Brand Management: A Case Study of H&M

BRAND MANAGEMENT

INTRODUCTION

Brand management is a process through which an organisation is able to take proper care and initiatives for engaging and attract numerous customers for the products and services offered by them (Keller et al., 2019). Brand management is a crucial aspect or all the organisations as a brand is the primary face of it.

In this assignment, we will look after the different ways of brand management and what is the brand, brand pyramid, brand equity and its role in marketing with the help of Aaker’s equity model and Keller's equity model for understanding customer-based brand. This assignment has also enlightened the different ways through which an organisation can expand its business globally. All these points have been discussed in the context of H&M. H&M is one of the leading fashion industries in the UK as well as wold. H&M is also one of the most powerful brands which will help us to understand brand management easily.

LO1

BRAND AND IMPORTANCE OF BRAND MANAGEMENT

BRAND

The brand is also known as the face of business. A brand can be easily understood by a symbol, name, logo, or any design which makes easy for people to identify the organisation. Also, every organisation builds up a logo to make them identical in the market and amongst customers. The brand forms a unique recognition in the market and also creates a difference between the competitors' product and services (Sheikh, 2018). A strong brand also creates goodwill of the organisation. H&M is a well-known brand dealing in fashion industry sustainable growth and global reach. H&M is followed by a brand logo:

Figure 1 H&M Brand logo

Source: Jirawongsy, 2020

Importance of Brand

1. Branding creates trust

2. Branding creates strong recognition

3. Branding build financial value

4. Branding inspire employees

5. Branding generates new customers

BRAND PYRAMID

Figure 2 Brand pyramid

Source: LAKSHMI MUTHUMANI, 2017

The brand pyramid can be defined as a tool or a technique which describes the brand operations in the market. It is one of the most crucial components of marketing which helps in evaluating and developing the image in the market. H&M draws up the brand pyramid in the course to achieve high sale objective and growth in the market. Following are the brand pyramid segments:

Features and attributes:

This segment focuses on the unique selling products offered by the organisation and how it is distinguished from the several products that are offered in the market. H&M is one of the most loved brands in the fashion industry as it provides unique styling and fashionable products.

Functional benefits:

The functional benefits refer to the extra function assessed with the product offered by the organisation. It is an important aspect of the point of view of customers. As they focus on what extra the organisation is offering to fulfil the needs and requirements of customers.

Emotional benefits:

The main purpose of brand development and management to make a good relation with customers. Also, every brand has a story behind it which is delivered to customers with the help of brand mainly. Hence, it often helps in creating a loyal customer for the organisation.

Brand personality:

All organisations need to connect an emotional relationship with customers. Hence, should create a human characteristic and personality in the brands. This will help an organisation with better emotional and psychological connection with customers.

Brand essence:

This question answers of the above sections of the pyramid. And focuses on the different elements such as operational improvement, product enhancement. These play a vital role in the segment of brand satisfaction power of customers.

BRAND EQUITY

Brand equity refers to the generated premium value of the organisation from the perception and thinking of customers for the organisation’s product and services focusing over the brand (Anselmsson et al., 2017). The brand equity doesn't focus on the actual satisfaction or differentiation of product it only focuses on the brand. For example, H&M is a well-known brand in the UK and is loved by the youngsters mostly, if they will be launching a new product then the consumers' satisfaction will be associated with the brand and not with the unique quality or quantity offer fed by H&M.

REINFORCEMENT AND REVITALIZING

All the organisations face the period where the bran becomes weak and are not compatibly ineffective. In such situation reinforcement and revitalizing plays a vital role to manage and rebuild the brand image in a specific period of time. Reinforcement and revitalizing are the effectual strategies which assist the reinforcement and revitalizing. There are various components which lead to the weakening of brands such as the introduction of latest and updated technologies, innovative products launched by the competitors. To overcome all these negative impacts which decrease the brand value of the organisation, the business undertakes the reinforcement and revitalization to resolve these critics. H&M has faced such incidents due to competitors extra providing ability. Introducing more variety of products and worked more on reaching the customers and taking their reviews to fulfil their demands. All these strategies helped H&M to regain its brand value. They also focused on obtaining effective marketing strategies. They have focused on creating innovation such as designing a website an app which makes the shopping comfortable for people.

ROLE OF BRAND IN BRAND EQUITY, BRAND POSITIONS AND BRAND TECHNIQUES

AAKER’S BRAND EQUITY MODEL

Managing a business brand is one of the vital practices that should be undertaken intensively. The brand management leads to the success and growth of the organisation, the main purpose of brand management is to work upon the brand growth and creating a positive perception of consumers towards it. One of the best ways to upgrade the brand management is focusing on providing higher satisfaction to consumers. H&M seeks to rapidly work upon the brand management to understand customer behaviour and engage them with the products of their own brand. Aaker’s brand equity model helps to understand and demonstrate the perception of consumers towards the product and services offered under brand H&M,

Figure 3 Aaker's brand equity model

Source: Man, 2016

Brand Loyalty: Brand loyalty can be defined as the rapid purchasing power of customers and how they are committed towards the brand. Brand loyalty can be built with the help of satisfying customers and providing the best quality products and services (Man, 2016). H&M draws up many strategies and have a CRM which helps in maintaining good relationships with customers and keep a check over the qualities provided by them. It is essential for an organisation to look over brand loyalty for taking competitive advantage (Coelho et al., 2017)

Brand Awareness: Digital marketing, advertising and commercialising are the ways by which an organisation develops brand awareness amongst the employees (Man, 2016). Brand awareness shows how well customers are able to recognise the brand. Brand awareness is an important part of the organisation as it helps in generating more products with successful results.

Perceived Quality: Organisations who aims to achieve higher positions, growth, development and good revenue then they must understand the need for providing high-quality goods and service to customers (Man, 2016). Higher the quality of goods and services higher the level of satisfaction. H&M product's quality has been recognised and loved by the consumers. They and no compromise with the main focus on providing high-quality goods and doesn’t compromise with quality.

Brand Associations: Process through which an organisation successfully creates the image in customers mind of a business brand is known as brand associations (Tanveer and Lodhi, 2016). The main consideration and focused customers of H&M are women, as they believe that women are their main customers who shop for themselves, their husbands and kids. Also, H&M is able to attract youngsters for retaining them and keeping them committed towards the H&M brand.

Other Proprietary Assets: Brand is build up with some assets such as copyrights, patents and trademark. These assets are very useful and effective for the organisation as they contribute to managing the brand in an appropriate manner (Tanveerand Lodhi, 2016). These assets are also built with hard work and many achievements of the organisations. H&M has its own trademark and copyrights which strengthens the business.

LO2

OVERCOMING BRAND CRISES

It is an important part of brand management to look after the obstacles coming in between of successful implementation of branding. The organisation often faces the different types of crises which are as follows:

• Technological crises

• Confrontation crises

• Rumour spread over crises

• Competitors brand innovation crises.

These crises are also been faced by H&M and they have practices following steps:

Understanding and assessing all the situations together

Assigning duties and communicate with everyone all together.

Understanding the needs and problems of all the customers and trying to resolve all the problems.

Developing the existing product and services with the latest updations.

BRAND PORTFOLIO

Portfolio management

Brand portfolio is drawing up effective strategies for controlling and enhancing the brand image of the organisation, these strategies are drawn up with the guidance of managers. In an organisation it is essential to frame up long –term engagement and business sustainability which can be easily achievable through maintaining healthy and happy relation with customers. H&M is a fashion industry which provides a wide range of products to the customers and helps them in discovering the products for the demand. Managers of H&M focus on following strategies to successfully maintaining customer relations:

Branded house: Branded house refers to the different companies branding together in a unified voice through which they are can precisely demonstrate value proposition. There are many brands which have formed a brand house with H&M, and they are shown below:

Figure 4 Brand house of H&M

Source: Uggla, 2017

Advantage: The cost of marketing is comparatively low and this makes the enforcement of focus on the main brand to pursue the brand attraction effectively.

Disadvantage: The biggest disadvantage of a branded house is that they are highly dependent on each other which can affect reverse at the time of conflicts.

Branding could be done in two forms wherein changes could be made based on the width of the brand and this way is very important as well as relevant for the maintenance for the changes based on external business association (Hajli et al., 2016). The image of the M&S can further be extended in two forms:

• Breadth extension: This means improving the products and services with a wide range of product and services. The main meaning of this is to extend the products and services.

• Accessories.

• Shoes.

• Jackets & Coats.

• Trousers & Leggings.

• Jumpsuits & Rompers.

• Cardigans & Jumpers.

These are some products offered by H&M.

BRAND HIERARCHY

Figure 5 Brand Hierarchy

Source: Azizi, 2018

Brand hierarchy is an illustrative representation of branding for different products and services offered by an organisation. Branding helps in differentiating the products from other company's and it is quite easier for the customer to identify the product of H&M. The brand hierarchy portfolio is as follows:

Corporate brand: There are several brands under an organisation which they provide to customers. This is because when a group of brands comes under one organisation it is easier to reach customers and sale more products. Under H&M there are COS, Monki, Weekday, Cheap Monday, & other stories, H&M home is some brands.

Family brand: Family brands means when a customer is aware of a particular brand but is unknown to the parental brand of it.

Modifier: In modifier, the requirements of consumers are overlooked and several strategies are made up for providing satisfaction to the customers. Also, H&M focuses on providing a diverse variety of products and fulfil their requirements.

Product descriptor: Product descriptor means offering customers with a wide range of products and services. These are made for creating competitive advantage.

KELLER’S BRAND EQUITY MODEL

Figure 6 Keller's Brand equity model

Source: Vasileva and Vasileva, 2017

Level 1- Brand identity

Brand identity refers to the viewpoint and knowledge of customers has in their mind for the particular brand. H&M is one of the most loves fashion brands amongst people and has a positive impact on the customers, especially youngsters. Hence, it is known that H&M is able to create a positive impact on the customers and have good attracting power.

Level 2- Brand meaning

Brand meaning refers to the knowledge and adequate information that customers are having for the organisational brand. The motive of organisations is to convey the right message about the brand to potential customers. H&M sells outstanding fashion clothes with high quality and this becomes the base for attracting customers.

Level 3- Brand response

Customers are the asset of organisations and their purchasing of products or services of an organisation depicts their response. The brand response is better understood with the customers' behaviour towards the product or services which the organisation is offering. Customers are very judgemental towards the products and forms different feelings for before making the purchase. H&M is successful towards making healthy customer relationship and also customers have been granting positive response towards the purchasing of the product

Level 4- Brand resonance

Brand resonance refers to the matter about the ability of the brand by which a customer can relate its entire element. The brands need to attract and engage customers with the brand of an organisation. H&M is spread over the 74 countries with a successful projection which replicates the loyalty and trust of consumers towards the H&M brand. H&M is well-known for serving premium quality products and supporting services relating the purchased products.

LO3

BRAND EXTENTION APPROACHES AND STRATEGIES

BRAND EXTENSION: Brand extension is also known as brand stretching. Brand extension is a way through which the organisation enlarges its products or the product categories in the market. Products offered by the H&M are clothing. It includes various products for men, women and kids. H&M believes in extending the brand for better revenue and growth in the country (Rangongo, 2020).

BRAND LEVERAGE: Band leverage is the strategy used by the organisation for launching new products or services with the help of the existing brand. This focuses on the related good product or service category only. As the customers are already aware of the brand and have big trust over it, which makes it easier to kick out great sales for the new product. H&M is well-known brands and drives the privilege of brand image.

LINE EXTENSION: Organisation has many ways for expanding their business but one of the much-known ways and used ways for expansion is line extension. This is an easy way for expansion. In this, an organisation focuses on launching and adding new product which is related to the existing product line driven by the company.

TECHNIQUES OF LEVERAGING BRAND

Following are the ways through which an organisation can leverage:

Fit: This technique is used for relating the product category with the customers effectively and prominently. Its Organisation forms various programs in which they can understand the demand and desires of the customers.

Leverage: This is a well-known technique which is driven by organisations. This is all about taking smart initiatives with the support of generated brands image (goodwill) for launching and extending the products.

COLLABORATIVE AND PARTNERSHIP AGREEMENTS

BRAND COLLABORATION

This is one of the most used methods by the organisations for attaining the goals and objectives formed by them. When two or more organisation comes together intending to gain more profits and grow in the market (Rangongo, 2020). Brand collaborations make the work better, it’s all about working together. H&M is a big brand which has collaborations with Comme des Garcons, Versace, Alexander Wang, Balmain and Kenzo.

Partnership agreements:

This is one of the most used methods. In this, the parties engaged or planning to engage in the same organisation, form a mutual partnership agreement. In this agreement, there are various rules and regulations which are embedded. The discussion of profit and loss sharing with assigning duties is mentioned in this agreement. The main purpose of the partnership agreement is to minimise the risk of conflicts and precisely discussing all the important variants of it.

1. Line extension: This is one of the easiest ways to extend the brand wherein latest product is added to the existing line of product. This technique allows the new product to take advantage of the powers enjoyed by the existing product in the market.

2. Category extension: Category extension refers to broadening the products with the use of different categories. For example, H&M is engaged in the fashion industry and sells of clothes, and if it goes ahead in the extension of groceries this will form category extension.

3. Market extension: When an organisation moves forward with the extension of its products in the new market, the market. This is very helpful as new customers are gained in the new market.

4. Geographic extension: This is one of the most popular ways of extending the business. It means opening a business at a totally new and different place. A graphic extension is the most expensive extension for the business as it has to set up the business and develop it with keeping in mind about the different about the culture and trend of the other country. H&M is a well-known brand around the globe and has an outstanding global reach. It is spread over 75 countries delivering quality products to them.

ANSOFF MATRIX

Figure 7 Ansoff Matrix

Source: Thompson, 2019

Market development- The H&M is highly capable of endeavouring success with the existing products. As the products offered by H&M have an awesome quality which is also very trendy. This attracts customers more. This strategy intends on entering the new market with the existing product (Thompson, 2019).

Market Penetration- This focuses on increasing sales with the help of an existing product. H&M managers are quite active with this strategy they form various offers and gift vouchers that can help in increasing the sales of the existing product (Thompson, 2019).

Product development- This strategy induces the formation and launching of new products in the existing market. This can increase customer attraction and increase in revenue too. H&M has a wide range of products, compressing all the fashion requirements of different age groups (Thompson, 2019).

Diversification- This is totally a new concept which builds up the forming of new product in the new market. It is quite expensive and is also driven by high risk. H&M is focused on diversifying fashion products only (Thompson, 2019).

LO4

MEASURING AND MANAGING BRAND VALUE

MARKET SHARE

Market share refers to the holding power of an organisation in the market. It is basically the value of an organisation in the market they deal in. H&M has a powerful customer base in the market which mainly contributes taking over the competitive advantage. H&M hold on the 5043 stores around the globe, whereas 294 stores in the UK. Based on sales H&M is ranked on 3^rd number in the UK market. Also, H&M holds the heart of the fashion industry as it focuses on customer satisfaction which is driven effectively and efficiently.

PURCHASE INTENT

Purchasing intent can be defined as the capability and interest of the customers for purchasing the product and services of a particular organisation. The purchase intent focuses on the possibilities and profitability of consumers to buy a product or services (Khodabandeh and Lindh, 2020). This is carried by the perception, decision and planning of customers to follow up the purchasing action. Brand, quality, price of the product or services are the components of purchase intent. The main motive of purchase intent is to get known about the customers' mind regarding the product or service.

It is important for an organisation to know about the customer’s intentions for making the purchases. Conducting surveys, looking throughout the consumer behaviour, measuring the feedbacks of consumers and observing market trends. H&M is well-known for its customer handling engaging power. The most common method for Purchase intent is social media trafficking. H&M adopts this method for better understanding of the customers and their behaviour. In this, they seek for the demand of customers and their interest side products. This is one of the most used methods by H&M.

TECHNIQUES USED FOR BRAND MANAGEMENT

Following are the techniques used by H&M for managing the brand:

Preference metrics: Preference metrics refers to looking throughout the ability of customers for purchasing the product or services of the organisation. H&M focuses on fulfilling the desires and demands of customers. They try to make customer's preference for their own brand.

Financial metrics: Financial metrics refers to how an organisation takes the financial practices to make optimum utilisation of fund resources. H&M organisation focuses on how the revenue of the organisation is utilised and allocated. It also focuses on the effective practices of financial metrics.

Competitive metrics: All the competitors draw up some strategies for enhancing their own brands and influence customers for purchasing their products. Therefore H&M needs to look upon different strategies made by their competitors such as ZARA, M&S and John Lewis. Hence, competitive metrics help in looking after such practices.

LEAN PRODUCTION

Lean production can be defined as the tools and techniques which are used by the organisation for maintaining and improving the production. The lean production helps an organisation to (Marodin et al., 2018). The main motive of lean production in organisations is to minimise the waste which is occurring in their operations. It is also important for the organisation to drive this step in order to achieve sustainability. H&M is a believer of cutting down unnecessary wastage and maintaining the approaches such as reuse, recycle, reduce, repurpose and reduce.

DIFFERENT BRAND APPROACHES

COST APPROACH

The cost-based approach is driven from the Fair market value which focuses on the total asset value of the business. The basic criteria of this approach are to cover the net asset of the organisation. This is followed by H&M when they are taking the minor scope.

INCOME APPROACH

This approach is based on the total revenue earned by the organisations. It is driven with the help of the cash flow statement. This is one of the most accurate methods to understand the value of the brand. Also, H&M uses it when they are calculating it in the broad say major terms.

MARKET APPROACH

The market approach follows business sales as its base. There are two methods Guideline public company method and Merger and acquisition method. This method is basically the perception of market situation and customers towards the brand of the organisation. H&M has a good approach in the market, and also they get positive response towards it.

CONCLUSION

This assignment has concluded about the brand managements different aspects. Brand management is one of the most important and crucial parts of every organisation to operate. It is said that if an organisation can implement the brand management successfully then they can achieve high customer attraction. This assignment has been followed by techniques to enhance brand management. Aaker’s model for evaluating brand equity of H&M. Ansoff matrix was performed for analysis of extension, Keller's model for understanding customer-based brand equity. Also, we have looked after the different approaches to create brand value.

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