Transcript Week 5 Chapter 3 Fashion Research and Planning (2)

* Chapter 3:
Fashion Research &
Planning
AD 3118 Fashion Marketing & Brand Management
A.Kwanta Sirivajjanangkul
Albert Laurence School of Communication Arts
Department of Advertising
2014
*Chapter Outline
* Marketing Research
* Market Research
* Planning and Strategy
To be effective, fashion marketing needs to be
• planned consciously
• managed strategically
• researched continuously
• reviewed consistently.
Ongoing cycle of endeavor is vital in a highly
competitive, fast paced industry such as fashion
AD3118 for 2/2014 by A. Kwanta S.
Marketing Research
AD3118 for 2/2014 by A. Kwanta S.
*Marketing Research
*
*
*
It is a vital component of both business and marketing
For a fashion company to be able to determine its future business
direction and marketing strategy, it will need to continuously gather,
analyze and integrate information obtained from a diverse range of
business, fashion, and market sources
7P marketing mix
*
product, price, place, promotion, people, process, physical
evidence
* Kotler defines marketing research as:
* “Systematic problem analysis, model building, and fact-
building for the purpose of improved decision-making and
control in the marketing of goods and services”
* Scope of Marketing Research
Business
Product
research
Market
research
Marketing
research
Promotion
al
research
Distributio
n & routes
to market
Fashion
research
* Scope of Marketing Research
Business
Product
research
Market
research
Marketi
ng
researc
h
Distribution
& routes to
market
Promotiona
l research
Fashion
research
•
•
•
•
Finance
Business models
Business opportunity
Political & economic
* Scope of Marketing Research
• Consumers
• Demographics
• Psychographics
• Consumer trends &
behaviors
Business
Product
research
Market
research
Marketi
ng
researc
h
Distribution
& routes to
market
Promotiona
l research
Fashion
research
• The Market Place
• Prices
• Emerging market &
trends in the market
• Size of the market &
state of the market
• Retail trends
• Competitors
• Product prices
• Operations &
services
• Market share
* Scope of Marketing Research
Business
Product
research
Market
research
Marketi
ng
researc
h
Distribution
& routes to
market
Promotiona
l research
Fashion
research
• Logistics
• Catalog
• Bricks & mortar
stores
• Internet
* Scope of Marketing Research
Business
Product
research
Market
research
Marketi
ng
researc
h
Distribution
& routes to
market
Promotiona
l research
Fashion
research
• Fashion forecasting
• Trend picked up by
press
• Designer runway trends
• Consumer fashion
trends
* Scope of Marketing Research
Business
Product
research
Market
research
Marketi
ng
researc
h
Distribution
& routes to
market
Promotiona
l research
Fashion
research
•
•
•
•
•
•
Personal selling
Advertising
Viral marketing
Public relations
Sales promotion
Event and fashion show
* Scope of Marketing Research
Business
Product
research
Market
research
Marketi
ng
researc
h
Distribution
& routes to
market
Promotiona
l research
Fashion
research
• Technological
developments
• Product design
• Product manufacture &
supply chain
• Fabrics, materials,
components
*Marketing Research
*
It is important to define the differences between marketing
research and market research
Marketing Research VS Market research
*
Market research forms a subset of marketing research and refers
specifically to investigations of the market itself, comprising the
marketplace, competitors, and consumers
*
Marketing research relates to a much wider-ranging set of concerns
which include business, politics, economics, cultural and social
trends, developing technologies, logistics, promotions and prodcut
research
*Marketing Research
Marketing environment
1. The macro marketing environment
2. The micro marketing environment
* Porter’s five forces analysis
3. The
Internal environment
* Marketing environment
Interest
rates
Taxation
Legislation
Internal
Distributors
The micro
environment
Business
relationships
The macro
environment
End-consumers
supplier
stakeholders
Social
trends
customers
Exchange
rates
competitors
Technology
Cultural influences
* Marketing environment
The macro
environment
The macro environment
•
•
•
•
•
PEST analysis
Political & legal factors
Economic factors
Social & cultural factors
Technological factors
* Marketing environment
The macro environment
•
•
•
•
•
PEST analysis
Political & legal factors
Economic factors
Social & cultural factors
Technological factors
• The macro marketing
environment refers to the
wider situation impacting on
all businesses. The macro
environment is outside a
company’s direct control and
comprises a complex set of
variables.
• It can be simplified in 4 key
areas;
• Political & legal factors
• Economic factors
• Social and cultural
factors
• Technological factors
• PEST analysis
* Marketing environment
Political & legal
Economic
• Taxation
• legislation
• Trade tariffs
• Interest rate, rate of inflations,
currency exchange rate
• Economic climate
• marketplace
Social & cultural
Technological
• Lifestyle trends
• Leisure activities
• Film, television, music, art
• Communication technology
• WEB 3.0
• Body scanning and
customization technology
• CAD
* Marketing environment
The micro
environment
The micro environment
• Customers
• Competitors
• Suppliers & supply chain
logistics
• Distributors & distribution
channels
• stakeholders
* Marketing environment
The micro environment
• Customers
• Competitors
• Suppliers & supply chain
logistics
• Distributors & distribution
channels
• Stakeholder and partner
relationships
• The micro marketing
environment will be
determined by the market
sector in question and will be
unique to each company.
• The micro marketing
environment refers to factors
that impacts more directly
on an organization and affect
its ability to operate within
its specific market.
* Marketing environment
Porter’s five forces analysis
•It is a tool that can be used to assess pressures within a
competitive business environment.
•Porter’s model identifies 5 forces that impact the
competitive and profitability of a business within a
particular industry
1.
2.
3.
4.
5.
The bargaining power of suppliers
The bargaining power of buyers
Rivalry between competitors in the market
Threat of new entrants to the market
Threat of substitute products or services
* Marketing environment
Porter’s five forces analysis
1. The bargaining power of suppliers
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A supplier will have a strong bargaining position if they
provide a unique product or a necessary service.
If a particular fashion trend takes off, perhaps one featuring
lace or hand embroidery, then a manufacturer in India or
China with capability to produce delicate handwork may find
that they have a stronger bargaining position on price
Suppliers that have built up a strong relationship with their
customers will also be in a stronger position as it can be
costly for customers to switch to a new supplier or
manufacturer (money, time, energy have gone into product
development, creating samples, and working on product
fittings and specifications.
* Marketing environment
Porter’s five forces analysis
2. The bargaining power of buyers
•
•
Buyers will naturally want to purchase products or services at
the best possible price to ensure that they can remain
competitive.
Suppliers need to keep their order books filled, so they will
be under pressure to meet buyers’ demands, particularly in
difficult economic times.
•
Buyers from large retail chains will not only bargain for low
prices but will also demand favorable discount terms and
usually require suppliers to contribute markdown costs on
stock that does not sell at full price.
•
Fashion retailers that produce their own collections will gain
the upper hand in negotiations with manufacturers if they
place high-volume orders.
* Marketing environment
Porter’s five forces analysis
3. Rivalry between competitors in the market
•
•
Fashion retail is full of numerous available brand and fashion
labels, all competing with one another for the endconsumer’s custom.
Rivalry between competitors will also relate to supply chain.
4. Threat of new entrants to the market
•
A brand with loyal customers and a solid business might
capitalize on their existing resources to extend their
operation into a new sector of the fashion market; ex. a
successful womenswear retailer deciding to develop a range
for men.
5. Threat of substitute products and services
•
If customers can find an alternative product or service, they
may switch their custom, thus weakening the power of a
business to succeed.
* Marketing environment
Internal
The internal environment
• Company and departmental
structure
• Finance
• Resources
• Internal systems
• Personnel
• Technological capabilities
* Marketing environment
The internal environment
• Company and
departmental structure
• Finance
• Resources
• Internal systems
• Personnel
• Technological
capabilities
• The internal structure and
culture of a business
organization will impact on
the way it operates
• The way internal processes
and procedures are set up
• A key stage in the process of
creating a marketing plan is
to carry out an internal audit
• The audit provides a
company with an opportunity
to review its internal
procedures, capabilities,
resources, and marketing
strategies
Market Research
AD3118 for 2/2014 by A. Kwanta S.
*Market Research
* Fashion market is a challenging arena. Designers must come
up with fresh and new ideas every season.
* At the same time, retailers worry about slowing sales,
customers are tightening their wallets, and magazines are
losing advertisers.
* it is very important to carry out market research, assess
shifts in trends, understand competitors and gain knowledge
of consumers and their requirements.
* The market research process involves gathering, analyzing,
and interpreting information, data, and statistics on:
1.
2.
3.
4.
Market size
Market trend
Competitors and their market share
consumers
*Market Research Methods
* First determine the aims and objectives of the study.
Marketing research should be considered when:
* starting a new business
* entering a new market
* launching a new product or product range
* adding a new service
* targeting a new customer segment
* reviewing progress or resetting targets
* researching how to compete in a market
* investigating issues of underperformance
*Market Research Methods
* Research brief should contain:
* information on the company and its current market
* the background for the research
* the issues that research should address
* what the research should achieve
* detailed time frame for the project
* deadline for submission of the report
* available budget and resources
*Market Research Methods
Basic primary research methods;
* Observation (visiting fashion trades and cites)
* Comparative shopping (visiting competitors’ stores)
* Like-for-like product comparison (LFL)
* When company wishes to investigate in depth how a particular
product comparing with similar items offered by the competitors in
the market ex. T-shirt of Gap, Uniqlo, American Apparel, Mark &
Spencer & Calvin Klein)
*
the garments will be compared in terms of price, fabric and make
quality, design details and fit, wash care, and performance
* Mystery shopping
* Focus group interviews
* Questionnaires
*Market Research
*Monitoring the market
1. Define the size and composition of a market size
2. Determine the state of the market
3. Assess trends within the market
4. Establish which competitors operate in the
market
5. Analyze competitors strengths and weaknesses
6. Research consumers and understand their
requirement
*
1. Market size
* Location of market: global, international, national
* Product category: accessories, apparel, lingerie, perfume,
homeware
* Who the product is for: women, men, tween market,
children, and baby
* Product type: pro-sport, active wear, casual wear, denim,
formal wear, dresses, evening
* Market level: couture, premium, mid-market, value or
commodity market
*
2. Market Trends
* it is useful to track market data over a longer time frame
* this helps to reveal trends, indicating if the market is
expanding, stagnant, or contracting
3. Fashion forecasting and market intelligence
* an essential element of monitoring the market is keeping
abreast of changing fashion trends.
* developments in global fashion culture, runway trends,
street style, and the market in general
* designers start planning their collections up to a year in
advance of what they will sell in store
* most designers will visit essential fabric and trade fairs as
a key part of their job
*
3. Fashion forecasting and market intelligence
* Most fashion forecasting and intelligence agencies will
supply:
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Market intelligence
Consumer insight
Information on emerging global trends
Reports on street style
Runway reports
Key styles and design ideas
Color forecasting
Fabric trend information
*
3. Fashion forecasting and market intelligence
* fashion designers, manufacturers, retailer buyers,
merchandisers, and brand managers will use a market and
trend information as a basis to predict the future direction
of their businesses
* in fashion retail, sales data is usually reviewed on a daily
basis and analyzed in more depth every week
* designs and product developers will build on this
information with research into color, fabric, design,
technical trends, so that they can develop appropriate
products for the coming seasons
*
3. Life cycle of a fashion trend
* fashion market and fashion trends change over time, this is
why research should be ongoing discipline
* A Fad:
- is short-lived and usually difficult to predict
- A fashion fad can be individual item, look, style that becomes
intensely popular almost overnight and then dies out as
suddenly as it came it
- A fad might be in fashion for one season only and then next
season be out of fashion
- A fad lasts for a year or less
*
3. Life cycle of a fashion trend
* A Trend (Fashion):
- A fashion trend may start slowly with low acceptance in early
stages and build momentum over time
- It will peak and then taper off, either disappearing altogether
or flattering out and remaining in fashion long enough to be
reclassified as classic
- The woman’s pant suit has become a classic.
- The seed of this trend was seen in 1966 when Yves Saint
Laurent introducing “Le smoking,” a tuxedo pant suit for
women.
- This illustrates how a trend may be initiated at couture or
designer level and then work down through the mass market
stores, this is known as “The Trickle Down effect”.
- Trends can also move in other direction.
*
3. Life cycle of a fashion trend
* A Megatrend :
- A megatrend is a large social, cultural, economic, political, or
technological change that is slow to form but will influence a
market over an extended time frame.
- Denim jeans!!!
*
3. Life cycle of a fashion trend
*
3. Identifying competitors
- the most basic way of categorizing competitors is to define those
that offer and supply similar types of products and services at
the same level of market
- Gucci & Prada
- Nike & Adidas
- Competition Criteria
- Product type and usage
- Consumer psychology
- Product and brand positioning
- Shopping location
*
4. Competitor analysis
- The aim is to evaluate how they are performing and investigate
their operation in terms of
- Size
- market share
- capabilities and resources
- Product offer
- Services
- Routes to market
- Number of retail outlets
- The purpose is to assess their strengths and weaknesses and
determine how best to compete
- This links to Porter’s five forces, as powerful companies may have
a stronger negotiating position with suppliers
Planning and Strategy
AD3118 for 2/2014 by A. Kwanta S.
*
Marketing Plan
- The purpose is
- To review and assess the existing circumstances of both the
business and the market
- To determine marketing objectives and strategies
- To establish the actions an organization intends
- To achieve its marketing and business goals
*
Marketing Plan
Situation analysis
- Where are we now?
- What is the current state
of the market?
- Utilize SWOT and PEST
analysis
Objectives
- Where do we want to go?
- What are the market
opportunities?
Strategy and tactics
- How do we get there?
- What action do we need
to take?
- Who will carry them out?
Sales forecasts, predicted
costs, and budgets
- How much will it cost?
- What is the predicted
return on investment?
*
Situation Analysis
-Marketing mix
-Target customers
-Positioning strategy
-Differentiation strategy and USP
-Competitive advantage
-SWOT analysis
-PEST analysis
*
Market opportunity – Ansoff’s Matrix
-Ansoff’s Matrix is a tool that offers four potential scenarios for
opportunity that could be used by a company that has an
objective to achieve growth
1. Market penetration
2. Market development
3. Product development
4. Diversification
*
1. Market penetration
- Market penetration means continuing to sell existing product
within an existing market with the aim of capitalizing and
improving upon the profitability of the current market
proposition.
- Key strategies:
1. Increase number of customers
2. Increase average spend
3. Increase margin (raise priced and buy in at lower cost price)
4. Improve product mix and range plan
*
2. Market development
- Expanding their business by taking existing product to the new
market.
3. Product development
- Developing new products to existing market. This allows for
growth by capitalizing on a brand name to launch a new
individual product or branded product range such as bridge, or
diffusion line
4. Product development
- Developing new products for a completely new market , such as
homeware or fragrance.
- This is the most risky of the four options. It ususally requores
solid strategic partnerships and is most likely to be achieved by
licensing the brand name.
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