CATEGORY

MANAGEMENT AND
FRANCHISING
GROUP 5
• VARUN AGARWAL – 01
• SHAKTI GONEWAR- 19
H&M VS FOREVER 21 • HITANSH MOMAYA- 34
• SAMKIT SETHIA- 47
• AKSHAY SRIVASTAVA- 55
 CATEGORY MANAGEMENT

• Category Management is an essential activity which keeps the shopper, retailer

and supplier at the heart of all decisions. In fact, we see it as a ‘business as usual
discipline’ that maximises every stage of the process.
• One foremost reason for the introduction of ‘category management’ is that all the
items of merchandise are not equally important for a retailer from cost revenue
generation point of view. Some items are very small but of high value, some items
are most popular but of low profit margin. Therefore need was point to
categorized the items in to different sub groups.
 H&M

• Hennes & Mauritz AB is a Swedish multinational clothing-retail company known for

its fast-fashion clothing for men, women, teenagers and children.
• The company was founded by Erling Persson in 1947.
• First outlet by him was opened in Västerås, Sweden.
• The shop, called Hennes (Swedish for "hers"), exclusively sold women's clothing.
• Persson acquired the hunting apparel retailer Mauritz Widforss, which led to the inclusion of a
menswear collection in the product range and the name change to Hennes & Mauritz.
• 3000+ outlets all over the world
 FOREVER 21

• FOREVER 21, is an American fast fashion retailer headquartered in Los Angeles, California.
• Forever 21 began as the store called Fashion 21 with 900 square feet (84 m2) in Highland
Park, Los Angeles, in 1984.
• Designs similar to those seen in South Korea were sold to and targeted at the Los Angeles
Korean American community. In its first year in operation, sales totaled $700,000 and, by 2013,
there were more than 480 stores and a revenue of $3.7 billion.
• Originally, Forever 21 only sold clothes for women but later expanded to sell menswear.
• Most Forever 21 stores now sell clothes for men and women, including plus size clothing for
women.
 COMPETITORS FOR BOTH

• ZARA
• Uniqlo (Japanese Fashion Brand)
• GAP
ASOS
• American Eagle Outfitters
• Chanel
• Benetton Group
• Louis Vuitton
• Mango
• Aeropostale
 SWOT ANALYSIS FOR H&M
Strength
• Wide Range of products.
• Diversified Global presence.
• Strong Financial.
• Strong Digital presence.
Opportunities
• Focus on expansion to
improve profitability.
• E-commerce as a platform.
• Expand in emerging markets.
• Improving Lifestyle.
Weakness
• Dependence on third party.
• Affordable pricing affects quality.
• Profitability ratio and Net Contribution % of
H&M are below the industry average.
• Financial planning is not done properly and
efficiently.
Threats
• Evolving fashion trends
• E-Commerce allows new entrants
• Intense competition
• Rising labor costs in developed countries.
• A risk of foreign exchange fluctuations
 SWOT ANALYSIS FOR FOREVER 21

Strength
• Staying in trend.
• Something new every day.
• Forever 21 is associated with a lot of new
generation celebrities like Justin Beiber, Lady
Gaga, and Emma Watson.
• Forever 21 is associated with a lot of new
generation celebrities like Justin Beiber, Lady
Gaga, and Emma Watson.
Weakness
• Private ownership.
• Centralised decision making.
• Excessive focus on teens.
• Does not have any reward
system or any coupon system.

Opportunities Threats
• Growing need for youngsters to • Economic Crisis.
stick to trends. • Focus on recycling.
• Fashion changes. • Weather- Can’t wear in winter season.
• Personalisation clothing. • Intense Competition.
• Popular celebrities wear.
STP ANALYSIS • Segmentation-
FOR H&M • International market.
• People who love to spice up their wardrobe and want to
look uber stylish at all times.
• Target Group-
• Fashion for women (18-45 age), men (18-45 age) and
Teenagers (9-17 age).
• High Purchasing Power.
• Positioning-
• High Class Brand.
• Luxury Brand.
 • Segmentation-
• The Companies in the clothing industry uses the mix of
the psychographic, demographic and geographic segment. The variables
like age, expectations, gender, income group, region, family size, loyalty,
STP ANALYSIS social class, price sensitivity, personality attributes, and lifestyle.

FOR • Targeting-

FOREVER 21 • Mass targeting strategy is used by the company to be competitive in the

fashion industry and target the customer group with the distinctive
features and offerings.

• Positioning-
• The speciality retail store has positioned itself based on young, trendy
and fashionable offerings which create the image of being young or
ahead of fashion. The company has positioned itself based on value-
based positioning strategy.
HEAD TO HEAD COMPARISONS
 • H&M stores are very spacious
and follow a grid layout.
H&M
• Store Size – 17,000 Sq.Feet with
STORE LAYOUT an approximate footfall of 7000
on weekends and 2000 on weekdays.
 • All the apparels are further divided into specific categories.
For eg. Casuals shirts, Formal trousers , etc
STORE LAYOUT
–H&M
 • Forever 21 follows a not so organized format of
arranging their products.
FOREVER 21 – • Store Size – 9500 Sq.Feet with an approximate footfall
STORE LAYOUT of 2200-2500 on weekends and 1000-1500 on
weekdays.
FOREVER 21 – • They do not follow any specific categories. One might
STORE LAYOUT find party wear and normal tees in the same stack.
 CATEGORY ROLES –
DESTINATION
• H & M – plain t shirts, basic casuals,
formal shirts
• Forever 21 – Party dresses, Crop
tops
 CATEGORY ROLES -
ROUTINE
• H & M – FOOTWEAR, JACKETS
• FOREVER 21 – TROUSERS, BASIC
CASUALS
CATEGORY ROLES -
OCCASIONAL
• H & M – Hats, festive goodies
• Forever 21 – Jackets, Jumpers
 CATEGORY ROLES –
CONVENIENCE
• H & M – Socs, Hair accessories
• Forever 21- Make up sets, jewellery,
Flagship Cash Machine Maintenance/ Growth

Core Traffic Under Fire Rehabilitation

CATEGORY ASSESSMENT – H&M

CATEGORY ASSESSMENT – FOREVER 21
RECOMMENDATIONS –
H&M
RECOMMENDATIONS –
FOREVER 21