Semester-vi elective II a apparel marketing



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Economy

General economic factors such as income, employment and home

ownership have just as great an effect on the clothing industry as
on other product groups. Consumer expenditure on new clothing is

very dependent on the general state of the economy measured by

the gross national product (GNP), their employment status and their

disposable income. There are many other factors that infl uence the

shape of the market for clothing and footwear. Consumer spending

is infl uenced by some economic factors mentioned above while lifestyle

changes that occur, such as getting married, having children,

children leaving home and retirement, all alter people’s requirements

and aspirations for clothing and footwear. Clothing is one area where

in recent years there has been price defl ation, sales growth in volume

is exceeding sales growth by value, people aren’t buying less clothes

but the clothes are becoming cheaper. In the 1960, households spent

on average 10.3% of their income on clothing. This fell to less than

6% in the late 1990s and have more or less stayed at that fi gure ever

since. This relatively low fi gure can be accounted for by the ability

of manufacturers and retailers to source from around the world and

constantly respond to competitive pressure on prices.

Recession versus ‘feel good factor’

In the late 1980s and continuing into the early 1990s the UK was in a

recession that was mirrored throughout the world. Increasing unemployment

and high interest rates led consumers to be wary of spending

more than was necessary. This in turn led to more frugal spending

on clothing and a partial rejection of fashions that require a total new

look, causing a move towards more classic styles that will last beyond

the next season.

By the late 1990s there was discussion in the media of a ‘feel good

factor’ in the economy, but this did not necessarily reach the clothing

stores, many of which had somewhat lost their direction and positioning

in terms of consumer needs. In the new millennium people

may feel the benefi t of low infl ation rates, easily available credit and

a consumer confi dence that their standard of living will stay the same

or get better. This can lead to more spending but with clothing, and

the price defl ation experienced in the market, more items purchased

do not necessarily relate to more spending overall.

Unemployment

Local spending power can be greatly infl uenced by unemployment,

which varies considerably from region to region within the UK. The

retail sector of whole towns can be devastated by the closure of a

large local employer.
Home ownership

Home ownership has been increasing steadily since the end of World

War II. However, as interest rates rose, the cost of mortgages greatly

increased for a time, putting pressure on owner-occupied households.

Even as rates began to fall again, consumer caution and the switch to

saving spare cash may not result in the anticipated increase in spending.

With average house prices having risen more than two and a half

times over the past 10 years, homeowners have gained in confi dence

as they have seen the price of their house rise (Table 2.8). Coupled

with relatively low interest rates homeowners have been able to

spend more on themselves. They are more willing to access the equity

in their homes by remortgaging. Conversely high house prices mean

that it is hard to get a foothold onto the property ladder for fi rst time

buyers. They are having to save hard for a deposit and then take out

large mortgages to buy even the most modest property.

Credit cards

There is concern that consumers and their willingness to take out

personal loans and credit will follow the pattern of the 1980s. At that

time consumers were more willing to borrow when their homes rose

in value and were confi dent to extend their personal loans in the

knowledge that their assets were appreciating in value faster than the

rate of infl ation. However, as the rise in interest rates caused depression

of the housing market, and the value of some properties fell, the

banks, so willing to lend in the 1980s, restricted credit. Spending on

plastic cards has increased over four times the amount spent 10 years


ago, although this does include debit as well as credit cards. Usage of

store cards as consumers have realized the high interest rates being

charged or as they are converted into store credit cards, likes Marks

and Spencer, where purchases can be made in other stores using a

Marks and Spencer credit/store card.

The rest of Europe does not have the same love of credit cards

and willingness to go into debt as the British, having a much greater

reluctance to take on the high levels of debt as seen in the UK.



European Monetary Union

In January 1999, 11 of the 15 EU members at that time joined the

European Monetary Union (EMU) and now have a single currency –

the Euro. Currently, the UK Government does not feel that the economy

fulfi ls the fi ve economic tests set out by the Maastricht Treaty,

and so UK membership is still on hold. The likely addition of the UK

to the EMU in the next few years will mean that stores will trade in

the Euro. UK retailers will gain the chance to trade more easily in a

wider European market although this will also mean more competition.

It will be possible for EU consumers to easily buy throughout

Europe and the world via the Internet.

Exchange rates

Both exports and imports are greatly affected by the strength of the

pound. Since the late 1990s sterling was particularly strong, making

imported clothing cheaper and hampering clothing exports by

increasing their costs in foreign markets.
Unit – II

Marketing Function –Assembling, standardization and grading and packaging, product planning and development, importance of fashion products, nature of fashion products. The fashion industry and the new product development, product mix and range planning , fashion and related cycles.


One Word Answers

1. Buying and selling are vital to the success of a business.

2. The product planning function is also called as merchandising function.

3. The nature and characteristics of the product affect the marketing program to a larger extent.

4. Convenience goods which consumer buys frequently and with minimum shopping efforts.

5. Core attributes will revolve around the three basic tenets of clothing which are protection, modesty and adornment.

6. Standards are generally determined on the basis of weight, colour, quality and other special or specific features of a product.

7. The product mix is the assortment of goods a company offers for sale at any time.

8. Intangible attributes are the additional services and benefits that supplement the core and tangible attributes.

9. The every stage in the planning cycle may comprise any combination of textile and fashion designers, production mangers, sale people, buyers and store personnel.

10. The concept of fashion product life cycle is based on the proposal that all products have a finite lifecycle that can be plotted over a given period.



Short Answers
1. Explanation on Standardization & Grading, Product Planning and Development:
Product Planning and Development


  • Product planning is the starting point of the overall marketing programme of a firm.

  • It is concerned with the deviations related to the nature and aspects of the products produced.

  • It is a very wide activity.

  • It involves the innovation of new products, improvement in the existing product line or dropping the un-economic products from the product line.

  • This embraces activities that enable a firm to determine what is to be produced and where it has to be placed and how the demand for the product is to be created within the consumers.

  • Product development is concerned with the technical activities of product research, engineering and design.

Standardization & Grading




  • Standardizing refers to the establishment of standards for products and generally recognized as having a fixed value.

  • Standards are generally determined on the basis of weight, color quality and other specific features of a product.

  • Grading is a part of standardization .It refers to the sorting out of the different commodities on the basis of the standards laid down.

  • There are two kinds of grading viz., 1.Fixed grading and 2.Variable grading.

  • Fixed grading- is sorting out the goods according to the size, quality and other contents on the basis of fixed standard.

  • Variable grading is the application of varying standards where no permanency in quality is found.



2. Details about Buying and Assembling, Selling and Transportation:

Buying and Assembling




  • Buying is the first step in the process of marketing .Intelligent buying is vital to the success of business.

  • It may be done thro’ directly or thro’ middleman.

  • Manufacturers buy raw materials converting them into final products.

  • Similarly wholesalers and retailers buy goods for the purpose of resale.

  • Consumers who buy for their own use.

  • Buying is a combination of various sub-functions or elements .They are

1. Planning the purchase of goods, 2.Assembling, 3.Locating the sources of supply, 4. Market news, 5.Negotiation terms, and 6.Transfer of title and delivery

  • Assembling starts after the goods have been purchased .It means bringing together, collecting and concentrating goods of the same type from the various sources of supply at centrally located places.

  • It is generally done by middleman.

  • The object of assembling is to avail the economies in transport and to ensure regular supply of goods.

Selling



  • It is the crucial function in the process of marketing.




  • It is the actual point where the transfer of ownership occurs.




  • It involves advertising, facing competition, creating demand for new products, conducting market research, supply goods in the right time and places.

Transportation




  • It involves the movement of goods from the point of production to the place of consumptions.




  • It provides place utility to the product.




  • Large scale production become possible




  • Land, Air & water are the principal means of transport.


3. Details about Storage and Warehousing, Financing and Risk bearing:
Storage and Warehousing


  • Most of the mass consumption of goods is produced on the basis of anticipation of demand.

  • This factor requires storage for at least some time at the production centers and also at the distribution point.

  • It is also necessary for products with uneven demand period and with seasonal demand.

  • In some cases increases the value of the products.

Financing





  • Money is required at each stage in the process of marketing.

  • Without adequate finance even the very existence of the business concern shall be affected.

  • Although procurement of funds is the responsibility of the finance dept of the business firm.

  • Yet the amount of capital required for marketing division is considerably influenced by the decisions of marketing manager

Risk bearing




  • Risks are involved at almost all the stage in the process of marketing.

  • Right from the product policy, risk is possible due to reasons like changes in demands and supply conditions, loss in storage and transport as such.

  • Thus, risk, in fact is part and parcel of every business as such.

  • The successful businessman is one who takes a calculated risk.

  • Therefore the marketer should estimate the extent to which these risks can be transferred borne and insured against it



4. Explanation on the Importance of Fashion Products:
It can be categorized in to three views


  1. Concept of fashion

  2. Economic importance of fashion

  3. Social role of fashion

Concept of fashion




  • The product is fundamental to the fashion design industry.

  • The continual process of new product development and resulting change drives the whole industry.

  • New ideas and offerings are resulting from the consumer demand

  • Unless the introduction of new ideas and constant generation into the marketplace the concept of ‘fashion’ would not exit.

  • If consumers were not engaged in the process of looking for new products or services to satisfy their emerging needs, the fashion process could not function.

  • This industry related to particular period of time i.e. seasonal , process in which new fashions introduced and some will remain for several seasons other will go off very quickly.

  • The regenerative process is very essential for continual survival of fashion.

Economic importance of fashion




  • In 1990s, clothing and textile industries were played major role in the employment sector of UK & USA.

  • In UK, the clothing and textile industries employed over the 300000 people in 1999, clothing alone accounting for almost 117000 employees.

  • In the same year the total sales amounted to over ₤8.1 billion for clothing and footwear and exports value around ₤2.6 billion.

  • Although household expenditure on clothing and footwear in the UK has slightly declined, and it still amounts to nearly 6% of the total of all consumer expenditure at current prices.

  • To remain competitive many UK clothing manufactures have chosen to follow an up market, high –cost route embracing high quality rather than competing with manufactures elsewhere in the world that are able to maintain very low labour costs.

Social role of fashion




  • Enhancing self esteem and acceptance by peers and various other social groups through the correct choice of clothing and accessories.

  • New product development, and understanding consumer needs within a society are the strategies to satisfy the consumer

  • Commercially this will lead to increased customer loyalty resulting in improved sale performance and profitability.


5. Classification of Products:

Two main categories of products

1. Consumer goods

2. Industrial goods


Consumer goods
These are designed for final consumption by the ultimate consumers and households.

These are classified in to 3 types.

a. Convenience goods – Goods which consumer buys frequently immediately and with minimum shopping efforts.

Further subdivided into Habitual goods, Purchases habitually and where brand loyalty is probably very strong. Impulse goods, purchased without any preplanning or searching.


Ex. Hosiery products, underwear.
b. Shopping goods – Goods which consumer selects and buy only after making comparisons on such bases as suitability, quality, price and style are called as shopping goods. Ex. Furniture, Ready –made garments etc. These are likely to be purchased less frequently.
c. Specialty goods – goods for which significant number of buyers are habitually willing to make a special purchasing effort are known as specialty goods. They should posses unique feature or have a high degree of brand identification. Ex. Gap & Next, Fila
Industrial Goods
Goods which are far use in the commercial production or other goods or for use in connection with carrying on of some business or institutional activity are known as industrial goods.
These are subdivided into 4 products.


  1. Equipments and physical facilities – Major capital assets such as plant, machinery, building etc. come under this category.

  2. Materials entering into the product – this category of industrial goods include raw material, semi – manufactured goods.

  3. Manufacturing or service supplies – these are products that are essential to the business operations of the industrial uses but do not become part of the finished product. Ex. fuel, oil, coal etc.

  4. Management materials – this covers both office equipments and office supplies.

Ex. Stationery, typewriters, calculators etc.

Essay Questions
1. Explanation on nature of fashion products:
Product Definition
A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objectives, services, persons, places, organizations and ideas.
I Classification of product:


  • The nature and characteristics of the product affect the marketing programs to a larger extent.

  • Hence , the marketer should know his product well



Two main categories of products

1. Consumer goods

2. Industrial goods


Consumer goods
These are designed for final consumption by the ultimate consumers and households.

These are classified in to 3 types.

a. Convenience goods – Goods which consumer buys frequently immediately and with minimum shopping efforts.

Further subdivided into Habitual goods, Purchases habitually and where brand loyalty is probably very strong. Impulse goods, purchased without any preplanning or searching.


Ex. Hosiery products, underwear.
b. Shopping goods – Goods which consumer selects and buy only after making comparisons on such bases as suitability, quality, price and style are called as shopping goods. Ex. Furniture, Ready –made garments etc. These are likely to be purchased less frequently.
c. Specialty goods – goods for which significant number of buyers are habitually willing to make a special purchasing effort are known as specialty goods. They should posses unique feature or have a high degree of brand identification. Ex. Gap & Next, Fila
Industrial Goods
Goods which are far use in the commercial production or other goods or for use in connection with carrying on of some business or institutional activity are known as industrial goods.
These are subdivided into 4 products.


  1. Equipments and physical facilities – Major capital assets such as plant, machinery, building etc. come under this category.

  2. Materials entering into the product – this category of industrial goods include raw material, semi – manufactured goods.

  3. Manufacturing or service supplies – these are products that are essential to the business operations of the industrial uses but do not become part of the finished product. Ex. fuel, oil, coal etc.

  4. Management materials – this covers both office equipments and office supplies.

Ex. Stationery, typewriters, calculators etc.

II Classification of products with a fashion element


1. Classics

2. Fashion and fads


Classics


  • Some styles never become completely obsolete, but instead remain more or less accepted for an extended period. A classic is characterized by simplicity of design, which keeps it being easily dated. Ex. Channel suit, which peaked in fashion in the late 1990s. Other ex. Blazer, Jackets, Polo shirts, Jeans etc.

  • In this design changes will be minimal

  • It is never out of style for its market segment

Fashion and Fads




  • Short – lived fashions, or fads, can come and go in a single season.

  • They lack the design strength to hold consumer attention for very long time.

  • Fads usually affect only a narrow consumer group, often begin in lower price ranges, are relatively simple and inexpensive to copy , and therefore flood the market in a very short time.

  • Because of market saturation, the public tires of them quickly and they die out.

Product Attribute


The fashion consumer will tend to view garment as a series o attributes. Some of these will relate more closely to the social and psychological needs of the consumer. It is essential that the fashion market is aware of both the subconscious and conscious aspects of the product to offer the best combination of need satisfying benefits to the consumer.
These product offerings can be analyzed at three levels.


  1. Core product

  2. Tangible product

  3. Intangible product

1. Core product attributes




  • This attributes will revolve around the three basic tenets of clothing – protection, modesty and adornment.

  • The consumer will decide how the combination of these functions matches his or her basic criteria’s for purchase.

  • On each purchase of a product will result in a compromise. This shows that these are apparent gaps in the market place and therefore the need for more differentiation.

2. Tangible product attributes




  • These are interpretation and presentation of the four design basics to provide an overall style, will revolve around in the first place the set of design feature which make up the actual product.

  • The designer must regard to the appropriate use fabric, texture, pattern and colour for any given season.

  • These are set in the context of both overall style and for instance, co-ordination with other garments and accessories to form a total look.

  • More discerning consumers now require quality of service and choice as well as product and there are significant implications in this quality procedure.

  • A suitable packaging and branding are important in image creation, leading to differentiation in market place which can be achieved very effectively through the use of labeling.

3. Intangible product attributes




  • These are additional services and benefits that supplement the core and tangible attributes, include service intrinsic to the purchase such as credit facilities, delivery arrangements and after sale services such alterations and money back guarantees.

  • Providing consumers with consultation as to personal image.

  • However, word of mouth recommendation, appealing shop interior and exteriors and even satisfaction with previous purchases can all be contributory factors to the build up of long term loyalty.




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