H&M

Introduction

If an industry has decided to conquer the international market, there are many choices that will be opened. These options may include the cost, risk and the degree of control that the company will encounter. In entering an international business, it is important that the management of the company should be able to choose a marketing entry strategy and carefully choose the product that the company will market. Exporting, is the simplest form of marketing entry strategy which includes direct or indirect method such as using an agent, in the case of direct method and counter trade if the company opted to implement an indirect method. Moreover, if the business firm wants to be known globally, there are many other ways to choose from like joint venture or export processing zone. If the management of the company has decided to choose the export strategy, they must include in their operation the specific channels to market their product.

Since, fashion has invading people style of living the product that has been chosen to go international market is the fashion cosmetics such as clothes, denims and other beauty cosmetics. Hence, this paper will provide a marketing entry strategy for the clothing company using Porter’s Five Forces model (Porter, 1980) (See Appendix 1) and SWOT analysis. The company is a new entrant to the Chinese Market, thus, this paper will provide a marketing entry strategy analysis for the company as it invade the market of China.

Competitors Analysis

Competitor’s analysis is very important when a company will be considered as a new entrant within the market place. It is essential so that the company will be able to know their competitors and the possible strategy that they may use to level up such competitors and know the needs of the target market. There have been several clothing and cosmetic companies in China. These companies have spent three years to increase their levels. Actually, there have been 4 leading clothing companies in China (i.e. Baoxiniao, Bosideng, Dayang and Ever-Glory International). Thus, this means that H&M will enter the China as a beginning industry considering many competitors within the market place.

Marketing Entry Analysis

Utilising Marketing Mix

Traditionally, marketing has been utilised by the private sector in decisively increasing the capabilities of an organisation. Marketing can be considered as one of the most important element underpinning successful business creation (Hills, 1994). Perhaps because of its complex applications, marketing has been defined in a variety of ways (Sheth, Gardner, and Garrett 1988). The marketing concept was first promulgated in the late 1950’s (Elliot, 1990). The importance of marketing concept incorporates oft-repeated elements such as: customer orientation; integrated marketing efforts; and resultant profitability (Elliot, 1990). Part of a marketing strategy is the utilisation of the marketing mix.

The marketing mix principles is controllable variable that is why it can be adjusted on a frequent basis to meet the changing needs of the target market and other dynamics of marketing environment (McCarthy, 2004). In relation to marketing plan, marketing mix includes both short term and long term strategies makes for a more profitable marketing mix. Long term strategies build brand/company awareness and give sales revenue a permanent, gradual boost. Short term strategies create a temporary, immediate revenue boost by giving buyers an incentive to purchase. By implementing both long and short term strategies, you can attend to immediate sales goals while building your business reputation and goodwill (Kyle, 2004). (See Appendix 2)

1.1. Product

H&M AB (originally known as Hennes & Mauritz), is a Swedish clothing company, known for their inexpensive and fashionable clothing offerings. It was established in VÐ"¤sterÐ"Ґs in Sweden in 1947 by Erling Persson, though at the time it only sold women's clothing and was called Hennes, Swedish for "hers." In 1968, Persson acquired the premises and inventory of a Stockholm hunting equipment store named Mauritz Widforss. Included in the inventory was a supply of men's clothing, prompting Persson to expand into menswear. Accordingly, he renamed the store Hennes & Mauritz, later abbreviated to H&M (www.hm.com).

H & M is considered as one of the world’s favourite and preferred designer of apparels and clothing for man and women. In addition, H & M is also known not only for their fashion cosmetic but because of the quality of the clothes designed durability and the funkiness of its clothes. Through the online stores, H&M provides the US, UK and European Market an exclusive clothing designs. The main goal of this company is to provide innovative designs of apparels and clothes for different types of people in different countries all over the world. The company has been known because of its strategy of providing clothing designs exclusively for each country’s preferences and needs.

1.2. Pricing

One of the advantages of the H & M is when it comes to its pricing tactic. In order to be known into the market place and as a new entrant, the company will provide its target market with an affordable cost while providing them a high quality products and services. The company will be given the customer and client a price that is lesser than its competitors so that the consumer will be enhanced to buy and patronise the H & M clothes and cosmetics.

1.3. Placement/Distribution

To be known in the market place, the product will be distributed directly to its clients and consumers. And to be known internationally, one of the strategies that the product will utilise is going on a joint venture with distinguished distributor of apparels, clothes and cosmetics, providing them with great offers, so as to market the product of the H & M.

In 2003, H&M announced its entry into the traditionally exclusive Milan fashion scene. Initial analysts declared that the high-fashion Italian market would