Price element - Dolce & Gabbana vs. H&M

This post will look at how the price element of the 4Ps (marketing mix) differs between upmarket retail companies in comparison to low budget organisations, focusing on popular brands Dolce&Gabbana with H&M. 

The price element of the marketing mix is referring to the price that businesses set for their products. It is an important factor and is often used to gain a competitive advantage over other businesses. Pricing is a carefully thought process, as a company has to set a price for its products in which the value justifies the expense of it, and that a profit will be made. The process takes research and analyses its competitors products and selling prices, as well as the market overall. The importance of pricing a product cannot be emphasised enough, as if a product's price is set too low for its value, then this will result in a loss of revenue for the business. If the product price is too high in comparison to its competitors, then this will lead to a loss in customers and again a loss in revenue.  

A pricing strategy should be established in order to help set the right prices for consumers. It gives a basis and starting point for the process of setting prices and should reflect the company's financial, marketing and product goals. As well as careful consideration of the customers needs and expectations.  

Pricing strategies can include:  

  

Price is also critical, in that it can help create a company's image and the type of brand people perceive it as. A good example of this is "If Chanel tried to sell Chanel No.5 in a two-litre bottle for £3, consumers would probably not buy it because the low price would destroy the prestigious image of this deluxe brand." (Dibb et al, 2016)  

Looking at the pricing in a retail clothing context, it is clear that there are huge differences between premium brand Dolce&Gabbana to everyday brands such as Primark and H&M. They have different pricing strategy's, methods and prices set and this comes down to a number of factors including the value of their clothing, the target consumers, the brand name etc.  

Dolce & Gabbana  -  

Dolce&Gabbana is known as an innovative brand who's clothing products are known to be luxurious, classic and elegant with a Mediterranean trend. Therefore, their prices are set high and consequently, their clothing lines are targeted and appeal to more affluent individuals. 

The current marketing mix is one of the reasons pricing is so expensive for Dolce&Gabbana clothing, as in order to advertise and promote their clothing, the brand dress famous people for example Madonna, Jennifer Lopez, Angelina Jolie and the Italian football team. Therefore, the money they use to pay celebrities to feature in their clothing has to be earned back, and this results in higher prices and consumers having to pay more for their clothing.  

                               Madonna wearing Dolce&Gabbana: 

  

Their clothing line prices vary, however they range from the hundreds of pounds right up to thousands. For example, a women's 'wool crêpe dress with embroidery' is priced at £4,300 and a gentleman's 'stretch wool suit with stitching' is £2,400.  

Domenico Dolce (One of the two designers of Dolce&Gabbana) emphasised "We built our fashion around three fundamental concepts: Sicily, tailoring, and tradition. Our dream is to create a style which is timeless, and to create clothes with such a strong personality that whoever sees them can instantly say without a shadow of a doubt: this is a Dolce&Gabbana."

H&M -

H&M will approach their pricing strategy differently from more premium brands such as Dolce&Gabbana.  

H&M are known as another low budget costing clothing brand which offer 6 different brands of clothing within their company. Their products consist of contemporary, unique and modern everyday clothing at affordable pricing.  

They have conducted a pricing strategy which reflects the consumers need, which is low prices for quality up to date clothing. They have tried to appeal to all different groups of people by stocking a large quantity of different fashions brands and clothing at low prices.

One way in which their pricing strategy differs from upmarket brands such as Dolce&Gabbana is by continuously promoting various clothing items at discounted prices in designated areas of their stores, in order to attract regular and new consumers. This is a strategy developed in order to increase their income and attract new consumers into their stores. It also allows them to be able to purchase new modern fashion regularly in a large quantity.  

In order to justify selling at low prices, their pricing strategy includes buying their clothing stock directly from an organisation, alternatively to having someone in between which negotiates a trading price. This means that it works out cheaper for the company, as they can purchase a large quantity of modern fashion lines for cheaper and in advance, therefore H&M can justify selling their clothing products at an affordable price. They try and keep the marketing and manufacturing process at a minimum cost which has led to their success at keeping prices low. This strategy is created in order to meet the customers needs and reach a wider market, as well as maximising profits and revenue.  

H&M clothing products are set at a price which appeals to many different social classes and is advantageous in a competitive market. An important factor for H&M when setting their prices is to gain a competitive advantage over similar brands such as NewLook, Topshop and Primark. As it is important that their prices are better than other brands which offer similar products, as they want to keep current consumers, as well as gain new customers, the only way this is done is by staying above competitors in price and quality terms.  

H&M emphasised "We want to make sustainable fashion choices available, attractive and affordable to as many people as possible." (H&M Group; 2016) Showing their commitment to their customers, in making sure they have high quality clothing for the right price at the right time.  

H&M prices vary, however they rarely exceed £200 and are kept relatively low. For example, the lowest priced clothing item for ladies is a women's V-neck top priced at £3.99, rising to £199.99 for a leather biker Jacket, in comparison to priced items at several thousand pounds for premium brands such as Dolce&Gabbana. However, H&M are a global brand therefore, these prices may vary in different countries with different currencies, although the price of clothing will still be low.