1. Fashion Marketing-Pricing

2. 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

3. 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

4. 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

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

6. 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 $

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

8. 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

9. 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)