fashion marketing 12
TRANSCRIPT
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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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