Marketing Strategies Merchandising Process Apparel Manufacturing by S H Shin

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Marketing Strategies Merchandising Process Apparel Manufacturing by S H Shin Powered By Docstoc
					                                                                                             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).




                                                                                                                                                                               1
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




                                                                                                                                                               2
                                                                                                      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




                                                                                                                                                                          3
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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