1. Substance of the Fashion Industry
Fashion Marketing
Chapter 4

2. Channel of Distribution
Def.: the route that products take from the original source, through the production process, and sales to the ultimate user.
2 channels:
Soft Goods Chain
Four Groups Approach

3. Fashion merchandisers should understand the processes, timing, and practices of the individual segments or groups within the overall fashion industry

4. The Soft Goods Chain Also, called textile/apparel pipeline
The channel of distribution for apparel and home decorating textiles.
3 main Segments:
Textile
Apparel
Retail

5. Textiles Fibers: very thin strands that are the beginning of textiles
Yarns: continuous strands of textile fibers that are processed into fabrics
Fabrics: long pieces of cloth
Greige goods: fabrics in an unfinished state

6. Apparel Produces finished garments and accessories
Steps in the Apparel Segment
The apparel must be designed
Designing is the process of creating new versions of garments, accessories, or other items
Design ideas move fashion forward by creating change

7. Apparel Steps in the Apparel Segment
After apparel is designed it must be manufactured
Almost all are mass-produced in factories
They are cut out of fabrics in large numbers and sewn along assembly lines
Apparel sales involves selling the manufactured garments in large quantities to retail stores

8. Apparel
Resellers – wholesalers who serve to distribute goods between producers and retailers or users

9. Retail Segment
Retailing is the selling of merchandise directly to customers
Retailers buy finished goods in large amounts from the apparel segment that precedes them in the pipeline
Retailers pay a wholesale price for this quantity buying of finished products
Retailers put these items out “on the floor” of their stores for sale at a retail prices, which is higher than the wholesale purchase price

10. Retail Segment
Retailers pay a wholesale price for this quantity buying of finished products
Retailers put these items out “on the floor” of their stores for sale at a retail prices, which is higher than the wholesale purchase price
The markup covers cost of heat, lights, taxes, sales help, and other expenses
Retailers do single item selling of garments, accessories, and other goods to consumers

11. The Four Groups Approach
Separates the fashion industry into 4 main groups of business:
Primary group (raw materials: textiles, leathers, furs)
Secondary group (manufacturing: garments, accessories)
Retail group (final distribution; stores catalogs, internet, TV sales)
Auxiliary group (fashion-related; trade associations, publications, and consultants)

12. Vertical Integration
The combining of 2 or more steps of the pipelines within one company and under one management.
Example: Textile mills produces their own yarn, fabrics and perform the finishing process.

13. Commodity, Fashion, and Seasonal Goods
Two main categories of merchandise
Commodity products
Staple goods…hardly ever change in design and are in constant demand…sales are predictable
Examples: cotton/polyester blend fabric, and men’s white business shirts and dark socks

14. Commodity, Fashion, and Seasonal Goods
Two main categories of merchandise
Fashion products
Always changing
Last year’s model or style cannot be sold this year because it is not in demand
Difficult to predict what the demand will be
Wrong decisions result in huge financial losses
Seasonal products
Change in popularity or demand with the seasons of the year