fashion marketing

helen goworek

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the UK fashion market

• the UK retail clothing market was estimated to

be worth ______in 2012 (Mintel, 2012)

• Clothing is the second largest UK retail sector

(Mintel, 2007)

• ______________ is the largest market

segment, accounting for approx. half of UK

clothing sales

Source: Mintel, 20123

Major issues in fashion marketing

• The marketing mix differs from other sectors –

high emphasis on product and an unusual

promotional mix

• Reliance on catwalk fashion and celebrities to

set trends

• Globalisation of manufacturing has affected

clothing prices

• Conflict between ‘fast fashion’ and

sustainability of clothing4

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• large shops and chains = around 75% of the UK fashion market

• The top 12 retailers accounted for 57% of the UK fashion market in 2008 (M&S holding 12%)

• the volume of the UK clothing market is increasing, while prices are decreasing

• in 2000, 73.6% of clothing sold in the UK was

imported, in 2005 this rose to 95%

• between 2001 and 2005, average clothing and footwear prices fell by 14.4% (Key Note 2006)

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• between 2001 and 2005 21% more was spent

on women’s, girls’ and infants’ clothing (Key

Note 2006)

• in recent years sales have moved towards

value and luxury brands at the expense of the

middle sector of the mass market

• supermarkets have increasingly gained market

share

The Marketing Mix:

the four P’s

product price promotion place

CUSTOMERS7

the structure of the fashion and textiles

industry

fashion promotion:

trade press and

trade fairs

mass media

textiles manufacturers

clothing manufacturers

retailers

CUSTOMERS

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product

• What makes a product successful?

• UNIQUE SELLING PROPOSITION

• USP

• Well-defined product concept prior to development

• Analysis of target market’s requirements

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When purchasing a fashion product what is the

consumer actually buying?

• the tangible product and intangible ‘bundles of benefits’ e.g.

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Who participates in fashion product

development?

designers

technologistsbuyers

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Fashion design and buying involve developing

commercially acceptable fashion products

within the following parameters :

• price

• appeal to the target customer

• technology

• timescale

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Jean-Paul Gaultier

Prada

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Product life cycle

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Focus groups

• Can be organised by agencies or internally

• e.g. Group of mums and dads for childrenswear:

Opinion on range

Opinion on competition

• Understand your customers’ way of thinking in

relation to your product range

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price within the fashion marketing mix

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fashion market levels

UPMARKET ‘designer level’Haute coutureReady-to-wear- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -MIDDLE MARKET ‘branded’Designer diffusion rangesBranded merchandise- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -MASS MARKET ‘High St’UpperMiddleLower

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‘Designer’ level

• upmarket, expensive

price bracket

• ‘one-off’ creations

(couture fashion) or

ready-to-wear fashion

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•Prada – Miu Miu, Jil Sander, Helmut Lang•LVMH – Marc Jacobs, Pucci, Celine•Gucci –YSL, Alexander McQueen, Stella McCartney, Balenciaga•PPR (Pinault Printemps Redoute)•PVH (Philips van Heusen) – Calvin Klein, Michael Kors

parent companies

Middle market

• Designer diffusion collections and fashionable brands

e.g.

Mass market

• High street stores and mail order

1.

2.

3.

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• retail prices have to achieve certain profit

margins e.g. 3 x cost price

• value retailers have much lower margins due

to fast sales turnover and supermarket pricing

principles e.g. George, Matalan, Primark

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Hourly labour costs US$ 2002

• Germany $28

• Japan $20

• US $18

• UK $16

• Portugal $5

• China $2

• India/Indonesia $0.75

(Lasserre, 2006)

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• Most people perceive a

relationship between

brand image and quality

• The price charged for a

company’s merchandise

will reflect the status of

that company’s brand

image

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Shoppers in Britain are getting the best bargains since Margaret Thatcher was prime minister. Official figures show many common items cost less now than in 1987, even though wages have

risen substantially…women’s clothing is nearly 25% cheaper now than in 1987.

(Grimston & Smith, 2003)

Deflation has occurred in the fashion market due to

mass market stores trying to keep pace with the value

sector.

retail price setting

• retail prices are balanced between:

a) customer perceptions

b) manufacturers’ costings

c) retailers’ required profit margins

• own label retailers typically sell at 3 x cost price

• branded merchandise is typically sold at 2 or 2.5 x cost price

• selling prices are set by merchandisers and buyersin mass market retailers

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Merchandise (stock

controllers/allocators/optimisers)

� planning budgets

� deciding the number of lines

within the range

� selection meetings

� placing orders

� markdowns and repeat orders

� progress meetings

� reviewing sales figures

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price architecture

• key entry prices/basics

• mid range

• premium lines

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GOOD

BETTER

BEST

Paul Smith

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mainlinemenswear

mainlinewomenswear

PS

jeans

accessories

• major differences in retail prices are caused by

quantities, i.e. economies of scale

• at designer level the customer is paying for

exclusivity

• fashion promotion is a proportionately high cost for

designer merchandise

• the promotion entices the customer with its brand

image, for which the customer pays a premium

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Price can be used as a promotional aspect:

• Discounts – loyalty card holders/magazine readers

• Three for two

• Buy one get one half price

• BOGOF

• Blue cross sale

THE COSTS INCURRED IN FASHION PROMOTION CAN HAVE A HUGE IMPACT ON RETAIL SELLING PRICES

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promotion

• Advertising

• Heavy reliance on

fashion photography and

selection of model

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Fashion companies rely mainly on ‘below-

the-line’ methods of promotion

• fashion shows

• PR agencies

• editorial

• advertorials

• press offers and discounts

• press launches

• point-of-purchase (POP)

• packaging32

• sponsorship

• personal selling

• internet (non-transactional websites)

• special offers

• competitions

• viral marketing (networks, word-of-mouth, can be internet-based e.g. blogs)

• guerilla marketing (non-traditional methods of promotion)

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place (distribution)

• methods of distribution:

• retail (bricks and mortar) e.g.

– independents

– dept. stores

– fashion multiples

– variety chains

– concessions

– franchises

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• visual

merchandising

(VM)

• mail order

• internet (has

overtaken

catalogue

shopping in sales

turnover)

• multi-channel

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• location

– global markets

– location of retail branches

– store interiors (store design)

– location of product within store (VM)

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Contemporary fashion marketing

issues• The sustainability impacts of clothing

• Challenging and competitive retail environment due

to current financial situation (e.g. Dolcis, Bay Trading,

Shoezone, Peacocks, La Senza, Blacks)

• The trend away from bricks and mortar retailing

towards online retailing

• Read Drapers, Retail Week, Mintel reports and the

Journal of Fashion Marketing and Management if you

are interested in this sector

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summary• The UK retail clothing market was estimated to be

worth

• Product– designers, technical staff and buyers develop fashion

products

• Price– relates to manufacturing costs, promotion and customer

perceptions of brand image

– price deflation relates to import saturation

• Promotion– advertising photographers and models

– heavy reliance on below-the-line promotion

• Place– VM and store design are significant in the fashion market

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bibliography and further reading

Easey, M. (2002) Fashion Marketing: 2nd edition Blackwell

Science: Oxford

Goworek, H. (2006) Careers in Fashion and Textiles

Oxford: Blackwell Publishing

Goworek, H. (2007) Fashion Buying second edition

Oxford: Blackwell Publishing

Grimston, J. and Smith, D. (2003) Prices in Britain

lowest for 15 years Sunday Times July 20th 2003

Hines, T. and Bruce, M. (2006) Fashion Marketing:

Contemporary Issues 2nd edition London:

Butterworth Heinemann39

bibliography

Jackson, T. And Shaw, D. (2009) Mastering Fashion Marketing London: Palgrave Macmillan

Kierstan, A. (2004) Tesco will slash prices for summerDrapers 24/4/04

Kotler, P., Armstrong,G., Saunders, J. and Wong, V. (2004) Principles of Marketing: The European EditionPrentice Hall Europe

Mintel (2010) Clothing Retailing Report

Tungate, M. (2008) Fashion Brands: Branding Style from Armani to Zara 2nd edition London: Kogan Page

Varley, R. (2006) Retail product management – buying and merchandising 2nd edition London: Routledge

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bibliography

Vogue October 2006

Vogue October 2007

www.lvmh.com

www.philippelasserre.net

www.retailmap.co.uk

www.vogue.co.uk

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websites• Online journals Journal of Fashion Marketing and Management (available at NTU) • Global Journal of Fashion Marketing• Fashion Practice

• online databases (e-search in NTU library)• Key Note (2008) Clothing and Footwear Industry• Key Note (2006) Clothing and Footwear Industry• Mintel (2002) Retail Intelligence – Clothing Retailing• Mintel (2009) Retail Intelligence – Clothing Retailing• Mintel (2009) Retail Intelligence – Value Clothing Retailing• Mintel (2010) Retail Intelligence – Clothing Retailing• Mintel (2012) Clothing Retailing UK

• www.drapersonline.com • www.ftv.com (fashion TV)• www.fuk.co.uk (fashion UK)

• Find fashion jobs in Drapers and www.retailchoice.com

• arcadiagroup.co.uk• style.com• usc.co.uk• vogue.co.uk