in fast fashion industry, selling stylish clothing worldwide. They both have high brand awareness, spreading fast and winning great recognition. Considering their fashionable design and the low price, the quality is good. Consumers can own those fashionable items and dress themselves as super stars without spending much budget.

Stage 2:

A)   Differentiation

Although ZARA and H&M are both selling fast fashion clothing, their positions are different. ZARA focuses more on the fashion items like the luxurious brands, for example, LV and CHANEL. ZARA dispatches young designers to participate in those fashion shows and sketch the latest design. Then ZARA can produce those designs by itself with the fastest movement, even in advance of the luxurious brands.

Regarding to H&M, its design style is more for street fashion. Consumers can wear H&M’s clothing in everyday life. H&M also hires designers to create original pieces, and sometimes invites famous designers to collaborate together.

B)    personal relevance & appropriate for consumer

ZARA’s black and white logo symbolizes its cool, individualistic character. ZARA targets on 25-35 years old people, and it provides fashionable clothing which is very suitable for business dressing or elegant party look.

Regarding to H&M, it focus more on young people and teenagers instead. It focuses on 20-35 years old people, providing street fashion. H&M is very close to consumers. It sells not only daily dressing like basic sweaters but also the chic party look.

Stage 3:

A)   social esteem

By the images, websites, communication ways, ZARA creates a cool and fashionable touches to consumers. The images of ZARA always are a person wearing modern clothing standing in front of clean, pure color wall. Without creating situation of wearing ZARA’s clothing, ZARA uses its modern, fashionable products to attract the public. Wearing ZARA is equal to fashion.

In H&M’s communication way, consumers can see people in trendy clothing having fun together. The people in the pictures can be a very normal person like you and me, and that means H&M is suitable for everyone in everyday occasion. Consumers feel comfortable and stylish when they wear H&M.

B)    personal emotional bonds

ZARA gives consumers an emotion that you are the one who is keeping up with the latest fashion. You are unique and superior. However, H&M releases the messages that you can be stylish and popular. With much more atmosphere of happiness and fun, H&M is trendy also friendly. Both of them seize the consumer needs that they want to be as fashionable as the celebrities and want the latest trendy look with best price.

H&M CBBE pyramid

Salience

Indicator of Brand Awareness

Depth of brand awareness: Alike the logo of H&M, H&M is a very friendly brand close to everyone. “Fashion and quality at the best price” is H&M’s slogan. It also cooperates with famous designers and invites celebrities to endorse H&M. With those efforts, H&M wants to let people know that normal people can own the same clothing as celebrities. H&M is one of the most famous brands in fast fashion industry.

Breadth of brand awareness: Offering fashion and quality at the best price, H&M offers a varied assortment for the entire family, including concepts for ladies, men, teenagers and children. Consumers can buy H&M anytime for every occasion. The products vary from casual clothing (most) to party dress. You can wear H&M in your everyday life.

Imagery

Meeting of customers' psychological and social needs

User Profile: H&M’s customers are young, and even younger than ZARA’s customers who are more seeking clothing for business look. H&M targets mainly on 20-35 years old people. And it provides young and lively street fashion to everyone. These consumers also seek trendy clothing with low price.

 

Purchase situations: Consumers might purchase H&M online or in store for any occasions. Besides, H&M has 3000 stores in 50 markets. With its amount of stores, it’s easy to reach and purchase. H&M offers consumers with low price thus consumers can repeatedly come and buy it.

Personality and values: H&M is friendly, trendy, warm, and full of fun. H&M is suitable for everyone who likes high street fashion.

Performance

Meeting of Customers' Functional Needs

Reliability & Durability: H&M operates since 1947. Through long development it has already won good reputation. With its good quality and endorsement, H&M is definitely a reliable brand.



Style & Design: H&M collaborates with many famous pioneer of designers such as Karl Lagerfeld, Stella McCartney, Viktor & Rolf, Roberto Cavalli, Comme des Garçons, Sonia Rykiel and Lanvin. Although designed by well-known designers, the design is for everyone. It’s available for you and people who love to follow the latest trend. Besides, the best thing is that you don’t have to spend lots of money to get those fashionable designs.



Service Effectiveness & Price: The fastest time from design to sale takes H&M 20 days. Although it is slower than ZARA, H&M can save money and can benefit consumers with 30-50% off price. H&M produces its basic style clothing in Asia (60%) and produces changeable, trendy clothing in Europe (40%) to save costs. That’s part of the reasons to offer consumers the

Best price.

Feelings

Creating which type of emotion during consumption

Fun, warm: H&M creates a fun, lively, warm, and stylish characteristic to clients. In the catalog of H&M, you can see people smile and sharing the fun time together. Also, there are some pictures present the modern and confident side of its design. In all, H&M is in your daily life.

Judgements

Integrating all the opinions from performance and imagery association of customers

Credibility: After viewing the value and the satisfaction from H&M’s consumers, H&M is a very reliable brand. It conveys the image of  “fashion and quality at the best price” successfully.

Resonance

Intensity or depth of psychological bonds that consumers have with the brand

Behavioral loyalty: For customers who like H&M, they would like to visit here repeatedly as they know H&M provides quality and good price. They are loyal to H&M but at the same time, if other brands can provide trendy and affordable products, it’s easy to switch to other brands.

Sense of community & Active engagement: H&M has a united Facebook fans page with 16.9 million people. Although the number is less than ZARA, the active browsers are more than ZARA (161,212 vs. 53,996). It’s because H&M engage with its fans every day. H&M not only provides the latest fashion design catalog/information, but also creates local events, invites brand spokesmen for recording videos, and provides advice on collections. H&M also has more marketing to communicate with consumers. For example, H&M invites David Beckham to endorse its bodywear collection and holds some physical events to let the consumers meet their idol and know that H&M has launched the latest series.

ZARA CBBE pyramid

Salience

Indicator of Brand Awareness

Depth of brand awareness: When mentioning ZARA, the black-and-white logo comes to our minds and also the high-street fashion brand identity. Although ZARA seldom uses advertisement, the vivid brand images are known when consumers come to visit ZARA’s physical stores and the displays. Importantly, ZARA’s store location strategy is its main way to communicate with the public. In consumers’ minds, ZARA has already been among the top highly fashion retail outlets

Breadth of brand awareness: ZARA has different product categories which suit for everyone like female, male, kids. When consumers need trendy but affordable clothing, ZARA ​is their good choice. ZARA brings consumers a concept that you don’t need to buy luxury clothing just for wearing only once, you can buy ZARA’s stylish design with limited budget.

Imagery

Meeting of customers' psychological and social needs

User Profile: Typical Zara customers are people who are young, fashion-conscious but with lower budget. They care about their appearances and longing for being stylish.

 

Purchase situations: Consumers might pass by ZARA’s stores and be attracted by its window display. As the clothing in ZARA changes very fast, If you don’t buy something you love now, it will be sold out next time. Thus, ZARA creates psychological thoughts to let clients buy its clothing without considering too much.

Personality and values: Zara is modern, trendy, high fashion and individualistic. Zara’s stylish personality appeals to the confident, young target audience.

Performance

Meeting of Customers' Functional Needs

Reliability & Durability: As ZARA’s idea is to wear disposable and fashionable design, the quality of clothing is good but less than luxurious brands.



Style & Design: ZARA provides the latest design. From designing to sale, the shortest time only takes ZARA 15 days. Thus, ZARA can always offer modern, latest fashion to attract consumers who want to be voguish and be unique. As fashion changes every moment, this fast fashion method make sure that ZARA is always ahead of competitors and be the first one to provide fashionable clothing.



Service Effectiveness: ZARA satisfies customers with its fast movement in designing and providing the latest fashion. ZARA also cares lots about consumers’ need. When some products are not so popular among clients, ZARA would not hesitate to remove these stocks so that consumers can meet what they love and buy it.

​

Price: The price is low comparing to other luxurious fashion brands. It’s very affordable for those who want to keep on the latest fashion. With this affordable price, consumers can buy clothing more often instead of spending lots of money on one piece of classic clothing from luxury brands.

Feelings

Creating which type of emotion during consumption

Self-respect: ZARA creates less emotion about warmth, fun, security; instead, ZARA builds more on self-respect. For people purchasing ZARA, they can feel they are unique, different, cool, chic, superior and individualistic. The logo and the modern decoration also help shape this atmosphere.

Judgements

Integrating all the opinions from performance and imagery association of customers

Credibility: After viewing the value and the satisfaction from ZARA’s consumers, ZARA is definitely a trustworthy brand. Since 1975, ZARA has offered fashion products continuously. ZARA is an expertise in producing fast fashion clothing for male, female and kids. Although it copies the design from other luxury brands, it truly satisfies consumers’ needs for chasing latest fashion.

Resonance

Intensity or depth of psychological bonds that consumers have with the brand

Behavioral loyalty: Because ZARA provides limited fast fashion products without replenishing many times, the products are possible to be sold out soon. Consumers know this fact, thus they would like to visit ZARA’s store to see the newly available products. Once they love those products, they can’t refuse to buy them. Otherwise the products would be sold out next time when clients come. The frequency of purchase is high and repeated buyers are a lot.

Sense of community: ZARA manage its social community in a cool way. It only posts information such as new design of this season or newly open store on FB. And ZARA doesn’t post and communicate with its clients every day. It’s the personality of ZARA so there’s no conflict by doing this way. And clients love ZARA and fashion so they will keep following its information.

Active engagement: ZARA has 19.7 million fans on Facebook. It communicates more with younger people who loves fashion. ZARA seldom do marketing; instead, it saves the money to design and optimizes its supply chain so that customers can be satisfied with its products. That’s how ZARA keep engaging the public.

The most representative strategy between ZARA and H&M: Supply Chain Management

The most different part in the supply chain management between ZARA and H&M is that ZARA has its own factories to produce its collection, but H&M does not.

ZARA

(1)   ZARA has followed a pull model because it creates more than one thousand designs every month according to sale volumes in physical stores and current and the latest trends. As in the “Customer’s Relation”, ZARA monitors its customers’ spending in the store to evaluate and understand what kinds of designs will be accepted and bought by customers and then the ideas will be considered in the next designs.

(2)   ZARA has a fast turnover because each good is produced in a few quantities, which can make it realize that what kinds of designs are attractive and accepted for its customers. Moreover, it is also a good chance for ZARA to create new designs in the market and lower the inventory rates.

(3)   Since ZARA has its own factories to produce its collection, the only thing is to find the suitable supplier which can provide raw materials with high quality for ZARA. In order to avoid that it will be over-dependent on some supplier, ZARA tries to find as many suppliers as possible; this strategy also shortens the reaction time for the suppliers to deliver materials and decreases purchasing costs, which contributes to ZARA’s features of low prices and fast distribution.

(4)   ZARA has very strong IT systems for its good distribution. All the finished products are shipped back to Spain, the central location and headquarter, and then these goods are distributed to different countries.

Note: In this analysis, we only focus on the production and distribution of ZARA. As for the rest part of ZARA’s supply chain strategy, please take a look in “The most representative strategy between ZARA and H&M: Customers’ Relation.”

The most representative strategy between ZARA and H&M: Customers’ Relation

One of the most representative and interesting company strategies between ZARA and H&M is the relationship with their customers.

For example, when you walk into ZARA’s physical store, it is likely for you to see there are many video cameras around every corner and cashier, and the store manager brings his/her PDA all the time. If one customer says something about the designs of its products to the staff, they will report to the store manager immediately in detail. Then the manager will deliver this information to the designers in headquarter twice a day through ZARA’s inner network. After the top managers in the headquarter make the decision about the customer’s suggestion, it will be delivered to its production place right away to revise the designs of the product. However, it is not the end for ZARA to adapt its design to catering to its customers’ desires. After physical stores are closed, the sellers will settle the account, make an inventory of every product and compile statistics about the rates of returned purchase and sales volume on that day. With information of its cash flows, they can analyze today’s transactions and ranks of today’s hot selling products through the transaction system. Finally, all data and analyses will be delivered to ZARA’s warehouse system. And that’s all the procedures for ZARA to maintain the relationship between its customers.

For ZARA, the way to gather all customers’ advices and suggestions to make its production decisions lowers the inventory rates substantially. Besides, ZARA can analyze the similar regional trends about its designs by using all the information collected in physical stores, which will help ZARA to comply with the customers’ needs in the market segment in terms of colors and styles.

Nevertheless, H&M tries hard and implements the same way to improve production process by using a huge amount of data and information, but it does not have a significant effect on it. Why?

The most important reason is that the main purpose of using massive information is to decrease the production time and revise the design of products as soon as possible according to the customers’ advices. However, H&M’s inner procedures of its management cannot deal with the massive information. H&M needs to spend around three months from designing its new products to delivering them into the market; nevertheless, it takes two weeks for ZARA to do the same process. We think that is because H&M establishes its production to many different places, such as Asia and South America, but almost half of ZARA’s production process is located around the headquarter in Spain. For H&M, it takes a long time to communicate across countries and adjust the products to customers’ suggestions. Therefore, even if the massive information reflects customers’ advices in different regions, it still cannot improve the designs right away. The separation of information system and production places makes H&M have restricted effects on dealing with the customers’ needs and desires.

From this comparison, we can realize that the key to using the massive information is to combine the information system with decision-making procedures, which will shorten the time spending on communicating and revise the products according to customers’ advices and demands.


Sources:

http://site.douban.com/164373/widget/notes/8783337/note/279142077/

http://www.businessinsider.com/zara-is-dominating-hm-2013-6

http://fastfashiontrend.wordpress.com/2012/12/07/competition/