What Is H & M Segmentation Strategy

Therefore, for the purpose of this report, two specific market segments have been selected and profiled to provide an overview of which segments H&M should specially target when launching in Melbourne.

Hennes & Mauritz (H&M) is one of the largest clothing retailers worldwide. Their target market range age group is about 0-40 years old, but is most popular for those 15-30 years old. The brand reputation has achieved the assumption that their goal is to offer fashionable clothing at a reasonable price. Their clothing is always on trend, and sold at an affordable price from about $0.80 to $450. H&M buys stock in large columns to keep prices affordable for their average consumer. They partake in many collaborations with designers and celebrities, such as, David Beckham, Alexander Wang, and the most recent, Kenzo, as well as many more. They have worked to achieve a quick and well established system with stores all around the world, and a large consumer variety. H&M is regularly featured in respectable fashion magazines, such as Vogue and Elle. The following shows all of the countries a customer is able to shop from on the online website.

Now a day, H&M is successful running multinational company all over the world. The company's business concept is to offer fashion and quality at the best price (H&M annual report, 2014). In addition to H&M , It includes in different groups and brands like COS, Monki, etc. The H&M group is running in 55 countries with more than 3500 stores. According to annual

Market segmentation is a marketing concept that divides a large heterogeneous market into smaller homogeneous subsets of consumers with similar needs, wants and characteristics. Researchers might be able to predict customer 's behavior by studying if there are any relations between customer 's personality and the product selection process. A key success for any business is to communicate with its customers better than competitors by understanding who its customers are and what they want. The more specific costumers are segmented, the easier a business will understand its customers and build successful relationship with them because customers usually choose a product that expresses their personality. The market can be segmented by different types of segmentations such as demographic, geographic and psychographic. Marks & Spencer uses demographic segmentation to target customers above the age of 30 with high income and executive occupation. It also segments the market through value, as many products in M&S’s clothing range have a premium-priced segment, a mid-priced segment and a lower price segment.

Different individuals have different level of involvement with regard to their personality, socio economic and demographic factors. A segment is a distinctive group of customers, who share some characteristics that make them different from other groups (Proctor, 2005). Different segments have different requirements, they may need different version of the same product, they may pay different prices, they may prefer to buy in different places. Hence the customers can be grouped together by attitudes, lifestyle, age, gender, job types. We can segment consumer markets as geographic, demographic, psychographic and behaviour patterns. Geographic relate to the area in which people live, which may be relevant to the catalogue company as more northerly customers will need warmer clothes. Geographic include postcodes on the bases of census or lifestyle and lifestyle characteristics obtained from wide range of sources. Demographic segmentation include age, income, family size, socio economic status. Demographic segmentation assumes that consumers with similar demographic profile will exhibit similar purchasing patterns, motivation, interest, lifestyle and characteristic will consider similar brand preferences. Psychographic segmentation which is known as lifestyle segmentation is related to the interest, activities and opinion of customers. Psychographic enables marketers to identify market segments and understand customer motivation for product or a

            Psychographic segmentation has to do with the consumers themselves.  One way Wal-Mart sets itself apart from its competitors is by marketing specific items to better suit their needs. “Wal-Mart, for instance, is expected to launch a new anti-aging cosmetics line this month called Geogirl, consisting of some sixty nine beauty products. Ravi Jariwala, Wal-Mart spokesman, said the line was developed in partnership with the chain’s customers to give parents a healthier, age-appropriate option for their tween girls who ask about wearing makeup. The line will be marketed to parents and targets a certain life stage as opposed to a certain age of girl so parents can make informed decisions” (Staples, 2011). This is one of many product lines that Wal-Mart develops specialized marketing techniques.

An internal scan is conducted in order to identify if the five factors of the retailing mix: product, value, communication, people, and place are present, and if they are working together in a way that it benefits a specific retailer. The purpose of this report is to determine if Fairweather’s retailing mix includes all five factors and if their specific mix is appropriate for them in regards to their female fashion department.

Fashion industry manufactures clothes that have short life span and do exhibit the following characteristics: Short life-cycles – These product is often ephemeral, designed to capture the present moment of the market. The period in which it will be saleable is likely to be very short and seasonal, measured in months or even weeks. It needs constant update as well. High volatility – Demand for these products is rarely stable or linear. It may be influenced by the weather and as such the time of the year. Celebrities, movie actors and music artist do greatly influence the fashion industry. Low predictability – Because of the volatility of demand it is extremely difficult to forecast with any accuracy even total demand

Because of this we can permit to charge a very high profit margin, because a high price is associated with the perception of quality. This profit margin is about 4 times as much as the production costs, versus a 0.5 margin for most imitator brands. Our pricing strategy supports our branding strategy because the profit margins are based on consumer’s willingness to pay for the quality and lifestyle Peak offers. Peak classifies our product as a luxury product. This is why we utilize a higher price structure. I believe consumers equate price with quality. Another criteria for our pricing is to estimate what the demand is for our product. The price will normally affect the demand curve. In order to get the best possible price, a marketer might do some test marketing in several similar markets using a different price for each. Generally, the best price will be the one that provides the maximum amount of profit to the company. No in you also may experience a price difference in different countries. This is generally due to difference in Taxes. Although Peak tries to keep the price stable wherever you go, prices may differ a bit due to a difference in production and transportation costs for that specific country.

Market segmentation is the process of dividing the market into parts that are different from one another. It is the identification of potential customers who would buy your products. Different customers have different needs and it is not possible to satisfy these needs by treating all customers in a similar way. Most organisations do not have all the resources to satisfy the needs of all the customers. Therefore, it is necessary to identify the similar groups of customers and to serve one or two group with the available resources. When market segmentation is done well the members in each segment of the market are as similar to each other as possible inside a segment and are also as different as possible

Fashion has a limited life cycle, and there is always some part of collection will not be able to accept for the customers. However, H&M try to execute a sustainable fashion for each collection and combination the right quality with the right price.

In fact, fast fashion necessitates a fast evolving need to replace clothing products in order to keep the consumer satisfied. In this environment, it is typical to have a loss leader strategy whereby products are sold a below market price and at a loss due

This huge difference can partly be attributed to H&M’s long term advertising campaigns with high-profile celebrities. In order to enhance the value of its brand name, H&M spends around 5% of its revenue on advertising.

H&M’s the best price by: having few middlemen, buying large volumes, having a broad, in-depth knowledge of design, fashion and textiles, buying the right products from the right market, being cost-conscious at every stage and having efficient distribution.

The study is about consumers and the factors of environment which has an impact on them. Differentiating them from the old consumers. Rapid growth for fashion awareness can be seen among males and females. Thus, the demand for better and good quality products has increased and if in case they don’t get the desired apparels they tend to will shift to other brand which satisfy their needs. In India the major share of firm marketing branded apparels goes to the foreign companies. This study focuses on assessing the purchase behavior for men and women for branded ready-made garments and how promotional activities used by marketers have an impact on their purchasing behavior. Brand awareness determines that consumers know about the existence