MPK732 Marketing Management and Brand Equity Theory
Answer:
Those Golden Days
It was in the year 1947 when a business idea came in the mind of a Swedish young man when he was on a trip to United States. He saw high volume clothing stores like Macy’s and Barney’s and immediately decided to do something similar in his country Sweden. This is how Erling Persson opened his first shop in Sweden. Erling Persson hardly knew anything about fashion but he understood that there is a demand for designer clothes everywhere in the world (Telegraph.co.uk.2017). From 1 small shop in 1947 to 3000 shop all over the globe the journey of H&M has become a textbook for all clothing retailers.
The Diversification and Controversies
Today H&M is the second largest clothing retailer in the world and it is just behind ZARA. The company has gone through lots of ups and down in its 67 years of existence. The company became no 1 brand in the year 2010. This is the time when the company also started venturing in other business. They started home furnishing in the year 2009 but failed miserably. There were also some controversies that hit the company hard. Some designers claimed that H&M has stolen their designs and have not given any credits to them.
Controversies are also there related to H&M’s production process. In the year 2016 the company manufactured more than 3.5 billion shoes using lower impact water based solvent which is very harmful for the skin. Questions were also raised for the working conditions of the factories where more than 35000 employees work. Despite of these controversies the company still has a huge brand image which helps them to sell more than 550 million garments per year (Siegle, 2017).
Customer Based Brand equity theory for H&M
As opined by Cho et al. (2015), every company tries to establish a proper brand identify. H&M has successfully created depth in their brand awareness. They have created a successful relationship with their customers and they have an extremely loyal customer base.
Through kellar’s brand equity model it will be observed how H&M has successfully created their brand identity. As stated by Buil et al. (2013), it can be easily said that H&M has successfully achieved resonance through their extremely creative marketing programs and brand meaning. From celebrity endorsement to releasing clothing lines designed by world’s top designers they did it all.
Kelar’s brand equity model for H&M
The above picture defines it all. Though being criticized for stealing designs of top designers the company has always been customer’s favorite choice. With their innovative designs, advertisement campaigns and high quality products the company has created their own customer base.
Sustaining the power of Brand
Advertising strategy is the key to success for any company. Same goes for H&M as well. For generations people have followed this brand religiously. Advertisements have been one of the major reasons for this existence. They have always done very good CSR activities to keep their brand name string. Feminism is strong point in the current society. They have taken feminism to a different level through their advertisements. Recently they have launched a Television advertisement where they have been successful in telling story of every normal women living in the society. I think all this factors just adds some extra value in the mind of the customers. I also feel that they specially target females because this company was made to sell fashion apparels and clothes to women only. So this feminism concept goes extremely well with the company’s products.
What role does innovation plays for H&M?
The competition in the clothing market is huge. Lots of new market entries have made the competition tougher. Moreover there is always a price war between brands that hugely impacts on consumer buying behavior. All this factors has made innovation mandatory for companies like H&M in order to sustain this competition. Thus H&M has successfully joined hands with some of the top designers in the world like Karl Lagerfeld , Victor and Rolf , Jimie Choo and even Pop Star Madonna who have made exclusive clothing lines for the company. All of these clothing lines have been huge hits in the world.
This is how their new products have worked extremely well in all these years. I think that it is extremely important for the company do take such initiatives because it is not false that there are some new companies who sell similar kinds of clothing lines that H&M sells. The only factor that differentiates H&M from other companies is this brand factor which is added by these star designers. Recently H&M has opened their 3000th store in China. It is not because of the product quality but it is the brand power of the company that has helped the company to dominate not only the domestic market but also markets where other brands have failed to reach. Last year H&M sales grew nearly 15% in Asian countries. This a bench mark which is yet to be touched by companies like ZARA in this particular market. Apart from this their initiative like recycling of clothes and producing clothes from natural environment friendly resources has also helped them to gain competitive advantage in different markets around the world.
People say that becoming a star is easy but maintaining stardom is difficult. H&M is one of those star companies that have been ruling hearts for generations with its uniquely styled products. With their constant improvement and experimentation trade analysts predicts that the company’s future is unbreakable.
References
Cho, E., Fiore, A.M. and Russell, D.W., 2015. Validation of a fashion brand image scale capturing cognitive, sensory, and affective associations: Testing its role in an extended brand equity model. Psychology & Marketing, 32(1), pp.28-48.
Buil, I., Martínez, E. and de Chernatony, L., 2013. The influence of brand equity on consumer responses. Journal of consumer marketing, 30(1), pp.62-74.
Siegle, L. (2017). Can H&M really claim to be ethical?. the Guardian. Available at: https://www.theguardian.com/business/2012/apr/07/hennes-mauritz-h-and-m [Accessed 12 Apr. 2017].
Telegraph.co.uk. (2017). Erling Persson. Available at: https://www.telegraph.co.uk/news/obituaries/1412974/Erling-Persson.html [Accessed 12 Apr. 2017].
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