Part 1: Basic Fashion and Business Concepts

Chapter 5

Satisfying the Fashion Market

Objectives

Distinguish between market growth, share, and segmentation

Describe the importance and methods of market research

Summarize the concept of product development Explain the latest fashion industry information

technology Explain the efforts that are being made for overall

industry excellence Describe how the industry is improving its image

Market Growth and Share

Growth is the increase in size of the entire market

Share is the part of the total market controlled by a firm

Competition results from firms trying to increase their market share

Market Segmentation

Dividing the total market into smaller groups that contain similar characteristics, since no business can serve ALL customers

Target marketing defines this niche

Demographics

Statistics of human populations by: Age Gender Race Education Religion Income Occupation Geographic location

Psychographics Statistics that try to

explain consumer behavior through: Lifestyle Values Attitudes Self-concept Culture Social groups Personalities

Market Research

Gathering and analyzing information relating to a particular market

Results may indicate: Shopping behavior Product preferences Price ranges Types of advertising

preferred Needs and wants

Market Research Methods Surveys Consumer panels

keeping diaries Slower; broad trends

Focus groups Particular subject or

product line Computer databases Electronic feedback tests Virtual reality

Product Development

Process of taking a product from the conceptual idea to the market

Continually changing, striving to meet the needs of the consumer

Information Technology

Providing information through computer technology

Collection, classification, storage, retrieval, and dissemination of data

Inventory control Shipping/receiving Customer tracking

Technology Methods

Bar codes Universal Product

Code (UPC) New UPC-A

includes numbers with the lines

Optical scanners Feed bar code data

to computers

Radio Frequency Identification (RFID) Uses radio waves to send data

from “smart” labels Magnetic stripes Voice recognition Machine vision

Identifies products Smart cards

Microprocessor within plastic

Technology Disadvantages

Financial cost Computer hardware Software Bar code printers and scanners RFID tags and readers

Power failures Vast amounts of data Consumer privacy concerns

Open Systems Integration of

computer systems with each other

Industry data exchange standards

Multivendor networks Outsourcing hires

“third party providers” to manage computer network

Electronic Data Interchange (EDI)

The exchange of information and transactions through computers using a common digital language

Data available in “real time” Printouts can be generated Web based

Cooperation for Industry Excellence

Competition from world markets has increased over last 50 years

Industry segments now cooperating to regain market

The industry is striving to provide quality, value, and delivery in a timely, efficient manner

Quick Response

Streamlines supply chain by transmitting product code data using EDI technology throughout the entire textile-apparel-retail pipeline.

Benefits: Focus on consumer needs Communication accuracy Higher quality standards Better buying, production,

and distribution Lower inventories Easier reordering Shorter lead/response time Improved forecasting Fewer markdowns Higher profits

Corporations and Partnerships

The Textile/Clothing Technology Corporation, [TC]2, is a not-for-profit industry-wide organization Researches high-tech

innovations in apparel production equipment and processes

Helps the industry implement new technologies and business processes

Improving Its Image

Continuing efforts to educate the public about the industry Quality products Higher standards of

ethics and social responsibility

Education, family care, health issues, and safety of employees

Environmental and community initiatives

Do You Know . . .

What demographic and psychographic data would define YOU?

Why is product development so important to the fashion industry?

Why is synergy so important to the industry?