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Fashion and the Economy

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leslie merritt

on 13 February 2017

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Transcript of Fashion and the Economy

Concepts
Manufacturers: make the goods
Retailers: sell the goods
Publix, Forever 21, etc.
Consumers: use the product or service
All of us
Resources are scarce
Land, labor, capital
Forms of Business Organizations
Sole proprietorship: business owned by one person

Partnership: operated by 2 or more people

Corporations: large; chartered enterprises that are owned by stockholders

Franchise-a contract arrangement that gives an individual (or group) the right to own a business while benefiting from the expertise and reputation of an established firm. The franchisee pays the company (franchisor) royalties on goods sold.

Licensing a legal arrangement giving firms permission to produce and market merchandise in the name of the licensor for a specific period of time. (Example-Ralph Lauren Home)
Supply is the quantity of product offered for sale at all possible prices
Demand is the consumer’s willingness and ability to buy and/or use products
Interaction between these 2 factors cause surplus, shortage, or equilibrium
Supply and demand play a major role in the pricing of a product
Law of Supply and Demand
Marketing
total process of finding or creating a
profitable market for specific goods or services
Target Market: consumers that a company wants as customers and directs its marketing towards
Who is the target market for American Eagle clothing?
Demographics-age, income, gender, ethnicity
Psychographics-attitudes and lifestyle
Geographics-where you live
Product
Relates to function of product planning
What to make or sell
When to make it or sell it
How much to make or sell
Level of quality
Packaging/Brand/Label
Place
Relates to the marketing function of distribution
The best ways to get the product into the customer’s hand
Channel of Distribution-path the product takes from the manufacturer to the consumer
Globalization-
refers to the increasingly global relationships of culture, people and economic activity.
Clothing and Textiles is a globalized industry
Pricing methods
Pricing strategies
Discounts?
Competition?
Profit margin desired?
Price
Advertising
Sales promotion
Public relations/publicity
Personal selling
Visual merchandising
Promotion
Direct or indirect distribution
(use a middleman?)
Where to sell?
How to sell-online, catalog, in-store, television- Multi-channel retailing
Level of intensity? Exclusive, integrated, selective, intensive
Marketing mix: (“4 Ps”)
Business of Fashion
Goods-Tangible
Services-intangible
Primary Market: includes the business that grow and produce the raw materials that become fashion apparel
Secondary Market: includes
businesses that transform
the raw materials into fashion
in the merchandise production phase
Tertiary Market: includes retail businesses
Brick and mortar
E-store
Textiles: largest segment of the primary market
Produces fibers, fabrics, leather, fur, plastic, metal, paper, and any other substance involved in production
Manufacturers
Wholesalers
Product Development Teams
Support Industries
Advertising Agencies, Accounting and Financial services, computer support industries, website design houses
Economy
Balance of Trade
Imports-Buying
Exports-Selling
Imports > Exports-Trade deficit
Imports < Exports-Trade surplus
Imports=Exports-Trade Balance
Trade Agreements
International Trade
NAFTA-free trade among U.S. Canada, and Mexico
Tariff-tax on trade
Quota-limits on imports
WTO-World Trade Organization
Regulates international trade
GDP-Gross Domestic Product
-the value of all goods and services produced in a country at a given period of time
Standard of Living
-Standard of living refers to the level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic area, basically quality of life.
Infrastructure-
The basic physical systems of a business or nation. Transportation, communication, sewage, water and electric systems are all examples of infrastructure vital to a country’s economic development and prosperity.
The wealth and resources of a country and how
those resources are distributed to produce goods and services
What are the positives and negatives of globalization?
Economic Issues in the fashion industry:
Labor-Sweatshops
Legislation-Tariffs, Quotas
Piracy-Knockoffs
Types of Economies
3 Basic Economic Questions:
What goods and services should be produced?
How should they be produced?
For whom should the goods and services be produced?
1. Traditional-cultural/religious practices and ideals that have been passed down by generations
What-Culture
How-Generation
Whom-Tradition
2. Market-No government
What-Consumers
How-Business
For Whom-People with money
3. Command-Government
What-Dictator/Central Government
How-Government
For whom-Government
Mixed-influences from all 3
1. Free Enterprise System

People have the right to make economic choices
Choose what to buy
Choose to own property
Choose to start a business and compete with others
2. Competition-the struggle between companies
Efficiency
Lower prices
New and improved goods and services
2 types of competition
Price-assuming customers will buy the product lower in price
Non-price-Quality, service, location, reputation
3. Risk & Profit
Business Risk-potential loss or failure
Potential earning increases so does risk
Profit-Money left over after expenses
Main incentive for free enterprise

The
Business
Cycle

Recession: A period of
economic slowdown.
Economy: Slowing
Unemployment: Rising
Productivity: Decreasing
Consumer Spending: Decreasing

Expansion: A time of
economic prosperity.
Economy: Growing
Unemployment: Low
Productivity: High
Consumer Spending: High

Recovery: A period of
renewed economic growth.
Economy: Renewed Growth
Unemployment: Decreasing
Productivity: Increasing
Consumer Spending: Increasing

Trough: A period of
transition.
Economy: Poverty High
Unemployment: High
Productivity: Very Low
Consumer Spending: Very Low

What is fashion's impact on the economy?
Over 4 million work in the fashion industry
Over 250 billion is spent on fashion goods in the U.S.
Discretionary income:
The money left after paying for basic living necessities (food, shelter, and clothing)
Inflation rate
rising prices
measures the change in price over a period of time
Economic Climate dictates fashion movement
People hold on to money
Economic climate dictates fashion industry
Quiet, simplistic, minimalist
Downsizing
Fashion shows less produced/elaborate

What do you think about Globalization
is it a good or bad thing?
Write a paper to support your position.
Paper should be 1/2-1 full page double spaced 12 pt. font

Economic Concepts
Fashion Industry-4 Groups Approach
Economic Measurements
Unemployment rate
Low is a sign of expansion

CPI-Consumer Price Index
Assignment:
Choose one retailer or fashion brand
Identify its marketing mix
Products/Services (include 5 pictures)
Pricing-Range; what types of pricing strategies are used?
Place-Where can you purchase this product?
Promotion-how is this brand/retailer promoted? Include 2 examples and explain each.
Types of Manufacturers
1. High End-designers or firms that produce innovative high quality apparel that is very expensive
2. Bridge-lower priced high quality merchandise (Example DKNY)
3. Better Market-high quality merchandise at a lower price point
4. Moderate-moderate quality and price point (Example-Express)
5. Budget-close copies of trends that are mass produced (Example-Forever 21)
Activity:
From Fiber to Fashion
Choose a fashion product and take it through the 4-groups approach
Post on construction paper
Full transcript