H&M and Its History of Advertising - Admission/Application Essay Example

H&M History of Advertising a. How they originated The origin of Hennes & Mauritz (H&M) s back to 1947, when its founder, Erling Persson, established a cloth store in the name of Hennes, which at the time only sold women clothing (Hennes & Mauritz, 2013). Hennes & Mauritz developed as an idea that Persson developed when he visited the USA after the World War II, and discovered the high level of efficiency and high volume with which the then American clothing outfit, Barneys and Macy’s, was making its sales (Lynn & Joines, 2010). Thus, when he went back to Sweden, Persson established the clothing business Hennes, which has then grown over the history of fashion industry development, rebranding itself from Hennes to Hennes & Mauritz (H&M) in 1968, after Hennes first purchased another Swedish men’s sportswear named Mauritz Widforss, and with this acquisition, came the diversification and expansion of the product portfolio for Hennes & Mauritz (AdBrands.net., 2014). The new company expanded its product range offering to include menswear, children swear, accessories, footwear, home furnishings and cosmetics, thus becoming a highly diversified fashion company in Sweden (Chen, Jin, Kour, Li & Liu, 2012). The expansion of the company internationally started in the 1950s, when the company ventured into different territories of Europe, where it could also acquire other business in the fashion industry line, to enhance its product offering in the new territories. Thus, in the period between 1950s and 2000, Hennes & Mauritz concentrated its expansion to Europe, but ventured into the USA market with its first store opening in New York in the year 2000 (2`55). Thereafter, the company has continued to expand to other regions globally, with entry into the Asian market in 2007 opening a store in China, and then expanded to Japan in 2008, after which the company ventured into the Latin America market in 2012 (AdBrands.net., 2014). Thus, currently, Hennes & Mauritz holds 3100 different stores globally, while its online stores are also important component of the company’s brand expansion efficiency. b. Advertising timelines and approaches The history of Hennes & Mauritz (H&M) advertising is as old as the company itself, owing to the fact that the company adapted the high-quality-to-low-price advertising strategy from its onset, and has continued to run this promotion campaign as its major advertisement strategy (In Jimenez & In Kolsun, 2014). The company has consistently offered high quality clothing products for its customers globally, while ensuring to target selling high volumes at relatively low prices compared to many global clothing and fashion lines, through adapting the high turnover strategy-to produce low pricing (Chen, Jin, Kour, Li & Liu, 2012). The advertising strategy for Hennes & Mauritz then added to the quality-price advertising strategy through adapting the celebrity advertising strategy, which comprised of advertising with famous celebrities as the endorsers of the company’s products globally (AdBrands.net., 2014) . Thus, under the celebrities advertising strategy, the company has had popular names such as Madonna, Stella McCartney and Karl Lagerfeld under its endorsement umbrella (AdBrands.net., 2014). The chronology of Hennes & Mauritz (H&M) advertising then shifted to the all-under-one-roof advertising strategy, where the company branded itself as a complete fashion outfit that does not only offer fashion clothing to all demographic segments of the society, but also the one that offers accessories, cosmetics and jewelry alongside the clothing and footwear products (In Jimenez & In Kolsun, 2014). With the advancement in technology, the advertising strategy for Hennes & Mauritz (H&M) advanced into music advertising, where music was used as a major tool of promoting the company’s products, through having the popular musicians and popular hits adapted for H&M products advertising (Chen, Jin, Kour, Li & Liu, 2012). Internet advertising then followed in the line of the advertising strategy with the company adapting online adverting and also opening online points of sale, to serve the technological savvy customers. From the internet advertising, Hennes & Mauritz (H&M) has now adapted mobile advertising as one of its key adverting strategy in the 21st century, owing to the important role that mobile phones are playing in enabling customer reach (AdBrands.net., 2014). CEOS: The CEO and president of Hennes & Mauritz (H&M) is Karl-Johan Persson (Lynn & Joines, 2010). PART II: Compare between H&M AND ZARA and respond the follow questions: a. which one has been more successful? H&M and ZARA are two fashion company giants globally, with presence in different international locations, which seem to have walked in the path of success since their inception. However, despite the fact that Zara has more stores globally, H&M appears to be the most successful company, owing to the fact that the financial index of the two companies shows Zara at $8 million in revenues in 2004, while H&M had revenues of $10 million for the same year (Lynn & Joines, 2010). The revenues for the two companies continued to grow, such tat by 2008, Zara had revenues of $15 million, compared to $16 million of the H&M (Chen, Jin, Kour, Li & Liu, 2012). Further, the profitability margin ranks for H&M higher than Zara, with H&M having a profitability margin of 14.7% in 2004 and sustaining the same through to 2008, while Zara had a profitability margin of 11.6% in 2004, reaching the highest in 2007 at 13.3%, and then dropping back to 12.1% in 2008 (Chen, Jin, Kour, Li & Liu, 2012). b. Which one has more potential to succeed in the future? H&M has a higher chance of succeeding in the future, owing to its strong brand reputation and the association with high quality and low prices in all geographic locations, which is different from Zara’s reputation of mixed results in different geographic regions (). Further, H&M has been able to venture into more international space recently than Zara, and there are more open opportunities for H&M to expand into more countries that Zara has already exhausted with its wider store chains globally than H&M, thus allowing for more growth opportunities in these regions (). c. Which one has handled their PR and customer approaches better H&M has handled PR and customer approaches better, since Zara only offers a loyalty reward program for its customers, while spending only 0.3% of its sales on marketing and customer-care related advocacy, compared to 3.5% of sales spent by H&M for customer outreach advocacy, while at the same time launching sensitive social campaigns such as the HIV/AIDS prevention projects, where the company has spent close to 25% of its corporate social responsibility funds to drive the campaigns for eradicating HIV/AIDS(). d. Which one has less client complaints and lawsuits? Both Zara and H&M companies have had a series of complaints and lawsuits facing them, most especially as related to poor conditions of working in their factories and also low wages (). However, overall, H&M has received more complaints and law suits compared to Zara. PART III: Hennes & Mauritz (H&M) is a global fashion house that has been in the market since 1947, and which has managed to sustain the reputation for high quality products and low-price offering (). The company has managed to expand to different regions globally and still sustain its quality and low price culture, despite the fact that the company has been faced by several complaints related to the working conditions and the salary scale paid to its workers in the developing countries (). The company has been accused of offering poor working conditions, while working its laborers for too many hours with little compensation. Nevertheless, the company has managed to leverage its name, through its high level participation in humanitarian programs such as the HIV eradication program (). The advertising culture of the company has been successful, owing to the use of strategies such as mobile, music and internet advertising, which have offered a wide-reach for the company to its customers.’ References AdBrands.net. (2014). H&M : Hennes & Mauritz (Sweden). Available at: http://www.adbrands.net/se/hennes_se.htm Chen, I., Jin, Y., Kour, C., Li, M. & Liu, Y. (2012). Hennes & Mauritz (H&M) AB: Case Synopsis, 1-8. Hennes & Mauritz AB. (2013). Our History: Facts About H&M. Available at: http://about.hm.com/en/About/facts-about-hm.html In Jimenez, G. C., & In Kolsun, B. (2014). Fashion law: A guide for designers, fashion executives, and attorneys. Lynn, H., Bennett, S. & Joines, H. (2010). H&M vs. Zara: Comparing Marketing Strategies, 1-19. Nawaz, M. & Saleem, M. (2010) Postponement in Fashion Retailing: A Case Study of H&M. Available at: http://hj.diva-portal.org/smash/record.jsf?pid=diva2:293502 Read More