Fashion Marketing 12

8/3/2019 Fashion Marketing 12

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Sanuwar Rashid

B.Sc. in Textile Technology (DU, Bangladesh)

M.Sc. In Industrial Engineering (THS, UB, Sweden)

(Major in Applied Textile Mgt.)

Fashion Marketing in Theory & Practice


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Introduction to Fashion Marketing

CHAPTER 1


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What is fashion?

Fashion is defined as short term trends or fad which involves change.

Hot trends are created overnight, consumer

preferences change like the breeze, and assortments change

more often than the seasons.

How successful the fashion is, depends on trends, consumer

preferences, Assortment range


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Fashion product and serviceFashion is not only about cloth

Related fashion Services

Advice on garment co-ordination

Cosmetic surgery

Tattoos

Image consultancy

Hair dressing

Hair transplant

Sun tanning

Garment cleaning service

Clothing alternation/repair

Clothing

Underwear Outerwear

Formal Informal

Bespoke Ready made

Natural Men-made

Related fashion products

Shoes

Hatshosiery

Jewellery

Belts

Bags

Scarves

CosmeticsFragrances

Cleaning Products

Haberdashery

Wigs


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Some Fashion IndustriesH & M

Gina tricot

Lindex

Adidas

NikeZara

American Apparel

Patagonia

Gap

Hugo Boss

Gorge ArmaniBenetton

Everest

Puma

Haglofs

Gant


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What is marketing

Marketing is a management process concerned with

anticipating, identifying and satisfying customer

needs in order to meet the long term goals of the

organization.

Marketing is a philosophy developed by each firm

to delivery product or service to their target

customer.


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What marketing does


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Factors that effect the growth of marketing

Long or short termLow/high promotion driven

Or up scale business

Promotional tactics

Digital or manual ad.

Viral marketing

Awareness: health issue

Share with reputed brand

Create your brand

Customer interest first

Offer better serviceDesign belongs to

Originality, sustainability


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What is Fashion Marketing

Fashion marketing is the application of rangeof techniques and a business philosophy that

centers upon the customer and potential

customer of clothing and clothing related

products and services in order to meet the

long term goals of the organization.

Intrinsic change in fashion marketing make it

different from many other areas of marketing.

The role of design in both leading and

reflecting consumer demand results invariety of approaches of fashion marketing.


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Two different views of fashion marketing

Fashion marketing is the same as

promotion

Design should be based solely on

marketing research

Sell what we can makeMake what we can sell

Design centered

Marketing centered

High failure rate

Relies on intuition

Bland designs

Stifles creativity


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Fashion Marketing concept

Low

Low

High

High

Design Centered

Failure Marketing centered

Fashion Marketing

concept

Concern for customer and profit

Concernforfashion

Design


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low concern for customer, profit and design leads to failure.

It is the consequence of overestimating design ability while

consumer preference and need for profit is undervalued.

The fashion marketing concept is devoted to high

concern for design, customer and profit by recognizing

the interdependence of marketing and design.

In this matrix, it can be seen that

Therefore, fashion marketing concept is not just a

theoretical model, it does work in practice.


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Job description of fashion MarketersFashion marketers have the job title like fashion

marketing manager, selector, merchandiser, sales

executive, public relation consultant

1. Fashion marketing research:

A researcher will investigate the market shares of

competitors and trends in those share. He is

responsible for carry out a group discussion with

potential consumer.

2. Fashion Product Management:A design manager should be concerned with

producing a specific range of clothing. He is

responsible to collect and pass on information to the

designer. Later the manager will sell the designs to

retailer , usually in the face of fierce competition.


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3

. Fashion Promotion:A fashion manager may think about brochure beside his

fashion cloth as a part of the promotional effort. In that case,

a brief to be given to a responsible person to prepare visual

and textual material for the brochure . It will include and

estimate of the no. of brochures needed and a list of

addresses.

4. Fashion distribution:

Someone who wish to expand his or her business , needs to

research a few options including franchising her business,spreading his product in selected department stores and linking

with a leading designer to produce new range.


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5. Fashion Product positioning and pricing:

To be competitive in fashion market, a retailer need to offer

reasonable price in compare to other retailer. So the positioning and

pricing of the product must be reviewed constantly by considering

the price sensitivity of customers.


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Fashion Marketing process

Fashion Marketing Organization

Price, Products & Services, Place, Promotion,

Marketing Mix

Marketing

ResearchCustomers

Design

Research

Marketing Environment


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Production Transportation Store End user

Merchandise depDesign dep.Pre-Production

Demand information

Product flow

Marketing

Demand

management

Product information

General model of fashion business


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3- tier view of fashion market

Haute

Couture

DesignerWear

Street Fashion (MassMarket)


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Haute couture

Haute couture refers to the creation of exclusive

custom-fitted clothing. Haute couture is made to

order for a specific customer, and it is usually made

from high-quality, expensive fabric and sewn with

extreme attention to detail and finished by the most

experienced and capable seamstresses, often using

time-consuming, hand-executed techniques.

Pierre Balmain adjusting a dress on

model Ruth Ford in 1947

(Photographed by Carl Van Vechten).

In France, the term haute couture is protectedby law and is defined by the Chambre de

commerce et d'industrie de Paris based in

Paris, France. The criteria for haute couture

were established in 1945 and updated in 1992.

Members of the Chambre syndicale de la haute couture must follow these rules:Design made-to-order for private clients, with one or more fittings.

Have a workshop in Paris that employs at least fifteen people full-time.

Each season (i.e., twice a year), present a collection to the Paris press, comprising

at least thirty-five runs/exits with outfits for both daytime wear and evening wear.


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5 Leading fashion Market allover world

Paris

Yves St Laurent, Chanel, Christian Dior, PierreCardin, Jean Paul Gaultier, Christian Lacroix,

Milan Gorgio Aramni, Gianni Versace, Emanuel Ungaro

London

Bruce Oldfield, Jasper Conran, VivienneWestwood, Paul Smith, Katharine Hamnett,

New York

Ralph Lauren, Calvin Klein, Bill Blass, Oscar de laRenta, Donna Karan

Tokyo

Yohji Yamamoto, Comme des Garcons, IsseyMiyake, Kenzo


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Yves St Laurent


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Chanel


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Christian Dior


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Pierre Cardin


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Jean Paul Gaultier


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Christian Lacroix


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Giorgio Aramni


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Gianni Versace


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VivienneWestwood


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Katharine Hamnett,


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The Fashion Marketing Environment

MACRO Environment

MICRO Environment

Demographics Legal

Technology Political

Social

Economic Environmental

Cultural

Supplier Manufacturer- Intermediate- Consumer

Competitor

Public


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Fashion Logistics

CHAPTER 2


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Traditional Apparel Supply Chain


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Globalized Apparel Supply chain


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THE VALUE CHAIN

Insource /

outsource?

Manage

variety,

quality& costs

BrandDevelopment

&

Management

Marketdevelopment

Distributor

liaison

Product &

service

liability

Product &

service

specification

Infrastucture

supoort

Value

Delivery


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Basic Supply chain management


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Own production

Fabric producers

Trimmings producers

Garment producers

Product developing brand

suppliers

Integrated retailers

Trade agents/importers

Licensees

Traditional wholesale dealers

Retailbranch companies

Independent shops

Voluntary multiple chains

Integrated wholesalers

Franchise

Department stores

Mailorders/Internet

Outlets

The companys value chain

Outsourced production

Fabric producers

Trimmings producers

Garment producers


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Fashion scheduling by traditional

players and ZARA


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Off shore supply chain may consists of severallinks:


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Sourcing Strategy


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Sourcing Concept

CM

CMT

Full Package (Full Price)

Private label

Own label


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CM Cutting Manufacturing

Customers supply full product specifications,

materials, patterns, accessories for the order.

The production company just makes the

manufacturing of the garments.


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CMT Cutting Manufacturing and Trimmings

The price covers cutting and manufacturing

and all trimmings, such as: threads, buttons,

linings etc.

The customer supplies full product

specifications, patterns, some of the

accessories and all main materials.


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Full package (Full price)

Cutting, manufacturing and materials.

The customer supplies full product specifications covering both

material and individual style.The supplier buys the material and sells the garment for so

called full price.

Patterns could be done by customer or supplier.


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Private label

The manufacturer independently or jointly with the

customer designs the product, searches materials,

makes patterns and sells the product for the full price.

The garments are delivered under the customers label.


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Own label

The manufacturer designs and manufacture the

product and sells it under own label.

Own brand sold to multi brand chains


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Gradual value addition


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Critical Success Factors

CHAPTER 3


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CRITICAL SUCCESS FACTORS

Offshore/nearby

sourcing

Processlead time

Up-front/

replenishmentmix

Forecast

accuracy


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Upfront/ Replenishment mix:

During the start of a particular season, all products are available

in retail shop irrespective of where it is produced, whether far

east or near by region as the order is placed earlier by

considering the lead time.But some products are going to stock out due to excessive

customer demand.

Then the issue of replenishment comes forward. As the product

design, material specification has already been done,

replenishment requires only the production duration and if theproduction is conducted with near by manufacturer, then the

newly lead time will be maximum two to four weeks.

Therefore, the replenishment tactic ensures fewer lost sale and

better service level.


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Offshore and nearby sourcing:

For functional products where the demand trend is predictable and

demand variation is less, offshore sourcing could be the best

practice.

But for fast fashion product where the demand trend is virtually

impossible, nearby sourcing is appropriate.

In nearby sourcing, the lead time is reduced and retailer or marketer

have the opportunity to manipulate the product design and someother specification.

Even in the season, they can modify some specifications of garments

as per the feed back of customer


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Process Lead time:

F

rom the starting stage ofidea generation done by

fashion designer, lead time is

counted. The following

figure will give a idea of

lead time. As per the figure,it is clear that transportation

is the main differential factor

for offshore and nearby

sourcing strategy. Material

purchase and product design

also have a impact on how

long or short the lead time

will be.


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Forecast accuricy

When a buyer makes a purchase plan for the season he tries to

forecast the demand as accurately as possible.

A survey carried on 16 fashion companies of Scandinavian region

expressed the tremendous influence of forecast accuracy on their

sourcing strategy. For Up-front sourcing, the forecast accuracy is

+33/-18 while In season or QR sourcing initiate 5% forecast error.


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FORECAST ERROR+ ERROR

Unsold goodsReduce price

Lose profit

- ERROR

Stock-outLost sales

Bad reputation


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Forecast ErrorForecast Error

+ 28+ 28

-- 1818

72 % sold at first price, and72 % sold at first price, and

28 % sold at reduced prices28 % sold at reduced prices

18 % lost sales = could have sold18 % lost sales = could have sold

more if there had been right goodsmore if there had been right goods


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FORECAST ERRORFORECAST ERROR

-20%

-15%-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Up-fronts Replenishments

28 %28 %

-- 18 %18 %

7 %7 %

-- 8 %8 %


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Success Measure of Fashion Retailing

Stock Keeping Unit (

SKU ) is a term referring to oneproduct on style, color and size level, i.e. the basic item in

stock management as well as in sales. SKU range means the

assortment of different SKUs bought for a season. To make

our understand on SKU range, lets consider a ladies wear

store of Europe where the sales per year is 130000 pcs. Andthe normal assortment range is:

SKU Range:


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S i l l


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Service level:

Service level indicates what proportion of the full SKU range

bought for the season is available at store. A service level of 90% means that 90 % of all the different SKUs bought for the

season are available through-out the whole season. It means

also that at the end of the season 90 % of SKU range is left over

and will have to be cleared through mark-down sales


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Lost sales:

The negative error of forecast accuracy denote lost

sales percentage. Due to excessive demand fromcustomer side, particular SKUs are quickly sold out.

Therefore, the percentage of sales lost due to stock out

is described by lost sales


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For 100% upfront purchase (offshore sourcing)

Forecast error +33% -18%Annual purchase 200 mEuro

Mark up 2.5 (150%)

Mark down 50% (Average)

For 70% Upfront (offshore) and 30% OTB (nearby/QR)


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Forecast error, for upfront +33% -18%

For Replenishment +7% -8%

Annual Purchase 200 mEuroMark up 2.5Mark down 50% (average)

For 70% Upfront (offshore) and 30% OTB (nearby/QR)


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Market Environment Analysis

Target Company: HUGO BOSS

Target product: Boss Black; Mens wear

Target Market: Germany

Selected competitor: Strellson, Emporio Armani

Prepared By:

Katja Schmitz

Sara Habte Selassie

Imran SarwarKamran Siddiqui

Han Jiashen

Sanuwar Rashid


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Market Environment Analysis

5- Force Model


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5 Force Model


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Product Quality & Cutting Edge


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Price & Cutting Edge

Price & Product Quality


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Price & Product Quality


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Brand Identity & Width of Distribution

C ti l i f k f t


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Comparative analysis of key success factors


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Sanuwar RashidShufei- Wang

ECO-FAIRBusiness for Green Planet

Case study on Fashion Logistics


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Company Description

Integrated retailer in the wholesale segment

Product - Knit Garments

Target group - Men and Women of all ages

including children.Annual Sales target - 125 M. SEK in retail price

& 50 M.SEK in whole sale price

No. Of stores - 6


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Our Business Strategy

Dealing with 100% natural fiber (cotton & wool)

Sustainable eco-textiles are produced on ethical working

conditions

Moderate price level

Wide product range

Strong CSR & Environment conscious

Good relation with supplier

Collaboration with Swedish School of textile


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Basic Supply Chain Model

Out SourcingRomaniaFULL PRICE

ECO-FAIR


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Value Chain of ECO-FAIR

Manufacturer Wholesaler Retailer

Outsource Production Integrated Retailer Own shops

Mono brand shops

Online shops


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Sourcing Matrix

ProductProductRangeRange

%% PurchasingPurchasing SeasonsSeasons/ year/ year

SourcingSourcingstretegystretegy

WhereWherefromfrom

Lead timeLead time

AA BBTotalTotalA+BA+B

ContinuousContinuousproductsproducts 4040

AutomaticAutomaticreplenishmentreplenishment

20%20%

UpUp--front 80%front 80%

11 VMIVMI100%100% OffshoreOffshore100%100% 88--1212weeksweeks 88--1212weeksweeks

1616--2424

weeksweeks

SeasonalSeasonalFashionFashion

6060UpUp--front 20%front 20%

During seasonDuring season

80%80%

44VMI 30%VMI 30%QRQR--70%70%

OffshoreOffshore20%20%

Near byNear by80%80%

33--44weeksweeks

33--44weeksweeks

66--88weeksweeks

11weekweek

11weekweek

22WeeksWeeks


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Critical Success Factor

Forecast error

Sell through %

Lost Sales %

Upfront (44%)

+30% -15%

70%

15%

Near By(56%)

+7% -8%

93%

8%

80% of continuous products are followed by upfront purchasing

As we source our seasonal fashion on the basis of QR from Romania, we

have the forecast error here in satisfactory level.


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Average Mark down: 50%

We offer huge mark down for our seasonal fashion product after the

season expired and moderate mark down for our continuous product.


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Average Service Level: 85%

As our products are subjected for both sexes including children, we have a

optimum SKU range. So 85% service level is relatively good for us.


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Stock Turn: 4.38

We eliminate the backup inventory; our all goods go directly in to the

store. Thats why our stock turn is now in satisfactory level. We are

focused more on logistics activities to get rid of interest paying on money

for backup inventory as well.


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OTB- 56%

Our 60% of total sales are based on seasonal fashion where QR is in action

to ensure the continuous flow of product according to customer demand.

We emphasize more on upfront buying only for continuous product where

high lead time is considered.


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GM- 56.2%

As we offer moderate price level, our mark up is about 150% and our markdown is approximately 50% on an average. We have minimum forecast

error for OTB (56%).

In these circumstances, GM value have been optimized which is now in

satisfactory level.


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GMROI- 5.63

GMROI is the consequence of our high stock turn.


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d i d l i i l d i


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Production and logistics, lead time

knitting

steamingpacking

yarn sourcing

transportation

winding linking Wash & drying

inspection inspection

inspection

distribution center in Sweden

RumaniaChina, Bengal

store

customersonline shop

by airby sea by air (QR)

1 week 3 days1 week

1 day

2-4 days4 weeks

1-2 days

4 days2 days

1 day

3 days1 day

1-2 days

Replenishment


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ep e s e t

productionstore suppliermarketing team

packaging

Design modification

transportation

3-4 weeks2 days

3days 1-2 week

2 days


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Fashion Marketing 12

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