Fashion/Luxury Marketing Midterm

fashion definition

• product

• creative process

• industry

• combines: art, business, culture

• BOTH making clothing AND how ppl consume it

• self-expression form/identity

• lifestyle, accessories, footwear, makeup, hairstyle, tattoos, body art

• tribal belonging

• individuality/differentiation

art + business + culture

DREAM FACTOR- sets industry apart

dream factor

• selling of dream

• emotional aspect

• brands leverage to connect w consumer

• fantasy/desire of lifestyle

segments of fashion industry

• haute couture

• ready to wear (RTW)/pret-a-porter

• diffusion

• bridge segment

• mass market

luxury definition

• exclusivity

• high quality

• high price

• heritage

• timelessness

• intrinsic values

segments: absolute, aspirational, accessible

fashion v. luxury

fashion industry segments: haute couture

• skill intensive labour

• only afforded by few

• made-to-measure clothes

(top)

ex; hermes, chanel

fashion industry

• fashion design

• manufacturing

• retailing

• supply chain management

fashion industry segments: RTW/designer brands

• wider audience

• high end craftsmanship

• lower entry price

• faster speed

(level 2)

ex; dior, DG, prada, gucci, SL, armani

fashion industry segments: diffusion

• higher production volume

• products consistent w brand image

(level 3)

ex; ralph lauren, marc jacobs, dkny

fashion industry segments: bridge

• lower quality products

• trends

• little gap between creation/sales

• more convenient price points

(level 4)

ex; calvin klien, diesel, coach, emporio armani, max&co

fashion industry segments: mass

• basic/affordable products

• more useful>fashionable

(lowest, level 5)

ex; mango, h&m, bershka, zara, mango

trends

• reflection of time in which they arise

factors:

• sociocultural shifts

• science/tech innovations

• media/art

• designer creativity

• textile

• zietgeist: spirit of the times

longterm (5+ years)

shorterm (up to 2/3 years)

macrotrends

• sustainability/ethics

• inclusivity/diversity (body positivity, gray hair, races, skin texture)

• gender nuetral

fad

• opposite of trends

• v short periods of time

micro trend

• shorter trend, usually up to 2/3, sometimes 5 years

• quiet luxury

• backless loafers

macro trend

• pervasive shift in direction

mega trends

• globally sustained

• impact socio, econ, culture, etc.

new era of fashion

• shorter time to market (no longer top down, social media)

• new values

• AI

• digital fashion

• new sales channels

• virtual fashion

• metaverse

• NFTs

brand

• name, term, design, symbol, or feature that identifies one seller’s good/service as distinct from other sellers

ASSET defined by set of attributes: tangible & intangible

TANGIBLE: name, logo, slogan, color

INTANGIBLE: functional, symbolic, experiential

trademark

provides legal protection for the brand

• identification

• distinct, novel, legal

brand identity

manifests all tangible/intangible specificities of brand- unique

• stylistic identity

• communication identity

• retail identity

• brand heritage

to have strong: need to maintain internal AND external consistency

brand equity

• added value company gets from product w distinct name/feature

  • vs. others of same kind

• brand awareness

• perceived quality

• brand association

• loyalty

brand management

strategic process of assembling/nurturing brand identity

• enhance brand awareness

• w purpose of increasing brand value w time

brand heritage

• builds loyalty

• justifies value

• cultural artifact

narrative/storytelling (ex; cartier ad, burberry story, LV christmas ad)

business model

• no one def. —> dif company to company

• how company creates, delivers, captures value

fashion industry business models

set firms apart w:

• value proposition

• customer segmentation

• communication

• distribution channels

• degree of complexity w firm’s values

4 building blocks: what (value prop) whom (client segment) how (value chain) who (revenue/gov model)

main fashion business models

• luxury brands (no influence of fads, icon pieces, timelessness, exclusivity, heritage, status, HNWI, narrative communication)

• designer brands/fashion griffe (dream factor, operate in many segments, vertical integration)

• premium brands (connect value of brand to volumes/scales, good price-quality ratio, clear brand vision)

• retailers (flow of fashionable merch at low prince, extensive distribution network, quick response, multibrands)

stages of industry analysis

1. define the business

2. determine industry segments

3. identify strategic groups, key success factors (KSF), growth outlooks, empty spots

4. drive conclusions on industry attractiveness

retailers v. fast fashion

retailers: commercializing from manufacturers, also wholesale (gap)

fast fashion: update collections actively throughout year, react to trends w complete control of supply chain (zara, hm)

conglomerates

• lots dif brands under one (i.e LVMH, prada group)

• share exec, financial, distribution/production, balance risk w portfolio'

• higher turnover, less family, risk brand dilution w growth

stylistic identity

set of stylistic/aesthetic codes used to make brand distinct/unique

• fabrics

• textures

• colors

• prints

• details

• use of logo

necessary to evolve

(ex; tommy hilfiger red white box, LV print, tiffany blue, chanel CC, hermes orange, burbery print, gucci GG/print and red green line)

fashion cycle

• fashion unique industry w seasonality

1. planning

2. design/product development

3. sell in

4. productino/delivery

fashion production process activities

• internal/external research on fasion trends

• def. of colection structure/guidelines

• merchandizing plan

• price positioning

• collection deleveopment

• collecton presentation

country branding

evoking positive associatoins in assosiations/vision of brand

—> known expertise in a product/category

• country as inseperable from heritgage, culture, traditions, intangible values

COO effect

“country of origin”

• implied recognition of validation, enhance product

haute couture

from 19th C Paris

= high dressmaking

• fasion in most refined form

• charles frederick worth (founding father)

• official standards: uphold quality, material, craftsmanship

• highest niche: few fashion houses

• not made to be sold but for show, publicity, credibility

french- used to create dream factor, image of ultimate luxury, LOSE $

french business model

clothing as an image builder/not real business

• growth in brand extention (fragrance, leather, jewelry, eyewear)

• maintain high supply chain control

• adopt conglomerate strategy

• merges/acquisiitions to grow

dior case ex

• rrevival of paris as fashion capital post WW2

  • volume silhouettes/long skirts = rebel against fabric economy dictating styles of war

competitive advantages:

• first to name collections

• first to introdue new trend every 6 months

• catwalk into fashion show

• first to exploit name into licensing agreements

• diversified through extension

chanel case ex

chanel no. 5: scent that smells like a woman, ultimate scent of femininity

• black dress: black wipes out everything else around

• iconic product: 2.55 bag

italian business model

• clothing is a core business

• first line extension THEN brand extension (beauty, accessories, etc)

• recently evolved from fasion houses (control style/image) into VERTICALLY INTEGRATED companies (control of manufacturing and reduction of wholesale)

  • bc high lvl craftsmanship hard to maintain

• move towards highly integrated

• mainly family run businesses

• style-driven approach prevails in it. designer companies

challenges: talent gap, balance innovation/tradition, supply chain consolidation

italy competitive advanatage/MII

• designres

• entrepreneurs

• textile industry

• “made in italy”: licensing

licensing

lincesning agreement: brand owner/licensor gives to another entinty (licensee) w permission to use name/design for production/distribution in certain plae/channels/time

licensing lifecycle

• line extensions (emerging brands/lines)

• brand stretching (designer/related accessories)

• brand extensions (lifestyle brands, unrelated categories)

line extension

expansion of existing product line

• uses established products/name

• launch slightly dif product in same category

brand extension

expand brand itself

• new brand category (related or not to og. products)

• successful needs to embrace consumer pov, innovate, nurture core biz

american model/growth rationale

“easy to buy, easy to wear”

• creation of lifestyle and branding = more important than product

• glorification of basic products via branding

• menswear to sportswear rev.

• growth w licensing/brand extension

• lifestyle creation

american fashion

• rise of casual dress 20th C

• informal

• accessibility

• casualwear

• performance

(ex; calvin klein: youthful, attention ads, Levi’s: menswear)

made in USA

• “mass” (production, consumption, marketing)- high consumption

• start of 19th C: menswear needed for sailors, workers, slaves

  • role of worker, man, society

• Levi Strauss (miners, denim fabrics)

• FUNCTIONALITY

department stores

• key role in american fashion

• retail driven biz model

• big stores + new trends

• move beyond mens/workwear w production, distribution, strong market orientation (slow intl. expansion)

evolution of sportswear

• post WW2

• american well known

• women specifically

• new revolutionary industry

japanese model

• operate within western fashion system

• cutting edge innovations

• doesn’t affect western much

tradition/innovation, radical/extreme, cutting edge

chinese model

• based in labor, tradition, culture

• national symbolism + creativity

• fashion = cultural statement

• nurturing of distinct chinese style

• defined cultural references

• understanding of local customers/demand

—> currently biggest consumer of W lucury goods

—> trying to develop as independent

jewelry industry market segments

industry w ancient pedigree

• very high

• high

• fine

• bridge

• designer

• fashion

• custom

(distinguish w materials: precious metals**, gemstones)

jewelry: very high

• precious metal (18k gold or platinum)

• precious stones (diamond) & semiprecious

• v high price

• haute couture/limited production

ex: cindychao, SABBA, Piaget

jewelry: high

L2

• precious metal (18k)

• precious/semi: color stones

• serial production

• med-high price

ex: cartier, graff

jewelry: fine

L3

• precious metal (18/14k)

• small carat diamond or semiprecious stones

• med price

• importance of aesthetics, serial production

ex: dior, chanel

jewelry: bridge

L4

• precious metal (9k)

• semiprecious, special materials (pearl, ceramic, wood)

• serial oroduction

• med price

ex: pamela love

jewelry: designers’

L5

• nonprecious metal (brass/gold plated)

• special materials

• related to fashion brands

• contemporary jewelry

• med/low

ex: on catwalks

jewelry: fashion

L6'

• nonprecious plated w gold/silver etc.

• pearl, crystals, fake gems, enamel, glass

• serial production

• med-low

ex: pandora

jewelry: custom

• “cheap” materials

  • metal, plastic, cords

• nonprecious stones

• mass production

• low price

ex: zara

vintage/pre-owned market

• global resurgance

• esp. italy/france w cultural heritage

jewelry industry

• diamond market growing + increase lab grown

• sustainability influencing customers rn

• 2nd hand important to circular economy

• many regulations w sustainability

luxury watch industry

• expensive timepiece

• symbol of wealth/reputation

key players: LVMH Moet, Hennessy, LV SE, Rolex SA, Compagnie Pinanciere RIchemont SA, Swatch group, Patek Phillippe, Audemars Piguit

strategy areas:

• culture/education

• retail partnerships

• cutomer centricity

• female market

• online

• exclusivity

• rise of pre owned

luxury watch segments

fine watchmaking (1/2):

1. watchmaking masters

2. luxury watches/high watch making/premium watches

1. rest of industry

• watchmaking masters

• high luxury

• luxury/premium

• designer

• quartz

based on mechanisms involved

“swiss made”

most distinct

regulated by law

• # of production phases in switzerland

• movement is swiss

• movement cased in switzerland

• manufacturer does final inspection in switzerland

modern luxury dilema

luxury = exclusive, timeless, tradition

digital = accessible, instant, relevant

—> digital- key for brand awareness/sales, customer engagement, e-commerce, online correct brand positioning

digital strategy elements

1. experience (on/offline)

2. exclusivity (create exclusive platforms for consumers: limited edition)

3. engagement (consumers)

4. emotion (raise)