Part 1: Basic Fashion and Business Concepts Chapter 5 Satisfying the Fashion Market

Objectives Distinguish between market growth, share, and segmentation Describe the importance and methods of market research Summarize the concept of product development Explain the latest fashion industry information technology Explain the efforts that are being made for overall industry excellence Describe how the industry is improving its image

Market Growth and Share Growth is the increase in size of the entire market Share is the part of the total market controlled by a firm Competition results from firms trying to increase their market share

Market Segmentation Dividing the total market into smaller groups that contain similar characteristics, since no business can serve ALL customers Target marketing defines this niche

Demographics Statistics of human populations by: Age Gender Race Education Religion Income Occupation Geographic location

Psychographics Statistics that try to explain consumer behavior through: Lifestyle Values Attitudes Self-concept Culture Social groups Personalities

Market Research Gathering and analyzing information relating to a particular market Results may indicate: Shopping behavior Product preferences Price ranges Types of advertising preferred Needs and wants

Market Research Methods Surveys Consumer panels keeping diaries Slower; broad trends Focus groups Particular subject or product line Computer databases Electronic feedback tests Virtual reality

Product Development Process of taking a product from the conceptual idea to the market Continually changing, striving to meet the needs of the consumer

Information Technology Providing information through computer technology Collection, classification, storage, retrieval, and dissemination of data Inventory control Shipping/receiving Customer tracking

Technology Methods Bar codes Radio Frequency Identification (RFID) Universal Product Code (UPC) New UPC-A includes numbers with the lines Optical scanners Feed bar code data to computers Radio Frequency Identification (RFID) Uses radio waves to send data from “smart” labels Magnetic stripes Voice recognition Machine vision Identifies products Smart cards Microprocessor within plastic

Technology Disadvantages Financial cost Computer hardware Software Bar code printers and scanners RFID tags and readers Power failures Vast amounts of data Consumer privacy concerns

Open Systems Integration of computer systems with each other Industry data exchange standards Multivendor networks Outsourcing hires “third party providers” to manage computer network

Electronic Data Interchange (EDI) The exchange of information and transactions through computers using a common digital language Data available in “real time” Printouts can be generated Web based

Cooperation for Industry Excellence Competition from world markets has increased over last 50 years Industry segments now cooperating to regain market The industry is striving to provide quality, value, and delivery in a timely, efficient manner

Quick Response Benefits: Focus on consumer needs Communication accuracy Higher quality standards Better buying, production, and distribution Lower inventories Easier reordering Shorter lead/response time Improved forecasting Fewer markdowns Higher profits Streamlines supply chain by transmitting product code data using EDI technology throughout the entire textile-apparel-retail pipeline.

Corporations and Partnerships The Textile/Clothing Technology Corporation, [TC]2, is a not-for-profit industry-wide organization Researches high-tech innovations in apparel production equipment and processes Helps the industry implement new technologies and business processes

Improving Its Image Continuing efforts to educate the public about the industry Quality products Higher standards of ethics and social responsibility Education, family care, health issues, and safety of employees Environmental and community initiatives

Do You Know . . . What demographic and psychographic data would define YOU? Why is product development so important to the fashion industry? Why is synergy so important to the industry?