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Chapter 1
FASHION MARKETING CONCEPTS
Objectives?
 Concept of Marketing?
 Utility?
 Marketing functions?
 Concept of market segmentation?
 Niche marketing?
 The marketing mix?
 The channels of distribution used in the
industry?
 Merchandising?
THE CONCEPT OF MARKETING
CONCEPT OF MARKETING…
“Marketing is a human activity, directed at
satisfying needs and wants through exchange
processes”
-Kotler
“Marketing is the management process which
identifies, anticipates and supplies customer
requirements efficiently and profitably”
Marketing is about making it easy for the customer to say “YES”
…which means
Identifying… Use market research and other
methods to understand customers
Anticipating… Analyse data and use marketing
skills to judge market opportunities
Satisfying
customer needs
Do everything possible to provide
develop products that meet
customer needs and provide great
customer service
Profitably Add value to a product to ensure it
is sold profitably
What is Fashion Marketing?
Marketing – the process of developing, promoting, and
distributing products to satisfy customers’ needs and wants.
 Starts at the very beginning of product development and
continues until a consumer purchases the product.
 A series of activities that fashion businesses undertake so that
customers will buy products from them instead of their
competitors.
Marketing Concept
Marketing concept – the idea that businesses must satisfy customers’
needs and wants in order to make a profit.
 Fashion products are presented in a way that makes the
customer want to buy merchandise
 Fashion marketers must offer the right product at the right
time and right price.
 Must develop strategies to tell selected market about these
products.
Customers
• Are generally looking for “value”
– Products which meet their
needs
– At a price they find
acceptable
• Are prepared to be loyal
– Provide positive word-of-
mouth recommendation
– Great source of market
research
• Their tastes change frequently
– Firms need to respond
Business responds to
customer needs and
wants – designs
products accordingly
Business develops
products based on
what it is good at
doing
Two marketing “orientations”
Production
Orientation
Marketing
Orientation
Smart Objectives Of Marketing
SPECIFIC
MEASURABLE
ACHIEVABLE
REALISTIC
TIMED
S
M
A
R
T
Details exactly what needs to be done
Achievement or progress can be measured
Objective is accepted by those responsible for
achieving it
Objective is possible to attain (important for
motivational effect)
Time period for achievement is clearly stated
Two Views of Fashion Marketing
Sample
statements
Assumption
Orientation
Alleged
drawbacks
Design should be based
solely on marketing research
Make what we can sell
Marketing centred
Bland designs
Stifles creativity
Fashion marketing
is the same as
promotion
Sell what we can
make
Design centred
High failure rates
Relies on intuition
Concern for
Fashion Design
Concern for customers and
profit
Fashion Merchandising
 The retailers role in fashion marketing is very important.
Merchandising = the buying and selling of goods.
Fashion Merchandising aims to have:
 The right fashion merchandise, at the right place,
at the right time, in the right quantities at the
right price
 Fashion merchandising – the planning, buying,
and selling of fashion apparel and accessories to
offer the right merchandise blend to meet
customer demand.
Marketing Strategies
 Three strategies that fashion marketers use to increase
their business:
1. increase the number of customers
2. increase the average transaction
3. increase the frequency of repurchase
UTILITY
 Utility refers to the value or benefit a customer
receives from the exchange.
 There are four types of utility: form, place, time
and possession; together, they help to create
customer satisfaction.
Marketing Functions
The process of setting the value or cost at the right level.
The price of a fashion product is dependent on the cost of
production plus a profit.
Customer demand can adjust the price up or down.
Pricing
 The price must cover all the
elements of the key marketing
functions:
1. The costs of gathering information of what the
customer wants
2. The costs of financing the business
3. The costs of design, fabric, and construction to
produce the product
4. The costs of advertising and promotion
5. The costs of moving the product to the
consumer
6. The costs of selling the product to the final
customer
7. Some profit for all of the people involved in each
of these steps.
Marketing-Information Management
 Involves gathering and using information
about what consumers want.
 Considered critical because it determines
what product to produce and sell.
Five main elements are:
1. Input – reports, past records, or surveys
2. Storage – saving information
3. Analysis – study information gathered so a decision can be
made
4. Output – reports of the analysis and conclusions
5. Decision making – the final result of the first four elements.
 Helps the customer understand the benefits of quality.
Distribution
Involves moving the product each step from the
design idea to the consumer.
Number of businesses involved in the actual planning
and movement of the product
Actual transportation of the product – by truck or by air.
Financing
 Involves planning ways to cover the costs of successfully
operating a business.
 Includes factors such as, production costs of the product,
product pricing for the customer, and everyday expenses
such as rent, supplies, and payroll.
Product/ Service
Management Designing, producing, maintaining, improving, and/or acquiring
products or services to meet customer needs.
Promotion
 Communicating with the customers about
the product to achieve the desired result –
customer demand for and purchase of the
product.
 Includes advertising, personal selling,
publicity, and public relations.
 Fashion marketers can create an image of
who wears a brand of clothing through
promotion.
MARKET SEGMENTATION
What is a target market?
Target market – the specific group of people that a business is trying to reach.
 Identified through research and by the shared characteristics of the
specific group of people.
Marketing Segmentation
 Marketing
Segmentation is:
* A process of dividing
the market into distinct
groups of customers
according to their
needs, characteristics,
or behaviors
* A compromise
between mass
marketing and target
marketing
Market Segmentation
 Market segmentation – a way of analyzing a market by
categorizing specific characteristics.
 Marketers divide the people into groups of possible consumers
based on various shared characteristics.
 Fashion marketers help to concentrate on meeting the needs
of certain types of buyers rather than the needs of all
shoppers.
Why segment the market?
Better matching of customer needs
Enhanced profits for business
Better opportunities for growth
Retain more customers
Target marketing communications
Gain share of the market segment
Levels of Market Segmentation
 Mass Marketing
 Segmenting Markets
 Niche Marketing
 Micromarketing
No Segmentation Complete Segmentation
Mass Marketing Segmenting Markets Niche Marketing Micromarketing
Mass Marketing
 Traditional marketing
strategy that uses no
segmentation strategies,
and uses the same
product, promotion,
and distribution to reach
a wide audience (whole
market)
 Promotes the concept
“One Size Fits All”
Mass Marketing – Key Features
• Customers form the majority in the market
• Customer needs and wants are more “general” &
less “specific”
• Associated with higher production output and
capacity
• Success usually associated with low-cost
operation or market leading brands.
Problems with Mass Marketing
 Low production cost
->lower prices ->
higher margins
 Nevertheless, it is hard
to appeal to all diverse
groups, more
competitors, and
proliferation of mass
media has made it
hard to further
practice “one size fits
all” approach
Segmenting Markets
 Companies that are segmenting markets realize the diversity
of the needs, perceptions, and buyer behavior between the
customers
 So that they match the needs of the customer’s more
efficiently, improve and promote products for a distinct
segment of the market
 A good segmenting approach will eliminate the competitors
Niche Marketing
 Niche Marketers focus
on the subgroups
within the segments of
the market, seeking to
find customers with a
distinctive set of traits
looking for the same
combination of
benefits.
Niche Marketing – Advantages
• Less competition - a “big fish in a small pond”
• Clear focus - target particular customers
• Builds up specialist skill and knowledge
• Can often charge a higher price
• Profit margins often higher
• Customers tend to be more loyal
Micromarketing
 A form of target marketing in which
companies fit their marketing mixes to
specific needs and wants of narrowly
defined geographic, demographic,
psychographic or behavioral segments.
Marketing Mix – 4 P’s
marketing mix – consists of our basic marketing
strategies known as the four P’s of marketing.
These are the basic elements to satisfy a
customers needs and wants.
Product
 What a company is offering for sale to
customers to satisfy their needs and wants.
 includes goods and/or services
 strategies that include producing, packaging,
and naming a product.
 Ex. jeans, sweaters, jewelry, hairstyling
Place
 the way products are distributed and their systems of
delivery
 getting the product to consumers and the steps of
distribution
 how and where a product will be distributed
 Where the customer will purchase the item
 when the product will be distributed
Price
 the amount of money consumers will pay for a product
 have to determine how much consumers are willing to pay
 depends on the price of producing the item, the markup,
and the customer demand.
 Goal: Business must make a profit.
Promotion
 Any form of communication that a business or organization
uses to inform, persuade, or remind people to buy it’s
product
 Inform customer about the features of the product and
persuade to make a purchase
Types of Promotion
1. Sales promotion – special contests, displayed merchandise in
windows, special coupons
 to increase customer traffic in a store
 contests, displays, and coupons – do not require
any direct contact with the customer
2. public relations– promote the image and communications a
company has with employees, customers, and the public.
3. publicity – usually unpaid mention of a business, its employees,
or its merchandise in the media.
4. advertising – paid message that a business sends to the public
about the product.
5. personal selling – requires personal communication and
contact with the customer
DISTRIBUTION CHANNELS
IN FASHION INDUSTRY
CHANNELS OF DISTRIBUTION USED IN
FASHION INDUSTRY
 Distribution is concerned with getting a product or service to the right
people, at the right time, taking into consideration the need for profit and
efficiency.
 Otherwise described as “the action of sharing something out among a
number of recipients.”
  When a customer purchases a product or service, they may have
brought it directly from the business or through a retailer or wholesaler. 
 These ways of purchasing are known as distribution channels.
CHANNELS OF DISTRIBUTION
1. Producer-Customer: Shortest and simplest of the 4 main channels (making it economical), no
middlemen involved, producers directly sell their products to consumers. The producer or entrepreneur
performs all the marketing activities himself and has full control over distribution. A producer may sell
directly to consumers through door-to-door salesmen, direct mail or through his own retail stores. E-
tailers like ASOS adopt this channel to cut distribution costs and to sell industrial products of high value.
Bigger firms tend to have more middlemen involved. Small producers and producers of perishable
goods also sell directly to local consumers.
2. Producer-Retailer-Customer: Still reasonably straight forward, however there is one middleman
involved – the retailer. The producer sells their products to big retailers/those who bulk buy, they then
sell the products onto the consumers. This channel relieves the manufacturer from burden of selling
the goods himself and at the same time gives him control over the process of distribution. This is
often suited for distribution of consumer durables (products which do not need to be bought
frequently as they last for a long period of time) and products of high value. An example of this is
Walkers who’s products are sold at retailers like Tesco and BP garages.
3. Producer-Wholesaler-Retailer-Customer: The third and most common channel of
distribution. This tradition method involves two middlemen – wholesalers and retailers. The
producer sells their products to wholesalers, who in turn sell it to retailers. The retailers then
sell the product to the consumers. Producers who have limited sources of finance and
narrow product lines tend to use this channel of distribution. This channel is also useful in
that it offers promotional support of wholesalers. An example of this is Costco, they sell a
variety of TV’s including brands like Sharp.
4. Producer-Agent-Wholesaler-Retailer-Customer: Finally, the fourth channel of distribution.
This is the longest channel due to the three middlemen who are involved. This is used when
the producer wants to be fully relieved of the problem of distribution and thus hands over
his entire output to the selling agents. The agents distribute the product among a few
wholesalers. Each wholesaler distributes the product among a number of retailers who
finally sell it to the consumers. This channel is suitable for wider distribution of various
industrial products. This method is popularly used in textiles and machinery.
CHANNELS OF DISTRIBUTION
CHANNELS OF DISTRIBUTION
 Businesses in the clothing sector tend to use the second channel of
distribution.
 Designers have a vision of what they would like the product to look
like, a plan is drawn up before the process begins.
 The process then starts by collecting the materials needed to
produce the clothes.
 For example cotton is purchased from the cotton farmers, it is then
shipped off to the factories where weavers and designers will
create the fabrics, the fabric factories will then sell to
manufacturing companies who will create something the retailers
can sell on to make a profit from the whole process.
 When they have been created they will choose either to sell them
onto a wholesaler or to sell it in their particular stores.
 International brands extend their distribution channels as they
have to distribute their goods further around the globe.
CHANNELS OF DISTRIBUTION
 If the retailer manufactures their own brand clothing i.e. Primark,
the producers send the finished garments directly to their
warehouses for distribution into their stores.
 If it is a clothing retailer that buys garments from fashion houses or
via other intermediaries then the finished items would go to their
wholesalers and then potentially go to retailers depending on what
business it is and then finally, they would be bought by the
consumers.
 For example, Topshop and New Look have other London brands in
their stores.
Fashion marketing concepts

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Fashion marketing concepts

  • 2. Objectives?  Concept of Marketing?  Utility?  Marketing functions?  Concept of market segmentation?  Niche marketing?  The marketing mix?  The channels of distribution used in the industry?  Merchandising?
  • 3. THE CONCEPT OF MARKETING
  • 4.
  • 5. CONCEPT OF MARKETING… “Marketing is a human activity, directed at satisfying needs and wants through exchange processes” -Kotler “Marketing is the management process which identifies, anticipates and supplies customer requirements efficiently and profitably” Marketing is about making it easy for the customer to say “YES”
  • 6. …which means Identifying… Use market research and other methods to understand customers Anticipating… Analyse data and use marketing skills to judge market opportunities Satisfying customer needs Do everything possible to provide develop products that meet customer needs and provide great customer service Profitably Add value to a product to ensure it is sold profitably
  • 7. What is Fashion Marketing? Marketing – the process of developing, promoting, and distributing products to satisfy customers’ needs and wants.  Starts at the very beginning of product development and continues until a consumer purchases the product.  A series of activities that fashion businesses undertake so that customers will buy products from them instead of their competitors.
  • 8. Marketing Concept Marketing concept – the idea that businesses must satisfy customers’ needs and wants in order to make a profit.  Fashion products are presented in a way that makes the customer want to buy merchandise  Fashion marketers must offer the right product at the right time and right price.  Must develop strategies to tell selected market about these products.
  • 9. Customers • Are generally looking for “value” – Products which meet their needs – At a price they find acceptable • Are prepared to be loyal – Provide positive word-of- mouth recommendation – Great source of market research • Their tastes change frequently – Firms need to respond
  • 10. Business responds to customer needs and wants – designs products accordingly Business develops products based on what it is good at doing Two marketing “orientations” Production Orientation Marketing Orientation
  • 11. Smart Objectives Of Marketing SPECIFIC MEASURABLE ACHIEVABLE REALISTIC TIMED S M A R T Details exactly what needs to be done Achievement or progress can be measured Objective is accepted by those responsible for achieving it Objective is possible to attain (important for motivational effect) Time period for achievement is clearly stated
  • 12. Two Views of Fashion Marketing Sample statements Assumption Orientation Alleged drawbacks Design should be based solely on marketing research Make what we can sell Marketing centred Bland designs Stifles creativity Fashion marketing is the same as promotion Sell what we can make Design centred High failure rates Relies on intuition Concern for Fashion Design Concern for customers and profit
  • 13. Fashion Merchandising  The retailers role in fashion marketing is very important. Merchandising = the buying and selling of goods. Fashion Merchandising aims to have:  The right fashion merchandise, at the right place, at the right time, in the right quantities at the right price  Fashion merchandising – the planning, buying, and selling of fashion apparel and accessories to offer the right merchandise blend to meet customer demand.
  • 14. Marketing Strategies  Three strategies that fashion marketers use to increase their business: 1. increase the number of customers 2. increase the average transaction 3. increase the frequency of repurchase
  • 15. UTILITY  Utility refers to the value or benefit a customer receives from the exchange.  There are four types of utility: form, place, time and possession; together, they help to create customer satisfaction.
  • 16.
  • 18. The process of setting the value or cost at the right level. The price of a fashion product is dependent on the cost of production plus a profit. Customer demand can adjust the price up or down.
  • 19. Pricing  The price must cover all the elements of the key marketing functions: 1. The costs of gathering information of what the customer wants 2. The costs of financing the business 3. The costs of design, fabric, and construction to produce the product 4. The costs of advertising and promotion 5. The costs of moving the product to the consumer 6. The costs of selling the product to the final customer 7. Some profit for all of the people involved in each of these steps.
  • 20.
  • 21. Marketing-Information Management  Involves gathering and using information about what consumers want.  Considered critical because it determines what product to produce and sell. Five main elements are: 1. Input – reports, past records, or surveys 2. Storage – saving information 3. Analysis – study information gathered so a decision can be made 4. Output – reports of the analysis and conclusions 5. Decision making – the final result of the first four elements.
  • 22.  Helps the customer understand the benefits of quality.
  • 23. Distribution Involves moving the product each step from the design idea to the consumer. Number of businesses involved in the actual planning and movement of the product Actual transportation of the product – by truck or by air.
  • 24.
  • 25. Financing  Involves planning ways to cover the costs of successfully operating a business.  Includes factors such as, production costs of the product, product pricing for the customer, and everyday expenses such as rent, supplies, and payroll.
  • 26. Product/ Service Management Designing, producing, maintaining, improving, and/or acquiring products or services to meet customer needs.
  • 27.
  • 28. Promotion  Communicating with the customers about the product to achieve the desired result – customer demand for and purchase of the product.  Includes advertising, personal selling, publicity, and public relations.  Fashion marketers can create an image of who wears a brand of clothing through promotion.
  • 29.
  • 31. What is a target market? Target market – the specific group of people that a business is trying to reach.  Identified through research and by the shared characteristics of the specific group of people.
  • 32. Marketing Segmentation  Marketing Segmentation is: * A process of dividing the market into distinct groups of customers according to their needs, characteristics, or behaviors * A compromise between mass marketing and target marketing
  • 33. Market Segmentation  Market segmentation – a way of analyzing a market by categorizing specific characteristics.  Marketers divide the people into groups of possible consumers based on various shared characteristics.  Fashion marketers help to concentrate on meeting the needs of certain types of buyers rather than the needs of all shoppers.
  • 34. Why segment the market? Better matching of customer needs Enhanced profits for business Better opportunities for growth Retain more customers Target marketing communications Gain share of the market segment
  • 35.
  • 36. Levels of Market Segmentation  Mass Marketing  Segmenting Markets  Niche Marketing  Micromarketing No Segmentation Complete Segmentation Mass Marketing Segmenting Markets Niche Marketing Micromarketing
  • 37. Mass Marketing  Traditional marketing strategy that uses no segmentation strategies, and uses the same product, promotion, and distribution to reach a wide audience (whole market)  Promotes the concept “One Size Fits All”
  • 38. Mass Marketing – Key Features • Customers form the majority in the market • Customer needs and wants are more “general” & less “specific” • Associated with higher production output and capacity • Success usually associated with low-cost operation or market leading brands.
  • 39. Problems with Mass Marketing  Low production cost ->lower prices -> higher margins  Nevertheless, it is hard to appeal to all diverse groups, more competitors, and proliferation of mass media has made it hard to further practice “one size fits all” approach
  • 40. Segmenting Markets  Companies that are segmenting markets realize the diversity of the needs, perceptions, and buyer behavior between the customers  So that they match the needs of the customer’s more efficiently, improve and promote products for a distinct segment of the market  A good segmenting approach will eliminate the competitors
  • 41. Niche Marketing  Niche Marketers focus on the subgroups within the segments of the market, seeking to find customers with a distinctive set of traits looking for the same combination of benefits.
  • 42. Niche Marketing – Advantages • Less competition - a “big fish in a small pond” • Clear focus - target particular customers • Builds up specialist skill and knowledge • Can often charge a higher price • Profit margins often higher • Customers tend to be more loyal
  • 43. Micromarketing  A form of target marketing in which companies fit their marketing mixes to specific needs and wants of narrowly defined geographic, demographic, psychographic or behavioral segments.
  • 44.
  • 45.
  • 46. Marketing Mix – 4 P’s marketing mix – consists of our basic marketing strategies known as the four P’s of marketing. These are the basic elements to satisfy a customers needs and wants.
  • 47.
  • 48. Product  What a company is offering for sale to customers to satisfy their needs and wants.  includes goods and/or services  strategies that include producing, packaging, and naming a product.  Ex. jeans, sweaters, jewelry, hairstyling
  • 49. Place  the way products are distributed and their systems of delivery  getting the product to consumers and the steps of distribution  how and where a product will be distributed  Where the customer will purchase the item  when the product will be distributed
  • 50. Price  the amount of money consumers will pay for a product  have to determine how much consumers are willing to pay  depends on the price of producing the item, the markup, and the customer demand.  Goal: Business must make a profit.
  • 51. Promotion  Any form of communication that a business or organization uses to inform, persuade, or remind people to buy it’s product  Inform customer about the features of the product and persuade to make a purchase
  • 52.
  • 53. Types of Promotion 1. Sales promotion – special contests, displayed merchandise in windows, special coupons  to increase customer traffic in a store  contests, displays, and coupons – do not require any direct contact with the customer 2. public relations– promote the image and communications a company has with employees, customers, and the public. 3. publicity – usually unpaid mention of a business, its employees, or its merchandise in the media. 4. advertising – paid message that a business sends to the public about the product. 5. personal selling – requires personal communication and contact with the customer
  • 55. CHANNELS OF DISTRIBUTION USED IN FASHION INDUSTRY  Distribution is concerned with getting a product or service to the right people, at the right time, taking into consideration the need for profit and efficiency.  Otherwise described as “the action of sharing something out among a number of recipients.”   When a customer purchases a product or service, they may have brought it directly from the business or through a retailer or wholesaler.   These ways of purchasing are known as distribution channels.
  • 56.
  • 57.
  • 58. CHANNELS OF DISTRIBUTION 1. Producer-Customer: Shortest and simplest of the 4 main channels (making it economical), no middlemen involved, producers directly sell their products to consumers. The producer or entrepreneur performs all the marketing activities himself and has full control over distribution. A producer may sell directly to consumers through door-to-door salesmen, direct mail or through his own retail stores. E- tailers like ASOS adopt this channel to cut distribution costs and to sell industrial products of high value. Bigger firms tend to have more middlemen involved. Small producers and producers of perishable goods also sell directly to local consumers. 2. Producer-Retailer-Customer: Still reasonably straight forward, however there is one middleman involved – the retailer. The producer sells their products to big retailers/those who bulk buy, they then sell the products onto the consumers. This channel relieves the manufacturer from burden of selling the goods himself and at the same time gives him control over the process of distribution. This is often suited for distribution of consumer durables (products which do not need to be bought frequently as they last for a long period of time) and products of high value. An example of this is Walkers who’s products are sold at retailers like Tesco and BP garages.
  • 59. 3. Producer-Wholesaler-Retailer-Customer: The third and most common channel of distribution. This tradition method involves two middlemen – wholesalers and retailers. The producer sells their products to wholesalers, who in turn sell it to retailers. The retailers then sell the product to the consumers. Producers who have limited sources of finance and narrow product lines tend to use this channel of distribution. This channel is also useful in that it offers promotional support of wholesalers. An example of this is Costco, they sell a variety of TV’s including brands like Sharp. 4. Producer-Agent-Wholesaler-Retailer-Customer: Finally, the fourth channel of distribution. This is the longest channel due to the three middlemen who are involved. This is used when the producer wants to be fully relieved of the problem of distribution and thus hands over his entire output to the selling agents. The agents distribute the product among a few wholesalers. Each wholesaler distributes the product among a number of retailers who finally sell it to the consumers. This channel is suitable for wider distribution of various industrial products. This method is popularly used in textiles and machinery. CHANNELS OF DISTRIBUTION
  • 60. CHANNELS OF DISTRIBUTION  Businesses in the clothing sector tend to use the second channel of distribution.  Designers have a vision of what they would like the product to look like, a plan is drawn up before the process begins.  The process then starts by collecting the materials needed to produce the clothes.  For example cotton is purchased from the cotton farmers, it is then shipped off to the factories where weavers and designers will create the fabrics, the fabric factories will then sell to manufacturing companies who will create something the retailers can sell on to make a profit from the whole process.  When they have been created they will choose either to sell them onto a wholesaler or to sell it in their particular stores.  International brands extend their distribution channels as they have to distribute their goods further around the globe.
  • 61. CHANNELS OF DISTRIBUTION  If the retailer manufactures their own brand clothing i.e. Primark, the producers send the finished garments directly to their warehouses for distribution into their stores.  If it is a clothing retailer that buys garments from fashion houses or via other intermediaries then the finished items would go to their wholesalers and then potentially go to retailers depending on what business it is and then finally, they would be bought by the consumers.  For example, Topshop and New Look have other London brands in their stores.