1. Chapter 2 Consumer Demand and Fashion Marketing

2. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 Consumer Demand America’s fashion industry mirrors the growth of the American economy: –Originally based on manufacturing, it consumed more than it could produce –Competition increased, leading to better, cheaper products and more consumer influence on production. –Ultimately, the industry shifted from production to marketing. Life styles and buying behaviors are analyzed. Advertising and marketing activities aim to establish the identity of a particular brand, making a consumer destination.

3. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 Consumer Groups Demographic trends, or statistical studies of measurable population characteristics, created consumers defined by age groups: –Gray market, born before 1945 –Baby boomers, born before 1965 –Generation X, born before 1980 –Generation Y, born starting in 1980 At the same time, ethnic diversity will create a much more diverse American society.

4. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 Consumer Groups Psychographics, or lifestyle studies indicate other trends: –Working women, who comprise over 70% of women aged 20 to 54, need ease of shopping for time-poor lifestyles. –Larger sizes are a growing market in America where 68% of the population is overweight. Mapping allows merchants to translate sales data and purchasing patterns into geographic maps representing the market and pinpointing customers.

5. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 The Impact of Economics on Consumer Demand Personal income is gross amount of income from all sources. Disposable income is personal minus taxes. Discretionary is income left over after food, lodging, and other necessities have been paid. Consumer credit proliferation has greatly extended purchasing power. Corporate ownership of manufacturers and retailers has encouraged increased efficiency and heightened branding.

6. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 The Impact of Global Trade on Marketing Globalization, in the form of both production and retailing, is an important fashion trend. Retailers, looking for high quality at low cost, increased the amount of textiles, apparel and accessories imported into the EU and United States. Cheaper labor in low wage countries fueled this growth. Balance of trade issues have sprung from this trend, creating large trade deficits for the United States and other net importers.

7. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 The Impact of Global Trade on Marketing Harmonized Tariff Schedule (HTS) classifies all products, speeding customs clearance. The WTO governs worldwide trade and aims to abolish all quotas as of 2005. NAFTA created a free trade zone between North America and Mexico in 1994. The Caribbean Basin Initiative (CBI) followed in 2000 and a Free Trade Agreement of the Americas (FTAA) is in process.

8. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 The Impact of Technology on Marketing The Information Revolution impacted the fashion industry in many ways: –Business communications were not only sped up, they enjoyed enhanced accuracy as well as more compelling images. –Communications with consumers allowed consumers to instantly know what was happening worldwide and pick up trends instantaneously in addition to dramatically raising knowledge levels about apparel. –Manufacturers and retailers were able to mine data to help them make better business decisions.

9. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 The Impact of Technology on Marketing –The Information Revolution impacted the fashion industry in many ways: Electronic Data Interchange (EDI) connected textile producers to manufacturers to retailers at the speed of light. –Out of this came two important advances: Automatic replenishment, allowing manufacturers to automatically ship goods when inventory falls below agreed upon thresholds. Value Chain Initiative (VCI) where standardized codes and linkage have been developed throughout the industry.

10. Fashion From Concept to Consumer, 8/e© 2005 Pearson Education, Inc. Gini Frings Upper Saddle River, New Jersey 07458 The Marketing Chain The traditional chain of textiles to apparel manufacturers to retailers to consumers is blurred. Many companies use vertical integration, combining fabric production and apparel manufacturing. Other manufacturers design and have all production sourced out in “full garment packages.” Manufacturers and retailers also recognized that cooperation leads to quicker product development, production and distribution, and higher profits. Finally, many retailers have become manufacturers themselves.