Fashion Marketing-Pricing

Price Value to Price Ratio: the relationship between the perceived quality and the expected satisfaction with the garment and the price Setting the Price: Manufacturers to wholesalers to retailers Wholesale: manufacturer’s price to the retailer Retail: price final consumer pays for a garment

Pricing Terms and Strategies Markdown: price reduction taken from the original retail price to speed up sales Markup: percentage added to the cost of the wholesale price to create a profit for the retailer and cover operating expenses Operating Expenses: salaries, advertising, building maintenance, cost to cover damage & stolen merchandise, cost of security

Pricing Terms and Strategies Margin/Gross Profit: difference between the selling price and the cost of the fashion item Net Profit: balance left after operating expenses are paid Formula: Selling Price-cost of items-operating expenses= net profit

Wholesale Price Retail Price Operating Expenses Margin, Gross Profit, and Markup Net Profit

Pricing Terms and Strategies Markup: the amount added to the cost to cover the operating expenses and the desired profit Retail $-Cost $=Markup $ Markup %=Retail $-Cost $ Retail $

Pricing Policies Competition: other businesses selling similar items Market Share: percentage of the total market represented by customers in a target market

Pricing Categories Price Range: used to identify the equality of the fashions Discount: low end price line represented by high-volume sales items and close-outs (Ross) Budget: below average prices (Wal-Mart) Value-Priced: good quality, not high fashion Moderate: middle-priced items Better: middle to high prices, sold in specialty shops or department stores

Pricing Categories Bridge: low-price end of a designer line of fashions (young designer, up & coming or special line designed for lower price like Polo) Designer: high-price end and carries a brand name with an image that allows the high price (established-Chanel, Gucci, Ralph Lauren) Couture: original, luxury items that are one of a kind and made of the top quality materials, hand-made (Chanel Couture)