Transcript Marketing Fashion Products - McGraw Hill Higher Education

Core Concepts in Fashion by Laura Portolese Dias
Marketing
Fashion
Products
Chapter Seven
McGraw-Hill
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Seven
Marketing Fashion Products
The Four P’s
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Product
Price
Place
Promotion
Each of these areas must be present and
considered to be most successful in marketing
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Marketing Fashion Products
The Product includes
– The variety of the item
 The colors it comes in, the size ranges
– Features
– Design
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Marketing Fashion Products
Product assortment
– The number of different products a store
carries
– Wide assortment
 Means many types of products are carried
– Narrow assortment
 Only a few different types of products are sold
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Marketing Fashion Products
Pricing considerations
– Wholesale price
 The price the retailer pays to purchase the item
– Retail price
– The price the customer pays
– External factors
 What is the market willing to pay for the product?
 What is the competition paying for the product?
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Marketing Fashion Products
Value Pricing
– Understanding the value of the product to
customers, and charging a price based on
that value
– Usually associated with intrinsic value
 Emotional, non tangible value placed on a product
Prestige pricing
– A product which can be priced higher due to
the brand name
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Marketing Fashion Products
Product Line Pricing
– Multiple levels of prices for similar items
– For example, suits are offered at many
different levels within the same store
Twofers
– Offering a discount to customers who buy
more than one
– i.e. Socks are one pair for $5, but three pairs
for $12.
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Marketing Fashion Products
 Reference Prices
– The price a customer expects to pay for a particular
item
 Promotional Prices
– Products which go on sale-usually for a short period
of time
 Geographical pricing
– Pricing different based on demand in a region
– Pricing different based on in store or internet sales.
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Marketing Fashion Products
 Markdowns are taken because:
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Having a special sale, such as a “half yearly
sale.”
Stimulating customer traffic
Clearing out of season or obsolete
merchandise
To move slow selling goods
Clearing stock of damaged or returned
goods that cannot be given back to vendors
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Chapter Seven
Marketing Fashion Products
 Skim Pricing
– Pricing an item high a first, but then gradually
lowering the price
 Penetration Pricing
– Pricing an item low at first (to gain interest) then
gradually raising price
 Cost Based Pricing
– Price based upon what the retailer paid for the item
 Keystoning
– Adding up the cost of materials and labor, then
doubling the price
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Marketing Fashion Products
 Line item pricing
– Prices end all items in similar numbers
– For example, 29.50, 34.50, 39.50, etc.
 Competitive based pricing
– Pricing strategy based upon what competitors are
selling a similar product for
 Economies of scale
– The more goods a retailer makes, the lower per unit
cost can be obtained on each item, due to purchasing
in “bulk.”
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Marketing Fashion Products
Place
– Distribution strategies
 Intensive
– Selling in as many retailers as possible
 Selective
– Selling in few retail outlets
 Exclusive
– Only one or two outlets in a region exist.
– Makes product seem more exclusive and upscale
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Marketing Fashion Products
Hard lines
– Hard goods such as hardware and tools
Soft lines
– Soft goods such as clothing, bedding and
towels.
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Marketing Fashion Products
Challenges for department stores in recent
years:
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Lack of unique merchandise
Too many sales/promotions
Customer service issues
Mergers
Increased competition from smaller retailers
Increased competition from outlet stores
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Marketing Fashion Products
Lifestyle merchandising
– Sometimes called branded concept shops
– A store within a store
– All items from a particular brand are in one
place
– Ralph Lauren at Macy’s.
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Marketing Fashion Products
Types of Stores
– Specialty Store
 Narrow focus
 Many only carry juniors or men’s clothing
– Single line store
 Only carries one type of merchandise, such as shoes
or handbags
– General Merchandise Store
 Low to mid level pricing
 Carry a variety of goods including clothing,
toiletries and cleaning supplies
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Marketing Fashion Products
Types of stores
– Discount Retailer
 Wal-Mart is an example
 Carry a variety of merchandise
 Difference between a discount retailer and a
General Merchandise store is the pricing.
– Off Price Discounters
 Stores such as TJ Maxx, Ross, Marshalls
 Deeply discounted merchandise which has not sold
in traditional retailers
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Marketing Fashion Products
Types of Stores
– Factory Outlets
 Originally was a place where retailers could sell
samples, closeouts and seconds.
 Now many retailers make goods specifically for
their retail stores
– Online Stores
 Many retailers have a traditional store, as well as
online stores
 Customers can purchase goods online and will be
shipped to desired location
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Marketing Fashion Products
Order Processing
– Can happen much quicker due to technology
– Systems can be used to develop and
manufacture goods very quickly
– EDI
 Electronic Data Interchange
 A system which allows computers from different
companies to talk with each other
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 Three types of receiving departments
– Centralized
 All completed goods are shipped to one warehouse location,
then distributed to individual stores
– Regional
 All completed goods are sent to a several facilities then
shipped to stores
 For example, one may be located on the East Coast, one in
the Mid-west and one on the West Coast
– Single Store
 Each individual store gets good shipped to them directly from
manufacture.
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Chapter Seven
Marketing Fashion Products
Promotion
– Four areas of promotion
 Advertising
 Direct Marketing
 Personal Selling
 Public relations
 Sales Promotion
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Marketing Fashion Products
Advertising
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Can be any form of one way communication
Is usually expensive
Radio
Television
Billboards
Bus Ads
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Marketing Fashion Products
Advertising
– Reach
 How many potential customers will see an
advertisement
– Frequency
 How often those same customers will see an
advertisement
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Chapter Seven
Marketing Fashion Products
Advertising
– Types of advertisements
 Selective demand
– Creation of demand for a particular product, such as a
skirt or a pair of shoes
 Primary demand
– Demand creation for a product in general
– Cotton advertisements are an example
 Institutional
– Designed to build brand reputation for a particular brand
 Advocacy
– Used by a company to promote a cause, such as breast
cancer research (Avon)
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Marketing Fashion Products
Advertising
– Magazines
 Two types of magazines
– One for the consumer
 Vogue, Redbook
– One for the industry professional
 Women’s Wear Daily
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Direct Marketing
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Something which comes directly to consumer
Email
Catalogs
Flyers
Personal Selling
– The one on one selling which happens when a
customer enters a store
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Chapter Seven
Marketing Fashion Products
Public Relations
– Usually inexpensive or free
– Press releases
– Special Events such as fashion shows
Sales Promotions
– A promotional technique which motivates the
customer to buy “right now”
– Sales, two for one specials and coupons
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Chapter Seven
Marketing Fashion Products
 Continuity
– The idea that all messages (though any of the
ways mentioned above) present the same
message
– Logo, colors and message (such as, “our
brand has the best value) be communicated in
all promotional activities
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