Chapter 2: PowerPoint
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Transcript Chapter 2: PowerPoint
The entire process of research, planning,
promoting, and distributing the raw materials,
apparel, and accessories
Marketing is the power behind the product
development, production, distribution, retailing,
and promotion of
Fibers
Fabrics
Leathers
Furs
Trimmings
Apparel and Accessories
Begins and ends with the customer
With increased income, consumers have
better and cheaper products
constant availability
Convenience
pleasant shopping experiences
Research what the customer wants to buy, then develop
the product
Marketing firms analyze lifestyles and buying behaviors
Consumer Demand is the effect the consumer has on the
market place
Created by increased spending on advertising and other marketing
activities
Ultimate goal of marketing is to establish the identity of a
brand or store so customers will seek it out (destination
brand)
Also known as market segments
Age
Lifestyle
Living area
Educational background
Ethnic background
Traditionally, society was divided by income
classes
Demographics are statistical studies of
population characteristics based on
Birthrate, age distribution, and income
Pre 1945
Most neglected by designers, retailers and the
media
Second-fastest growing segment
Tend to feel younger than actual age
Have money to spend and enjoy new products
Tend to dress up more often
Prefers shopping for apparel and accessories by
catalog, Internet, or department stores
By 2010, 1/3 of the population will be over age 50
Future marketers will need to cater to this segment.
1946-1964
Most influential group since WWII
Largest segment and primary demographic
spending group
The women spend more on clothing than any
other group
Often ignored by the industry
Advertisers have stereotypical ideas about the
style of those over 40 and are afraid to alienate
the younger crowd with multigenerational ads
Wants same style as young people but with the
appropriate length and fit
1965-1979
Also
known as the Baby Busters
Now career- and family-oriented
Spending reflects orientation
Housing, home goods, transportation, and
education
Post 1980
Also known as the Baby Boomlet
Children of baby boomers
Racially diverse
Global, sports, computer, and entertainment orientation
Ads, TV, movies, Internet, and magazines influence buying
decisions
Fashion oriented, passion for clothes
Cannot afford to spend as much as the baby boomers
Prefer specialty apparel chains and boutiques
By 2010, the nation will be polarized
Postwar boomers over 50 and millennial generation under 30
Companies must respond with multigenerational ad campaigns
The
Immigration and Naturalization Service
projects that legal immigration exceeds
700,000 per year
Black, Hispanic, Asian, and Native American
segments will grow much faster than the white
majority
Look
for different things in purchases
Cultural perceptions regarding styling, color,
pattern, fabrics, fit, quality, and value
Psychographics
is the use of psychological,
sociological, and anthropological factors to
construct market segments
Manufacturers
and retailers turn to
psychographics to further segment and
analyze consumer groups and their fashion
preferences
More
than 75% of females age 20-60 work
22 million women live alone or are single
head of households
Shop less often, favor convenient shopping
Use catalogs, electronic stores, and
superstores
Majority
of population is considered large
size
68% of Americans are overweight
This affects
Manufacturers
Must change sizing and construction of garments
Retail stores
Devote more square footage of the store to large-size
apparel
Community
Connection to the community; cities are gaining
population
Renewed interest in family life
More money spent on the home and family activities
rather than fashion
Cocooning
People stay in due to fear of terrorism, war, and crime,
shopping less or by catalog or Internet
Comfort
Staying relaxed and casual dressing at home/work or
activewear
Increase at-home use of computers
Working at home
Expected to increase
Value of time
Online shopping
Willing to trade money for free time leads to the appeal of shopping at
home/Internet
Stress
Busy schedules = other ways to shop
Target
Market is the group of consumers you
want to reach
Market niche
small population group of unserved or
underserved people who have a need for a
product
Gathered
to improve offerings
Collect and analyze data
Unknowingly we give merchants data
Shopping habits
Size
Color preferences
Lifestyle
Age
Income
And address
Other
information is formed into categorized
into databases (consumer profiles)
Merchants
translate sales data and
purchasing patterns into geographic maps
Visual representation of their market
Helps
management to understand traffic flow
and sales potential
Consumer profiles are used to
Learn about customers
Find new customers
Establish target markets
Find/create new products
New ways to advertise
Keep focused on their customers
Personal
income
Gross amount of income from all sources, such as
wages and salaries, interest, and dividends
Disposable
income
Personal income – taxes. This amount determines
a person’s purchasing power
Discretionary
income
Income left over after food, lodging, and other
needs have been paid for
Money available to spend or save at will
Purchasing
power
Is the amount of goods and services that income
can by
Related to the economic situation
Includes
Credit
Corporate Ownership
Labor Costs
Inflation
Recession
International Currency
More retailers are offering
their own credit cards for
their databases
Too much easy credit
available
Increase in personal
bankruptcy
Corporate debt has lead to
manufacturer and retailer
bankruptcies
Credit
Most companies have
grown into corporations or
purchased by other
corporations
Mergers and acquisitions
result in giant “corporate
groups”’
EX: Liz Claiborne
Corporations sell public
stock to gain access to
funding
Corporate Ownership
As people receive
higher salaries and
live better the cost of
making products
increases
Rising domestic labor
costs, we now must
search for cheaper
sources of labor
Asia, Mexico, the
Caribbean Basin, etc.
Labor Costs
The US experienced
inflation during the
1980s
People earn more
money each year
Higher prices
Higher taxes
Result in little or no
increase in purchasing
power
Inflation
2002-2003
A recession is a cycle
beginning with a
decrease in spending
Forced to cut back
production
Results in
unemployment
Drop in gross national
product (GNP)
Strong dollar
Americans can afford to
purchase foreign-made
merchandise cheaper
The Euro
In 1999, the euro
became the official
currency of 11 of the 15
members of the
European Union (EU)
Furthers the cycle
Recession
International Currency
Balance of Trade
Difference in value between a country’s exports and
imports
Tariffs
Customs charges imposed on imports in an attempt to
protect domestic industry
Quotas
Means of regulating imports and exports
Imports
Goods that are brought in from a foreign country to sell
here
Exports
NAFTA (North American Free Trade Agreement
In 1994, NAFTA created a free market (devoid of import
duties)
560 million people in Canada, the US, and Mexico
Promotes economic growth through the expansion of trade
and investment opportunities within the free trade area
Central American Free Trade Agreement (CAFTA) has been
enacted
The US also has negotiated trade agreements with
Australia, Chile, Israel, Jordan, Morocco, Singapore, and SubSaharan Africa
Working on a Free Trade Agreement of the Americas (FTAA)
Encompasses 34 Western Hemisphere nations as well as several
other countries
Business
communication
Computers
Intranet: E-Mail on a
closed Intranet network
system to share
information internally
among departments
Internet
Video
(videoconferencing)
Fax
Business Communication
Television
Telephone
Web sites
E-Commerce
Research
Personal Communication
Developed based on a companies needs
Product Development
Designers rely on consumer statistics and sales data to
track trends
Product Data Management (PDA) and Product Lifecycle
Management (PLM) coordinate each step of the design
process
In production, goods are given Universal Product Codes
(UPC) that identify style, color, size, price, and
fabrication
In
attempt to reduce waiting time in ordering
and distribution, textile producers, and
apparel manufacturers
Automatic Replenishment
Allows manufacturers to automatically ship goods
to stores when inventory levels are low
Value
Chain Initiative (VCI)
International standards for sharing information
among retailers, manufacturers, and suppliers
Covers all aspects of the supply chain
The
flow of product from concept to
consumer
Traditionally companies are separate and
independent
Trends
Traditional Marketing Chain
Vertical integration
Full package manufacturing
Manufacturer-retailer appliances
Fibers
•Product Development> Production> Sales & Distribution
Yarns
•Product Development> Production> Sales & Distribution
Fabrics
•Product Development>Weaving & Knitting>Sales & Distribution
Apparel & Accessories
•Product Development>Production> Sales & Distribution
Retailers
•Merchandising and Sales
Consumers
Many
companies are combining fabric
production and apparel manufacturing
A
Manufacturing and retailing
vertical company produces fabrics,
manufactures clothing, and sells the finished
product
Cutting out distribution costs increases
profits and keeps prices down to the
consumer
Full
Package Manufacturing
Manufacturer-Retailer Alliances
Forming informal partnerships to integrate the
marketing chain
Work on every step of the process together
Must have complete trust in each other