GUIDED NOTES

Unit C: The Business of Fashion

COMPETENCY:

3.00

Explain the business and economics of the fashion

industry.

OBJECTIVE:

3.01

Explain the concept of marketing in fashion.

A. Explain __marketing___ and the marketing concept.

1. __marketing____: The process of developing, promoting, pricing, and
distributing products in order to satisfy customers needs and wants.
Marketing involves the total process of finding or creating a profitable
market for specific goods or services.
2. ___Fashion merchandising__: Specific marketing activities designed to
have fashion-oriented merchandise at the right time, place, quantity, and
price to meet customer demand.
3. ___marketing concept____: A business approach that directs all
marketing efforts towards satisfying customer wants and needs.
Customer needs must be determined before goods can be produced.
B. Explain the __________________ and market identification.
1. Market: The group of all potential customers. These customers have
__needs and wants_and the willingness and means to satisfy those
wants. Businesses must understand who _potential customers_are in
order to efficiently meet their needs and wants.
2. Target market: _specific segment_of a total market that a company
desires to have as customers and toward whom it directs its marketing
efforts. It is important that each fashion company carefully define its
___target market___in order to make or carry products directed toward
that market.
3. Market segmentation: Dividing __entire market___into smaller groups
having similar characteristics. Every business must decide which
customers it can ____serve___to be successful. Businesses must
identify those customers to whom they can sell the most and maximize
profits.
a. __demographic__ segmentation: A way to segment markets based
on vital statistics of the population such as age, race, gender,
education level, income level, and occupation. Examples: The GAP
targets a youth market. Kmart and Wal-Mart target customers
interested in discounts.
b. __psychographic__segmentation: A way of segmenting a market
based on consumers lifestyles, values, attitudes, and self-concepts.
Psychographic segmentation tries to explain consumer behavior and
determine what the consumer is thinking and feeling. Behavior may
be influenced by cultural background or social group. Examples:
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Dressing down in the __________________a need for softer

fabrics and more __________________. Many magazine publishers
today produce publications specific to people who share interests
and activities, i.e., Golf Digest, Ski, and Modern Bride.
c. _geographic__ segmentation: Segmenting a market based on
where a person lives. Examples: Surf wear is primarily marketed at
or near the coast. Ski wear __________________to individuals at or
near areas that receive a lot of snow or in which skiing is a popular
winter sport.
d. _behavioral____ segmentation: Dividing consumers into groups
according to __________________. Behavioral segmentation
groups consumers into categories based on what they are __looking
for__in a product and why they buy the product. The marketer might
consider what benefits the consumer wants, the ___consumers___
rate of use of the product, loyalty to a particular product or brand,
and response related to a special occasion. Example: (product
benefits) Shoe manufacturers divide their market into segments for
people who __________________in various sports. Each of these
activities requires different demands on footwear; therefore,
__________________ must market different shoes for each of the
market segments. Each customer has different expectations of the
shoes __________________activity they are participating in.
C. Explain the marketing mix.
1. _marketing mix__: A combination of decisions a business must make in
order to best reach __target__market; known as the four Ps of
marketingproduct, place, price, promotion.
2. Product considerations. ____marketers___must decide what goods or
services are in demand and bring those products to the consumer.
a. Choice of products. The __________________of consumers must
be considered to determine which goods and services a business will
offer to its customers.
b. Brand name. What __________________products will the business
offer? Will the business develop private brands?
c. Level of quality. What level of __________________will the
business offer? How well does product quality reflect business
image?
d. Packaging. Does the __________________ protect the product and
provide necessary information about the product?
e. Warranties/guarantees. How will the business ___offer__ guarantee
satisfaction? Will warranties be offered when appropriate?
3. Place considerations. Marketers must make products __available__ at
the right time and location.
a. ____How and where__ will products be offered to customers?
b. What method will be used to get products from producer to
consumer? (____transportation___)
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(1) Direct distribution: A distribution channel in which the producer

sells goods or services to the final user. Example: A button
manufacturer __sells directly__to garment manufacturers.
(2) Indirect distribution: A distribution channel in which goods or
services _are sold indirectly_to the consumer through one or
more intermediaries. The most common form of indirect
distribution is when a product goes from manufacturer/producer
to retailer to consumer. This is the _path__ fashion apparel
takes. Example: Levi Strauss sells jeans to Belk who, in turn,
sells to the consumer.
c. What is the __________________method of transportation?
4. Price considerations. Marketers must decide on an__amount___to
charge customers for their products.
a. Affected by __supply_demand
b. Cost of producing the item
c. Markup
d. Terms of sale such as credit and/or discounts
5. Promotion. __Promotion_is the communication that informs, reminds,
and persuades customers of goods and services available to them.
a. Advertising
b. Publicity
c. Personal selling
d. Public relations
6. Many businesses also consider _people (employees)__ to be an
important element in the marketing mix since they can make the
difference between __success and failure__by the way they carry out the
other elements of the marketing mix.
D. Explain the marketing functions as they relate to the fashion industry.
1. Distribution: The _transporting, storing, and handling of goods___on
their way from the manufacturer to the consumer. Distribution is referred
to as place in the marketing mix.
2. Financing: Obtaining the __money___needed to cover the costs of
operating a business.
3. Marketing-Information Management: Obtaining _information__ about
what consumers want. Example: marketing research
4. Pricing: __determining a value_to charge for goods and services. Price
must cover
a. The costs _conducting__marketing research.
b. The costs of _financing_the business.
c. The costs __producing __the product.
d. The costs __promoting__the product.
e. The costs involved in _distributing__ the product.
f. The costs ___of selling__ the product to the final consumer.
g. ___profit__ for all people involved in the marketing process.

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5. Product/Service Management concepts and procedures___necessary in

designing, producing, maintaining, improving, and obtaining products or
services __to meet customer____needs.
6. Promotion: Communication used to inform, persuade, or remind people
about a businesss products.
7. Selling: Determining ____customers needs and wants__and responding
to those needs and wants through planned, personalized communication
intended ____to influence purchase___decisions and ensure
satisfaction.

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