Table of Content 1. Executive Summary 2. Introduction & History of Zara 3. Introduction & History of H&M 4. Products Offered By Zara & H&M 5. Marketing and Communication Strategy of Zara 6. Marketing and Communication Strategy of H& M 7. SWOT Analysis: Zara 8. SWOT Analysis: H&M 9. Conclusion

Executive Summary
This report will examine and make comparison of the communication strategy between two leading and established fashion brands, Zara & H&M. Through close study of each of their communication strategy we can understand the reasons behind their success in the current dynamic and competitive market. In the Hong Kong market where competition thrives and those that don’t adapt to the ever changing environment gets abandoned, we can understand how Zara & H&M has established as a ‘fast fashion’ boutique chain in this densely populated city. A communication strategy helps to develop brand awareness and product information dissemination [1]. The communication strategy can also help to retain the brand’s current customer base and more effectively reach out to a broader target audience.

Introduction & History of Zara

Zara is a spanish brand of clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Ortefa and Rosalia Mera. It is the flagship chain store of the Inditex group. Inditex group is the world's largest apparel retailer, the fashion group also owns brand such as Massimo Dutti, Pull and Bear, Uterque, Stradivarius and Bershka. The first store of Zara opened in 1975 at central street of downtown La Coruna, Galicia, Spain. Ortega wanted to name it Zorba because of the classic film Zorba the Greek, but the name has already been used and registered by another business which was two blocks away, so Ortega named her store Zara. The first store featured low priced products which looked similar to popular, high end clothing produced by more recognised fashion stores. In 1980, the company started its international expansion through Porto, Portugal. In 1989 it entered the United States market and in 1990 France market. This international expansion was increased in the 1990s, in 1992 Mexico, in 1994 Greece, Belgium and Sweden. Currently Zara has presence in over 73 countries worldwide and a total of 1770 stores.
Inditex decided to setup Inditex Asia Ltd in Hong Kong in 1997 as its regional buying office. But the first Zara store in Hong Kong was not opened until May 2004. According to David Konn (Inditex Asia General Manager) “the increasingly affluent mainland Chinese consumer, the top target for many high-end European and US brands in the city will not be Zara's main focus.” [2]. Since the first store of Zara in Asia was opened in Japan in 1998, Zara has been watching Hong Kong for quite some time, Hong Kong has always been an important market for the brand. The first Zara store in Hong Kong opened in the prestigious Central Financial district of Hong Kong and in one of the most recognised high end malls, IFC Mall. In 2004, IFC was still a very new shopping mall, opening just the year before. Zara choose IFC as its first flagship store in Hong Kong because it's located in the same building as high-end western brands, for example, Prada, Furla, Ferragamo and also its spanish competitor Mango.

Introduction & History of H&M

H&M, full name is Hennes and Mauritz, originates from Sweden. It makes fast fashion clothing for men, women, teenagers and children. The first store of H&M was opened on the high street of Vasteras, Sweden in 1947. It currently has 2629 stores in the worldwide and it ranked the second largest global clothing retailer behind Inditex. The first store outside of Sweden was opened in Norway in 1964, and it kept opening many stores in Europe's Scandinavia region including Denmark, Switzerland, Germany and the United Kingdom. The first store in United Kingdom was opened in 1976. In the 1990s, H&M expansion led to opening of stores in Austria, Belgium, Finland, France, the Netherlands and Spain [3].
The first store in Asia was opened in Hong Kong on March 2007. And then shortly after followed by stores opening in China, Japan and South Korea. The first H&M store in Hong Kong was opened on 10 March 2007, it was located on 68 Queen's Road Central. On the opening day, there was over 1000 people queuing outside the store and waiting for the official opening at 11am, with some people that has camped outside for more than 24 hours, creating a buzz around the event [4]. This was the flagship store in Hong Kong, the store measured approximately 3,500 square meters over four floors and offers an extensive collection of fashions for women, men, teenagers and children. But as retail property rental prices boomed in Hong Kong, H&M was forced to close the flagship location after just 6 years. The same location was taken over competitor, Zara. According to Cher Chui, '' our company had been unable to reach an agreement with its landlord. Zara will be paying about US$1.4 million in monthly rend, double what H&M had been paying.” Cher Chui, spokesperson of H&M Hong Kong [5].

Products offered by Zara & H&M

To understand the communication strategy we first must look at the product offerings of the two companies and its targeted audience and market. Both Zara & H&M will receive new merchandise every two weeks, which means when customers come into the store they should be able to seek out new products which was not available on the previous visits. And both Zara & H&M will renew its window displays every 2.5 weeks which can showcase their latest collections and products.
There are 4 main collection of Zara in Hong Kong, the first and the largest is the woman’s collection. These include items such as coats, blazers, dresses, shirts, trousers, jeans, skirts, knitwear, t-shirts, studio, lave, shoes, handbags and accessories. The first collection is targeted at mainstream female market and caters for the mass majority of customers coming into the store. The second collection is the TRF collection, that including coats, jackets, dresses, shirts, trousers, jeans, skirts, t-shirt, shoes, handbags. This collection is more aimed at …… .It's the man’s collection, including coats and trench coats, jackets, blazers, suits, trousers, jeans, shirts, t-shirts, sweatshirts, knitwear, wear to wear, basics, shoes, accessories, bags & soft wear. The man’s collection is designed to target male market of Hong Kong at all ends. The last one is Kids collection which includes products for girls (2-14 years old), boys (2-14 years old), baby girls (3-36 months ) and baby boys (3-36 months).
There are 4 main collections offered by H&M, the first is the Ladies’ collection which include tops, shirts & blouses, cardigans & jumpers, dresses, skirts, trousers, jeans, shorts, jackets & coats, blazers & waistcoats, office wear, sportswear, lingerie, socks & tights, nightwear, swimwear, accessories, shoes, cosmetics, H&M+ and maternity wear. Dived & denim, which is a younger line for the fashion conscious young men and women flock to H&M for up-to-the minute, that including accessories, shirts, jackets, dresses, skirts, shorts, shoes, etc. but all in denim style. The men’s collection includes t-shirts & vests, shirts, hoodies & sweatshirts, jumpers & cardigans, blazers & suits, jackets & coats, trousers, jeans, sportswear, underwear & socks, accessories and shoes. The last collection is the kids collection, these include newborn size 0-9m, baby girl size 4m-2y, baby boy size 4m-2y, girls size 18m-10y, boy size 18m-10y, girls size 8-14y+ and boy size 8-14y+.

Marketing & Communication Strategy of Zara

To understand the success of Zara we must look into its marketing and communication strategy to see how it’s able to attract the customer and retain its existing customer base. There are five elements to the marketing strategy which Zara employs. These include store location, store window merchandising, interior design and store image, assortment display and customer service [6]. Interestingly is how Zara is able to replicate all these through all its global stores.
Focusing on Hong Kong market we look at the first element, store locations. Within Hong Kong Zara currently have 10 stores across a relatively small country in contrast to other locations which Zara operates in. Out of the 11 stores, 5 of these are located in premium shopping malls which include flagship store IFC Mall (Central), Pacific Place (Admiralty), Times Square (Causeway Bay), Elements (Tsim Sha Tsui) & Harbour City (Tsim Sha Tsui). These 5 malls all occupy some of the most prestigious and expensive commercial rental property in Hong Kong. The strategic placement of Zara in these locations would be in line with its strategy to attract the customers which are around these locations. If we examine closely at these five malls they all have one common character, they are all located underneath an A grade Office Tower. This makes sense for Zara as this group of customers which are based in these A grade offices are the ones which they would like to attract and retain. Because of their fast turnaround on new merchandise, Zara would like to attract those who can afford to repeatedly return regularly to shop and buy their new products. If we now look at the other 6 locations, including its new flagship store Queens Road (Central), Telford Plaza (Kowloon Bay), New Town Plaza (Shatin), Metro City Plaza (Tseung Kwan O) & TMT Plaza (Tuen Mun). The flagship store is a new symbolic placement for Zara as the store itself represents the biggest advertisement of its brand (Figure 1).
Figure 1
Store window merchandising is one of the most strong and effective marketing and communication tool which Zara employs. Carefully timed and regular renew of its window display allows customers to see the latest fashion in town and attracts potential customers into the store to view an even more extensive range of products. With a refresh cycle of approximately 2.5 weeks, customers will always be presented with something new and refreshing.
The interior and store image of each store is replicated, not just locally but globally. This will allow customers to instantly recognise a Zara store from distance and even when in store navigating around products will be a similar experience. One of the distinguishing features of Zara’s marketing communication strategy is the lack of image advertising and promotion compared to competitors. CEO Echevarria says “Our marketing strategy tends to be humble. We don’t use mass-market approach or big campaigns. Instead, we focus on the customer and the store label. Our store is the most effective marketing communication tool” [6].
Assortment display, a product display to give customers a choice – colour, size and other variables [7]. If we enter any Zara store we can see how effectively this has been executed to allow customers to easily to locate, compare and make choices on their purchase. By having a large selection of products strategically deployed around the store, customers are able to navigate and locate the types of items which they would like to purchase.
Customer service is one of the most personal communication tool which can be used to attract and retain customers. Not just focusing on in-store customer service but if we look at how products are developed and delivered to customers, we can see how Zara has placed customer service as a priority. Zara employs a react rather than predict strategy on its product development, so whatever is demanded and in fashion Zara is able to design and deploy the product in 30 days [8]. This effectively satisfies customers demand for the latest and most up-to-date fashion items. By providing exceptional customer service experience from product development to in-store service, Zara has been able to maintain interest in customers to continue return. Zara relies heavily on its front-line employees, it sees them as a key to its advantage & success. By analysing sales data, the retailer increases staff during the periods when there is heavy traffic in the store. Employees are also expected to provide feedback on any fashion trends they see or hear about — including what’s hot, what’s cold, or what’s missing from the current collection.

Marketing & Communication Strategy of H&M

H&M is focused on four main communication strategy, these include advertising, public relations, personal selling and sales promotion.

Works Cited

[1] | F. Greene, "Marketing Communication Strategy," [Online]. Available: http://smallbusiness.chron.com/marketing-communication-strategy-3442.html. | [2] | "Zara Hong Kong," [Online]. Available: http://www.zara.com/hk/en/. | [3] | "H&M History," [Online]. Available: http://about.hm.com/en/About/facts-about-hm/people-and-history/history.html. | [4] | "H&M Grand Opening in Hong Kong," [Online]. Available: http://www.hkdigit.net/2007/03/hm-grand-opening-in-hong-kong/. | [5] | "Wallstreet Journal," [Online]. Available: http://blogs.wsj.com/chinarealtime/2012/07/27/hm-flagship-store-closes-amid-rentrises/. | [6] | F. L. T. S. Michael Dahlen, Marketing Communications: A Brand Narrative Approach. | [7] | "Popdesign," [Online]. Available: http://www.popdesign.com/glossary. | [8] | "Third Eyes Sight," [Online]. Available: http://thirdeyesight.in/articles/ImagesFashion_Zara_Part_I.pdf. |