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Technical paper
Competitive export strategies and
cases for the clothing industry
Part 1 : Guidebook
July 2008
Abstract for Trade Information Services
ID=38757 2008 SITC-84 COM
International Trade Centre
Competitive Export Strategies and Cases for the Clothing Industry. - Part 1 :
Guidebook.
Geneva: ITC, 2008. xxxii, 161 p.
Doc. No. MDS-07-130.E
Paper focusing on product and process innovation route for achieving competitive
advantages in the clothing sector and fashion industry – explains the concept of value
chain in apparels and illustrates the possibilities of integration of this chain through
links; describes the role and characteristics of various intermediaries along the value
chain; discusses the role of cultural factors, laws and regulations, competitive
environment, market access and currency issues; the need for product innovation, the
processes and functions for sustainable growth through value addition, as well as
modalities of conducting product portfolio analysis, provides market information on the
EU and US apparel markets; presents an in-depth analysis of market entry strategies;
highlights the role of clustering and textile complexes in branding, ensuring quality
production, and enhancing the competencies of individual firms; outlines various
competencies required at the firm level, to sustain in the existing markets or to enter
into new markets; includes bibliography, a glossary of related terms, a list of useful
Web resources, and a number of case studies.
Descriptors: Clothing, Research and Development, Competitiveness, Value Chain,
Export Marketing, Clusters, Market surveys, United States, European Union, Case
studies.
EN
International Trade Centre, Palais des Nations, 1211 Geneva 10, Switzerland
(http://www.intracen.org)
The designations employed and the presentation of the material in this report do not
imply the expression of any opinion whatsoever on the part of the International Trade
Centre- (ITC) concerning the legal status of any country, territory, city or area or its
authorities, or concerning the delimitation of its frontiers or boundaries.
While every effort has been made to verify the information contained in this
document, ITC cannot accept any responsibility for any errors that it may contain.
Mention of company names, financial institutions and commercial products does not
imply the endorsement of ITC.
ITC encourages the reprinting and translation of its publications to achieve wider
dissemination. Short extracts may be freely reproduced, with due acknowledgement
of the source. Permission should be requested for more extensive reproduction or
translation. A copy of the reprinted or translated material should be sent to ITC:
This document has not been formally edited by ITC.
Cover pictures by Marja Flick-Buijs, Sufi Nawaz (sufinawaz.com), None and Lotus
Head (www.pixelpusher.co.za).
Courtesy of SXC (www.sxc.hu).
Acknowledgements
The outline and concept for the technical paper, ‘Competitive export strategies and
cases for the clothing industry’ was developed by Rupa Ganguli, Advisor on Trade in
Textiles and Clothing, under the overall supervision of Matthias Knappe, Chief, Sector
Competitiveness Section, Division of Market Development.
The paper was written by ITC consultant, D K Batra, with technical support provided by
NIFT (National Institute of fashion Technology), New Delhi, India.
Finalisation of the paper was accomplished with assistance and inputs from Christophe
Marianne, research assistant - textiles and clothing, Federica Calò, intern - textiles and
clothing and Sylvain Fontan, intern - textiles and clothing.
The views expressed are those of the authors and do not represent the views of the
International Trade Centre or any organisation with which the authors may be
associated.
The paper, ‘Competitive export strategies and cases for the clothing industry’ is made
up of two components:
- Part 1 : Guidebook
- Part 2 : Presentations and Cases
For more information on ITC’s overall ‘cotton to clothing’ approach, please refer to:
www.intracen.org/cottontoclothing
Foreword
ITC trains SMEs in the textiles and clothing sector on the various elements required to
enable SMEs to market their products effectively and assist them in market
diversification, niche marketing approaches and branding.
The paper, ‘Competitive export strategies and cases for the clothing industry’ forms the
background for the ITC training course on ‘export marketing for clothing
manufacturers’. The focus of this course is to provide on-the-job guidance to clothing
manufacturers and exporters, to help them retain existing markets, to enter new markets
and to make the transition from a traditional outsourced workshop (CMT) to a modern
supplier with product portfolios.
Key topics include the following:
• International market space and dynamics
• Different buyer formats and their value chains (for example, brand buyers, store
buyers and wholesalers)
• The right export growth strategy that offers a competitive advantage
• Pricing and costing strategies
• Clustering as a competitive advantage
• The importance of customer relationship management
Modules offered (minimum 15 to maximum 25 participants per course):
Each course includes: 2 international export marketing experts, individual course
material for each participant, cost of the ITC course modules, all materials required for
the course. The following different training formats are currently offered:
• Basic (2 day modular option)
• Intermediate (4 day modular option)
• Advanced (7 day modular option)
• Supplement type 1 (Individual solutions for 10 - 15 companies)
• Supplement type 2 (working with individual companies or a group of companies to
develop samples and collections for identified market/buyer)
*Note: the complete course can be provided over period of time & customised to suit
demand.
For more information please contact:
Rupa Ganguli
Advisor for trade in textiles and clothing
Sector competitiveness, division of market development
Email: ganguli@intracen.org
www.intracen.org/cottontoclothing
Competitive export strategies and cases for the clothing industry
Table of Contents
List of Figures ...........................................................................................................xv
List of Tables ............................................................................................................xvi
List of Abbreviations ......................................................................................... xvii
Course details .........................................................................................................xix
UNIT - I ............................................................................................... 1
CHAPTER 1 THE SHAPE OF THINGS TO COME ...............................................................3
1.1 Increased regionalization of the clothing trade ..............................................3
1.1.1 Trade bloc formation: regionalization and its impact on exports.................................3
1.1.2 Trade blocs affecting clothing imports into North America and the EU .....................4
1.1.3 Regional trade agreements and tariff barriers ..............................................................4
1.1.4 Enlargement of trade areas and reduced market access ...............................................5
1.1.5 Trade diversion of imports into existing markets – the EU and United States ............6
1.1.6 Impact on suppliers to existing markets: predictions...................................................6
1.2 Free trade and impact of quota elimination....................................................6
1.2.1 The Agreement on Textiles and Clothing....................................................................7
1.2.2 Market shares after quota elimination..........................................................................8
1.3 Retail consolidation and its impact on export marketing................................9
1.3.1 Consolidation due to mergers and acquisitions..........................................................10
1.3.2 Impact on garment exporters .....................................................................................10
1.3.3 Advice to developing country exporters ....................................................................11
1.3.4 Longer-term relationships with suppliers ..................................................................11
1.4 Changing consumer preferences ...................................................................12
1.4.1 Shifting shopping preferences ...................................................................................12
1.5 Opportunities through apparel mass customization......................................13
1.6 Advent of fast fashion – quicker supply chain ...............................................14
1.6.1 What is fast fashion?..................................................................................................14
1.6.2 Why is it happening? .................................................................................................14
1.6.3 How is it done? ..........................................................................................................14
1.6.4 Who can do fast fashion?...........................................................................................15
1.6.5 Agile supply chains....................................................................................................15
1.7 Increasing use of non-tariff trade barriers....................................................16
1.7.1 Increasing importance of corporate responsibility as a tool for business...................16
1.8 Increasing role of intellectual property rights in the fashion industry..........17
1.8.1 IPR Tools of strategic importance for market intensification ....................................18
1.9 Emergence of textile complexes and marketing networks through natural
clustering and enhanced garment maps ................................................................19
1.10 Case study on corporate social responsibility: FIFA footballs...........20
1.10.1 The sporting goods industry responsive approach.................................................20
1.10.2 FIFA initiative in Pakistan and India .....................................................................20
1.10.3 The realistic approach............................................................................................21
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Competitive export strategies and cases for the clothing industry
CHAPTER 2 APPAREL VALUE CHAIN AND BUYER CHARACTERISTICS ........................22
2.1 Apparel value chain.......................................................................................22
2.1.1 What is a value chain? ...............................................................................................22
2.1.2 Parts of the apparel value chain ................................................................................22
2.1.3 Extended apparel value chain ....................................................................................23
2.2 Linkages between value chain activities........................................................24
2.2.1 Value analysis............................................................................................................24
2.2.2 Critical success factors ................................................................................................24
2.3 Control of value chains....................................................................................25
2.3.1 Outsourcing value chain activities .............................................................................25
2.3.2 Market relationships ..................................................................................................25
2.3.3 Value addition process in the apparel value chain.....................................................26
2.3.4 Limitations of value chain research ...........................................................................28
2.4 Distribution channels for retail and value expectations ...............................28
2.4.1 The complete buying value chain ..............................................................................28
2.4.2 Sourcing case example – Liz Claiborne.....................................................................29
2.5 Characteristics of buyers in the value chain .................................................30
2.5.1 Characteristics of wholesaler importers.....................................................................30
2.5.2 Characteristics of retailer importers...........................................................................31
2.5.3 Manufacturer importers .............................................................................................33
2.5.4 Agents........................................................................................................................33
2.6 Buyer categories and demand on the exporters ............................................34
UNIT - II ............................................................................................ 35
CHAPTER 3 ENVIRONMENT ANALYSIS BY EXPORTERS ...............................................37
3.1 International marketing task: environment threat & opportunity analysis...37
3.2 Different kinds of environment and interaction with the export firm ............39
3.2.1 Political environment.................................................................................................39
3.2.2 Legal environment .....................................................................................................39
3.2.3 Compliance audits – essential for preferred suppliers ...............................................40
3.2.4 Economic environment..............................................................................................40
3.3 Country-specific risk .....................................................................................41
3.3.1 Defining country-specific risk ...................................................................................41
3.3.2 Assessing country-specific risk .................................................................................41
3.3.3 Risk management ......................................................................................................43
3.4 Case studies ...................................................................................................43
3.4.1 Political and financial risk: impact of 9/11 in the United States and on apparel
suppliers.....................................................................................................................43
3.4.2 Financial risk: 1997 stock market crash in ASEAN countries...................................43
CHAPTER 4 MARKET INTENSIFICATION STRATEGIES .................................................45
4.1 Emergence of trans-national corporations....................................................45
4.1.1 The apparel commodity chain....................................................................................46
4.1.2 Industrial upgrading...................................................................................................47
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Competitive export strategies and cases for the clothing industry
4.2 Opportunities through full service exports....................................................50
4.2.1 Value chain of full-service exports ............................................................................50
4.2.2 Advantages and disadvantages of providing full-service exports..............................53
4.3 Case studies ...................................................................................................53
4.3.1 Case study: House of Pearl Fashion...........................................................................53
4.3.2 Case study: CMT Apparel .........................................................................................54
4.3.3 Case study: Texport Syndicate ..................................................................................54
4.4 Industrial upgrading and the role of innovation ...........................................55
4.4.1 Types of innovation and how they change throughout an industry’s life cycle.........55
4.4.2 The product innovation route for market intensification strategies: ..........................55
4.4.3 Product innovation in the workwear industry............................................................55
4.5 Case study on product innovation .................................................................56
4.5.1 Chinese silk product innovation route for competing in existing markets.................56
4.5.3 Market opportunities through product innovations in silk.........................................56
4.5.4 Challenges faced by the silk industry ........................................................................57
4.6 Process-based innovation..............................................................................59
4.6.1 Technology initiatives ...............................................................................................59
4.7 New product development for existing markets.............................................59
4.7.1 Importance of product life cycle management...........................................................60
4.7.2 Compressed apparel cycles........................................................................................60
4.7.3 Steps in new product development ............................................................................61
4.7.4 Consequences of new product development..............................................................61
4.7.5 Steps in range development .......................................................................................61
4.7.6 Normative steps in buyer-specific range development ..............................................62
4.7.7 Design buying influences ..........................................................................................62
4.7.8 A case for product diversification: UVR and product diversification in India ..........62
4.7.9 Product portfolio analysis ..........................................................................................63
4.8 Mass customization and new product development ......................................64
4.8.1 Application of mass customization principles ...........................................................65
CHAPTER 5 MARKET INFORMATION ON EXISTING MARKETS: EU AND UNITED
STATES...........................................................................................................................66
5.1 Textile and clothing market structure............................................................66
5.1.1 Textile sub sectors .....................................................................................................66
5.1.2 Clothing sales by retail format...................................................................................67
5.1.3 Product basket of imports ..........................................................................................68
5.2 Clothing market consumer segment structure ...............................................68
5.3 Import trends and supplier countries ............................................................69
5.3.1 Top ten supplying countries.......................................................................................69
5.3.2 Suppliers by value .....................................................................................................71
5.3.3 Volume ......................................................................................................................71
5.4 Import penetration possibilities based on retailer dominance in important
markets 72
5.5 Introduction to the United States apparel market .........................................72
5.5.1 The structure of the United States apparel market.....................................................72
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Competitive export strategies and cases for the clothing industry
5.6 Product profile of United States market imports.............................................73
5.6.1 United States clothing retail sales by format .............................................................74
5.6.2 Import trends..............................................................................................................75
5.6.3 Value trend ..................................................................................................................77
5.6.4 Volume trend...............................................................................................................77
UNIT - III ........................................................................................... 79
CHAPTER 6 NEW MARKET DEVELOPMENT..................................................................81
6.1 Need for a regional approach .......................................................................81
6.2 Regional approach to new markets of Latin America ...................................82
6.2.1 Introduction to Latin American markets....................................................................82
6.2.2 Structure of the markets.............................................................................................82
6.2.3 Retail shopping preferences.........................................................................................83
6.3 The need for a country-based approach..........................................................85
6.4 Characteristics of the Brazilian market for apparel .......................................85
6.4.1 Country-specific risk ...................................................................................................85
6.4.2 Structure of the textile and clothing industry...............................................................85
6.4.3 Brazil’s product basket ..............................................................................................86
6.4.4 Market access requirements.......................................................................................87
6.4.5 Import trends..............................................................................................................87
6.4.6 Prospects for Brazilian domestic markets.................................................................88
6.5 Characteristics of the South African market for apparel ..............................89
6.5.1 Structure of the South African industry and market ..................................................89
6.5.2 Consumption expenditure on clothing .......................................................................90
6.5.3 Import penetration .......................................................................................................90
6.5.4 Retail consolidation ...................................................................................................91
6.5.5 The South African clothing import product basket....................................................92
CHAPTER 7 PRICING AND COSTING APPROACHES ......................................................93
7.1 Pricing approaches .......................................................................................93
7.2 Components of a cost sheet using the cost plus approach ............................94
7.3 Why should buyer-backward and cost plus approaches be used together? ..95
7.4 Cost plus approach..........................................................................................96
7.4.1 Macro costs..................................................................................................................97
7.4.2 Indirect costs..............................................................................................................97
7.4.3 Zero-service factories, normal service factories, and full-service factories...............98
7.4.4 Direct costs ................................................................................................................98
7.4.5 Buying at the lowest cost...........................................................................................99
7.5 Hourly rate pricing / activity-based pricing vs. the cost plus method (using
absorptive method) ..............................................................................................100
7.5.1. Absorptive method...................................................................................................100
7.5.2 Activity based costing approach (based on standard allowable minutes) ................100
7.5.3 Highlights of the activity-based hourly or minute-based method ............................103
7.6 Product line pricing.....................................................................................104
7.7 Steps in conducting costing .........................................................................104
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Competitive export strategies and cases for the clothing industry
UNIT - IV......................................................................................... 105
CHAPTER 8 CLUSTERING AND TEXTILE COMPLEXES ...............................................107
8.1 What is a cluster? ........................................................................................107
8.2 Advantages for SMEs in a cluster ...............................................................108
8.3 Life cycle of a cluster...................................................................................110
8.3.1 Pros and cons of adopting a cluster approach ..........................................................111
8.4 Community development and clusters .........................................................112
8.4.1 Inter-firm cooperation aiding community development ..........................................112
8.4.2 Vertical inter-firm cooperation ................................................................................112
8.4.3 Horizontal inter-firm cooperation ............................................................................112
8.5 Role of SMEs in Italian industry .................................................................113
8.5.1 Factors that fuelled the explosive growth of Italian SMEs ......................................113
8.6 Case studies of clusters ...............................................................................114
8.6.1 Knitwear clusters of Prato, Italy ..............................................................................114
8.6.2 Veneto (Venice) region, Italy ..................................................................................114
8.6.3 The footwear clusters of Marche and Brenda, Italy.................................................115
8.6.4 Silk makers of Como, Italy ......................................................................................115
8.6.5 Clusters in China .....................................................................................................115
8.6.6 Bellary jeans cluster, Delhi, India............................................................................116
8.7 Conclusion...................................................................................................117
CHAPTER 9 FIRM COMPETENCY AND MARKET ENTRY .............................................119
9.1 Buyer requirements .....................................................................................119
9.2 Review of literature on barriers constraining marketing initiatives ...........121
9.3 Case study: ABC Enterprise – key performance indicators ........................124
9.3.1 Description and calculation of key performance indicators (KPIs) .........................124
9.3.2 Measuring the efficiency of ABC Enterprise...........................................................129
9.4 Conclusion...................................................................................................130
CHAPTER 10 MARKET ENTRY STRATEGY .................................................................131
10.1 Conducting market research in potential markets ............................131
10.2 Tools for conducting market research...............................................131
10.3 Mapping product categories for export potential..............................132
10.3.1 Conduct company SWOT analysis in relation to buyer characteristics ...................132
10.4 Developing an export plan ..........................................................................132
10.4.1 Export marketing .....................................................................................................134
10.4.2 Direct exports and market entry...............................................................................134
10.4.3 Exports through joint ventures.................................................................................135
10.4.4 Wholly owned company in the export market .........................................................135
10.4.5 Licensing agreements ..............................................................................................135
10.4.6 Direct exporting through trade fairs.........................................................................136
10.4.7 Market entry through foreign import agents ............................................................137
10.4.8 Import merchant ..................................................................................................137
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Competitive export strategies and cases for the clothing industry
10.5 Business practices in international selling........................................138
10.5.1 Clarity in transactions ..........................................................................................138
10.5.2 Building a working relationship ..........................................................................139
10.6 How to negotiate and conduct business with buyers...................................140
10.6.1 Be aware of cultural differences when meeting buyers ...........................................140
10.6.2 Business etiquette ....................................................................................................140
10.6.3 Business practices....................................................................................................140
REFERENCES AND BIBLIOGRAPHY .............................................................................143
APPENDIX I GLOSSARY OF TERMS..............................................................................153
APPENDIX II NEW MARKET INFORMATION: ARGENTINA ADAPTED FROM A REPORT
ON WWW.INFOMAT.COM .............................................................................................157
APPENDIX III NEW MARKET INFORMATION: VENEZUELA........................................159
APPENDIX IV CONTACT INFORMATION FOR THE BRAZILIAN MARKET ....................161
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Competitive export strategies and cases for the clothing industry
List of Figures
FIGURE 1.1. INCREASING NUMBER OF RTAS ....................................................................................... 5
FIGURE 1.2. SOURCE OF UNITED STATES CLOTHING IMPORTS ............................................................ 8
FIGURE 1.3. SOURCE OF EU CLOTHING IMPORTS ................................................................................ 8
FIGURE 1.4. NUMBER OF RETAILERS ACCOUNTING FOR 20% OF SALES IN EU AND UNITED STATES 10
FIGURE 2.1. APPAREL VALUE CHAIN ................................................................................................. 22
FIGURE 2.2. PORTER’S GENERIC MODEL VALUE CHAIN ..................................................................... 23
FIGURE 2.3. THE VALUE ADDITION PROCESS ..................................................................................... 26
FIGURE 2.5. SOURCING FLOWS .......................................................................................................... 29
FIGURE 2.6. RISK–RETURN TRADE-OFF ............................................................................................. 31
FIGURE 2.7. TYPES OF IMPORTERS .................................................................................................... 33
FIGURE 2.8. BUYER CATEGORIES AND DEMANDS ON SUPPLIERS ....................................................... 34
FIGURE 3.1. THE FIRM AND THE INTERNATIONAL MARKETING ENVIRONMENT ................................. 38
FIGURE 3.2. OVERALL COUNTRY RISK ON A 7-POINT SCALE, BRAZIL ............................................... 42
FIGURE 4.1. CHANGING TRADE COMPETITIVENESS: MOVING FROM MANUFACTURING TO FULL
SERVICE ......................................................................................................................... 47
FIGURE 4.2. MARKET COMPETENCE AND TECHNICAL ADVANCEMENT ............................................. 48
FIGURE 4.3. FIRM ROLES ................................................................................................................... 49
FIGURE 4.4. VALUE CHAIN OF FULL SERVICE ................................................................................... 51
FIGURE 4.5. DETAILED FLOW OF THE ACTIVITIES.............................................................................. 51
FIGURE 4.5. DETAILED FLOW OF THE ACTIVITIES.............................................................................. 52
FIGURE 4.6. ANSOFF’S PRODUCT MARKET EXPANSION GRID ............................................................ 60
FIGURE 4.7. BCG ANALYSIS ON INDIA’S EXPORT PRODUCT PORTFOLIO (NOT TO SCALE) ................. 64
FIGURE 5.1. TEXTILE AND CLOTHING SECTORS IN THE EU ............................................................... 66
FIGURE 5.2. RELATIVE IMPORTANCE OF TEXTILE FIBRES .................................................................. 66
FIGURE 5.3. MARKET SHARE OF RETAIL FORMATS, EU .................................................................... 67
FIGURE 5.4. SHARE OF CLOTHING IMPORTS INTO THE EU, BY VALUE, 2005..................................... 71
FIGURE 5.5. SHARE OF CLOTHING IMPORTS INTO THE EU, BY VOLUME, 2005.................................. 71
FIGURE 5.6. UNITED STATES TRADE IN CLOTHING ............................................................................ 73
FIGURE 5.7. UNITED STATES TRADE IN TEXTILES ............................................................................. 73
FIGURE 5.7. UNITED STATES IMPORTS OF TEXTILES AND APPAREL BY REGION ................................ 77
FIGURE 6.1. PER CAPITA INCOME OF SELECTED LATIN AMERICAN ECONOMIES ............................... 83
FIGURE 6.2. TOP 10 CLOTHING PRODUCING COUNTRIES, 2003 ......................................................... 86
FIGURE 6.3 PERCENTAGE SHARE IN CLOTHING IMPORTS INTO SOUTH AFRICA, BY VALUE .............. 91
FIGURE 7.1. LABOUR COSTS IN THE TEXTILE INDUSTRY.................................................................... 99
FIGURE 8.1. TYPE OF ORGANIZATIONS IN A CLUSTER NETWORK..................................................... 108
FIGURE 8.3. THE LIFE CYCLE OF CLUSTERS ..................................................................................... 111
FIGURE 8.4. SHAOXING TEXTILE CLUSTER, CHINA ......................................................................... 116
FIGURE 8.5 PARTNERSHIP CLUSTERS ............................................................................................. 117
FIGURE 9.1. ORDER-QUALIFYING AND ORDER-WINNING ELEMENTS ............................................... 120
FIGURE 10.1. DIRECT AND INDIRECT EXPORTS.................................................................................. 135
FIGURE 10.3. PRODUCT MARKET MATCH .......................................................................................... 139
FIGURE 10.3. NEGOTIATION CHECKLIST ........................................................................................... 141
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Competitive export strategies and cases for the clothing industry
List of Tables
TABLE 1.1. DUTY RATES ON IMPORTS OF CLOTHING IN MAJOR MARKETS, BY COUNTRY................... 5
TABLE 1.2. INTEGRATION OF TEXTILES AND CLOTHING INTO GATT................................................. 7
TABLE 1.3. CONSUMERS’ PREFERRED RETAIL CHANNELS FOR APPAREL IN THE UNITED STATES .... 13
TABLE 2.1. PERCEPTIONS OF IMPORTANCE OF DIFFERENT MARKET REQUIREMENTS ....................... 24
TABLE 5.1. PERCENTAGE OF SALES OF CLOTHING BY RETAIL FORMAT............................................ 68
TABLE 5.2. TOP IMPORTERS INTO THE EU FOR TEXTILES AND CLOTHING ....................................... 70
TABLE 5.3. SHARE OF TOP THREE AND TOP FIVE COMPANIES IN TOTAL TEXTILE AND CLOTHING
TURNOVER ..................................................................................................................... 72
TABLE 5.4. IMPORTANT APPAREL IMPORT CATEGORIES FOR THE US MARKET (1,000S DOZENS) .... 74
TABLE 5.5. UNITED STATES CLOTHING RETAIL SALES (MILLIONS US$) .......................................... 75
TABLE 5.6. APPAREL TRENDS BY VALUE AND VOLUME ................................................................... 75
TABLE 6.1. POPULATION DISTRIBUTION OF LATIN AMERICAN NATIONS (MILLIONS PERSONS) ....... 82
TABLE 6.2. SOCIAL SEGMENTATION AND BUYING POWER ............................................................... 82
TABLE 6.3. PER CAPITA INCOME OF SELECTED COUNTRIES IN LATIN AMERICA, 2003(IN US $) ..... 83
TABLE 6.4. HOUSEHOLD EXPENDITURE IN LATIN AMERICA ............................................................ 85
TABLE 6.5. TOP 10 TEXTILE AND CLOTHING PRODUCING COUNTRIES, 2003 (IN THOUSANDS OF
TONS) ............................................................................................................................ 86
TABLE 6.6. BRAZIL: PRODUCTION OF MADE-UP TEXTILES AND CLOTHING, 1990–2004 (1,000S
UNITS)............................................................................................................................ 87
TABLE 6.7. BRAZIL’S TEXTILE AND CLOTHING TRADE BALANCE WITH THE EU, 1990–2004 (1,000S
€) ............................................................................................................................ 88
TABLE 6.8. LEADING GARMENT PRODUCERS IN BRAZIL, 2004 ........................................................ 88
TABLE 6.9. REAL RETAIL SALES GROWTH 1999–2003 (CONSTANT 1995 PRICES, MILLION RAND) .. 90
TABLE 6.10. IMPORTS OF TEXTILES AND CLOTHING, 2000–2004 (MILLIONS RAND (ZAR) AND US$)91
TABLE 6.11. RETAILER PROFITS BEFORE TAX (MILLION RAND) ......................................................... 91
TABLE 7.1. EXAMPLES SHOWING COST PLUS (DIRECT COSTING USING ABSORPTIVE METHOD) AND
BUYER-BACKWARD APPROACHES FOR A POLO NECK T-SHIRT EX COLOMBO TO THE
EU. ............................................................................................................................ 94
TABLE 7.2. INFLUENCE OF MACRO COSTS ON LANDED DUTY PRICE ARTICLE A............................... 97
TABLE 7.3. INFLUENCE OF MACRO COSTS ON LANDED DUTY PRICE ARTICLE B............................... 97
TABLE 7.4. EMANUEL UNGARO WOOL BLAZER: DIRECT COSTS ...................................................... 99
TABLE 7.5. EMANUEL UNGARO WOOL BLAZER: FABRIC COSTS ....................................................... 99
TABLE 7.6. EMANUEL UNGARO WOOL BLAZER: CMT COSTS........................................................ 100
TABLE 7.7. COST SHEET: V-NECK BLOUSE..................................................................................... 102
TABLE 7.8. STITCHING OPERATIONS .............................................................................................. 103
TABLE 7.9. V-NECK BLOUSE: BUYER-BACKWARD COSTING .......................................................... 103
TABLE 9.1 QUANTITY RECEIVED AND TIME DELAY ...................................................................... 125
TABLE 9.2. DEVIATION OF PLANNED PRODUCTION ........................................................................ 126
TABLE 9.3 KPIS MEASURED AT ABC ENTERPRISE ....................................................................... 129
TABLE 10.2. PROMINENT FAIRS AND THEIR SPECIALIZATION .......................................................... 136
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Competitive export strategies and cases for the clothing industry
List of Abbreviations
The word ‘billion’ is used to mean a thousand million. Dollars ($) are United States
dollars. ‘Tons’ are metric tons. The following abbreviations are used:
AAMA American Apparel Manufacturers Association
AGOA African Growth Opportunity Act
ASEAN Association of South-East Asian Nations
ATC Agreement on Textiles and Clothing
CAD Computer aided design
CAFTA Central American Free Trade Agreement
CBI countries Caribbean Basin Initiative countries
CBPTA Caribbean Basin Trade Partnership Act
CIS Commonwealth of Independent States
CMT Cut-make-trim
CSR Corporate social responsibility
EDI Electronic data interchange
EFTA European Free Trade Association
ERP Enterprise resource planning
ETI Ethical Trading Initiative
EU European Union
FIFA Fédération internationale de football association
FLA Fair Labor Association
FTA Free Trade Agreement
GATT General Agreement on Trade and Tariffs
GDP Gross domestic product
HRM Human resource management
ICRG International Country Risk Guide
ICT Information and communication technology
ILO International Labour Organization
IMF International Monetary Fund
IPR Intellectual property rights
ISN Information services network
ISO International Organization for Standardization
ITC International Trade Centre
KPI Key performance indicators
LTA Long Term Agreement (Textiles)
MERCOSUR Mercado Comun del Cono Sur
MFA Multi-Fibre Arrangement
MNC Multi-national corporation
NAFTA North America Free Trade Agreement
NGO Non-governmental organization
NPD New product development
NTB Non-tariff barrier
OBM Original brand manufacturing
ODM Original design manufacturing
OECD Organisation for Economic Co-operation and Development
OEM Original equipment manufacturing
OETH L’observatoire Européen du Textile et de l’Habillement
OPT Arrangement Outward Processing Trade Arrangement
OTB Open to buy
OTEXA Office of Textiles and Apparel (United States)
PTA Preferential trade agreement
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Competitive export strategies and cases for the clothing industry
R&D Research and development
RTA Regional trade agreement
SA 8000 Social Accountability 8000
SAM Standard allowable minute
SCF-UK Save the Children Fund United Kingdom
SEZ Special economic zone
SMEs Small and medium-sized enterprises
SWOT Analysis Strengths weaknesses opportunities threats analysis
T&A Plan Time and action plan
TNC Transnational corporation
UNCTAD United Nations Conference on Trade and Development
UNICEF United Nations International Children’s Emergency Fund
UVR Unit value realization
VMI Vendor-managed inventory
WFSGI World Federation of Sports Goods Industry
WIPO World Intellectual Property Organization
WRAP Workload requirements Assessment Process
WTO World Trade Organization
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Competitive export strategies and cases for the clothing industry
Course details
(Refer to accompanying manual Part 2 : Presentations and Cases)
Marketing is about meeting the needs and wants of the customers. The Guidebook on
export marketing emphasizes the need for exporters engaged in export marketing to
understand market trends, conduct marketing research, understand buyer characteristics,
conduct environmental analysis and match company’s competencies with the
customer’s needs. Export marketing is also about integrating efforts to increase market
share in existing markets like the EU, US and Japan and researching new markets for
existing and new product categories. The workshop shall focus on product and process
innovation route for market growth and achieving competitive advantages. The
workshop shall also provide in-depth treatment to market entry strategies using direct
and indirect fashion marketing channels. It is imperative that exporters learn to adopt
benchmarked business practices and conduct fruitful negotiations with the buyers.
Communicating with the buyers keeping in view the cultural, political & technical
environment of the import markets shall be dealt with succinctly and cogently.
The guidebook has the following units:
Unit-I - Chapter 1 - Shape of things to come
Chapter 2 - Apparel value chain and buyer characteristics
Unit-II - Chapter 3 - Environment analysis by exporters
Chapter 4 - Market intensification strategies
Chapter 5 - Market information on the EU and US markets
Unit-III - Chapter 6 - New market development
Chapter 7 - Pricing and costing approaches
Unit-IV - Chapter 8 - Clustering and textile complexes
Chapter 9 - Firm competency and market entry
Chapter 10 - Market entry strategies
The units in this guidebook should be used by the instructor along with power point
presentations and exercises prepared for each day of the workshop. Many prescribed
handouts are contained in the textbook and/or annexed.
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Competitive export strategies and cases for the clothing industry
PROPOSED WORKSHOP SCHEDULE FOR PARTICIPANTS
Day 1 Unit-I
10:00 am – 12:00 noon Lecture on Shape of things to come (PPT presentation)
12:00 noon – 1:00 pm Brainstorming session on impact of changing market
scenario on garment exports. FIFA case study on
corporate social responsibility. The session shall be
moderated by the instructor.
1:00 pm – 2:00 pm Break
2:00 pm – 3:00 pm Lecture on apparel value chain and buyer characteristics
(PPT presentation)
3:30 pm – 4:30 pm Role-play by the instructor as buyer and participants
attend the negotiation meeting for obtaining orders as
suppliers. (A handout focusing on buyer characteristics to
be provided by the instructor).
Day 2 Unit-II
10:00 am – 11:00 am Lecture on Environment analysis by exporters (PPT
presentation)
11:00 am – 12:00 noon Lecture on Market intensification strategies (PPT
presentation)
12:00 noon – 1:30 pm Exercise on Environment analysis by exporters
Example sheet on German market environment analysis
(to be provided by the instructor) (30 minutes)
Case study on Product innovation by Chinese silk
exporters (30 minutes)
Brainstorming session on Market information on the EU
and US markets. Session to be moderated by the
instructor (30 minutes)
1:30 pm – 2:30 pm Break
2:30 pm – 3:30 pm Lecture on fast fashion and quick thinking (PPT
presentation)
4:00 pm – 5:30 pm Quiz on Market Entry in existing markets
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Competitive export strategies and cases for the clothing industry
Day- 3 Unit-III
10:00 am – 11:00 am Lecture on New Market Development (PPT presentation)
11:00 am – 12:30 pm Brainstorming session on new markets of Brazil, South
Africa etc. Session to be moderated by the instructor with
guidelines or questions to be asked.
12:30 pm – 1:30 pm Lecture on Costing and Pricing Approaches (PPT
presentation)
1:30 pm – 2:30 pm Break
2:30 pm – 4:30 pm Exercise on Costing using cost plus and buyer backward
approach. Cost example sheet on two products and a
handout to be provided.
Day- 4 Unit-IV
10:00 am – 11:00 pm Lecture on Market Entry Strategies (PPT presentation)
11:00 am – 12:00 pm Discussion on case example of Clusters and Exercise on
Firm competencies using KPI’s
12:30 pm – 1:30 pm Guidelines on Business plan (Handout)
1:30 pm – 2:30 pm Break
2:30 pm – 4:30 pm Participants prepare and submit their Business plan to the
instructor.
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Competitive export strategies and cases for the clothing industry
GENERAL GUIDELINES FOR INSTRUCTORS
DAY 1 – UNIT-I
Session 1 (Day 1 – General Guidelines)
Shape of things to come and buyer characteristics
Shape of things to come (PPT annexed ‘A’) is about understanding the changes in the
International marketing scenario. The instructor shall use the PPT and the textbook
chapter-I to discuss the following important issues:
- Regionalization and its impact on exporters to traditional markets like the EU and
US. The session shall conduct discussions on the trade blocks and impact of
regional trade agreements on developing country’s exports.
- Impact of quota illumination and implementation of ATC with a special reference
on expiry of quota for China till 2007- Quota categories will be facing intense
competition and growth rate of export will get affected for various supplier
countries.
- Retail consolidation and its impact on export marketing – As buyers become bigger
due to consolidation; the demand on suppliers in terms of price pressure, product
diversification of categories and services like product development, inventory
management and logistics; will increase.
- Changing customer preferences – The importing country customer’s profile is
changing and older customers have started preferring buying from discount retail
channels. The impact on exporters shall be discussed.
- Quicker supply chain- Faster fashions have been in the fore front of exports and
companies like Mango, Zara and H&M etc. have started buying flash collections
almost on a monthly basis. The opportunity and threat of this change shall be
discussed.
- Increasing importance of non-tariff barriers -Corporate social responsibility mandate
requires internal and external monitoring by exporters. Issues of environmental &
quality norms and welfare measures constitute non-tariff barriers to exports, which
can be also used as a strategic tool for market entry.
- Increasing role of IPR- Copyright, branding & trade labels and corporate trade
secrets need to be protected through IPR provisions.
Session 2 (Day 1 – General Guidelines)
The instructor shall also provide a handout on FIFA case study on the importance of
using corporate social responsibility as a marketing tool for exports to prestigious
brands. (Handout annexed as ‘B2’)
Questions for discussions in the brainstorming session on impact of marketing scenario
changes are listed in session-I, shall be discussed (Annexed as ‘B1’):
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Competitive export strategies and cases for the clothing industry
a) Discuss the impact of regional trade agreements and tariff barriers in important
markets like the EU, US, Japan and Australia.
The tariff ranges from 7-9% in the first three markets and is around 29% in
Australia. The instructor must emphasize and steer the discussion towards the
aspects of enlargement of trade areas and reduced market access. Example of EU
enlargement can be discussed in the class. European Union has enlarged to 25
countries and is three times of its size as compared to 1980. This enlargement and
preferential trade agreements with Mediterranean countries etc. has put countries
outside the block to a disadvantage in terms of reduced market access.
b) What is the role of formation of Trans National Corporation in meeting the
negative impact of trade blocks on developing supplier countries?
Discuss case examples on CMT Apparels, HOPF and Texport Syndicate etc.
(Handout Annexed as ‘B1’) as suggestive methods or solutions.
c) How should an exporter negotiate when buyers become bigger due to retail
consolidation?
The instructor should give examples of US based Federated stores merger with
May department stores or any other example as deemed fit. The impact on prices
and favorable terms demanded by bigger buyers, with respect to product
development, shorter lead times and services, should be highlighted. Engaging
into full service exports should be offered as one of the solutions in meeting this
challenge of changing market scenario.
d) Which retail format should be focused for selling on account of changing
consumer preferences?
Provide a handout of research by Cotton Incorporated Lifestyle Monitor which
shows that older generation in US prefers discount chains which requires exporters
to change their market strategies. (Annexed as ‘B1’)
e) Can developing countries exporters meet the demand of quicker and faster
fashions?
The instructor could discuss examples of Zara, Hot kiss, Mango and H&M etc.to
show how more fashion cycles are happening in a year and flash collections are
required to meet the demand. The exporters need to be guided on which product
categories should be handled for product development effort.
f) Why is Non-Tariff Barriers (NTB) important to study for market entry strategies?
The article from the text book on internal and external monitoring and NTB could
be discussed from chapter-I of text book.
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Competitive export strategies and cases for the clothing industry
g) Is copyright of designs against the fashion industry exporter?
The instructor should highlight the role of international conventions on copyrights
and the legal framework in which Intellectual Property Rights (IPR) have started
playing an important role. The importance of using IPR in value creation and in
using it as a strategic tool shall be highlighted.
Session 3 (Day 1 – General Guidelines)
Apparel value chain and Buyer characteristics
The instructor shall use the power point presentation made (annexed as ‘C’). The study
of buyer characteristics is important as export marketing thrust is dependent on
differentiated buying needs of the buyers. Various market level buyers work with a
different margin, time frame and product categories. The sourcing flow diagram should
be discussed in the workshop along with the channel example of either the US or any
European market.
Session 4 (Day 1 – General Guidelines)
Role Play
Responsibilities and needs of the buyers ought to be highlighted in terms of product
categories, quality requirements, buying cycles, approval process and price points.
The role play may have a few participant exporters in the workshop participating in a
simulation exercise on a selling situation, where the instructor acts either as the retail or
wholesale buyer and participants act as sellers. The role play must focus on
characteristics of the buyers in terms of time lines, quantities to be placed, price
negotiations and delivery time schedules (Handout on buyer characteristics annexed as
‘D’).
It could also have the possibility of including in commercial indications of currency,
shipping routes and quality parameters etc.
DAY 2 – UNIT-II
Environment analysis, Market intensification strategies & Market information on
the EU and US markets
This unit is about the need for exporters to understand and analyze economic, political
and cultural environment, in the existing import markets. The objective is to sustain
competitive advantages and intensify market efforts towards achieving growth. The
environment analysis comprises the inter relationship of firm’s 4 Ps and uncontrollable
variables in the environment and result in the form of Environment threat Opportunity
analysis (ETOP) matrix. The exporters face country specific, sector specific and
commercial risk; associated with shipping apparel consignments to destination countries
and buyers. There are many agencies which assess and manage country specific risk
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Competitive export strategies and cases for the clothing industry
and their role is discussed in chapter-III of the text book. It shall also be suggested to
exporters to take short and medium term cover against commercial transactions,
including special transactions/ shipments against war, calamities, government action
and currency risk etc.
Market intensification strategies are about emergence of Trans-National Corporations
and creating opportunities through full service exports. One of the most important
routes followed to increase the market share in existing markets (the EU and US) is the
route of product innovation.
Session 1 (Day 2 – General Guidelines)
The instructor shall deliver the lecture on Environment Analyses (PPT presentation
annexed as ‘E’) and clarify the assessment of country specific and commercial risk from
chapter-III of the text book. He/ she could also go to the ONDD website in the
workshop and illustrate how country specific risk is rated and assessed.
Session 2 (Day 2 – General Guidelines)
This exercise shall be followed by a PPT presentation (Annexed as ‘F’) on Market
intensification strategies. These strategies should cover the benefits to suppliers while
they consider becoming full service exporters. The advantages of full services like:
having a global presence, better market access, proximity to customer and better value
addition through innovations; should be highlighted. The disadvantages of engaging
into full services namely; managerial and administrative problems, increased cost of
operations and unviable economies of scale, also needs to be pointed out. New product
development and range development exercise using fashion trend forecast should be
covered with various steps.
Session 3 (Day 2 – General Guidelines)
Exercise I:
The instructor may ask the participants to fill up a sheet on environment analysis of the
country and the products that they are catering to. An illustrative example sheet on
German Environment Market analysis shall be provided by the instructor to help
participants fill up the sheet of their own company through self assessment. The
exercise should ideally be conducted in 30 minutes (annexed as ‘G’).
Exercise II:
The instructor may spend 30 minutes with the participants on product innovation route
case study on Chinese silk exporters (annexed as ‘H’). The instructor may also get the
participants to visit various Chinese silk exporters’ websites (provided in the reference
section) to illustrate examples in using product innovations to increase market share.
The case study discussion should be moderated by the instructor and important product
category shifts of silk; from nightwear to daywear, women’s wear to men’s wear and
outerwear to innerwear; needs to be highlighted.
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Competitive export strategies and cases for the clothing industry
Exercise III:
Brainstorming session on Market information on the EU and US markets (annexed
as ‘I’):
The important issues to be discussed are as follows:
- Product categories imported by these countries
- Distribution structure and retail formats
- Ease of market penetration
- Value and volume growth of product categories etc.
Session 4 (Day 2 – General Guidelines)
Presentation on Fast fashion and Quick Thinking (Annexed as ‘J’) should highlight the
importance of compressing the supply chain to faster demand and in creation of market
opportunities. Quick thinking is about finding new product categories with in existing
markets (for instance Pet Apparels).
Session 5 (Day 2 – General Guidelines)
This should be followed by a quiz on market entry in existing market (Annexed as ‘K’).
Quiz:
1. Which countries have the largest imports of apparels from developing countries?
Name the countries in order of preference.
2. How will you get the list of buyers for prospecting?
3. What will be your communication plank to the buyers in these markets?
4. Which product categories will be chosen to focus on the country selected?
5. Which market entry routes are possible for the existing markets?
6. How do you price your lines for these markets?
DAY 3 – UNIT-III
New Market Development, Pricing and costing approaches
In this unit, the focus of the exporters will be shifted to new markets and it shall also
allow participants to gain insights into their own competencies including abilities to cost
garments and other product lines. New markets should be approached by selecting a
region-based approach. After considering the region wise characteristics, a country
specific approach should be followed. Focusing a specific sector can narrow the
approach adopted by the exporter and is usually beneficial. The text book chapter VI
cites examples in approaching Latin American apparel markets as a whole followed by
adopting a country specific approach e.g. Brazil. Brazil itself is a huge textile and home
furnishing market for imports and a growing garments import market. The country is
difficult to enter into and market entry barriers are crucial to study.
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Competitive export strategies and cases for the clothing industry
Session 1 (Day 3 – General Guidelines)
The instructor shall start with a PPT presentation on New Market Development
(Annexed as ‘L’)
Session 2 (Day 3 – General Guidelines)
This should be followed by a brainstorming session on new markets of Brazil and South
Africa etc. The session should be moderated by the instructor and the questions to be
used as guidelines are as follows:
1. Which are the important product categories imported by Brazil and South
Africa?
2. What are the distribution channels and retail formats for market entry?
3. What are the barriers in market penetration (cultural, political and
administrative)?
4. How should an exporter contact buyers in Brazil and South Africa?
5. What is the price value expectation of buyers in these markets?
Session 3 (Day 3 – General Guidelines)
A power point presentation shall be made on various international approaches like target
pricing, cost plus, activity based, incremental and competitive parity pricing etc
(Annexed as ‘N’).
Session 4 (Day 3 – General Guidelines)
An exercise on costing, using cost plus and buyer backward approach together, shall be
conducted by the instructor. Cost example sheet on two products and a handout to be
provided by the instructor (Annexed as ‘O’). The garments brought by exporters and the
instructor may be costed in the workshop using the various approaches covered by the
lecture.
DAY 4 – UNIT-IV
Session 1 (Day 4 – General Guidelines)
A power point presentation (annexed as ‘P’) on how to make market entry using direct
exports, franchising, import agents and licensing route etc. should be made to the
participants.
Session 2 (Day 4 – General Guidelines)
Discussion on case examples of clusters in Italy and China (Annexed as ‘Q1’) and
exercise on key performance indicators to calculate competencies of firm shall take
place in the session. Case examples and handouts shall be provided by the instructor.
(Annexed as ‘Q-2’)
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Competitive export strategies and cases for the clothing industry
Session 3 (Day 4 – General Guidelines)
Guidelines on business plan to be provided by Instructor are as follows: (Annexed as
‘R’)
1. Make a list of buyers and the retails formats
2. Conduct market research and SWOT of the export company
3. Choose promotion tools for exporters like trade missions, e-commerce catalogues,
personal selling, fair participation and contact through associations.
4. Guidelines of negotiation with buyers include maintaining business etiquettes,
adopting standard business practices and awareness in cultural differences in
conducting meetings.
5. Follow guidelines regarding presentation of company to the buyers:
- Make a visual cum factual presentation regarding credibility, product lines
and promoters of the company.
- Compare the prices with the competition
- Detail indication about time, activity of various stages of the order, if
committed.
- Insure participation of the buyer in feedback on products and services
- Insure communication with key people is addressed to.
6. Conducting negotiation:
- Arouse awareness in categories and company profile
- Prospecting and handling enquiries personally and through internet
- Present credentials
- Conduct price negotiation using methods given in the text book.
- Close the sale
- Provide feedback
Session 4 (Day 4 – General Guidelines)
The participants shall prepare and submit their business plan to the moderator
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Competitive export strategies and cases for the clothing industry
COURSE STRUCTURE
(refer to accompanying manual on Presentations and Cases)
DAY – 1
Session/ Subject Topic Specific learning Teaching/Learning
Duration outcomes Activities
Session-I Changes in export Knowledge about impact Lecture –Power point
120 min marketing scenario- of changes on export Presentation Lecture
Retail consolidation, selling and titled ‘Shape of things to
Regionalization, impact merchandising in come’ (Annexure ‘A’)
of quota elimination, fast companies
fashions, Corporate
social responsibility and
role of IPR etc
Session-II Discussion questions on -do- Brainstorming session on
60 minutes above impact of issues changed
marketing scenario on
export marketing &
merchandising
(Moderator based
session)
Hand out – list of
questions (Annexure
‘B1’)
FIFA Case Study- for
discussion (Annexure
‘B2’)
Session-III Apparel Value Chain How to communicate and Lecture Power Point
60 Minutes Buyer Characteristics deal with buyers based presentation titled
Sourcing structure on their market role ‘Apparel Value Chain
and Buyer
Characteristics’
(Annexure ‘C’)
Session-IV -do- -do- Role-play by the
60 Minutes instructor as buyer
(participants attend the
negotiation meeting for
obtaining orders) focus
on buyer characteristics.
Handout on buyers
characteristics
(Annexure ‘D’)
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Competitive export strategies and cases for the clothing industry
DAY – 2
Session/ Subject Topic Specific learning Teaching/Learning
Duration outcomes Activities
Session-I Analysis of Economic, Learning on assessing Lecture – Power point
60 min Political and Cultural country specific and Presentation Lecture
Environment of import commercial risk and how titled ‘Environment
countries to manage it by the Analysis’ (Annexure ‘E’)
exporter
Assessment of country
specific risk – political
and financial risk.
Management of risk.
Session-II Trans National Learning will be on how Lecture – Power point
60 minutes Corporations, Full to increase market share Presentation Lecture
service exports, Product and achieve growth in titled ‘Market
and Process Innovation existing markets like the Intensification Strategies’
route for market EU and US (Annexure ‘F’)
intensification.
Session-III Exercise German Market How to assess the Exercise on environment
90 Minutes Analysis using environment of import analysis by exporters.
environment threat Example sheet on
opportunity analysis German Market
environment analysis to
be provided by the
instructor. Participants
are expected to choose
their own country and
product categories. (30
Minutes) (Annexure ‘G’)
Case study on Product Knowledge on product Case study discussion
Innovation by Chinese innovation route for (30 Minutes) (Case study
Silk Exporters market intensification Annexure ‘H’)
Brainstorming session on Information on existing Moderated group
market information on markets discussion – (30
the EU and US markets. Minutes)
(List of questions
Annexure ‘I’)
Session-IV Fast fashion and agile How to cater to fast Lecture – Power point
60 minutes supply chain fashions Presentation Lecture
titled ‘Fast fashion fast
thinking’ (Annexure ‘J’)
Session-V QUIZ on market entry in Market entry strategies Quiz conducted by
90 minutes existing markets for the EU and US instructor. Handout to be
given. (Annexure ‘K’)
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Competitive export strategies and cases for the clothing industry
DAY- 3
Session/ Subject Topic Specific learning Teaching/Learning
Duration outcomes Activities
Session-I New Market Knowledge on market Lecture –Power point
60 min Development region entry approached to new Presentation Lecture
wise approach, country markets including titled ‘New Market
specific and sector market access Development’(Annexure
specific approach with requirements ‘L’)
examples on Latin
American Market
Session-II General information on -do- Brainstorming session on
90 minutes Brazil and South Africa, new markets of Brazil,
retails formats, Market South Africa etc.
Entry routes and product Session to be moderated
profile by the instructor
(Annexure ‘M’)
Session-III Pricing approaches like Learning on international Lecture –Power point
60 Minutes target pricing, cost plus, costing methods and Presentation Lecture
incremental cost and how to present costing to tilted ‘Costing and
competitive parity etc. the buyers for Pricing Approaches’
Buyer backwards and negotiations. (Annexure ‘N’)
cost plus approach, SAM
based activity approach
and product line pricing.
Session-IV Calculation of cost plus -do- Exercise on Costing
120 minutes approach using cost plus and buyer
backward approach. Cost
example sheet on two
products and a handout
to be provided by the
instructor (Annexure
‘O’).
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Competitive export strategies and cases for the clothing industry
DAY –4
Session/ Subject Topic Specific learning Teaching/Learning
Duration outcomes Activities
Session-I Tools to Market Knowledge on market Lecture –Power point
60 min research, market access entry routes and skills on Presentation Lecture
requirements, exporter handling buyers in titled ‘Market Entry
buyer profile match, various markets Strategies (Annexure
routes to market entry ‘P’)
including direct and
indirect exports, business
planning and guidelines
for business practices
and negotiations with
buyers.
Session-II Innovation through Knowledge on marketing Discussion on case
60 minutes Clusters, advantages/ through clusters and examples of cluster in
disadvantages of being building organizational Italy and China and
in a Cluster and competencies. exercise on key
competency of firms performance indicators
using key performance to calculate
indicators. competencies of firm-
case examples and
handout to be provided
by the instructor.
(Annexure ‘Q1’ - Cluster
examples)
(Annexure ‘Q2’ - Key
performance indicators)
Session-III Business Planning, Learning the importance How to make a Business
60 Minutes budgeting and of Business Planning in Plan? Discussion
calculating variances and export management. session.
projected order Guideline on Business
calculations. Plan to be provided by
the Instructor.
(Business Plan-
Annexure ‘R’)
Session-IV -do- -do- Participants prepare and
120 minutes submit their business
plan to the instructor and
discussion for approval.
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