Fashion Quiz 1

Fast fashion

(2005- Present) an ultrafast supply chain with a focus on consumer demand. These companies introduce new products in small quantities with little or no replenishment - One of the most successful is Zara - Success depends on vertical integration, designers working with production planners and marketing specialists, making design and production decisions based on consumer demand, offering consumers limited quantities of multiple styles of merchandise and the ability to produce merchandise in weeks instead of months.

Conventional marketing channels

consist of independent companies that separately perform the designing, manufacturing, and retailing functions.

4 major inventions in response to the textile demand

- Spinning "Jenny" machine (1764) - power loom (1785-1787) - cotton gin (1794) - sewing machine (1832,1845-1846)

Triangle shirt way factory

- a sweatshop incident where a fire started that could've been prevented and it killed over 100 people in 18 minutes - This led to the Sprinkler Law

RTW becomes available

- for men first because their styles were less complicated - for children second boys then girls because a lot of children were working - for women last because sizing was difficult and shirtwaists became very popular

Licensing Advantages

For the licensee, the value added to the merchandise by a licensed name, image, or design comes in many interrelated forms. The licensee gets automatic brand identification - The licensor also gains from licensing agreements. Licensing allows for brands to extend into other categories of merchandise without revealing to consumers that the licensor is not manufacturing the merchandise. Such arrangements allow companies to expand their product lines by taking advantage of the manufacturing and distribution expertise and facilities of other companies.

Licensing Disadvantages

For the licensor, overuse of licensing arrangements may result in saturation of the property in the marketplace. This can lead consumers not perceiving a distinct image with the property. When a licensed product sells well, the licensor must rely on the licensees ability to react by producing goods quickly. * Depending on the licensing contract, licensors also risk losing control over quality or distribution of licensed merchandise. To assure consistent quality, the licensor must arrange for constant monitoring of production quality by inspecting samples or production facilities -For licensees, the major disadvantage of licensing is the risk associated with predicting the popularity of the licensed name or image. Timing is extremely important for the success of many licensed products, and licensees must be experts in understanding and predicting consumer demand. Sometimes, however, the license does not turn out as anticipated. This often happens when big-budget movies flop. * Licensees also bear the expense of controlling channels of distribution and trying to prevent counterfeiting of the licensed goods. They are responsible for additional costs related to the manufacture of licensed products according to the licensors rules and regulations

Direct Marketing Channel

fashion companies sell directly to consumers. For example, consumers may purchase goods directly from the fashion company through catalogs or over the internet - AKA direct connect to consumer, manufacturer to consumer

Time Limit element

for many licensed products, timing is everything. - For example, the contract for the image of a currently popular movie character may be for a shorter time than for a classic designer name.

Ecommerce

(mid 1990s to beginning of 21st century) Online business. Online retailing very important consumers now expect omnichannel retailing and seamlessly integrates bricks and mortar and online operations - Companies became online retailers only - Additional developments in online retailing have included the rise of peer-to-peer (P2P) commerce, such as Etsy, which provides a platform for individual crafters to sell their product without the expense of maintaining their own website or store.

Fashion is evolutionary

because it's always changing

Prior the industrial revolution there was

a shortage in fabric so there had to be a period of mechanics to get us to RTW

Development of Licensed Products Steps

1) The image or design, commonly referred to as the property, is created 2) Consumers are exposed to the property through media 3) The property is marketed by the licensor to build name or image recognition 4) Merchandise with the property added is produced by a variety of manufacturers 5) Merchandise os distributed by retailers 6) Merchandise is demanded by consumers

Fashion brand licensing

130 billion dollar industry. Because of the widespread use of licensing within the fashion industries, an understanding of the role it plays in the creation of fashion brands is important. - Licensing is the selling by the owner (licensor) of the right to use a particular name, image, or design to another party (licensee), typically a manufacturer, for payment of royalties. -The licensee buys the right to use the name, image, or design, referred to as the property, on merchandise to add value to the merchandise. - Licensing has grown dramatically as companies recognize the value of established brand names, characters, and brand extensions. - Many name brands use licensing agreements to expand their production and distribution in other countries. - The success of licensing depends on consumers desire for goods with a perceived difference based on brand name, trademark, or image. The diversity of licensed goods proves their effectiveness in creating a favorable difference in consumers minds.

World Trade Organization WTO

1995 regulates the contracts between countries on behalf of both parties to make sure business transactions are fair and ethical with a goal to enhance international trade - Bilateral trade agreements amongst 2 countries became multilateral agreements among multiple countries - Barriers were removed like quotas, taxes and tariffs - Rules were developed that resulted in countries redefining their roles to maximize advantages

What is fashion?

A broad term/style of consumer product that's deemed to be appropriate

Fast fashion retail brands

A type of SPA retail brand, Fast fashion companies are characterized by their low prices, fashion trends, and short time from concept to retail - Examples: Zara, H&M, Uniqlo

SPA specialty store retailer of private label apparel

A type of private label brand, the retailer and the brand are one and the same and so are sometimes referred to as store brands. - Examples: Gap and Banana Republic, Victoria Secret and Pink

Quality element

Clauses about the materials and manufacture of merchandise and the submission of samples of merchandise for approval by the licensor give the licensor control over product quality

Advances element

Contract clauses set the amount of advance money that will be paid up front and then deducted from the royalty payments

Guarantees element

Contracts often guarantee that the licensee will be paid a minimum dollar amount, even if royalties fall below this amount

Notification of agreements to customs department element

If goods are being manufactured offshore, or outside the United States, this notification is needed so the goods will clear customs and not be confiscated as counterfeit goods. Contract clauses assure licensees that the licensor will provide notification if needed

First mall opens

In Kansas, Missouri 1922 and fashion magazines also start to develop

corporate licensing

Licensing of brand names and trademarks of corporations. - This type of brand extension licensing extends a brand that is well known in a product area to a different product area

Marketing and distribution element

Licensors often want to control the marketing consistency of their licensed merchandise. Also, many designers do not want their licensed merchandise distributed through discount or off-price retailers, and they put clauses in their contracts to prevent it.

Nostalgia Licensing

Manufacturers license the names and images of legends, such as Marilyn Monroe, James Dean, and Babe Ruth, as well as old-time movies and radio and TV shows,

Sports and collegiate licensing

Professional sports team and university logos are licensed to appear on sport-related merchandise, - Athletic footwear companies often have unique licensing agreements with professional and collegiate sports leagues or individual teams. - In these agreements, footwear companies pay the leagues or teams for the right to sell merchandise with the league or team logo. - They may also purchase the right to outfit the team with athletic footwear and/or uniforms with the company's logo

Exclusive licensing for a retailer

Retailers often team up with celebrities and designers to create merchandise sold exclusively at a particular retailer, creating a unique form of private label merchandise. - exclusive licensing programs can contribute to the brand identity of retailers.

International name brands

Some companies have established international recognition as a brand name. - EXamples: Nike, adidas

International designer / luxury brands

Some designers have international recognition and sell their licensed merchandise through boutiques or other high-end retail venues. - In addition, a number of brands have positioned themselves along with designer brands at the luxury level. Designer brands and other luxury brands are associated with high prices, high quality, and distinct prestige - Examples: Louis Vuitton, Gucci

National / local designer / luxury brands

Some designers have more local or national recognition and sell their merchandise through boutiques in their community or country. These brands are also associated with high prices and high quality but may not have the international reputation as the international designer or luxury brands

Character and entertainment licensing

Such images as cartoon characters, movie or television characters, and fictional characters are often licensed to appear on a range of merchandise, from sleepwear to backpacks to sheets and towels - In recent years, licensed merchandise relating to movies and movie characters has been extremely popular, particularly for infant and childrens clothing and other childrens merchandise.

The Licensing Contract

The terms of the agreement between the licensee and licensor are outlined in a contract. Typically including elements

Marketing channel information flow

This is communication among companies within the marketing channel pipeline. Increased information flow between manufacturers and retailers has resulted from many supply chain management strategies

marketing channel promotion flow

This is the flow of communications designed to promote the merchandise either to other companies (trade promotions) or to consumers (consumer promotions) in order to influence sale

Marketing channel Physical Flow

This is the tracking of fashion merchandise from the factory to the retailer or ultimate consumer. It includes warehousing (or storing), handling, and transporting merchandise so that it is available to consumers at the right time, at the right place, and in the right quantity.

marketing channel payment flow

This is the transfer of monies / money among companies as payment for merchandise or services rendered. This includes both the methods used for payment and the company to whom payments are made

Marketing channel ownership flow / title flow

This is the transfer of ownership or title from one company to the next. - For example, does the retailer own the merchandise when it leaves the factory, or the manufacturer distribution center, or when the retailer actually receives the merchandise? The manufacturer and retailer negotiate when the title is to be transferred

Designer name licensing

license their names as brand names for products including scarves, jewelry, fragrances, cosmetics, home fashions, and shoes

Royalty payment element

Typically, the licensee pays the licensor royalties of 7 to 14 percent of the wholesale price of the goods sold.

Multichannel distribution

With the growth of non-store retailing, including web-based and mobile retail formats companies offer merchandise through varying retail venues: bricks-and-mortar stores, catalogs, and/or websites.

Celebrity name licensing

a celebrity's name on a label effectively fast-tracks a new fashion brand shaving off as much as ten years to develop widespread recognition.

What is a Brand?

an entity with a distinctive idea expressed in a set of functional and experiential features with a promise of a value reward relevant to its end user and in economic return to its producers (through the building of equity). - A successful brand has a strong identity (mentally and physically), is innovative, consistent, competitively positioned, and holds a matching positive image in the consumers mind - AKA a brand needs to establish identity well, be consistent and ensure quality

Marketing channels

are routes that products follow to get to the ultimate user. They consist of businesses that perform manufacturing, wholesaling, and retailing functions in order to get merchandise to the consumer. Marketing channels have several structural systems

Quick Response QR scanning pull system begins

as demand strategies based on the flow from consumers to manufacturers of timely and accurate info about consumers wants and needs - This was a change from the original push system that were supply strategies used to push products on consumers (1980-1995) - Collaboration, trust and dependability make this effective - Goal is to reduce inventory, shorten time for raw materials to become a finished product in the hands of consumers and to provide better service to consumers

Casual clothing and sportswear

become an expanding segment of history (1950-1980)

Sweatshops

began as contractors and subcontracts for slop shops but later became known for the intense labor and harsh work environment mostly in NYC

Corporate Social Responsibility CSR

business practices that contribute positively to society. Corporate social responsibility strategies in the fashion industries is evidenced through-out the supply chain. - Socially responsible supply chain management is achieved through design, sourcing, and distribution decisions that positively affect social, environmental, and economic systems - Socially responsible design includes practices that enable designers to influence the social, environmental, and economic systems through design solutions. This is achieved through inclusive design, environmentally respon-sible design, health-related design, and design that promotes fair trade. - Socially responsible production is achieved through safe and healthy working conditions, environmentally responsible production, fair wages, and production that promotes fair trade. - Socially responsible marketing considers consumers desire to purchase goods and services that have been produced and distributed with sustainability in mind and in safe and humane conditions by individuals who are paid a fair or living wage. -Socially responsible distribution is achieved through safe and sustainable practices for getting products to the ultimate consumer.

Dual distribution

fashion brand companies will sell their merchandise through their own stores as well as through other retailers. - AKA having 2 different ways to market themselves. Positioning yourself as your own brand then marketing yourself differently to a department store or market as an individual store

Vertical Marketing channels

consist of companies that work as a united group to design, produce, market, and distribute merchandise - AKA retailers made themselves vertical as to where they're designing, distributing, marketing etc. - Examples are: An apparel manufacturer sells merchandise only through its own (or franchised) retail stores. A textile producer also manufactures and distributes finished textile products to retail stores. Private label and specialty store retailer of private label apparel (SPA)/store brand merchandise are produced specifically for a retailer.

Image element

contract clauses specify how the image will appear, giving the licensor control over graphics, colors, and other design details.

Labor costs in the US

drastically increase which led them to seek cheaper labor in Hong Kong and Southeast Asia which made this industry global (1980-1995)

The rise of the middle class

during the industrial revolution brought upon technology in the fashion industry and RTW

brand positioning

how the company positions its brand on key characteristics as compared to its competitors this is how brand identity is determined - Merchandisers for fashion brand companies will use these processes to analyze how their brand compares with competitor and how their brand is different from competitors on characteristics important to the target customer.

Demand for RTW rises

in early 19th century because middle class wanted quality clothing with cheap/ less expensive prices

Supply chain network

include all of the interconnected individuals, businesses, and processes that are necessary to get a product to the ultimate consumer. - Throughout these supply chain networks are processes that add value to the product for each of the customers along the way. - As with other industries, the fashion industries rely on supply and value chain networks to take the product from material (e.g., fibers, fabrics) to fashion brands sold through one or more of many types of retail venues to the ultimate consumer of the fashion. - Making supply chain management very important

Extended Marketing Channel

involve either Wholesalers acquire products from manufacturers and make them readily available to buyers, usually retailers OR Intermediaries buy products from wholesalers at special rates and make them available to retailers. Intermediaries are sometimes referred to as jobbers in this segment of the industry. - AKA from manufacturer to wholesaler to retailer to consumer - because this is a timely process its rare / seldom to use

Lifestyle brands

is a term used to describe brands that are associated with a particular target customers activities and way of life. - Tommy Bahama is a good example of a lifestyle brand as the merchandise is associated with the lifestyle of people who live or vacation in tropical locations.

brand identity

is controlled by the fashion brand company through marketing and advertising and includes all means by which a company portrays the brand and communications with the consumer.

brand image

is created by the consumer in their minds based on their experiences with the brand and their attention and interpretation of the company's marketing and advertising efforts.

Mass production

is huge at this time (1950-1980) and mass fashion becomes affordable to most of the population (1960)

a private label brand

is specific to a particular retailer that oversees the design and marketing of the brand - Examples: * Department store private label brands: JCPenney's Worthington label and Nordstrom's Classiques Entier and Treasure&Bond brands. * Exclusive licensing brands: Jaclyn Smith's line of apparel licensed to Kmart. Vera Wang's Simply Vera Vera Wang exclusive brand for Kohls.

Marketing Channel integration

is the process of connecting the various levels of marketing channels so that they work together to provide the right products to consumers in the right quantities, in the right place, and at the right time. - can be created through conventional marketing channels or through vertical marketing channels.

Logistics

is the term used to describe the processes of coordinating these interconnected activities

Vogue created in 1892

kept sewers up to date

Brand differentitation

results in creating distinct brand images in the minds of consumers.

Limited Marketing Channel

retailers survey the various fashion brand companies and select / buy merchandise that they believe their customers will want. Retailers also serve as gatekeepers by narrowing the choices for consumers and providing them with access (through retail outlets) to the merchandise, thus performing an important service to consumers. - Retailers may also arrange for the production of specific goods (private label merchandise) that they then make available to their customers. - AKA from Manufacturer to Retailer to Consumer - In some cases, fashion brand companies sell merchandise through their own retail stores. Because a retail store is used in the process, this form of distribution is considered a limited marketing channel rather than a direct marketing channel, even though the product is sold by the fashion brand company. - This is the most typical / common marketing channel used

Because there were already sewing machines, women began to

sew at home AKA slop shops

Textile industry gets fancy introducing

synthetic fibers specifically Nylon, synthetics needed to happen because cotton couldn't be produced fast enough for the industry

In the 1800s there was a large amount of immigration in the US

this provided workers for the labor

Vertical Integration begins

where as one company is doing all the creating, controlling several steps like designing, manufacturing, marketing distribution etc (1980-1995) - Integrator brands example: Target, Walmart, Nike, Adidas, Gap, Levis - Strategies include brands opening or expanding retail stores, department stores entering partnerships with manufacturers to produce private labels for their retail stores and retail stores adopting a store brand concept with their name on the products

Because of globalization, Supply Chain Management SCM becomes a thing

which is the flow of goods and services making sure everything is safe and successful - AKA the collection of actions required to coordinate and manage all activities necessary to bring a finished product to market - Goal is to reduce inventory, shorten time for raw materials to become a finished product in the hands of consumers and to provide better service to consumers - Collaboration, trust and dependability make this effective - SCM companies share forecasting, POS data, inventory info and info about unforeseen changes in supply or demand for materials or products - business-to-business (B2B) web-based technologies emerged, both smaller and larger companies have implemented effective supply chain management strategies for information sharing. Through the use of password-protected websites, businesses can share information and conduct business transactions effectively and efficiently.