Sunday, March 3, 2019
Clothing Retailer Hennes & Mauritz Essay
A key ingredient in selling success is the strength of a companys dissemination channels. Kerry Capells (2002) Business Week word looks at Sweden-based Hennes & Mauritzs (H&M) sourcing and scroll management strategies and their reliance on distribution channel partners. H&M has developed a unique distribution channel strategy to vie with better entrenched retailers including Gap, Old Navy, Zara and FCUK.H&M Product outlineUnderstanding H&Ms distribution strategy requires a clear understanding of their crossroad philosophy and strategy. Like Gap and otherwise clothing retailers, H&M commercialises to a particular segment of the room consumer market. H&Ms philosophy is Fashion and quality at the best price (H&M, 2004). H&M keeps up with its competitors by providing a variety of styles from updated classics and expressive style basics to cutting-edge fashion trends (H&M, 2004).Kotler defines the product as a combination of goods and services (Kotler et al, 2001). H&M seeks a product edge by providing affordable fashion lines similar to its competitors, but with a fast turnaround from design to employment to sales chronicle (Capell, 2002). Capell cerebrate on this compound distribution channel in his article.Distribution lend OutlineMarketers often refer to the fourth P, place, as placement, logistics or distribution. Marketers essential create a place or a way for logistics and visible delivery to get a product to market and into the hands of order consumers (McColl-Kennedy and Kiel, 2003). A distribution channel refers to the type of intermediary or gene linkage among producers and consumers. A one-channel distribution network involves only the retailer between producer and consumer. Direct distribution occurs when the producer directly supplies the product to the buyer. The plectrum of distribution channel depends on avariety of factors, including the type of product. age not all clothing retailers use direct distribution models, H&M and its competitors in the low- and mid-range clothing market use this model to go for low costs and a fast time to market (Capell, 2002). remote many industries, time-to-market is critical to retail clothiers, as trends and fashions dismiss change quickly. To derogate time-to-market, H&M employs a team of in-house designers in 21 intersection offices worldwide that work to forecast trends and find inspiration for clothing designs in everything from street trends, to films, to flea markets (H&M, 2004). From its headquarters in Stockholm, the company directs a rapid-response manufacturing process to gain on design trends immediately (H&M, 2004).H&M moves designs through production and into its retail sales channel with a three week to hexad month lead time. With low-wage, high-volume production in China and Turkey, the company can maintain low input costs and often outfit its stores with the a la mode(p) trends within a month of the initial design (Capell, 2002). H&M constantly red efines its distribution strategies in response to changing retail market conditions and production conditions in its worldwide manufacturing centers (Capell, 2002). This adaptation ensures that the company can to remedy the efficiency of its production flow.This model has direct application in H&Ms retail stores where it sells its products to consumers. H&Ms incarnate buyers in Sweden actively manage its inventory, researching itemized sales reports by country, store, and, most importantly, type of merchandise daily (Capell, 2002). The buyers use this information to reallocate production or shipments, reducing potential overstock problems. The itemized reports also allow buyers to maintain a high level of turnover, keeping apparel on the sales floor up to date.Enhancing the companys competitive advantage in this area, the integrated direct distribution channel ensures that H&M stores receive natural shipments daily, giving the company further control over responses to supply and ask shifts (Capell, 2002). The company estimates that each store receives between 500 and 1,000 new-fangled items daily, with summation sales of over 550 millionitems annually company-wide. For example, if a particular fashion proves exceptionally popular to men in the U.S., but not in Europe, the company can shift inventory in that product from European stores to meet demand in the U.S. The channel also enables H&M to respond to market segment changes. When its $39 pants line be too upscale for inner city nitty-grittys, H&M apply its integrated channel to shift that inventory to suburban locations and rotate new inventory into the mall stores (Hjelt, 2004).As with virtually every industry, H&Ms continued success and prosperity depends on efficient distribution channels. H&M has effectively incorporated its supply chain and retail distribution channels into its business strategy. As the company expands more severely into the U.S. market, its unique streamlined distribution ch annel will be a critical component of its success.Works CitedCapell, Kerry. (2002, November 11). Hip H&M The Swedish retailer is reinventing the business of affordable fashion. Business Week. 106-109.Hjelt, Paola. (2004). Will $39 heave = Profits? H&M was too trendy for many mall shoppers. Fortune.com. Retrieved August 23, 2004 from the World Wide meshwork at http//www.fortune.com/fortune/subs/article/0,15114,395434,00.htmlH&M. (2004). About H&M. HM.com. Retrieved August 23, 2004 from the World Wide Web at http//www.hm.com/us/hm/facts_history/srt.jspKotler, P., Armstrong, G., Brown, L. and Adam, S. (1998). Marketing. Sydney Prentice Hall.McColl-Kennedy, J.R. and Kiel, G. (2003). Services Marketing. Hoboken, NJ Wiley and Sons.