FM – 4.00 Understand the marketing of fashion 4.01 Understand the fashion retail elements of marketing

Free-market system An economic system in which individuals, NOT THE GOVERNMENT, make important economic decisions. Consumer choices determine which products are offered for sale. Sellers may charge any price they desire.

Free-market System People freely choose how to spend their money – Those choices determine which products are offered in the market along with price and quality – There is little government involvement – A business with goods or services to sell can charge any price and sell to anyone willing to pay – Consumers are free to buy whatever they want and can afford

Profit The money left over after costs, expenses, and taxes have been deducted from sales. PROFIT IS THE DRIVING FORCE BEHIND THE FREE MARKET SYSTEM!!! Determines whether or not a business will succeed

We Love Us Some: COMPETITION A rivalry between two or more businesses to gain as much of the total market sales or customer acceptance as possible. Helps maintain reasonable prices Provides consumers with new and improved products

Competitive Market Structures Competition is good for the economy, there are laws that prevent a single enterprise from becoming too BIG P Pure CompetitionMonopolyOligopoly Ideal condition – no single company is large enough to influence prices. Example: T-shirts Only one company offers a given good or service for sale. Example: Electric Company Cross between Pure Competition and Monopoly. Only a few large rival firms offer the same type of product. Example: Credit Cards

Forms of business organizations Sole Proprietorship – owned by just ONE person. Easiest form to start or to dissolve. The owner has freedom and flexibility and there are few government regulations. Major risk is liability or responsibility for debts and obligations of the business

Forms cont’d Partnership – unincorporated businesses co- owned and operated by two or more persons. They are easy to form although an agreement should be drafted and signed by the partners. Partnerships have longer life spans but there is potential for conflict

Forms cont’d Corporations – separate legal entities Empowered by the state to carry on a specific line of business Owned by stockholders (aka shareholders) Can raise money by selling shares of stock Are complex and expensive to form and dissolve Types – public, private, S, and nonprofit

Satisfying today’s consumer

Components of a Marketing Mix

Relationship between marketing and merchandising MarketingMerchandising 1.works with the brand on a community/advertising level 1.works with the product on a retail level 2. how a company advertises itself/raises awareness of its image 2. how a product is displayed in a retail market 3. is creating a feeling around a company & a brand that makes a consumer want to buy products 3. is creating promotions, displays, and maximizing revenue per square foot of floor space 4. the management process through which goods and services move from concept to the customer 4. the activity of promoting the sale of goods at retail markets 5. begins the experience and continues awareness of the company after leaving the retail market 5. guides consumer to the product and it’s unique qualities. Then completes the consumer’s experience

Demographics & Psychographics importance in the fashion industry Demographic Considerations - By analyzing population shifts, market size, family status, nationalities, age groups, and so forth, it is possible to gain a significant insight into potential markets. Social classes, and the ways each level views its income, goals, education, and attitudes, and the family life cycle and how the needs of people at each stage affect their purchasing potential are two other areas that merit attention Psychographic Considerations - By studying people’s lifestyles and attitudes, fashion retailers are able to take even closer looks at their targeted markets. The self-concept theory focuses on how the consumers perceive themselves. Fashion retailers can gain another perspective of their customers by applying this theory to how they stock their inventories