Need textiles, ideas, product to produce and market

Fashion industry segments Primary market-grow and product raw materials Secondary – includes businesses that transform raw materials into fashion—they are the link to retail world Tertiary market – includes retail businesses

primary Plays key role in development of fashion Involves technical research and planning Complex production processes The production schedule is ahead of the other segments Textile industry –largest segment—produces fiber, fabric, leather, fur, plastic, metal, paper, etc. Also makes home furnishings

Secondary market (handout p. 63) Transform textiles to the finished product This section is interdependent Example: design division creates new styles Sales staff works with retailers Production is based on retailer need Includes: manufacturers, wholesalers, contractors, and product development teams

Tertiary market Is the retail industry Selling of products to customers Either direct selling or exchange of merchandise in return for money or credit Different types of stores: department, specialty, discount, variety, off-price stores, warehouse, outlets, e-tail. Retailers direct their purchasing towards their target market

Types of businesses Sole proprietorship – owned/operated by one person Owner enjoys all profits and losses-is legally liable Taxed as personal income tax –business lasts only as long as the owner does Partnership – legal agreement who are jointly responsible. Set agreement about distribution of profit and loss. Doesn’t pay personal income tax. Personal assets are still at risk Corporation – chartered by the state, operates apart from owners. Has the right to issue stock. When owner/s die, business still exists

Risk No method to completely safeguard a business from risk You can, however, plan for it. Manage risk exposure Human safety Environmental factors Law Use marketing information, consider ways to avoid loss

Types of risk Economic-occur from business conditions--unemployment Human-human mistakes and unpredictability (customer trips and falls, or theft) Natural-from weather, climate change Pure –occur when there’s possibility of loss. Speculative-when gains or losses are possible—like produce large quantities Controllable-have locked display case Uncontrollable-like bad cotton crop cuz of weather Insurable-purchase insurance –fire, accidents Uninsurable-amount of loss can’t be predicted, like customers choosing not to buy

Managing potential risk Purchase insurance Employee training Transfer risk back to manufacturer through product warranties

Fashion and economics Ships have carried goods from exotic ports—since 18 th century Government policies and new trends in international trade have caused the market for fashion goods to increase Countries no longer limited by their borders Technology has made the world smaller Countries with lower wages have advantages 66 percent of consumers in 8 countries love to shop for clothing—Global Lifestyle Monitor

$ spent on apparel American Textile Manufacturers Institute US spends 275 billion every year Approx 1 million employees work in the US textile segment Use of cotton has declined The rise of global competition—see article from RD Most obvious impact on economy—employment Skilled labor (designing/marketing) is in US Manual labor is being outsourced

Assignments-individual and pairs Print online quiz Write out terms and definitions Read the article handout about fashion designer in Readers Digest—summarize important points—10 facts List 3 companies that outsource to other countries, then choose one and find out as much as you can-- Name of company Type of company-what they produce- Country they outsource to/effect on USA What are the demographics of laborers What are the working conditions (Levi Strauss, JC Penny, etc. Reebok, Nike Fill in page 62 about fashion careers