Clothing Retailer Hennes & Mauritz Essay

A key fragment in selling success is the strength of a companys distri exclusivelyion bridle-paths. Kerry Capells (2002) line of business Week phrase looks at Sweden-based Hennes & Mauritzs (H&M) sourcing and history make lovement strategies and their reliance on distribution alley partners. H&M has developed a unequalled distribution melodic phrase strategy to compete with kick downstairs entrenched retailers including Gap, Old Navy, Zara and FCUK.H&M output StrategyUnderstanding H&Ms distribution strategy requires a clear sagaciousness of their crossway philosophy and strategy. Like Gap and opposite fit out retailers, H&M foodstuffs to a feature segment of the shape consumer marketplace. H&Ms philosophy is Fashion and quality at the scoop price (H&M, 2004). H&M keeps up with its competitors by providing a variety of styles from updated classics and fashion basics to cutting edge fashion trends (H&M, 2004).Kotler defines the product as a junto of goods and ser vices (Kotler et al, 2001). H&M seeks a product edge by providing affordable fashion lines alike to its competitors, but with a fast turnaround from image to product to sales nucleotide (Capell, 2002). Capell foc employ on this integrated distribution epithelial duct in his article.statistical distribution Channel OutlineMarketers very much refer to the fourth part P, place, as placement, logistics or distribution. Marketers must create a place or a way for logistics and animal(prenominal) delivery to get a product to market and into the hands of target consumers (McColl-Kennedy and Kiel, 2003). A distribution channel refers to the type of intermediary or linkage amid manufacturing businesss and consumers. A one-channel distribution network involves only the retailer between producer and consumer. Direct distribution occurs when the producer deportly supplies the product to the buyer. The choice of distribution channel depends on avariety of factors, including the type of p roduct. piece not all clothing retailers use direct distribution models, H&M and its competitors in the broken- and mid-range clothing market use this model to maintain low costs and a fast time to market (Capell, 2002).Unlike many industries, time-to-market is critical to retail clothiers, as trends and fashions screwing change quickly. To minimize time-to-market, H&M employs a team of in-house designers in 21 output signal offices worldwide that work to forecast trends and find transport for clothing designs in everything from street trends, to films, to flea markets (H&M, 2004). From its headquarters in Stockholm, the company directs a rapid-response manufacturing process to capitalize on design trends immediately (H&M, 2004).H&M moves designs done takings and into its retail sales channel with a three week to six month contain time. With low-wage, high-volume production in China and Turkey, the company can maintain low input costs and often outfit its stores with the la test trends within a month of the initial design (Capell, 2002). H&M endlessly redefines its distribution strategies in response to changing retail market conditions and production conditions in its worldwide manufacturing centers (Capell, 2002). This adaption ensures that the company can to improve the efficiency of its production flow.This model has direct application in H&Ms retail stores where it sells its products to consumers. H&Ms corporate buyers in Sweden actively manage its inventory, researching itemized sales reports by country, store, and, most importantly, type of production daily (Capell, 2002). The buyers use this information to reallocate production or shipments, reducing potential everywherestock problems. The itemized reports overly allow buyers to maintain a high take of turnover, keeping apparel on the sales floor up to date.Enhancing the companys competitive benefit in this area, the integrated direct distribution channel ensures that H&M stores receive n ew shipments daily, with child(p) the company further control over responses to tack and demand severances (Capell, 2002). The company estimates that each store receives between 500 and 1,000 new items daily, with total sales of over 550 millionitems annually company-wide. For example, if a particular fashion proves exceptionally popular to men in the U.S., but not in Europe, the company can shift inventory in that product from European stores to sustain demand in the U.S. The channel also enables H&M to respond to market segment changes. When its $39 pants line proved overly upscale for inner city malls, H&M used its integrated channel to shift that inventory to suburban locations and rotate new inventory into the mall stores (Hjelt, 2004).As with virtually every industry, H&Ms continued success and prosperity depends on high-octane distribution carry. H&M has effectively incarnate its supply chain and retail distribution channels into its business strategy. As the company expands more hard into the U.S. market, its unique streamlined distribution channel volition be a critical component of its success. whole shebang CitedCapell, Kerry. (2002, November 11). Hip H&M The Swedish retailer is reinventing the business of affordable fashion. Business Week. 106-109.Hjelt, Paola. (2004). Will $39 Pants = Profits? H&M was too trendy for many mall shoppers. Fortune.com. Retrieved August 23, 2004 from the knowledge domain Wide Web at http//www.fortune.com/fortune/subs/article/0,15114,395434,00.htmlH&M. (2004). About H&M. HM.com. Retrieved August 23, 2004 from the universe Wide Web at http//www.hm.com/us/hm/facts_history/srt.jspKotler, P., Armstrong, G., Brown, L. and Adam, S. (1998). Marketing. Sydney Prentice Hall.McColl-Kennedy, J.R. and Kiel, G. (2003). Services Marketing. Hoboken, NJ Wiley and Sons.