Dr.

Virendra Swarup

COLLEGE OF MANAGEMENT STUDIES

A Project Report On

COMPARATIVE STUDY ON COSUMER PREFERENCE

FOR BRANDS ZARA AND H&M

Submitted in partial fulfilment of the requirement

for the award of the degree of
Bachelor of Business Administration (BBA)
Submitted By:
Mili Kushwaha

Roll No. : 21014002189

Under the guidance of

Mr. Sunil Sharma
(Project Coordinator)

(Affiliated to CHHATRAPATI SAHU JI MAHARAJ UNIVERSITY,KANPUR)

i
 ACKNOWLEDGEMENT

I wish to express my sincere gratitude and regards to my Internal

guide Mr. Sunil Sharma (Assistant Professor) for her constant
inspiration, supervision and valuable guidance during the training.

With regards

Signature of student:

i
i
 STUDENT DECLARATION

I, Mili Kushwaha student of Bachelor of Business Administration at College of

Management Studies, Kanpur declare that the project work entitled a survey on
the ‘ ‘COMPARATIVE STUDY ON CONSUMER PREFERENCES FOR
BRANDS ZARA AND H&M’ is compiled and submitted under the guidance of
Mr. Sunil Sharma (Assistant Professor). This is my original work.

The information furnished above in this project report is true to the best of my
knowledge.

NAME: MILI KUSHWAHA

BBA 3rd YEAR

BATCH- 2023-24

i
ii
 Dr . Virendra Swarup
COLLEGE OF MANAGEMENT STUDIES UNNAO
@RAGENDRA SWARUP KNOWLEDGE CITY
(Affiliated to Chhatrapati Shahu Ji Maharaj University, Kanpur Nagar)
Kanpur –Lucknow National Highway

CERTIFICATE

This is to certify that the Market Survey Report entitled “A

COMPARATIVE STUDY ON CONSUMER PREFERENCES FOR
BRANDS ZARA AND H&M” is a bona fide work of “MILI
KUSHWAHA” (21014002189) BBA 6th Semester. It has been done
under my supervision for the partial fulfilment of the requirement for the
award of the degree of Bachelors of Business Administration (BBA)
from CSJM university Kanpur.
This study presented here today has not been submitted earlier
elsewhere. I am pleased to say that the performance of the student during
the period of report work was extremely satisfactory.

Supervisor Name: Mr. Sunil Sharma

Supervisor Signature:

Designation: Assistant Professor

Date:

Principal

Dr. Ashutosh Mishra

i
v
 Executive Summary

This project report presents a comprehensive comparative study of the effectiveness of

promotional schemes utilized by Zara and H&M, two prominent fashion retailers in the market.
The analysis encompasses various aspects of their marketing mix, promotional schemes, SWOT
analysis, and an assessment of the effectiveness through a survey. Based on the findings, the
report concludes with suggestions and recommendations for both companies to enhance their
promotional strategies.
The report begins by outlining the marketing mix of Zara and H&M, focusing on the key
elements of product, price, place, and promotion. It examines how these companies position
their products, set competitive prices, establish efficient distribution channels, and implement
promotional activities to reach their target markets.
Next, a detailed analysis of the promotional schemes employed by Zara and H&M is presented.
This includes an examination of their advertising campaigns, public relations efforts, sales
promotions, and digital marketing initiatives. The report evaluates the strengths and weaknesses
of each company's promotional strategies and identifies areas where improvements can be made.
A SWOT analysis is then conducted for both Zara and H&M to identify their internal strengths
and weaknesses, as well as external opportunities and threats. This analysis helps in
understanding the competitive advantages and challenges faced by each company in terms of
their promotional effectiveness.
To gauge the effectiveness of the promotional schemes, a survey is conducted among target
customers of Zara and H&M. The survey measures customer awareness, perception, and
response to the promotional activities of both brands. The data collected provides valuable
insights into the impact of these promotional strategies on customer behaviour and brand
perception.
Based on the findings of the survey and the overall analysis, the report concludes with key
observations and recommendations for Zara and H&M. These recommendations aim to improve
the effectiveness of their promotional schemes and maximize their impact on customer
engagement, brand loyalty, and overall sales performance.
In summary, this project report presents a comprehensive comparative study of the effectiveness
of promotional schemes employed by Zara and H&M. It examines their marketing mix,
promotional strategies, conducts a SWOT analysis, and incorporates a survey to evaluate the
effectiveness. The report concludes with valuable insights and recommendations to help both
companies enhance their promotional efforts and maintain a competitive edge in the fashion
retail industry.

INDEX
5
 S. No. Topic Page No.
1 Acknowledgement 2
2 Self Declaration 3
3 Certificate 4
4 Executive Summary 5
5 Chapter-1: Introduction 8-21
• Industry overview
• Company profile
(Zara and H&M)
• S.W.O.T Analysis of Zara and H&M
6 Chapter-2: Literature Review 22-23
• Scope of study
• Objective of study

7 Chapter-3: Market Overview & Analysis 24-38

• Marketing strategy of the Company
• Marketing mix of the Company
• Financial status of the Company

• Products offered by both companies

8 Chapter-4: Research Methodology & Research Design 39-45

• Choice of research
• Research approach
• Tool for Data collection
• Research Design
• Objective of the study
• Hypothesis of the study
• Population/Universe
• Sampling Unit
• Sample Size
• Sampling procedure
• Data collection

6
 • Statistical tools

9 Chapter5- Analysis and Interpretation 46-58

Findings and Conclusion

10 Chapter6-Suggestions and Recommendations 59-61

• Suggestions
• Summary of dissertation
• modification
• methodological Criticism
• Practical implication Future research
11 62
References

12 Annexure 63-67

7
 Chapter – 1
Introduction

FASHION APPAREL INDUSTRY-AN OVERVIEW

The fashion apparel industry is a vast and dynamic sector that encompasses the design,
manufacturing, distribution, and retail of clothing and accessories. It is an industry driven by
constant change and evolving consumer tastes and trends. Within this industry, one prominent
segment is fast fashion, which has gained significant popularity in recent years.
The fashion apparel industry operates on a global scale, with major fashion capitals such as New
York, Paris, Milan, and London serving as hubs for designers, fashion houses, and fashion
weeks. It involves a complex supply chain that includes designers, manufacturers, textile
suppliers, wholesalers, and retailers.
Fast fashion is a business model that emphasizes speed and affordability. It involves the
production of low-cost garments inspired by the latest fashion trends and made available to
consumers quickly. Fast fashion brands are known for their ability to quickly replicate designs
from high-end fashion brands and deliver them to consumers at a fraction of the cost. They
achieve this through efficient supply chain management, large-scale production, and often by
outsourcing manufacturing to countries with lower labour costs.
Fast fashion brands typically release new collections frequently, sometimes even weekly, to
constantly offer consumers new products. They rely on aggressive marketing strategies and the
concept of "disposable fashion," where consumers purchase inexpensive items that are often not
designed for long-term use or durability. Fast fashion has become associated with high turnover
rates, excessive consumption, and environmental concerns due to its impact on sustainability
and waste generation.
Despite the negative aspects, fast fashion has revolutionized the fashion industry by
democratizing fashion and making it more accessible to a wider audience. It has allowed
consumers to keep up with rapidly changing trends without breaking the bank. Fast fashion
brands have also played a role in empowering consumers to express their personal style and
experiment with different looks.
However, the fast fashion model has faced criticism for its negative impact on the environment
and labour practices. The industry's rapid production and consumption cycles contribute to
significant waste generation and pollution, as well as exploitation of workers in developing
countries. In response, there has been a growing demand for sustainable and ethical fashion,
encouraging brands to adopt more responsible practices.
In recent years, many fashion brands and consumers have shown a greater awareness of the
environmental and social impacts of the industry. This has led to the rise of sustainable fashion,
which focuses on environmentally friendly materials, fair labour practices, and reducing waste
throughout the supply chain. Slow fashion, a counter-movement to fast fashion, promotes the
idea of investing in quality, timeless garments that are made to last.

8
Overall, the fashion apparel industry is a multifaceted and ever-evolving sector that
encompasses various players, styles, and business models. While fast fashion has brought
affordability and accessibility to fashion, it also raises concerns regarding sustainability and
ethics. As the industry moves forward, there is an increasing emphasis on creating a more
sustainable and socially responsible fashion ecosystem.

FASHION APPAREL INDUSTRY IN INDIA

India is the second largest producer of textiles and garments in the world. India‟s fashion and
apparel industry is a significant contributor to the country‟s economy, accounting for 2.3% of
the GDP. The industry is projected to experience strong growth in the coming years, with a
projected CAGR of 10%, and is expected to reach US$ 190 billion by 2025-26.
According to the Indian E-commerce Trends Report of Unicommerce, the online fashion and
accessories industry in India witnessed an order volume growth of 20.9%, becoming the
segment with the highest order volumes in FY22 as compared to the previous financial year.

9
 H&M
H & M Hennes & Mauritz AB (H&M) is a Swedish multinational retail-clothing company,
known for its fast-fashion clothing for men, women, teenagers, and children. H & M Hennes &
Mauritz AB comprises six independent brands: H&M, COS, Monki, Weekday, Cheap Monday
and & Other Stories.

Founded in 1947, H&M‟s design team creates sustainable fashion following a low-cost
principle. The collections include everything from dazzling party collections to quintessential
basics and functional sportswear 3 for women, men, teenagers and children, and for every
season or occasion. In addition to clothes, shoes, bags, jewellery, makeup, and underwear there
is also H&M Home 3 fashionable interiors for children and adults.

History Of H&M

H&M In the year of 1946 the 30-year-old Swedish entrepreneur Erling Persson goes on a road
trip through the USA. In New York, the idea of selling women‟s fashion in a new way is born.
The following year, 1947, Persson opens a new womenswear store in Västerås, Sweden. He calls
it Hennes, Swedish for “Hers”.
The soon-to-be-famous Hennes logotype is designed by the founder himself. A first store in
Sweden‟s capital, Stockholm, opens in 1952. When a second Stockholm store opens in 1954,
the popularity is already at fever pitch.
That same year, Hennes takes out a full-page colour ad in Sweden‟s largest daily; a pioneering
belief in the power of marketing.

10
The 1950s closes with the opening of a flagship store in the first of five skyscrapers built in the
Hötorget area in central Stockholm.
In 1968, Hennes acquires the Stockholm-based hunting apparel and fishing equipment retailer
Mauritz Widforss, and the name is changed to Hennes & Mauritz. This is the start of offering of
men‟s and also children‟s clothing, leading to H&M offering clothes for the entire family.
The expansion is rapid: by 1969, Hennes & Mauritz has 42 stores. During these decades, the
international growth begins. Norway comes first, followed by Denmark, U.K., and Switzerland.
In 1973, Hennes & Mauritz starts selling underwear. The same year, ABBA-member Anni-Frid
Lyngstad becomes the first “supermodel” to be photographed for the company, wearing make-
up from the new cosmetics range.
The growth pace increases even further, with five or six new stores opening every year.
In 1974, Hennes & Mauritz is listed on the Stockholm Stock Exchange. The same year, the
stores are rebranded with the abbreviation “H&M”.
In the late 1970s, modern teenagers get their own version of H&M as the Impulse concept is
launched, inspired by U.S. denim stores.
In the 1980s, the foundation is laid for the upcoming global expansion. New openings include
the first H&M stores in Germany and Netherlands.
Long before the term e-commerce was even born, sale of H&M fashion move into the
customer‟s homes through the acquisition of Swedish mail order company Rowells in 1980.

In 1982 - 35 years after the start in Västerås, Sweden, the company gets its second-ever CEO, as
Erling Persson steps aside to make room for his son, Stefan Persson.
In the 1990s, traditional newspaper advertising is largely replaced by large city billboards. The
choice of models signals that H&M has become a truly international brand. Super models are
used next to famous actors and artists wearing H&M clothes. The fashion speaks for itself.
The famous annual Christmas underwear campaigns are launched in 1990, featuring super
model Elle Macpherson. The campaigns gain a lot of media attention.
Throughout the 1990s, models from <The Big Six> Elle Macpherson, Cindy Crawford, Naomi
Campbell, Claudia Schiffer, Christy Turlington and Linda Evangelista 3 are used in H&M‟s
campaigns.
In 1998, H&M starts offering online shopping. The first online market is Sweden.
The expansion of H&M in Europe continues. By the end of the decade there are H&M stores in
several European countries including France, where the first H&M store opens 1998 in Paris.
In 2000, a major H&M flagship store opens on Fifth Avenue in New York. The opening of the
first store in the U.S. marks the start of the expansion outside Europe.
H&M and Karl Lagerfeld take the world of fashion by surprise in 2004, teaming up to show
that design isn‟t a question of price.
11
 Since this first designer collaboration fashion giants like Versace, Roberto Cavalli, Alexander Wang
and Stella McCartney have been invited to make their design accessible to fashion fans globally.
The expansion of online sales continues, initially to European countries.
H&M goes far east, opening the first stores in Shanghai and Hong Kong in 2007.
2007, marking 60 years after the first Hennes store opened, COS is born. The honour of hosting
the first store goes to London, UK.
Weekday, Monki, and Cheap Monday are welcomed to the H&M group through the purchase of
FaBric Scandinavien AB.
Home styling becomes more fun thanks to the launch of H&M Home in 2009.
In 2000 Rolf Eriksen is appointed CEO. Karl-Johan Persson takes over as CEO in 2009.

12
 ZARA

Zara is a Spanish fast fashion retailer brand. It is focused on design, production, distribution,
and sales through its extensive retail network. Zara‟s products range from clothing, accessories,
shoes, swimwear, beauty, and perfumes.

The company was founded in 1975 by Amancio Ortega and Rosalía Mera. Zara is the main
brand of the Inditex group, the world‟s largest apparel retailer. The fashion group also owns
brands such as Massimo Dutti, Pull&Bear, Bershka, Stradivarius, Oysho, Zara Home, and
Uterqüe. Zara manages up to 20 clothing collections a year.
Zara has presence in 202 markets through its online platform and it has over 7,000 stores in 96
markets. And it employs 174,000 workers around the world.

History Of ZARA

Zara was founded by Amancio Ortega and Rosalía Mera in 1975 as a family business in
downtown Galicia in the northern part of Spain. Its first store featured low-priced lookalike
products of popular, higher-end clothing and fashion. Amancio Ortega named Zara as such
because his preferred name Zorba was already taken. In the next 8 years, Zara‟s approach
towards fashion and its business model gradually generated traction with the Spanish consumer.
This led to the opening of 9 new stores in the biggest cities of Spain.
In 1985, Inditex was incorporated as a holding company, which laid the foundations for a
distribution system capable of reacting to shifting market trends extremely quickly. Ortega
created a new design, manufacturing, and distribution process that could reduce lead times and
react to new trends in a quicker way, which he called <instant fashion=. This was driven by
heavy investments in information technology and utilising groups instead of individual
designers for the critical <design= element.
13
 In the next decade, Zara began aggressively expanding into global markets, which included
Portugal, New York (USA), Paris (France), Mexico, Greece, Belgium, Sweden, Malta, Cyprus,
Norway and Israel. Today, there is hardly a developed country without a Zara store. Zara now
has 2,264 stores strategically located in leading cities across 96 countries. It is no surprise that
Zara, which started off as a small store in Spain, is now the world‟s largest fast fashion retailer
and is the flagship brand of Inditex. Its founder, Amancio Ortega, is the sixth richest man in the
world according to Forbes magazine.

Today, Inditex is the world‟s largest fashion group with more than 174,000 employees operating
more than 7,400 stores in 202 markets worldwide including 49 online markets. The revenues of
Inditex was USD 23.4 billion in 2019. The other fashion brands in the Inditex portfolio are:
Zara Home: Home goods and decoration objects founded in 2003. Operating in 183 markets,
70 of them with stores.

Pull & Bear: Casual laid-back clothing and accessories for the young founded in 1991.
Operates in 185 markets, 75 of them with stores.

Massimo Dutti: High end clothing and accessories for cosmopolitan men and women acquired
in 1995. Operates 186 markets, 74 of them with stores.

Bershka: Blends urban styles and modern fashion for young women and men founded in 1998.
Operates in 185 markets, 74 of them with stores.

Stradivarius: Casual and feminine clothes for young women acquired in 1999. Operates 180
markets, 67 of them with stores.

Oysho: Lingerie, casual outerwear, lounge wear and original accessories founded in 2001.
Operating in 176 markets, 58 of them with stores.

Uterqüe: High-quality fashion accessories at attractive prices founded in 2008. Operating in

158 markets, 17 of them with stores.

Apart from fashion brands, Amancio Ortega has also set up a global real estate investment fund,
Pontegadea Inversiones, which manages corporate offices across 9 countries including United
States (Seattle), Britain (London), France (Paris), Canada, Italy, South Korea. These corporate

14
properties house large companies including Facebook, Amazon and Apple, and prestigious
luxury and retail brands.

15
 S.W.O.T Analysis of the Organisation

SWOT ANALYSIS OF ZARA

A fact-based SWOT Analysis are of four primary components; strengths, weaknesses,

opportunities, and threats. Zara is one of the biggest apparel brands which has customers all over
the world. The SWOT Analysis of Zara can identify the strengths of the brand that has helped it
to grow over the last few decades while pointing out the weaknesses they need to work on for its
sustainability. SWOT Analysis of Zara will also help in deciphering future opportunities and
threats.

Strengths
* Unique Designs: The brand pays attention to the market and the fashion trends, allowing
them to have unique designs to compete with the other apparel brands. They have a team of
more than 700 designed to develop trendy garments attracting customers from different age
groups, ethnicities, and cultures. On average, the company designs around 450 million
products. Hence, they do not have issues with launching a variety of items.

* High Quality at Low Price: Zara produces clothing items and accessories that are high in
quality. They keep the price affordable which attracts more customers. The brand does not
spend money on advertising, but its unique designs and high demand compel the buyers to bag
the items as soon as they are dropped.

* Global Presence: The brand is not only successful in its homeland but has expanded its
business in countries of Europe, Asia, and the USA. They have more than 2000 stores all over
the world. Additionally, they operate an online boutique which also contributes to their sales.

* Environment-friendly manufacturing: The brand concentrates on developing toxic-free

production units. They have eliminated the harmful elements that can be hazardous to the
environment. At the same time, they participate in campaigns that stress preserving natural
resources.

Weaknesses
* Limited Advertising: Though the brand is quite a pro at visual merchandising, they do not
spend much money on Television and Print ads. Though they make apparel for women and

16
teens, they primarily target the younger generations. Hence, they prefer using social media for
advertising rather than traditional media. The 'word-of-mouth' promotion also works fine for
the brand, but including the print and TV ads might help them increase the revenue.

* Disruption in Supply Chain: The brand has more than 2000 retail outlets worldwide, and its
supply chain needs to work in close coordination to maintain a smooth process. Any disruption
in the supply chain causes delay and leads to customer dissatisfaction.

* Committing too much to fashion trends: Although Zara is known for its unique design and
favouring new fashion trends, this can be its weakness. They pay too much attention to highly
volatile trends.

* Issues with Offline sales: Zara is very much dependent on their outlets for sales, and they are
yet to explore the potential of the online business. There is a lack of adequate details about
apparel on their website, and the customer may not be satisfied with the delivered product for
the same reason.

Opportunities
* Innovative Campaign: The brand can design innovative campaigns to interest its customers
while targeting audiences on print, TV, and social media. Zara's creative campaign may target
people of the middle age group, bringing them more customers.

* Domestic Factories: The company is a part of a large brand and can afford to invest money
in making domestic factories and warehouses to avoid delays in deliveries and cushion the
disruption in the supply chain.

* Classic and Unique: As rapidly changing fashion trends can be a weakness of the company,
Zara may come up with some classic ranges, apart from being unique. It will decrease the
chance of losses while something 'in' fashion suddenly becomes back-dated.
* Concentrating on Online Business: The COVID pandemic has shown that problems can
arise if a company depends largely on its offline counters for sales. Zara can expand their
business by aptly structuring its online boutique. They must fix the website issues reported by
the customers and use innovative ideas to increase their sales online.

17
Threats
* Competition: Many apparel makers are coming to the market and offering trendy clothes at a
competitive price. Although Zara offers unique designs at a competitive price, the stiff market
competition is a threat.

* Government Initiatives for local products: Zara's revenue depends on its worldwide sales.
However, while operating in countries where the Government has favourable schemes and
promotional offers for the local sellers, they can face a setback.

* Fluctuation of currency: Since Zara is a global presence, currency fluctuations, instability in

the economy, and pricing problems can negatively impact its growth.

* Limitations: Due to their low interest in advertising, they fail to reach a maximum number of
customers. Taking that opportunity, many local companies are coming up with cheap
imitations of their products having similar designs. It is also a threat to the sale and their
reputation.

18
SWOT ANALYSIS OF H&M

Understanding the success of H&M as a fashion brand can definitely begin with a simple
analysis of its strengths and weaknesses, as well as studying the opportunities and threats that it
faces in the industry. Besides reading about these elements in detail, it would also help to have a
more visual representation, like a mind map.

Strengths:

•Fast Fashion Strategy

The fast-fashion model is the new thing in the retail clothing industry. It is where the company
fast-tracks production and releases a new collection to the market every two weeks or so, giving
customers new choices whenever it visit the stores. This is in contrast to the usual method of
seasonal production that involves a wait of 4 to 6 months before a brand's new collection comes
out.

•Wide Global Reach

H&M is not lacking at all in its efforts to reach the global market. With more than 5000 stores in
6 continents, H&M is adequately represented in more than 70 countries. It has a firm hold in the
international market and is continuously broadening its reach by tapping new markets.

•Affordable Pricing
This Swedish fashion brand does not have its own production facilities. Instead, it works with
multiple suppliers that provide H&M with top-quality apparel for a low labour cost. While some
may frown on this potential lack of control over production, this system is actually very cost-
efficient and allows them to sell its goods at lower prices.

•Well-Organized Supply Chain

One of the advantages of partnering with multiple suppliers is that there is very little chance of
having low supply issues. H&M keeps all its stores well-stocked with its current offerings, and
whatever supply issues it encounters are very quickly resolved.
Formidable Online Presence
H&M has a good eCommerce strategy that sufficiently caters to the online market. Aside from
its official website, it also uses third-party platforms to help reach more online shoppers and
generate more eCommerce sales.

• Weaknesses:

19
•Excessive Outsourcing
Unlike some of its close rivals in the retail fashion industry, H&M outsources all of its clothing.
This strategy does have its advantages, but it also limits the control that the brand actually has
over the production process. Problems that arise in the supplier's facilities can also cause drastic
damage to the sales and operation of the company.

•Fashion Conformity
The clothes sold by H&M are always trendy and of high quality, but they mostly just follow the
current fashions. Many of the items are patterned after other designers' products. They do not
have original designs that bear a distinctive H&M look.

•Controversial Designs
It may be a one-time occurrence, but it is going to be difficult to forget the 2018 incident where
H&M produced a hoodie with the words "Coolest Monkey in the Jungle" and used a black child
to model it. After being called out for racism and being boycotted worldwide, the fashion
company might have learned to be more careful in approving apparel designs.

Opportunities:

•Better eCommerce Strategies

The online market has already been growing at a steady pace, but when the pandemic began, and
people were forced to stay home, more consumers discovered the benefits of online shopping.
H&M already has a robust online presence, but there is still much room for improvement, especially
now that the online market is growing at a faster rate than ever.

•Brand Expansion
H&M has built a solid reputation as a high fashion brand. If it suddenly starts selling items
outside this sphere, like second hand clothing or sporting goods, it might confuse customers and
even lead to a decrease in sales. But it can still expand through mergers and acquisitions.
•Emerging Markets
Fashion retailers like H&M focus mostly on the upper-class market. But there are several
emerging markets that show great potential for sales, and it would benefit the company to look
into these prospects.

Threats:

•Strong Competitors
The fashion retail industry has plenty of competitive players, and H&M will have to find ways
to stay ahead of them.

20
•Fakes and Imitations
There is a growing trade in fakes and imitations in the fashion world. As counterfeiters get
better, sales of premium brands like H&M might drop considerably.

•Higher Production Costs

The cost of material and labour has been increasing, and even more so in recent years. This is an
uncontrollable factor that can reduce the profitability of H&M's products.

CHAPTER-2

21
 LITERATURE REVIEW

• Scope of this study

The scope of studying a comparative study of the promotional schemes of Zara and H&M
involves examining and analysing the various promotional strategies employed by both
companies in order to understand their effectiveness, impact, and overall performance. This
study aims to provide insights into the similarities and differences in the promotional approaches
of these two prominent fast fashion retailers.

H&M and Zara have become one of the most prosperous fashion companies. It‟s business has
been steadily growing all around the world. In recent years it also started operating stores in
India.
To strengthen the relationship with customers and spur more traffic to its stores, Zara is thinking
about implementing loyalty programs.
Additionally, the business is putting a lot of effort into enhancing its logistics system which is
crucial to add success in the apparel sector. Zara depends less on advertising and more on the
stores location to draw customers. Compared to its rivals who spent about 3.5% on advertising
the company only spends 3% of sales on it. Instead than spending extra money enticing
customers into the store, Zara is more concerned with locating the precise retail location that
best suits the brand.
In order to promote the newest collection H&M is currently promoting to its customers through
a mobile marketing campaign. Customers who use this mobile marketing technique get SMS
vouchers and mobile banners ads on important portals and media websites. To promote this plan
of action and it's affiliated ad network Adiento, H&M uses Mobiento .Swedish customers were
the target for this ad.
H&M started using this medium in 2006 and has since developed numerous campaigns to reach
a variety of customers. The major objective of this marketing strategy is to increase H&M club
membership and promote the newest seasonal trends. Customers can enrol by visiting the
website and providing their mobile number.

• Objectives of this study

22
1.Comparative Analysis: Conduct a comprehensive analysis of the promotional schemes
implemented by Zara and H&M, comparing their strategies, techniques, and tactics used to
attract and retain customers.
2.Promotional Mix Evaluation: Assess the promotional mix elements employed by both Zara
and H&M, such as advertising, sales promotions, public relations, personal selling, and direct
marketing, to understand how each company utilizes these tools to achieve their marketing
goals.
3.Target Audience Analysis: Examine the target audience for Zara and H&M and evaluate how
their promotional schemes align with the preferences, behaviours, and needs of their respective
target markets.
4.Brand Image and Positioning: Investigate how promotional activities contribute to the brand
image and positioning of Zara and H&M in the fast fashion industry, considering factors such
as brand perception, customer loyalty, and market positioning.
5.Impact and Effectiveness: Measure and evaluate the impact and effectiveness of promotional
campaigns undertaken by Zara and H&M, analysing factors such as customer response, sales
performance, and market share.
6.Competitive Advantage: Identify and compare the competitive advantages derived from the
promotional strategies of Zara and H&M, including unique selling propositions,
differentiation, and customer value propositions.
7.Emerging Trends and Innovations: Identify any emerging trends or innovative promotional
practices within the fashion industry and examine how Zara and H&M adapt to these trends,
leveraging them to stay competitive and maintain customer engagement.
8.Recommendations: Provide actionable recommendations for Zara and H&M to enhance their
promotional strategies, based on the findings and analysis of the comparative study, with the
aim of improving their overall promotional effectiveness and achieving sustainable growth.

CHAPTER-3

MARKET OVERVIEW AND ANALYSIS

23
Zara's Marketing Strategies :

Zara, a global fashion retailer, has implemented several distinctive marketing strategies that have
contributed to its success in the fashion industry. Here is a brief overview of some key marketing
strategies employed by Zara:

1- Fast Fashion Model:

Zara is renowned for its fast fashion approach, characterized by a highly efficient and vertically
integrated supply chain. Zara designs, produces, and distributes its clothing quickly, enabling the
brand to respond swiftly to emerging fashion trends and deliver new collections to its stores at a
rapid pace. This strategy allows Zara to provide customers with up-to-date fashion items and a
constantly changing assortment.

2- Agile Supply Chain:

Zara's agile supply chain is a critical element of its marketing strategy. By maintaining a
significant portion of production in-house and utilizing local suppliers, Zara reduces lead times
and increases flexibility. This enables the company to quickly adapt to customer demands and
market trends, resulting in a competitive advantage over other fashion retailers.

3- Limited Inventory and Scarcity Marketing:

Zara intentionally maintains limited inventory in its stores to create a sense of scarcity and
urgency among customers. This scarcity marketing strategy generates a perception of exclusivity
and encourages customers to make purchases promptly, fearing that the desired items may sell
out quickly. Limited inventory also helps Zara reduce markdowns and maintain higher profit
margins.

4- Store Location and Layout:

Zara strategically selects prime locations for its stores, often in high-traffic areas and prominent
shopping districts. The store layout is designed to provide an enjoyable and seamless shopping
experience. Zara's stores feature minimalist aesthetics, allowing the clothing to take center stage.
The placement of merchandise is frequently rearranged, fostering a sense of discovery and
encouraging customers to explore the store further.

5-Integrated Marketing Communications:

24
 Zara focuses on integrated marketing communications to create a cohesive brand image. They
utilize various channels, including digital advertising, social media platforms, print campaigns,
and in-store visuals, to communicate consistent messages and showcase their latest collections.
Zara also leverages fashion events and partnerships to enhance brand visibility and engage with
their target audience.

6-Embracing Technology:
Zara embraces technology as part of its marketing strategy. The brand invests in innovative
solutions such as RFID (Radio Frequency Identification) technology to track inventory and
improve supply chain efficiency. Zara also utilizes augmented reality (AR) in its mobile app to
enhance the shopping experience by allowing customers to virtually try on clothes.

5- Customer Engagement and Feedback:

Zara places importance on customer engagement and feedback. They actively encourage
customer participation through social media, contests, and user-generated content campaigns.
Zara values customer insights and leverages feedback to adapt their product offerings and
improve the overall shopping experience.

6- Sustainability Initiatives:
Zara has been increasingly focusing on sustainability, addressing consumer concerns about
ethical fashion. The company has implemented initiatives such as the "Closing the Loop"
program, which promotes garment recycling, and the use of sustainable materials in their
collections. These efforts align with the growing consumer demand for sustainable and
responsible fashion choices.

Zara's marketing strategies encompass a fast fashion business model, agile supply chain
management, scarcity marketing, store location and layout considerations, integrated marketing
communications, technology adoption, customer engagement, and sustainability initiatives.
These strategies collectively contribute to Zara's brand differentiation, customer loyalty, and
market positioning in the fashion industry

Zara - Target Audience :

Zara‟s target audience is a diverse group of fashion-conscious individuals who appreciate high-
quality clothing at an affordable price point. The brand‟s demographic spans a broad age range,
from teenagers to young adults and middle-aged individuals, with a strong focus on the 18-35
age group.
Geographically, Zara has a global presence, with stores in major cities around the world.
However, the brand has a stronger presence in urban areas and is more popular among city
dwellers than rural communities.

Zara‟s target audience is characterized by their desire for fashion-forward clothing that is both
trendy and timeless. They value quality over quantity and are willing to invest in pieces that they

25
 can wear for years to come. They are fashion-savvy and keep up with the latest trends, but they
also have a unique sense of style that they like to express through their clothing choices.

Zara - Marketing Mix :

Zara has become a household name in the fashion industry, known for its unique business
model, innovative designs, and affordable pricing. The brand‟s marketing mix plays a crucial
role in its success, allowing it to reach a diverse range of customers and remain at the forefront
of the fashion industry. Zara‟s marketing mix consists of four key components: product, price,
place, and promotion.
Product

Zara offers a wide range of clothing options for men. women, and kids. The brand‟s design team
is constantly updating and refreshing its collections to stay on-trend and offer customers the
latest styles. Zara‟s commitment to sustainability is also reflected in its product offerings, with
the brand using more sustainable materials and production methods.

Price

Zara‟s pricing strategy is affordable and competitive, making its clothing accessible to a wide
range of customers. The brand offers clothing at a lower price point than some of its luxury
competitors, but still maintains a high level of quality in its products.
Place
Zara has a strong retail presence, with stores located in major cities around the world. The
brand‟s website and mobile app also allow customers to shop online and have items delivered to
their doorstep. Zara‟s fast fashion model means that new products are constantly being
introduced to stores and online, creating a sense of urgency for customers to make purchases.
Promotion
Zara‟s promotion strategy is focused on creating a strong online presence and engaging with
customers through social media. The brand uses platforms like Instagram to showcase its latest
collections and offer styling inspiration to customers. Zara also invests in digital marketing
campaigns to drive traffic to its website and promote its products.
Zara‟s marketing mix is carefully crafted to appeal to a wide range of customers and stay ahead
of the fashion industry. By continuously updating its product offerings, pricing strategy, retail
presence, and promotion tactics, Zara remains a top player in the fashion industry.

PRODUCTS OFFERED BY ZARA:

26
 Zara offers a wide range of products including clothing, shoes, accessories, and beauty products. Here's a
detailed list of some of the products you might find at Zara:

Clothing:
Tops: T-shirts, blouses, shirts, sweaters, sweatshirts
Bottoms: Jeans, trousers, skirts, shorts
Dresses: Casual dresses, evening dresses, party dresses
Outerwear: Jackets, coats, blazers
Activewear: Sports bras, leggings, shorts, jackets
Loungewear: Sweatpants, hoodies, loungewear sets

Shoes:
Boots: Ankle boots, knee-high boots, heeled boots
Flats: Ballerina flats, loafers, sneakers, sandals
Heels: Pumps, sandals, mules

Accessories:
Bags: Handbags, crossbody bags, clutches
Jewelry: Necklaces, earrings, bracelets, rings
Belts: Leather belts, chain belts, fabric belts
Hats: Fedoras, beanies, bucket hats
Scarves: Silk scarves, knit scarves, printed scarves

Beauty Products:
Fragrances: Perfumes, body mists
Makeup: Lipsticks, eyeshadows, foundations, nail polish
Skincare: Moisturizers, cleansers, serums, masks

Men’s Clothing:
Shirts: Casual shirts, dress shirts, denim shirts
Trousers: Chinos, dress pants, joggers
Jackets: Bomber jackets, leather jackets, parkas
Suits: Tailored suits, blazers, suit trousers
Activewear: T-shirts, shorts, hoodies, sweatpants
Swimwear: Swim shorts, swim trunks

Children's Clothing:
Baby: Bodysuits, rompers, pajamas
Boys: T-shirts, shirts, jeans, jackets
Girls: Dresses, skirts, leggings, sweaters
Shoes: Kids' sneakers, boots, sandals

Home Decor:
Cushions: Throw cushions, decorative cushions

27
 Bedding: Duvet covers, pillowcases, bedspreads
Tableware: Plates, bowls, cups, cutlery
Decorative Items: Vases, candles, picture frames

Travel Accessories:
Luggage: Suitcases, travel bags, backpacks
Travel Organizers: Toiletry bags, passport holders, luggage tags
Travel Comfort: Neck pillows, eye masks, travel blankets

Tech Accessories:
Phone Cases: iPhone cases, Samsung Galaxy cases
Laptop Cases: Laptop sleeves, laptop bags
Audio Accessories: Earphones, headphones, Bluetooth speakers

Zara Home Fragrances:

Candles: Scented candles, decorative candles
Diffusers: Reed diffusers, room sprays
Fragrance Collections: Perfumes, room fragrances

28
• H&M’s Marketing Strategies

H&M, a renowned fashion retailer, has implemented several effective marketing strategies to
establish and maintain its presence in the competitive fashion industry. Here is a brief overview
of some key marketing strategies employed by H&M:

1- Fast Fashion Approach:

H&M is known for its fast fashion model, which involves quickly producing affordable, on-
trend clothing and accessories in response to the latest fashion trends. By constantly refreshing
their product offerings and ensuring a rapid turnaround from design to production, H&M attracts
fashion-conscious consumers who seek current styles at affordable prices.

2- Collaborations and Designer Collections:

H&M has successfully collaborated with renowned fashion designers and celebrities to create
limited-edition collections. These collaborations generate excitement and buzz among
consumers, attract new customers, and position H&M as a brand that offers exclusive, high-
fashion products at accessible prices.

3- Fashion Shows and Events:

H&M organizes fashion shows and events to showcase their latest collections. These events
create a sense of anticipation, generate media coverage, and allow H&M to engage directly with
consumers and influencers, enhancing brand visibility and desirability.

4- Multi-channel Marketing:
H&M utilizes a multi-channel marketing approach to reach and engage a wide range of
consumers. They have a strong online presence through their e-commerce platform, where
customers can browse and purchase products. Additionally, H&M leverages social media
platforms, such as Instagram, Facebook, and YouTube, to showcase their products, share
fashion inspiration, and interact with their audience.

5- Store Experience:
H&M focuses on creating an engaging and enjoyable in-store shopping experience. Their stores
are designed to be visually appealing, with trendy displays and well-organized sections. H&M
also offers frequent store promotions and discounts, further enticing customers to visit and make
purchases.

6- Sustainable Initiatives:
H&M has taken significant steps to promote sustainability in the fashion industry. They
launched initiatives like garment recycling programs, conscious collections made from
sustainable materials, and transparency campaigns to educate consumers about their sustainable
practices. These initiatives align with the growing consumer demand for environmentally
friendly and socially responsible brands.
29
7- Influencer Marketing:

H&M collaborates with influencers and celebrities to promote their products and collections on
social media platforms. By partnering with influencers who resonate with their target audience,
H&M effectively reaches and influences potential customers, leveraging their social influence
and credibility.

8- Customer Loyalty Programs:

H&M offers customer loyalty programs, such as the H&M Membership, which provides
exclusive discounts, personalized offers, and early access to sales events. These programs
encourage customer loyalty, repeat purchases, and foster a sense of exclusivity among members.

H&M's marketing strategies focus on offering trendy fashion at affordable prices, engaging
customers through various channels, promoting sustainability, and creating an enjoyable
shopping experience. By continuously adapting to evolving consumer preferences and market
trends, H&M maintains its relevance and competitive edge in the fashion industry

H&M- Target Audience :

H&M's target audience primarily consists of fashion-conscious individuals who seek trendy and
affordable clothing options. The brand targets a broad demographic range, including
Young Adults, Fashion-Forward Individuals, Value-Conscious Shoppers, Urban and Trendy
Consumers, Socially Conscious Consumers, Online Shoppers etc.
It is important to note that while these are the primary target audiences for H&M, the brand has a
broad customer base and aims to cater to a diverse range of individuals with varying fashion
preferences and budget constraints.

H&M Marketing mix :

30
The marketing mix of H&M, also known as the 4Ps (Product, Price, Place, and Promotion),
encompasses the key elements of the brand's marketing strategy. Here's an overview of H&M's
marketing mix:

Product:
H&M offers a wide range of fashion products, including clothing, accessories, footwear, and beauty
products. The brand focuses on providing trendy and affordable fashion for various customer
segments. H&M's product mix includes clothing for men, women, and children, as well as
specialized lines such as maternity wear, sportswear, and sustainable collections.

Price:
H&M follows a pricing strategy that positions the brand as an affordable fashion retailer. The pricing
of H&M products is relatively lower compared to high-end designer brands, making fashionable
clothing accessible to a wide range of customers. The brand often offers frequent promotions,
discounts, and sales events to further enhance its value proposition and attract price- conscious
shoppers.

Place:
H&M operates an extensive global retail network, with stores located in prime shopping locations
worldwide. The brand carefully selects strategic locations in high-traffic areas and prominent
shopping districts to ensure maximum visibility and accessibility. Additionally, H&M has an online
presence through its e-commerce platform, allowing customers to browse and purchase products
from the convenience of their homes.

Promotion:
H&M utilizes various promotional tactics to create awareness, generate interest, and drive sales. The
brand employs a multi-channel marketing approach, leveraging digital marketing, social media
platforms, print advertisements, and in-store visuals to communicate its brand message and showcase
its latest collections. H&M also collaborates with influencers, celebrities, and designers to promote
their products and create buzz around exclusive collections. The brand actively engages with its
audience through social media campaigns, contests, and user-generated content to foster customer
loyalty and encourage participation.

31
 Additionally, H&M focuses on sustainability and responsible fashion, promoting its initiatives and
efforts to engage with environmentally and socially conscious consumers. The brand's sustainability
practices are integrated into its marketing messaging, reinforcing its commitment to ethical fashion
choices.
Overall, H&M's marketing mix is centred around offering trendy and affordable fashion products
through an extensive retail network, attractive pricing strategies, effective promotional campaigns,
and a commitment to sustainability. These elements work together to differentiate the brand, attract
its target audience, and maintain a strong presence in the competitive fashion industry.

PRODUCTS OFFERED BY H&M:

H&M offers a diverse range of products across various categories, including clothing, accessories,
beauty, and home decor. Here's a detailed list of products you might find at H&M:

Clothing:
Tops: T-shirts, blouses, shirts, sweaters, sweatshirts
Bottoms: Jeans, trousers, skirts, shorts, leggings
Dresses: Casual dresses, party dresses, maxi dresses
Outerwear: Jackets, coats, blazers, parkas
Activewear: Sports bras, leggings, shorts, hoodies
Basics: Tank tops, basic tees, leggings, underwear

Men's Clothing:
Shirts: Casual shirts, dress shirts, denim shirts
Trousers: Chinos, dress pants, jeans, joggers
Jackets: Bomber jackets, leather jackets, parkas
Suits: Tailored suits, blazers, suit trousers
Activewear: T-shirts, shorts, hoodies, sweatpants
Swimwear: Swim shorts, swim trunks

Children's Clothing:
Baby: Bodysuits, rompers, pajamas, jackets
Boys: T-shirts, shirts, jeans, jackets, shorts
Girls: Dresses, skirts, leggings, sweaters, jackets
32
 Shoes:
Women's Shoes: Boots, flats, heels, sneakers, sandals
Men's Shoes: Boots, loafers, sneakers, dress shoes
Kids' Shoes: Sneakers, boots, sandals, flats

Accessories:
Bags: Handbags, backpacks, crossbody bags, clutches
Jewelry: Necklaces, earrings, bracelets, rings
Hats: Caps, beanies, sun hats
Scarves: Wool scarves, silk scarves, snoods
Belts: Leather belts, fabric belts, chain belts
Sunglasses: Fashion sunglasses, UV protection sunglasses

Beauty Products:
Makeup: Lipsticks, eyeshadows, foundations, nail polish
Skincare: Moisturizers, cleansers, serums, masks
Haircare: Shampoos, conditioners, styling products

Home Decor:
Cushions: Throw cushions, decorative cushions
Bedding: Duvet covers, pillowcases, bedspreads
Towels: Bath towels, hand towels, beach towels
Decorative Items: Vases, candles, picture frames
H&M Home:
Kitchenware: Plates, bowls, cups, cutlery
Textiles: Tablecloths, napkins, tea towels

Baskets, boxes, organizers

H&M regularly updates its collections, so the availability of specific products may vary. It's a good idea to
check their website or visit a store for the latest offerings.

33
 Financial status of ZARA
Sales

Inditex net sales during 2015 financial year (from February 1st 2015 to January 31st 2016) grew more
than 15% to €20.9 billion, with growths in all the geographic areas where the Group‟s operates.

From all those sales, €13.6 billion are from Zara. As it is shown in Figure 6, 65% of the sales are sold
by the major brand of the Group, whereas the rest is divided among the other stores of the company.
This means that Zara is the most important retailer. This is because it is the retailer that has first got
into new countries and the online store.

Store and online sales by concept

2% 1%
3% Zara
6%
Pull&Bear
9% Massimo Dutti
Bershka
7% Stradivarius
Oysho
7%
65% Zara Home
Uterqüe

Store and online sales by Inditex's concepts

Regarding Zara‟s evolution since 2007, 2015 has been the year with biggest increase in sales since 2012.
In particular, its sales have grown more than 17%.

34
 Sales evolution 2007-2015 (€m)
25.000

20.000

15.000

10.000

5.000

0
2007 2008 2009 2010 2011 2012 2013 2014 2015
Inditex Zara

Sales evolution between 2007 and 2015

All Inditex group comes together in the same philosophy that stands on three pillars: increasing sales
volume in each of its stores, opening new stores and create other business concepts that complement
those that already have.

Net profit

Net income reached to €2.9 billion in 2015, 15% higher than the previous year. This isthe best result got
by the holding group to the moment.

Net income evolution (€m)

3.500

3.000

2.500

2.000

1.500

1.000

500

0
2007 2008 2009 2010 2011 2012 2013 2014 2015

Inditex's net income evolution between 2007 and 2015

35
Financial status of H&M

Sales

In 2015, sales have developed well for all brands: H&M, COS, &Other Stories,
Weekday, Monki and Cheap Monday. As a result, the H&M group‟s sales increased by
19 percent to SEK 180,861 m (19,711 m€) during the financial year.

Sales evolution 2007-2015 (€m)

25.000

20.000

15.000

10.000

5.000

0
2007 2008 2009 2010 2011 2012 2013 2014 2015

Sales evolution between 2007 and 2015

The full year results published by the company do not provide data of the sales that each
brand has.

36
Net income

Profit for the year after tax increased to SEK 20.9 billion (2,277 m€), which is the highest result to
date. This has occurred despite the fact that the strong US dollar exchange rate has made purchasing
much more expensive.

Net income evolution (€m)

3.500

3.000

2.500

2.000

1.500

1.000

500

0
2007 2008 2009 2010 2011 2012 2013 2014 2015

H&M's net income evolution between 2007 and 2015

During 2011, profit decreased compared to the previous years. This was mainly related to the increased
purchasing costs combined with the fact that H&M chose a strategy of further strengthening its
customer offering and its market position relative to competitors

CHAPTER-4

37
 RESEARCH METHADOLOGY AND RESEARCH
DESIGN
In this topic a discussion about choice of methodology, research strategy, data collection
including both secondary and primary data and finally the scientific approach are
presented.

Choice of Methodology

To explain why H&M‟s and ZARA‟s compete differently and why their business models differ,
the traditional theories of Internalization Theory, Transaction Cost Analysis and Resource-based
View were studied. Furthermore, research was studied about the two firms and the EU clothing
industry in general. None of the theories can explain both H&M‟s and ZARA‟s business-
models entirely, but the theories can be a helpful tool in finding key characteristics that can
explain the differences in the business-models. John Roberts‟s describes Complementarity as
variables within industries of mass production and modern manufacturing. By expanding
Roberts‟s Concept of Complementarity our own set of Complementarities for H&M and ZARA
were created, based on the information derived from studying the two firms and from interviews
conducted with experts.

Research Approach
This dissertation has a deductive approach as the main research approach. It starts out with a
literature review which the Complementarities are based on. By starting out from theory a goal
is to find some causality between the two different business models and the Complementarities.
The aim was also to find some Complementarities that distinguish the two business-models. To
evaluate these Complementarities they were tested them by conducting interviews.

The opposite of deduction is induction, the purpose of this approach is to build a new theory
from explored data and not develop existing theory. When using the inductive research approach
a study of a smaller group of people would be more appropriate. In contrast a study of a larger
group of people would be more suited for a deductive research approach. In this research a
smaller group of people was interviewed and therefore this dissertation has some features of the
inductive approach as well. According to Saunder‟s a mix of deductive and inductive research
approach, called abduction, is possible and this is the most suitable approach for this dissertation
(Saunders et al., 2007).

Data Collection

38
This section describes the process of how data were collected, first secondary data will be
presented followed by primary data.

Secondary Data
Data that have been reanalyse from earlier studies for other purposes are called secondary data,
which includes both raw data and summaries. The combination of data will form new data and
new relationships can be explored (Saunders et al., 2007).

Many researchers have emphasized the field of firms‟ business-models dealing with both
outsourcing and in-house production. Several researchers have also devoted time explaining the
business-models of both H&M and ZARA. For that reason the secondary data were collected
through articles and books, which were originally collected for some other purpose.

Information was also collected on the traditional theories from articles and books when trying to
find features that could contribute to an understanding of why H&M and ZARA choose different
business-models. Internalization Theory, Transaction Cost Analysis, and Resource-based View
were analysed in depth.

Primary Data
Data that are conducted specifically for a research project are classified as primary data.
Interviews were conducted as a way of collecting primary data, the interviews had a semi-
structured outline. A semi-structured interview is when the researchers have a list of questions
that should be answered, but the questions may vary from interview to interview. This means
that depending on the flow of the conversation the researchers can ask more than the questions
that they have prepared (Saunderset al., 2007). Since our dissertation is an explanatory study, a
semi-structured interview was appropriate. We wanted to go in depth when investigating
H&M‟s and ZARA‟s business-models. By conducting semi-structured interviews the
interviewed person could further explain unclear answers. The purpose was to get the
interviewed person to talk as freely as possible. The questions varied from interview to
interview depending on who was participating. The interviews were carried out on a one-to-
one basis over the telephone.

Research Design

39
(a) Objective of the Study:

The objective of this study is to conduct a comparative analysis of the promotional schemes
employed by Zara and H&M, two prominent fashion brands. The study aims to identify and
analyse the similarities and differences in their brand positioning, target audience, product range
and pricing, advertising and communication channels, sales promotions and discounts, as well as
collaborations and influencer marketing strategies. The findings will provide valuable insights
for fashion brands seeking to enhance their promotional efforts.

(b) Hypothesis of the Study:

H1: Zara and H&M employ different brand positioning strategies in their promotional schemes.

Zara and H&M have distinctive brand identities and target different segments of the fashion
market. Zara is known for its fast-fashion approach, focusing on trendy and up-to-date
designs with a premium feel. The brand positions itself as providing affordable luxury and
emphasizes its commitment to fast product turnover and frequent new collections. Zara's
promotional schemes may revolve around highlighting its fashion-forwardness and trendiness
to attract fashion-conscious consumers.
H2: Zara and H&M target different demographic segments in their promotional efforts.

To determine whether Zara and H&M target different demographic segments in their
promotional efforts, a thorough analysis of their target audience and marketing strategies is
necessary. It's important to note that the following comment is based on the hypothetical
research design, and no actual data has been collected.
Based on the hypothesis that Zara and H&M target different demographic segments in their
promotional efforts, it can be inferred that these two brands likely have distinct target audiences.
The target audience refers to the specific group of consumers that a brand aims to attract and
serve with its products and promotional activities.
H3: Zara and H&M offer distinct product ranges and employ different pricing strategies in their
promotional schemes.

Zara's product range typically includes trendy and fashionable items, often inspired by current
runway styles. In terms of pricing, Zara positions itself as a mid-range brand, providing a
balance between affordability and quality.

40
On the other hand, H&M's product range encompasses apparel for women, men, and children,
along with additional offerings such as home decor and beauty products. H&M focuses on
affordability, offering fashion-forward designs at lower price points compared to some of its
competitors.

H4: Zara and H&M utilize different advertising and communication channels to promote their
brands.

Zara utilizes its physical stores as a key advertising and communication channel, strategically
placing displays and arranging the store layout to showcase their latest collections. Additionally,
Zara may also employ traditional advertising channels such as print media, billboards, and
television advertisements to reach a broader audience.
H&M places significant importance on digital marketing and employs various online advertising
and communication channels to reach its target audience. This includes social media platforms,
email marketing, influencer collaborations, and their official website. H&M leverages its digital
channels to engage with customers, provide product information, and promote its latest
collections.

H5: Zara and H&M employ different sales promotions and discount strategies in their
promotional schemes.

Zara may employ short-term sales promotions, such as seasonal discounts, flash sales, or
exclusive promotions for loyalty program members. Zara's sales promotions may focus on
creating a sense of urgency and exclusivity, enticing customers to make purchases during
specific periods.
H&M's sales promotions may include ongoing discounts on selected items, seasonal sales, or
promotional events such as "buy one, get one" offers. H&M's approach to discounts may be
more consistent and long-term, allowing customers to find affordable fashion options throughout
the year.

H6: Zara and H&M engage in diverse collaborations and influencer marketing activities in their
promotional efforts.

Zara has partnered with designers such as Isabel Marant, Balmain, and Giambattista Valli to
create limited-edition collections. These collaborations generate significant buzz and attract
customers who are interested in unique and exclusive fashion offerings. Zara may also engage
with influencers and fashion bloggers to showcase their latest collections, create content, and
promote their brand on social media platforms.

41
H&M has also established itself as a brand that frequently collaborates with high-profile
designers and influencers. The brand has collaborated with notable names such as Versace,
Alexander Wang, and Moschino, creating limited-edition collections that generate excitement
and drive sales. H&M leverages influencer marketing by partnering with popular influencers to
create brand awareness, share fashion inspiration, and engage with their target audience through
various digital platforms.

Zara has partnered with designers such as Isabel Marant, Balmain, and Giambattista Valli to
create limited-edition collections. These collaborations generate significant buzz and attract
customers who are interested in unique and exclusive fashion offerings. Zara may also engage
with influencers and fashion bloggers to showcase their latest collections, create content, and
promote their brand on social media platforms.
H&M has also established itself as a brand that frequently collaborates with high-profile
designers and influencers. The brand has collaborated with notable names such as Versace,
Alexander Wang, and Moschino, creating limited-edition collections that generate excitement
and drive sales. H&M leverages influencer marketing by partnering with popular influencers to
create brand awareness, share fashion inspiration, and engage with their target audience through
various digital platforms.

(c) Population/Universe:
The population/universe for this study consists of customers who have engaged with the
promotional schemes of Zara and H&M. This includes individuals who have:
1. Shopped at Zara and/or H&M physical stores.
2. Made online purchases from Zara and/or H&M websites.
3. Engaged with Zara and/or H&M social media accounts, such as liking, sharing, or
commenting on posts.
4. Subscribed to Zara and/or H&M newsletters or email updates.
5. Participated in loyalty programs or received promotional offers from Zara and/or H&M.
6. Responded to surveys or feedback requests from Zara and/or H&M regarding their
promotional activities.
7. Interacted with Zara and/or H&M promotional campaigns, such as participating in contests
or events.

(d) Sampling Unit:

The sampling unit are the individual customers who have made purchases or interacted with the
promotional activities of Zara and H&M.
We are taking the sample of Delhi.

42
(e) Sample Size:

The sample size for this study will be determined based on the resources available and the level
of statistical significance desired. A larger sample size will provide more robust results. For the
purpose of this hypothetical design, we took a size of 100 customers (50 for Zara and 50 for
H&M).

(f) Sampling Procedure:

A combination of convenience and stratified sampling was employed. Convenience sampling

involved selective customers who were easily accessible, such as those visiting Zara and H&M
stores or engaging with their online platforms. Stratified sampling was ensured representation
from different demographic segments, including age, gender, and location, to capture a diverse
sample.

(g) Data Collection:

Data was collected through a combination of primary and secondary sources. Primary data was
collected through surveys conducted with the selected 100 customers. The survey questionnaire
included questions related to brand positioning, target audience, product range and pricing,
advertising and communication channels, sales promotions and discounts, as well as
collaborations and influencer marketing.
Secondary data was collected through an extensive review of existing literature, including
academic journals, industry reports, and official websites of both the brands .

(h) Statistical Tools:

To analyse the data, statistical tools such as mean, chi-square tests, and t-tests were utilized.
Mean was used to calculate the average responses related to different aspects of the promotional
schemes. Chi-square tests determined the association between categorical variables, such as
brand positioning and target audience. T-tests were employed to compare means and identify
significant differences between Zara and H&M in terms of product range, pricing, and other
variables.

43
 Chapter – 5
Analysis & Interpretation

1- Gender 2- Age Group

44
3- Occupation

4- Do you have Social Media?

5- Which social media platform do you use the most?

45
6-. Will you choose Zara for shopping rather than H&M?

7- H&M is more preferable while shopping for clothes rather than Zara?

8- Do you know about the cloth brand ZARA and H&M?

9- How do you know about the above brands?

46
10-Do you follow ZARA and H&M on social media?

11-If yes, on which social media platform you follow ZARA and H&M?

47
12-How much are you satisfied with posts of ZARA and H&M on their social media pages?

13-Have you ever purchased any product following a social media post from the brands?

14-Is ZARA and H&M is active on social media?

48
15-The marketing activities of ZARA and H&M are attractive on
their social media pages.

Analysis
The analysis of the responses is done because it gives readers an insight into what the findings
depict. The data collected from the questionnaire is 100 respondents in the questionnaire some of
the questions were not compulsory to answer. So the responses were less on those questions
The analysis of each question and with the responses are as follows-
The first question is to do the gender analysis. Out of 100 responses, there were a majority of
female respondents
(56.2%). From this, we can analyse that females are more interested in participating in the
questionnaire.

49
The second question is to do the analysis on the age of the respondents. From the presentation of
data of the questionnaire, we can see that the largest part (41.9%) of the respondents are of the
age group between 20-24. So we can analyse that this age group uses more social media and
they also wanted to take a part in this questionnaire.

The third question is to gain an insight into the occupation of the respondents. Out of 100
responses, the majority of the respondents are students (43.8%) and the other major part is self-
employed (21.9%) So we can analyse that the interested respondents are students.

The fourth question is a basic question to know that the respondents are having laptops or
mobiles. From the presentation of data. we have noticed that every respondent has laptops and
mobiles. So the analysis of the question is nowadays laptops and mobiles are an important part
of our daily lives. These devices have become our workplace, our classrooms etc.

The fifth question asks the respondents which social media platform they use the most.
In the presentation of data, we can see that there is a bar graph that depicts the most used social
media platform by the respondents. And the most used platform the respondents use is Facebook,
then the other majority of the respondents are users of Instagram and YouTube. So the analysis is
that we are more familiar or attracted to Facebook because it was introduced as a social media
platform and every age group of people uses Facebook more and then uses YouTube and teenagers
or middle. aged people use Instagram and LinkedIn more.

The next sets of questions are to understand the preferences of the consumers. These questions
were made because this research project is based on the two popular fast-fashion brands Zara
and H&M and their promotional activities.

The second of the set or the seventh question is used to describe the choice of respondents in the
question. there were given four options which are positive. negative, both, or neither of these
impacts the industry. From the result, we have seen that out of 100 responses, the majority of the
respondents think that there is both a positive and negative aspect of choice between both the
brands and half respondents say that there is a positive influence (40%). So the analysis is that
the society of people thinks that there is both negative and positive influence of both the brands
on our daily fashion style.

The third set consists of eight questions. These eight questions are given to know whether the
respondents are
familiar with the brands Zara and H&M. Some of the questions in this set are not required to
attempt compulsory because there are some respondents who are not familiar with the brands.
This set also helps us to analyse the social media performance of Zara and H&M.

50
The first question of the set asks the respondents are they familiar with fashion brands Zara and
H&M. So for the analysis, we need to look at the presentation of data. From the presentation of
data, the result is that the majority to most people.

The second question of the set is only for those respondents who are familiar with the brands'
names. Out of 100 respondents 79 respondents responded to this question. The question is from
where the respondents got to know about the brands. From the bar graph presented in the
presentation of data for this question, we can see that the majority of the respondents got to
know about the brands from social media platforms, and the other part of the respondents got to
know from print and television advertisement. So the analysis is that Zara and H&M are actively
promoting on social media and they are more popular on social media platforms for this reason
people are getting to know about the brands.
The third question of the set is a required question. This question asks the respondents do they
like, follow and subscribe to the social media pages of Zara and H&M. The result of this
question is in a pie chart. So by observing the pie chart we can say that the option "yes" has
more percentage than option "no‟‟. The analysis is that the respondents like to follow the
pages of the brands on social media. And we can analyse this also that they like to follow the
pages because of the brands active participation.

The fourth question of the set is not a compulsory question. This question is only for
respondents who responded
to the previous question. For this reason, we only got 61 responses to the question. The question
is to know on which social media platform the respondents follow the brands. So the largest
part of the respondents responded that they follow Zara and H&M on Facebook (72.8%) and
then the other majority says that they follow the brands on Instagram (54.3%) then comes
YouTube (37%). The results of the question help us to analyse that the brands are more
attractive and more liked on Facebook and then the order of the responses continues.

The fifth question of the set is again not a compulsory question. We got only 79 responses to this
question out of 100 respondents. This question is to analyse the satisfaction rate of the pictures
or videos the brands post on their social media pages. The result is presented in the form pie
chart, so after analysis of the pie chart, we can conclude that most of the respondents are
satisfied (46 4%) with the brands' cost. The other part responded that they are very satisfied
(24.7%) and neutral (23.7%). There are few people who responded that they are not satisfied
with the posts. So we can analyse that the post of Zara and H&M are attractive and satisfies the
needs and preferences of their targeted consumers

The sixth question of the set asks the respondents whether they have purchased products directly
from the brand‟s social media pages. This is a "yes" or "no" question, so the percentage of the
option "yes" is more (77.5%) than "no‟‟. So from the result, we can analyse that the brands

51
selling strategy from their social media pages are good for this reason the respondents buy their
product directly after seeing their social media costs.

The seventh question of the set is whether the brands are active on their social media platform or
not. This is also a question of yes or no. The largest part of respondents responded, "Yes"
(86.5%). So the analysis is that the brands are very much active on social media with their
unique and attractive post.
The last and the eighth question of the set is to understand the social media marketing activities of
Zara and
H&M. The question is in the form of a statement with four options of "agree", "disagree",
„neutral‟, and "strongly disagree". From the result of the statement. we can see that the
majority of the respondents agreed to the statement and the other part of the respondents
was neutral. So we analyse that the social media marketing activities of the brands are
attractive and that is a key point for the brands to make a profit and to gain a good name.

Findings & Conclusion:

52
ZARA does not manufacture the complete products in its facility. Instead, it assembles elements
of product from suppliers, gives it a finish, and sells these to the end customer. This implies that
Zara and suppliers are managed by the principles of industrial sub-contract and these
relationships are affected by factors characteristic to this kind of organizations. This is an
example seen in with respect to single and especially individual source suppliers, having
commanding positions in the relationship with Zara as Zara is intensely dependent on these
deliveries. The company makes an effort to setup better relationships with such suppliers, and
maintain these relationships with frame or partnering agreements.

Theoretical Aids to Consumer-Supplier Relationships

Out of the different theories, each theory applies to the aspects of customer – supplier
relationship, and strives to aid in optimizing the Zara‟s SCM. The Transaction Cost theory helps
determine what to produce and what to have suppliers deliver. The Principal Agent theory helps
understand how Zara should streamline these relationships. The Network Based theory
perspective stresses on the need for developing long-term connections with suppliers so as to
access important information.

This can be realized with respect to Kraljic‟s portfolio technique, managing suppliers on the
basis of their importance for the organization. This indicates the necessity for market-inclined
relationships with certain suppliers and intimate network-based relationships with others. Zara‟
supply chain management follows vertically integrated supply chain as we discussed earlier.
Therefore, Zara keeps control over suppliers. Demands are easily met. However, Zara has
number of suppliers; speed and accuracy is prime concern of Zara to decrease lead-time. There
are risk involves in supply chain like uncertainty, insecurity, delay in delivery and shortage of
raw material. Zara‟s 95% suppliers are located near to Zara‟s factories.

The Procurement Procedure

ZARA has defined a process that explains how procurement and communication with suppliers are
to be managed. This process is a component of the main business process used in Zara. Zara use
vertically integrated supply chain, where different elements are integrated like design, production,
distribution and retailing.

1) DOCUMENTATION

Today‟s wide-ranging requirements for product documentation are regarded as the most cardinal
elements, since both Zara staffs and suppliers find it difficult to manage. Orders given by ZARA

53
are every so often incomplete or issued too late contributing to difficulty for the vendors
(suppliers) to deliver them on time. Dramatic changes and corrections are made, orders are not
regularly updated but and feedback on clarifications is received late. This is not only an ZARA
challenge but also the supplier‟s. From this standpoint, the need for more contracts, illustrating
the requirements and expectations and better contract assessment, becomes apparent. Challenges
with respect to documentation are intimately attached to the absence of competence. As
mentioned earlier, people will not be able to handle things in which they have little or no
knowledge. A marginal percentage of interviewees stressed on the need for better training of
suppliers as well as ZARA personnel. For instance, how to deal with documentation related
requirements.

2) CO-OPERATION

Agents representing Zara and suppliers consider that intimate mutual aid and better co-operation
as improvement areas. Mutual aid in this sense is primarily related to long-term dedication and
contracts with key suppliers as well as enhanced cooperation with them prior to and during
project execution. Improved use of supplier proficiency (technical clarifications) by supplier‟s
participation in design reviews is useful for Zara in seeking optimized products from supply-
chain inclined perspective.

3) COMMUNICATION

Effective communication is primarily concerned about consistent use of single point of contact
towards suppliers and formal communication procedures. This is to ensure that people receive
all important information without fail. Today Zara appears not merely as a single organization,
but as a conglomeration of numerous organizations, each with different perceptions. This,
indeed, has not just been reported by suppliers, but also by approved Zara employees. The need
for enhanced communication within the company is also seen through the stated presence of
conflicts of interest about technical as well as commercial aspects. According to a Zara
representative, extended focus on cross-sectional efforts in the possession stage is potentially
an effective approach to these challenges.
Thus, there is a necessity for explanation of role, responsibility, authority, and more usage of
formal communication procedures (Within the organization, internally, as well as with suppliers,
externally.

54
4) PROGRESS STATEMENT

Progress reporting is mainly concerned about either delay in sending reports or not being sent by
suppliers. This is contemplated as a challenge as it turns out to be a difficult task to keep track of
the status of deliveries, especially crucial in case of delays. The consequence of this is that the
staffs of ZARA have to spend time, labour and facilities to get this information without
depending on anyone.

5) LEAD TIME

The effect on the supply-chain Agility is initiated as an answer to the dynamic and choppy
markets and customer demand. It directly impacts the supply-chains and is one of the reasons
models such as agile supply-chain and fast-fashion emerged. The need for shrinking lead times
and promoting flexibility in fast fashion required the involvement of suppliers to achieve a
higher level of customer satisfaction.
Supply Chain Operation (SCO) controls three clear aspects: maximize use of resources,
minimize inventory, reduce and lead times.
These three factors are said to directly influence pricing, customer satisfaction, and by and large
business values such as profit, turnover, and sales. Production ratio, in Zara, ought to be
reserved as small as possible, setting aside the extra capacity in the products, which are
predominantly necessary in manufacturing. It disputes that big orders, typically, will lead to
inventory increase. On the other hand, with Zara stores greater than before in number, across the
world, lead times cannot be kept very short.
The two aspects of lead time, in a production environment include complexity and ambiguity.
Zara is making fashion outfits, which have low complexity, but high uncertainty.

6) PRESSURE ON SUPPLIER

Suppliers, under progressive pressure due to changing consumer needs reflect on the whole supply
chain (Carmen de la Cruz Iglesias, 2013). The contemporary fashion business continuesto be
acutely competitive with added pressure for fashion organizations to compete on price as well as
their ability to deliver freshness While most of the retailers are stressed with this new scenario.

55
 Conclusion

In this chapter a summary of the dissertation is presented, followed by modification,

methodological criticism, practical implication and future research.

Summary of Dissertation
The clothing industry is considered to be a highly competitive environment where many firms
choose to outsource non-core operations. Outsourcing enables firms to concentrate on their core
activities; thereby firms minimize their costs and become as efficient as possible. At the same
time other firms concentrate on gaining control over as many sections as possible by analysing
their value chain. Firms that obtain control over the total production process have an in-house
based business-model, which facilitates short lead-times.
Many theories are discussing characteristics that can have value when explaining different
business-models for clothing firms. The Internalization Theory explains the ability to overcome
market imperfections, such as the free flow of products and sale of know-how, through FDI. The
Transaction Cost Analysis explains that due to costs of transactions it can be better to manage an
activity inside the firm, in other words vertical integration. Characteristics that affect the level of
vertical integration are asset specificity, high level of uncertainty and how frequently the
transactions are. The Resource-based View highlights the importance of identifying key
resources to maximize returns and create sustainable competitive advantage. John Roberts‟s
Concept of Complementarity is used to analyse the environment and competitive advantage from
the characteristics found in the firm. These characteristics should complement each other, doing
more of one is only beneficial if doing more of the other characteristic.

According to the theories, firms that are competing in the same industry should implement
similar business-models. Therefore, these theories fail to explain firms that choose different
business-models when they are active in the same environment, facing the same market
imperfection and are exposed to the same transaction costs. The development in the EU clothing
industry has more valuable information about clothing firms‟ different business-models.
Heightened competitive pressure has made many EU clothing firms focus on lowering costs by
relocating production facilities. Firms have outsourced labour intense activities to low-wage
countries. At the same time others have restructured and modernized their technological
technology to create higher value clothing and keep production in the domestic country. Two
extremes in the clothing industry when it comes to their business-models are H&M and ZARA.
Based on traditional theories, the general EU clothing industry, and facts about H&M and
ZARA, we created a set of Complementarities to explain why the two firms choose different
business-models. The purpose with this dissertation and the Complementarities is to understand
why H&M and ZARA chose different business models. The Concept of Complementarity was a
way to extend the Resource-based View. It is possible that key resources can be developed
through the Concept of Complementarity by identifying key resources that are complements to

56
each other and to the firms‟ business model. Further these Complementarities explain why firms
choose different business-models depending on which complementary characteristics they have.
To confirm the Complementarities, interviews were conducted with the Irresponsible at H&M
and two stock analysts. The interviews were structured in a semi-structured way. Most of the
Complementarities were confirmed by at least one of the interviewed people.

The confirmed complementarities to H&M‟s business-model are; home society and firm
founder, Independent foreign suppliers, outsourcing, international production and flexibility,
core activities, size and bargain power, control by culture, logistics and IT, closeness to the
market, lower costs and lower price and expansion strategy. The Complementarity that was not
confirmed was flexible capital, however, this characteristic may still contribute to the
understanding of H&M‟s business-model.

The complementarities to ZARA‟s business-model are; closed governance structure, internal

trade and in-house production, control and flexibility, firm founder, short lead-times,
distribution model and internal communication systems, fast response to consumer demand,
high skilled workforce, productivity and higher price. The Complementarity that was not
confirmed was variety and small batches. However, these characteristics may still contribute to
the understanding of ZARA‟s business-model.

This case study shows that the Complementarities that were found in H&M and ZARA to some
extent have an explanatory meaning for their choice of business models. The characteristics
found in H&M are more related to an outsourcing business-model. Therefore, H&M‟s choice of
an outsourcing business-model is the most beneficial and efficient business-model for H&M. At
the same time the characteristics that were found in ZARA are more related to an in-house
business model.
Therefore, ZARA‟s business-model is the most beneficial and efficient business-model for
ZARA. The two firms‟ individual characteristics creating Complementarities increase the
understanding of why H&M and ZARA are using such different business-models, even though
they are active in the same industry.

57
 CHAPTER-6
SUGGESTIONS AND RECOMMENDATIONS

When creating the Complementarities possible explanatory characteristics existing in H&M and
ZARA were valuated. To make the presentation of Complementarities clear only core
Complementarities were highlighted, in other words, Complementarities that have a direct
connection to H&M‟s and ZARA‟s business models. All characteristics that can affect the core
Complementarities could not be included in our analysis. However, the importance of all the
characteristics that affect the Complementarities within H&M‟s and ZARA‟s business-models
have not been disregarded.

Enhance Product Quality: Both Zara and H&M should focus on maintaining and improving the
quality of their products to meet consumer expectations. This can help in building long-term
brand loyalty and attracting more customers.

Optimize Pricing Strategy: Evaluate pricing strategies to ensure they are competitive yet
profitable. Consider offering value-added pricing bundles or discounts to appeal to price-
sensitive consumers without compromising on quality.

Improve Customer Experience: Enhance the overall shopping experience by investing in store
ambiance, customer service training, and efficient checkout processes. Additionally, consider
implementing technology solutions to streamline the shopping experience, such as mobile apps
for easy browsing and purchase.

Strengthen Brand Identity: Build a strong brand identity that resonates with the target audience.
This can be achieved through consistent messaging, unique brand positioning, and engaging
marketing campaigns that highlight the brand's values and offerings.

Expand Sustainable Practices: Both Zara and H&M should continue to expand their sustainable
practices, such as using eco-friendly materials, reducing waste, and supporting ethical
manufacturing processes. This can appeal to environmentally-conscious consumers and enhance
brand reputation.

Enhance Online Presence: Invest in improving the online shopping experience, including
website design, user interface, and mobile responsiveness. Implement strategies like
personalized recommendations and easy returns to increase customer satisfaction and loyalty.

Innovate and Adapt to Trends: Stay abreast of fashion trends and consumer preferences by
regularly updating product offerings. Introduce innovative designs and collections to maintain
consumer interest and differentiate from competitors.
Community Engagement: Engage with the community through social responsibility initiatives
and partnerships. This can help in building a positive brand image and connecting with
consumers on a deeper level.

58
Customer Feedback and Communication: Establish a feedback loop with customers to
understand their preferences and address any issues promptly. Improve communication channels
to keep customers informed about new products, promotions, and brand updates.

Differentiation Strategies: Identify unique selling propositions that set Zara and H&M apart
from competitors. This could include exclusive collaborations, limited edition collections, or
innovative marketing campaigns that create buzz and drive consumer interest.

Methodological Criticism

The dissertation is based on a case study. Through the interviews the Complementarities were
partly confirmed. Nonetheless, the time for analysis from when the interviews were conducted
to the hand in date was rather narrow. This was to a certain degree a deliberate choice since we
did not possess the required knowledge to conduct the interviews earlier.
If the interviews were conducted face-to-face instead of by telephone the result could have had a
different outcome. The interviews could have presented another outcome if the interviewed
persons had received the questions in advance. They would have had the chance to prepare and
we could possibly have received more elaborated answers.

Practical Implication

Considering that the dissertation is focusing on H&M and ZARA. This fact creates a limitation
of the dissertation practical implication. The dissertation is most meaningful for H&M and
ZARA. It would not be right to say that other clothing firms can use our Complementarities
without doing modifications that suits their particular business-models. However, clothing firms
can use our findings to evaluate their individual characteristics which the firm‟s business-models
are built on. Given that H&M and ZARA are successful firms within the clothing industry other
firms could benchmark7 themselves against them. It is possible that firms can find a way to learn
from H&M and ZARA and copy their way of combining key resources in a more efficient way.
Also, other firms can use our method of turning key resources into Complementarities. By
mastering that, firms will make the most efficient use of their key resources. Since the key
resources will all complement each other and strengthen the firm‟s business-model.

59
Future Research

The Complementarities were created to investigate the underlying facts to why H&M and
ZARA have chosen different business-models. It seemed as if the
Complementarities could explain H&M‟s and ZARA‟s business-models. However, the
Complementarities can be further expanded. Possible future research areas are:
• It would be interesting to conduct more interviews with people working at, for example the
purchasing department, the marketing department and the distribution department at H&M and
ZARA. This would bring further reliability to the Complementarities.
• Since the Complementarities are only based on two firms it would be interesting to add other
existing firms considered as extremes in the clothing industry, for example Benetton, American
Apparel and GAP.
• Considering that experts doubt that ZARA is going to be able to produce domestically when
expanding internationally. On the other hand H&M‟s business model can reach obstacles
considering its low-wage labour locations, which can result in loss of intellectual property,
reputation and specialized skills. Therefore, in the future it will be interesting to examine
which business-model that is most durable in a long perspective for clothing firms.

REFERENCES

Books:

60
1- SuccessfulBusiness Models in the Fashion Retail Industry. Strategic Audit of H&M
compared to ZARA

2- Fashion Brands: Branding Style from Armani to Zara - Mark Tungate

Websites:

https://www.therobinreport.com/why-zara-wins-hm-loses-in-fast-fashion/

https://www.investopedia.com/articles/markets/120215/hm-vs-zara-vs-Zara and H&M-

comparing-business- models.asp#:~:text=Zara's%20strategy%20is%20to
%20offer,10%2C000%20pieces%20produce d%20per%20year.

https://edited.com/blog/zara-vs-hm-whos-in-the-global- lead/#:~:text=Both%20brands%20have
%20starkly%20different,emails%20by%20age%20and% 20gender.

https://startuptalky.com/marketing-strategies-of-zara/

https://thestrategystory.com/blog/hm-marketing-mix-
4ps/#:~:text=Social%20media%20marketing%3A%20H%26M%20has,collections%2C%20and
%20promote%20sales%20events

https://unicommerce.com/blog/apparel-industry-challenges-solutions/
Annexure

QUESTIONNAIRE

The researcher is conducting a survey concerning effectiveness of promotional schemes

of Zara and H&M in India. To enable the researcher to make the necessary conclusions and

61
recommendations for this study, it would be very much appreciated if you answer all the items
in the questionnaire.
Information given will be treated in strictest confidence.
Thank you

What is your age?

below 8 8-15 15-21 21-27 27-35
35-50

2 Your sex?
Male Female

3 What is your first consideration when purchasing clothes?

TasteColour and design
FashionBrand popularity
Value for moneyGood Quality
Good service

4 Where will you make shopping for clothing products?

Internet
Department stores
Flagship stores
Stores in high streets/shopping mall
All of the above

5 What do you go shopping for?

Clothes Shoes & Bags
Accessories All of the above

62
 Others please specify.

6 Have you ever heard of Zara and H&M?

Yes No
If your answer is 'No', please jump to question 13.
If your answer is 'Yes please jump to question 7.

7 How can you aware Of Zara and H&M?

Newspaper
TV advertisement
Magazine
Website searcher
E-mail
Friend’sadvice
Offer/discount
provided All of
the above

Others please specify:

8-How many marks do you rate of Zara and H&M's products in terms of
value for money? (5 is the highest and I is the lowest)
…………………………………………………………………..

9-How many marks do you rate of Zara and H&M's products in terms of
causality? (5 is the highest and I is the lowest)
…………………………………………………………………….

10-How many marks do you rate of Zara and H&M's products in terms of
quality? (5 is the highest and I is the lowest)
……………………………………………………………………………….

63
 11-How many marks do you rate of Zara and H&M's products in terms
of1 catching up with fashion? (5 is the highest and 1 is the lowest)
……………………………………………………………………..

12 How many marks do you rate of Zara and H&M's products in terms of 12 Colour
and design ? (5 is the highest and 1 is the lowest)

13-If not, if Zara and H&M is a brand which emphasize on budgeted, dynamic, casual clothes,
will you be interested in purchasing it?
Yes No

14 If you know nothing about Zara and H&M and its products, then what will you expect from
anew brand?
value of money from products
Good quality of products
Trendy of products Others please specify:

15 Have you ever heard of H&M?

64
 Yes No
If your answer is 'Yes ', please jump to question 16. If your
answer is 'No', please jump to question 22.

16 How can you aware of H&M?

Newspaper
TV advertisement
Magazine
Website searcher
E-mail
Friends' advice
Offer/discount provided
All of the above

Others please specify:

17-How many marks do you rate of H&M's products in terms of value for money ? (5 is the highest and
I is the lowest)
…………………………………………………………………………………..

17 How many marks do you rate of H&M's products in term of causality?

…………………………………………………………………………

18 How many marks do you rate of H&M's products in terms of quality? (5 is the highest and 1 is the
lowest)
…………………………………………………………………………………

19 How many marks do you rate of H&M's products in terms of 20 Colour and design? (5 is the highest
and I is the lowest)
…………………………………………………………………………………………….

65
21How many marks do you rate of H&M's products in terms of
catching up with fashion? (5 is the highest and I is the lowest)
…………………………………………………………………………

22 Have you ever heard of Zara?

Yes No

If your answer is 'Yes ', please jump to question

If your answer is 'No', please jump to question

23- How are you aware of Zara? Newspaper /

TV advertisement ?

………………………………………………………………

THANKYOU FOR YOUR RESPONSE

66