Market Planning for Fashion

Retailing
Fashion Buying – Chapter 4
Lecture # 5
Marketing

Marketing is the process of identifying

and satisfying customer needs through
the profitable supply of product and
service benefits. As such, it is concerned
with managing the marketing mix to
ensure that the benefits are delivered
effectively.
The Importance of Marketing
• To understand the key marketing theory underpinning the development of a
range of fashion products.

• Source of income for a fashion retailer is the profit from the sales of its products.
Less profit per garment means less income to pay its bills.

• Fashion retailer must know what its customers want and are expecting. Problems
in defining and then keeping up with changing customer needs and expectations
are arguably the most important factor in successful selling.

• A problem of poor or slow sales is commonly addressed in fashion retail by the

use of mark-down, which discounts the selling price to customers and, so long as
demand is ‘elastic’, results in increased sales of the product line.
The Marketing Mix
The marketing mix is a series of elements which have traditionally been
referred to as the 4Ps but which subsequently have grown to 7Ps with
the acknowledgement of the importance of service to the overall
package of benefits bought by customers (Table 4.1).
• Product refers to the complete package of benefits offered to
the customer but represented in a tangible fashion product.

• Price refers to the retail selling price consumers have to pay. It

must represent value, compared with competing alternatives
and real choice through offering similar product styles at a range
of different price points. Designers, buyers and financial
managers need to be aware of the limits a competitive retail
selling price places on product cost price and profit per product.

• Promotion refers to a wide range of activity from product

labels/ tickets/packaging to image-based advertising/PR and in-
store visual merchandising. It also refers to incentives designed
to increase sales, which include all mark-downs. The term
‘promotion’ has a very wide application and is the combined
responsibility of a number of retailer functions.
• Place refers to the channels through which the products are sold. Important issues will
include the accessibility, location, available selling space, layout and presentation of the
channels. Customers must have access to sufficient choice of styles, colours, sizes and
price points, with stock being changed regularly to maintain the perception of fresh
fashion looks.

• People refers to all individuals, including customers, suppliers and the fashion retailer’s
staff, who are involved in the buying and selling of the products. For a fashion retailer to
succeed in selling its products it must ensure that all involved in the supply chain have a
clear understanding of the customers’ fashion product needs and expectations.

• Process refers to the intended customer experience of the retail facility, ranging from
store/website layout and function to more specialist personal shopping or home-delivery
features. These will vary tremendously among small boutiques, multiple retail outlets
and department stores.

• Physical evidence refers to the presentation of the store/website, its fascia, windows,
stock and staff. Also included could be promotional material such as in-store posters,
point of sale leaflets and brochures, all of which reflect the brand image of the retailer.
Marketing within Fashion Retailing
• The primary role of a fashion retail marketing department is to promote the
brand and its products, using the promotional mix of advertising, public relations,
sales promotion, personal selling, visual merchandising and the Internet.
• The remaining elements of the marketing mix are the primary responsibility of
other retailer functions: buying and merchandising, design, retail operations,
human resources and systems (Table 4.2).
Defining Customers
• This process of identifying customer needs is called ‘market
segmentation’ and its purpose is to identify a market ‘gap’
or opportunity where a group of customers sharing broadly
similar needs are not being targeted or catered for by other
businesses.
• The final target market must be clearly identified,
measurable and ‘reachable’.
• A segment that cannot be reached effectively, possibly
owing to intense competition, lack of a credible brand
image, or inappropriate distribution channels, does not
represent a meaningful market.
Methods of Segmentation
Geographic Demographic
• Region – North, South, South • Gender
East, West
• Occupation
• City centre/Town high
• Income
street/Out-of-town shopping
centre (Bluewater) • Age
• Variations in weather patterns. • Family life-stage
• Size / height.
Geo-demographics
The six ACORN categories are shown in Table 4.3.
Diffusions of innovation – Rogers (1983)
• Rogers1 developed a five-level classification (Table 4.5).
These are often referred to as ‘fashion leaders’, ‘fashion followers’, ‘fashion
mainstream’ and ‘commodity buyers’ in the fashion industry.
• Fashion retailers need to reflect the appropriate level of fashionability in their
products, or risk alienating customers through being either too forward or ‘old-
fashioned’ in the designs they offer.
Fashion Attitude
• Customers’ interest in and perception of
fashion varies widely.
• Their perception of a fashion brand is
influenced by the promotion of an image that
the brand portrays.
• The image is designed to reflect an attitude
that is consistent with the self-image and
aspiration of the target customer.
• Fashion retailers can segment by targeting
certain types of personality through getting
them to respond to a specific attitude.
Life-style
Marketing theory explains ‘life-style’ • Experientials
as an individual’s pattern of living,
• I-Am-Me
which is expressed through their
activities, interests and opinions • Achievers
(AIO). • Socially conscious
• Emulators
The Values and Lifestyles (VALs) • Belongers
typology is a common form of
customer classification which • Integrated
identifies nine categories according • Sustainers
to whether the person is inner-
directed, outer-directed or need- • Survivors.
driven:
Historical Purchasing Behaviour
• There are many ways for a fashion business to - Product details (style, colour, size, fit, price)
try and segment its customer base, most of
- Frequency of purchase
which have already been discussed. In addition
to these characteristics of the customer, - Time of purchase
retailers have access to a range of information - Linked items
about customers’ past purchase behaviour.
- Value of transaction
• This is valuable, as it provides factual data
about sales of products and their various - leading to average spend per customer
skews, as opposed to speculation about future - Store location
behaviour based on potential needs and wants.
- Reaction to sales promotion / new lines.
• Store cards and loyalty or reward cards also
provide important information about
purchasing behaviour, which can add to the
segment profile:
Pen Portrait
• The pen portrait is a written description of
the kind of person the fashion retailer is
selling to and includes many of the
segmentation variables.
• Typically, ‘mood’ and ‘customer’ boards
that illustrate key features of the target
customer’s personality and life-style
support the pen portrait.
• However, pen portraits must be based on
accurate research of meaningful customer
characteristics. If buyers simply guess at
probable life- style activities, degree of
fashion innovation and attitudes, they may
buy inappropriate products.
Tip
Ensure that your customer
profile includes the
following:
• User occasion
• Life-style (AIO)
• Attitude
• Innovation category
• Income band
• Age band
What is a Season?
• In the fashion business the term Factors which have led to a change in
‘season’ means a period of time during the structure of seasons
which fashion products are sold. • Less distinct and predictable weather
• For example, to a fashion retailer patterns, as winter is milder and the
selling swimwear, the season will be summers begin later
March to August, with a peak in sales • Greater travel, as customers require
in May. clothing for a variety of climates and
• The term may also refer to a collection occasions out of season (e.g.
of products, which are linked by a swimwear in winter, supplied by many
common theme, most commonly the airport retailers).
weather: Spring, Summer, Autumn/Fall
and Winter.
Fashion Seasons and User Occasions
• In marketing terms it could be said that they are ‘buying’ to satisfy discreet ‘user occasions’.
• These user occasions are the situations when customers develop a particular need for a product,
either as a result of their attitudes and lifestyle activities or because of the time of year.
• Consumer demand is forcing retailers to rethink product ranges around changed customer
behaviour. For example swim wear is required in December and January, as more people fly off to
sunnier climates on holiday (Table 4.6).
Modern Seasonal Trading

Pro-tip: Seasonality
1 Understand customers’ life-style activities
2 Satisfy their fashion clothing and related product needs by occasion
3 Plan for linked occasion products
Market positioning
• Market positioning is an important concept in marketing, as it determines how a
product or brand will be seen and understood by its customers compared with
competitors.
• A distinctive market position is communicated to fashion consumers through the
marketing mix. As the end result is a perception held in the mind of consumers,
so retailers rely on distinctive branding to identify themselves.
• It can be achieved through a variety of promotional activities including
advertising, PR, corporate identity and visual merchandising. The latter two
reinforce the positioning statement every time customers walk past or into the
fashion retailers’ shops.
Fashion Retailers Should Do:
• Monitor customers’ profiles/changing needs and understand what
fashion products they expect
• Not make fundamental changes without effective customer marketing
communications
• Remember that brand images are not changed over night
• Track what customers are asking for – both
a What is not in the range and should be
b What is currently out of stock and shouldn’t be
What is a Range?
• In fashion retail, a ‘range’ is an assortment of products, most commonly garments and
accessories, which is developed under different categories to sell to customers.
• Products may be organised according to the size and structure of the business, from fashion
boutique to department store, historical trading and current or anticipated trading plans.
Scope of a Range
A critical issue in developing a range of products is to balance the width and depth of the range.

• Width
‘Range width’ refers to how wide a choice of products is to be offered to customers. Some fashion
retailers – e.g. Miss Selfridge – began selling clothing and accessories but have widened their
product ranges to include jewellery, make up and a whole host of other products reflecting the life-
style needs of their customers.

• Depth
The ‘depth’ of a range refers to the choice of styles, colours, sizes and price points available to
customers in significant numbers of units within product categories. Customers expect to find new
styles of fashion clothing in a variety of colours and their size. Where a fashion retail business is very
focused on a niche segment, it can stock in depth with customers accepting its specialised range of
products.
Price Points
• Price points are sometimes referred to as price ‘architectures’,
implying a structure of price points from low to high for the same
product category.
• Mass- market fashion retailers have to allow for the normal
distribution of customer needs, which will range from basic market
entry-level items to more stylish ones where a premium price can be
charged.
• Psychological price points ending in 50p, 95p or 99p offer perceived
value to some markets. A pair of trousers seems better value if it is
priced at £19.95 rather than £20.
Product Options
• At product level, designers, buyers and
merchandisers make decisions about
styles and colours.
• Styles are represented by variations in
silhouette, fabric and print design.
• Product designs initially begin life as
two- dimensional black and white
outlines with some distinguishing
detail. Some examples are shown in
Figure 4.1.
Typical Options
Options form the basis of
merchandise range planning, as
they can provide a visual
representation of every product line
and colour to be included in the
range. It is important to stress at
this stage that an option is not a unit
of stock, unless the business is
providing one-off exclusive items in
a very exclusive luxury market.
Coordination
Strategic Development
The problem of balancing the portfolio of new
and existing products with existing and
potentially new customers needs buyers and
merchandisers to consider some basic strategic
options. A useful tool from marketing theory is
the Ansoff product–market matrix shown in
Figure 4.2.
Strategic Alternatives
Buyers and merchandisers should recognise the
strategic alternatives indicated by the Ansoff
Matrix,2 and the differing implications of each
to developing product ranges in a season (see
Table 4.9).