Market Segmentation and Fashion Industry: Understanding Consumer Behavior and Trends - Pro, Study notes of Introduction to Business Management

Download Market Segmentation and Fashion Industry: Understanding Consumer Behavior and Trends - Pro and more Study notes Introduction to Business Management in PDF only on Docsity!  Mass Market: A large group of consumers with similar needs.  Market Segmentation: The subdivision of the marketplace into relatively homogeneous subsets of consumers, called market segments.  Target Market: Specific groups of potential consumers that a business is attempting to turn into regular customers.  Basis for Market Segmentation: Geographic, Demographic, Psychographic, Behaviorist, Sociological  Geographic: Classified by region of the world or if rural or urban. What people buy depends on where they live.  Demographic: What people buy depends on who they are. (age, gender, education, income, occupation, race, religion, etc.)  Disposable income: Money available after taxes  Discretionary income: Money available after taxes and necessities.  Upper class: 5% or the population  Lower class: 20% of the population  Middle Class: 60% of the population  Upper Middle Class: 15% of the population  Social Class: Any group of people who share a similar economic position  Social Status: Social position that brings degree of prestige, honor, respect, and lifestyle.  Socioeconomic Status: complex mix of social and economic factors  Psychographics: subjective characteristics that involve aspects of lifestyle, values, and personality.  Behaviorist: Based on consumer usage, loyalty, or buying responses to a product or service  Emotional Motives: Status and prestige are often involved in the purchase of consumer goods  Rational Motives: Good quality, competitively prices, material durable, etc.  Sociological: How social forces shape the fashion landscape.  How is the Fashion Industry Divided? Primary, Secondary, Retail, Auxiliary  Primary Level: Raw material producers, earliest stage, usually 2 years in advance  Secondary Level: Manufacturers, contractors, and designers. work 6-18 months in advance  Retail Level: Ultimate distributor of fashion to the consumer, 3-6 months in advance  Auxiliary Level: Functions with all the other levels at the same time. composed of support services.  Competitive advantage: advantage over your competitors.  Product differentiation: Aspect of a product that separates or distinguished it from others.  Government involvement: Can regulate competition and labeling laws (laws to protect consumers)  Forms of business ownership: Sole proprietorship (single owner/easiest), Partnership (multiple owners), Corporation (many owners/hardest)  Horizontal business growth: When a company expands its capabilities on the level which it currently operates  Vertical Business growth: When a company expands its capabilities on levels other than its primary function  Mergers and Acquisitions: sale of one company to another to form a larger corporate organization. (ex. Macys)  Diversification: The addition of carious lines, products, or services to serve different markets.  Franchise: Purchased operations that conform to the franchisers directives and benefit from the franchiser's name, buying power, and merchandising expertise. (ex. McDonalds)  Licensing Advantages: Manufacturers have highly recognizable name attached to their product, licensor does not have to endure the risks of production, translates high quality.  Licensing Disadvantages: Too much Licensing of a designer can dilute the image  Who are the key players of the fashion Industry? Designers, Manufacturers, Retailers  What are the key players roles? Study trends, be aware of changes, and remain current and in touch with the consumers needs and wants  What is the main concern for the fashion industry? Fashion begin with consumers and the charting, forecasting, and satisfaction of consumer demand.  About how many fashions fail each year? about 2/3  What are the different types of designers? High fashion (name designers are responsible for direction), Stylist Designers (make variation of lower priced items), Freelance Designers (sell ideas to manufacturers) , Technical Designers (Establishes garment fit) Product Developer (Works in buying office creating a retailers private label)  What are the different types of manufacturers? Designer Market, Bridge Market, Better Market, Moderate-priced Market, Budget Market  Designer Market: $500+Giorgio Armani  Bridge Market: $400 Emporio Armani  Better Market: $150 Armani Exchange  Moderate-priced Market: $70-$150 Gap, Ann Taylor, American Eagle  Budget Market: $20-$50 Target, Walmart  Fashion Leaders (Retailers): Neiman Marcus, Nordstrom, Saks. Innovators  Traditional (Retailers): Macys, Dillards. Late Rise, early culmination.  Mass (Retailers): JCP, Khol's. Late culmination  Discounter (Retailers): Wal-Mart, Target. Late Culmination  What is Forecasting? a business tool. look for new innovative trends.  Fashion Scan: Fashion professionals, follow fashion news, Network with people in creative fields, scan popularity in cultures  Consumer Scan: Point of Sale (POS) date--what people are buying. Consumer research to identify target market, cohort group and segments of consumers who are likely to respond to the companies offerings  Fashion Analysis: Synthesis of fashion scan and consumer scan information.  Social and Economic Analysis: Broad scan of cultural, economic, population, and technology factors and changes. Identify megatrends.  Trend Analysis: Put megatrends and fashion analysis together. Looks at the interaction of shifts in fashion, consumer lifestyles, and culture.  What is a forecast report: The forecasting agencies publish reports twice a year and add supplements as needed. They range from all-purpose editions focusing on each segment of the industry, to individual books concentrating on specific segments