Table of Contents
Abstract
The paper examines the policies and strategy adopted by Zara and H&M companies, in their quest to pursue sustainability-led marketing. For instance, Zara has utilised market segmentation and laid its focus on clients between 18 and 40 years. It adopted the use of social media as the primary channel for its advertisements. It has also established the Environmental Code of Conduct for protecting the environment. Additionally, it has adopted an organised a recycling policy from 2016. H&M on the other hand has utilised the Pricing strategy, segmented its market, and regulated and managed of its supply chains. The pricing strategy and the use of social media have been identified as the most appropriate sustainable strategies used, and the complete use of biodegradable and recyclable materials has been recommended to improve their activities.
Introduction
As the other aspects of business activities shift their focus towards a sustainable course, marketing has also evolved, and several firms have adopted sustainability-led approaches in the process of promoting their product sales. Such strategies are based on the concepts of sustainable development, which aims at meeting the current needs of the consumer, without significantly affecting the future market and generations to meet their specified needs (Peñaloza, Toulouse, and Visconti, 2012). This strategy should cater for both inter and intragenerational equity, such that there is equity between same generation, which are located in different parts of the world, and equality between the current and the future generations. Sustainable marketing development should cater for environmental, social and economic aspects of the society. Therefore, the primary objective of this approach to marketing is to address the advancing consumer and stakeholder interests to the impacts caused by their products and activities into the environment (Kotler and Lee, 2005). The paper will examine the policies and strategy adopted by Zara and H&M companies, in their quest to pursue sustainability-led marketing.
Literature Review
Zara and H&M are fashion-based firms that majorly focuses on men, women and children clothing. The two companies have adopted varying forms of marketing strategies, and have also invested in maintainable marketing approaches, which assist them in maintaining the current and future markets. For an organisation to adopt a sustainable marketing strategy, it should consider the short-term and the long-term nature of the market. Hence, Zara and H&M for instance, has adopted policies that are aimed at protecting the environment, as well as minding on the economic status of its customers.
Case Study 1: Zara Sustainability-Led Marketing Approaches
Zara is one of the most famous fashion giants in the UK and across the globe. The firm has committed itself to ensure that its marketing strategies are relevant to the current market, and sustain such impact in the future market. For instance, the firm has adequately segmented its market and identified its prime target as men and women aged between 18 and 40 years (Zara, 2017). This approach favours the sales of the firm, since the said bracket constitutes the largest populations, and consist of individuals, who are fashion-based. Such a segment presents individuals who reside in the urban centers since they are either in college or in the working bracket. This makes it possible for such markets to access the stores located in several urban centres (Seshadri, 2013). This bracket is largely influenced by the current fashion trends, which provides a suitable client base in the present and future markets.
Additionally, Zara has adopted the use of social media as the primary channel for its advertisements and product promotion activities. The Zara’s has facilitated this strategy creative and up to date marketing team, which has been able to attract massive followers in the corporation’s social media sites (Zara, 2017). For instance, the firm has garnered more than 26 million followers on Facebook and more than 1.2 million followers of twitter (Mariadoss, Tansuhaj, and Mouri, 2011). These channels have provided a broad target audience for the corporation’s products. This shows the organisations sustainable marketing since the social media currently presents the most appropriate channel for product promotion, and its audience is progressively growing. Thus, this offers a future and a dynamic model of marketing for Zara.
The organisation has also adopted the Environmental Code of Conduct for its manufacturing and supply process. These policies govern the wastewater treatment and discharge procedures, energy conservation and supply waste material management. The packaging materials used in shipping its products to different parts of the world should be reusable or recyclable (Zara, 2017). This has facilitated the firm’s targets to reduce environmental pollution. The parent company; Inditex, has banned the burning of any waste products in and outside the enterprise’s premises. This has hastened the adoption of reusable and recyclable packaging material by the supplies. Inditex has banned the use of synthetic cotton, and the firm in 2016 utilised more than 5,000 tons of pure and organic cotton, such that its products are recyclable. This has ensured that the company conserves the environment for the current and future generations and market.
The firm has adopted an organised a recycling policy from 2016, where it accepts back old clothes from its customers for resale donation purposes. In its first attempt, the firm collected more than 7,102 tons of shoes, garments, and complements, which were gathered from its significant stores and head offices across the world. These products were recycled and then donated to charitable organisations such as Red Cross, CEPF, Oxfam, and Caritas. The move was identified as a concern for the economic well-being of the society, and the environment. The old garments and shoes would have found its way back to the environment, causing pollution. Hence, the organisation’s move to recycle and refurbish such commodities helped in reducing the levels of contamination in the setting (Gupta, Rudd, and Lee, 2014). The resale of the garments and shoes that were not in bad conditions garnered money, which was channelled to charitable activities. This was an indication of social inclusion, which is one of the sustainable strategies in marketing.
Case Study 2: The H&M Sustainability-Led Marketing Approaches
H&M is a giant brand that deals with clothing and fashion. The company has also engaged in sustainable marketing, where it focuses on the economic status of its customers and the safety of the environment. H&M has utilised the Pricing strategy, where it avails high-quality products and accessories to its customers at affordable prices (H&M Group, 2017). In the clothing segment, the company’s primary competitors are Zara and GAP. Among these rivals, H&M pose the lowest prices to its consumers. This means that its clients can acquire high-quality products at a relatively reduced cost. The company also can maintain its client base and increases the possibilities of attracting more in the current and the future markets. This idea revolves around the concept the relationship between the prices and demand of such products. Thus, the organisation increases its probability to attract more customers and will be able to sustain such trend if its rates remain lower than those of its competitors.
H&M has successfully segmented its market and identified its dominant target group as men and women aged between 18 and 45 years. This segment represents the population that considers shopping to be a social event and a source of pleasure in their lives. This approach favours the sales of the firm, since the said bracket constitutes the largest populations, and consist of individuals, who are fashion-based (H&M Group, 2017). Such a segment presents individuals who reside in the urban centers since they are either in college or in the working bracket. This makes it possible for such market to increase access to the firm stores located in several urban centres. Some percentage of this market are young parents, who would be compelled to shop for their babies, thus, creating a secondary demand for the company’s products. This bracket is additionally influenced by the current fashion trends, which provide a suitable client base in the present and future markets.
The H&M has adopted the regulation and management of its supply chains. The firm audits and holds accountable the suppliers who do not act responsibly. On the other hand, the corporation has established a program which utilises an Index Code of Conduct, which weighs the performance of the suppliers and then rewards the best-performing ones (H&M Group, 2017). It encourages transparency and the use of materials that do not cause harm to the environment. The organisation has instructed their suppliers to adopts the use of materials that will facilitate a greener society, such as the use of biodegradable products (Belz, 2012). This ensures that the firm attains a positive image in the community due to its concern for its wellbeing. Thus, such a move makes sure that the business remains relevant in the current society, and contribute to the establishment of a future environment which will adequately host its consumers. The adoption of recycling and reuse strategies have also ensured that the firm releases the least effluents possible to the environment.
Analysis of the Best Policies Used
The Zara’s strategy to focus on the social media can be identified as a significant success in the achievement of the organisation’s goals and objectives. The current market is migrating from the analog mode of operation to a digital platform, where various transactions will be conducted virtually. Hence, social media is a movement that seems to be expanding uncontrollably. Considering the age bracket of the Zara corporation, most of its clients are in the teenage and middle ages, which infers that they are actively involved in social media interactions. The impact of such a strategy is indicated by the company’s net sales of more than 110.0 billion Swedish Krona (Fashionbi, 2017). The plan also promotes the globalization of the firm’s products, since one can access these social media sites from every part of the globe. Thus, this is one of the best strategies used in sustainability-led marketing.
Additionally, the H&M focus on the pricing strategy is one of the significant and applicable approach used. The firm has been able to utilise and take advantage of the forces of demand by lowering its prices (H&M Group, 2017). Such a move gives the corporation a competitive advantage over its competitors, since most of the customers would prefer to get a product at a lower price, provided the quality of the two goods is equal. Thus, this will help the H&M corporation to maintain and attract new customers in the current and future markets since human beings are enticed by the idea of reduced prices.
Recommendations
The organisations have been able to manage their supply chains. However, the firms have not been able to push them to fully adopt the use of fully biodegradable and recyclable packaging materials (Hunnicutt, 2009). This action will promote the promotion of a clean and conducive environment, which is free from any pollution. The strategy will also improve the image of the firm that will implement it fully. This, in turn, will help it increase its sales volumes and profitability since the members of the society will be impressed by the actions undertaken to protect the ecosystem.
In conclusion, the paper has examined the policies and strategy adopted by Zara and H&M companies, in their quest to pursue sustainability-led marketing. For instance, Zara has adequately segmented its market and identified its prime target as men and women aged between 18 and 40 years. Additionally, it adopted the use of social media as the primary channel for its advertisements and product promotion activities. It has also established the Environmental Code of Conduct for its manufacturing and supply process, which aims at protecting the well-being of the environment. The firm has adopted an organised a recycling policy from 2016, where it accepts back old clothes from its customers for resale donation purposes. H&M on the other hand has utilised the Pricing strategy, where it avails high-quality products and accessories to its customers at affordable prices. It has also segmented its market and identified its main target group as men and women aged between 18 and 45 years. Additionally, it has regulated and managed of its supply chains. The pricing strategy and the use of social media have been identified as the most appropriate sustainable strategies used, and the complete use of biodegradable and recyclable materials has been recommended to improve their activities.
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