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The role of the marketing division
Marketing is a part of a firm’s strategic plan.
Marketing Strategies & To market product successfully;
Positioning the firm relative to target markets and the
Merchandising Process titi
competition.
Identifying “Target markets” for their products
Continually monitoring markets.
ADM4307 Apparel Manufacturing
By S. H. Shin, Ph.D.
The role of the marketing division Strategic marketing processes
Marketing strategy considers;
Market segmentation and Target markets Marketing objectives
Target markets Analysis of the competition
Described in demographic characteristics (See Table 2-1, p. 34) Market positioning and product differentiation
1) Core customers (the foundation of their business)
Product sell-through
2) Fringe customers (potential for business growth)
Market segmentation Marketing objectives
Mass market strategies Market penetration
Middle income class, large portion of the U.S. population (about 80%) Expends sales of current products in current markets
Multiple-segment strategies Achieved through
Two or more marketing, Examples: men’s sport shirt + a line for women’s shirts Price promotion/ Low pricing
Niche marketing (or Micromarketing) Brand/ Store loyalty
Narrowly defined target market (gender, price range, size range, life style) Convenience/ Accessibility /Internet
A firm may change its conception of target market; Market development
1) Distribution changes among age groups (Example: Y Generation) Seek new markets or new uses for products (Example: Nylon)
2) Population shift to the south and west. Diversification
3) Needs of special market segments: petite, plus, tall, and large size. Develop new products aimed at new markets (Example: Liz Claiborne’s
diversification Elizabeth for large sizes, Liz sport for casual market,
Claiborne for men’s wear)
Marketing strategy Marketing strategy
Analysis of the competition (see p. 37) Product sell-through
Identify by It must be sold at “regular” price.
asking customers/ reading the trade press/ consulting industry
directories/ and participating in trade associations. 1) Push-through system
Determining potential competition is difficult. 2) Pull-through system (the essence of QR)
M k t positioning and product diff
Market iti i d ti ti
d t differentiation S l F
Sale Forecasting
ti
To make positioning decisions, the firm must know “Outlines expected company sales for a specific good
1) purchase criteria of their target customers to a specific consumer group over a specific period of
2) product performance expectations time”
3) customers’ perceptions of competing product
Research method:
Market analysis example (see Figure 2-1 p. 39)
Qualitative methods (Consulting)
Product differentiation by using
Labeling, price, quality, customer service, fit, fashion, styling.
Quantitative methods (statistical analysis)
Market positioning example (see Table 2-2. p. 38) Reflect market potential (Pull), NOT production
capability (push).
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Retail/Wholesale Marketing Strategies Marketing calendar
Relate to Channel distribution. Marketing calendar
Developing retail strategies Timing of product development, production, and
Selling distressed merchandise in outlet store. presentation is critical (p. 45).
Examples: VF Corp. using Dual-distribution system (own stores+ Selling periods:
traditional discount, specialty, or department store), Lands’ End Factors: Seasonal, Holidays, fashion change.
(Internet + catalogue) T-shirts k ) Seasonal it
T hi t (52 weeks), S (8-12 k )
l items (8 12 weeks)
Developing wholesale market strategies 6 selling periods a year and 5 lines a season.
A place where a group of apparel manufacturers is showing their Marketing calendar example (Table 2-3, p. 45)
product lines for sale at wholesale.
MAGIC International trade show in Las Vegas (twice a year) Marketing dates
www.magiconline.com Line review: Presentation of the line to the sales staff. (2wks prior to line
Target of the wholesale force-> Retailers ->target consumers. release)
Sale reps (2 types) Line release: Line must be complete for showing.
Inside sales rep. Start to ship: Line is ready for delivery to retail store.
Outside sales rep. Ship complete: date by which retailer orders are to be completely filled.
QR Partnering arrangements (within 3 wks).
Other marketing strategies Merchandising processes
Global marketing
Merchandising is:
Marketing on the Internet
Labeling and Licensing Planning,
Labels Developing, and
National brands and trademarks
Private brands
Presenting product lines for a target market
Legally required labels involving pricing, assortment, styling, and
Merchandising license agreements timing.
Intellectual property
Licensing (Example: Lauren by Ralph Lauren, Peerless Gross margin (profit):
International, a licensee of RL)
Licensing contracts
The difference between net sales and cost of
Royalty (1~15 % of sales) goods sold
Merchandising calendar
Merchandising calendar with Quick Response system
Lead time:
Merchandising calendar: The time between placing an order and delivering merchandise.
Customer-driven.
The timing required to develop, plan, and The importance of level of inventory
Enough inventory to minimize lost sales but not so much as to have lots
present for each selling period. of excess at the end of the selling period.
Based on 52 week merchandising cycle
Selling periods (3~52 wk) defined as weeks of In the past (56 weeks)
Retailers
sale for products.
Manufacturers
Quick Response
(Short time) Customers
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Dimensions of product change &
Concepts of apparel product lines
Merchandising responsibilities
Product line: A perceptual map of product change (see Figure 3-4,
The total merchandise mix presented for sale.
Within each line/category/classification, the merchandiser builds an assortment (e.g. p.70)
style).
Merchandisers and designers when planning and developing product lines think in Merchandising responsibilities:
groups rather than individual styles.
Categories for merchandisable groups: Merchandising taxonomy detailing planning, developing,
Separate: 3-6, p.75)
and presenting a product line (see Figure 3 6 p 75)
Tops/ bottoms or both items
Example:1 Style+5 colors+4 sizes (see Figure 3-1, p.67)
Coordinates: Line planning
Groups of different products with common characteristics such as style, trim, colors, etc.
(see Figure 3-2, p.68).
Example: 5 styles+2 colors+ 6 sizes
Multi-piece style (Example: Suits) Line Development
Related separates:
Displayed and sold like a separates line but has even more coordinating potential
because of common colors and materials.
Example: 2 styles of shirts + 2 styles of sweaters (See Figure 3-3, p.68)
Line presentation
Merchandising Responsibilities Line planning
Line planning: Planning merchandise assortments based on budgets:
A balanced assortment matches the assortment plan to
guides, defines, and limits the line by evaluating customer demand.
merchandise mix and forecasting. Assortment balance is based on the development of model stock
Look at last seasons sales at same selling period. plans that identify SKU (number of Stock Keeping Units).
Review current market information
SKU = Number of Styles x Number of Sizes x Number of Colors
Brainstorm for new ideas
World market shopping.
Planning merchandise budgets by:
Looking at last years sales and plan for sales increase/decreases. Number Number Number
Take into consideration new accounts and current retail relationships. of of of
Talk with buyers on their projected buying % for the upcoming selling Styles Sizes Colors
period.
Example: See Figure 3-7, p. 78.
Line planning Line development
Assortment:
Range of choices offered, usually defined by: Line development:
Style + Size + Color
Assortment variety: Includes all processes required to translate a
Total number of unique items that must be produced to satisfy the design plan line plan into real merchandise.
Assortment volume:
Number of units that must be sold to achieve planned sales Line concept:
Assortment diversity:
Is measured by Volume per SKU (VSA) for the assortment. First phase, determining the look and appeal that
Example: 5 or less means losing sales.
establishes identity and salability.
Assortment distribution:
Allocation of volume broken down by style, size, and color. Current issues, fashion trends
Analyze and update merchandise plans when conditions change in
the market, merchandising plans must be adjusted. Inspiration/Concept board.
Example: see Figure 3-9, p. 81
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Product development Line presentation
Product development: Line presentation
The design and engineering required to make Wholesale level:
products salable and producible. Line preview- Sales reps see the line and become
Apparel product development (2 phases) inspired with it sales potential.
i i d ith its l t ti l
1) Creative design- focus on creativity and Line release- must coincide with market dates,
formation of merchandisable groups target date for showing to buyers.
2) Technical design- perfecting the style, fit,
patterns, also including specs and costing.
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