MANAGEMENT AND MARKETING OF TEXTILES UNIT TUTOR: Johanna Bergvall-Forsberg The University of Manchester, UK Johanna.Forsberg@manchester.ac.uk

COURSE OUTLINE Introduction Strategic Management Operations Management Marketing The Fashion Operation Exam

LEARNING OUTCOMES …to understand the strategic role of the textile manufacturing operation …to understand the importance of marketing in managing a fashion operation …to recognise the importance of added value to the textile and clothing industry

MANAGEMENT AND MARKETING OF TEXTILES Expectations Marketing Operations Customer Strategic Decision Product and/or Service Specification Interpretation of

A CUSTOMER DRIVEN OPERATION “The process starts with the customer (customer needs and use situations) and ends with the customer (the customer’s level of satisfaction).” (Walters, 1999) Customer Needs Value Drivers Desired Benefits Value Creation Customer Satisfaction Customer Use Situation Cost of Purchase

VALUE CREATION “A value strategy involves identifying, producing and delivering the combination of price and non-price related benefits the customer is seeking.” (Walters, 1999) “Our premise is that buyers will buy from the firm that they perceive to offer the highest delivered value.” (Kotler, 1997)

THE TEXTILE AND CLOTHING SUPPLY CHAIN FINDINGS SECTOR CLOTHING SECTOR RETAIL SECTOR Clothing Findings Production Cutting Sewing Garment Finishing Retail Sales FIBER SECTOR TEXTILE SECTOR Natural Fibre Weaving Yarn Production Fabric Finishing Man-made Fibre Knitting

MERCHANDISE CHARACTERISTICS Functional Products Innovative Products Low demand uncertainties High demand uncertainties More predictable demand Difficult to forecast Stable demand Variable demand Long product lifecycle Short selling season Low inventory cost High inventory cost Low profit margins High profit margins Low product variety High product variety Higher volume per SKU Lower volume per SKU Low stock out cost High stock out cost Low obsolescence High obsolescence Basic or Classic Fashion Accepted by majority of people May be expensive or inexpensive Remains “in fashion” for a longer period of time Fad Fashion Short lived - enthusiastically accepted by large group for a very short period of time High Fashion (Haute Couture) Limited appeal because of newness, unusualness and often impractical Produced and sold in small quantities at high prices Accepted by fashion leaders Mass Fashion (Fast Fashion) High competition between retailers Copy of latest catwalk trends Manufactured and sold in large quantities at moderate to low prices Branded Fashion Uses marketing to push products to market Manufactured and sold in large quantities at moderate to high prices (Fisher, 1997)

FUNCTIONAL- PREDICTABLE Product life cycle - more than 2 years Contribution to overheads - 5 to 20 % Product variety - low Forecasting error - 10% Mean stockout rate - 1 to 2% End of sale mark down – not relevant Product life cycle – 3 to 12 months Contribution to overheads - 20 to 60 % Product variety - high Forecasting error – 40 to 100% Mean stockout rate - 10 to 40% End of sale mark down – 10 to 25% INNOVATIVE - UNPREDICTABLE

THE TEXTILE AND CLOTHING INDUSTRY New market entrants Changes in consumer demand Shortened product lifecycles Globalisation of supply “In these short life-cycle markets, being able to spot trends quickly and to translate them into products in the shop in the shortest possible time has become pre-requisite for success” (Christopher et al., 2004)

THE FASHION MERCHANDISE RANGE Basic Products generally sold throughout the year Seasonal Products shelf life of 12-25 weeks Short-Season Products shelf life of 6-10 weeks or less (Lowson, 2003)

COMPETITIVE REQUIREMETNS DIFFERENTIATION Stuck in the middle COST LEADERSHIP FOCUS (added value) Source: Porter’s generic routes to competitive advantage