Subject : Apparel Marketing. Unit 2: Introduction to fashion marketing. Quadrant 1 E-Text

Transcription

1 Subject : Apparel Marketing Unit 2: Introduction to fashion marketing Quadrant 1 E-Text Learning Objectives The learning objectives of this unit are to: Define marketing, market, need, want, demand, value, satisfaction. Differentiate between various philosophies of Marketing. List components of Marketing. Detail the process of Fashion Marketing. Review and appreciate latest developments in Fashion Marketing. 2.1 Definitions Marketing is a social and managerial process by which individuals and groups (organizations) obtain what they need and want through creating and exchanging value with others - By Philip Kotler. It s a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. The definition when analyzed deals marketing as both social (where the traditional way of transaction and exchange through social groups takes place) and managerial ( where modern way of dealing through organizational structure and methods takes place). It deals how individual (Haute couture, Designer wear) and groups (Pret, bridge, street wear) segments are to be targeted and positioned. The definition lays emphasis that without need and want there is no demand and hence no marketing. It lays emphasis that without marketers creating and delivering value there will not be any purchase, hence no exchange. Let us understand the important terms in the definition: Market: The traditional definition says it s a place where buyers and sellers meet. In today s context it can be virtual. The set of all actual and potential buyers of a product or service. Need: States of felt deprivation Want: The form human needs take as shaped by culture and individual personality. Demand: Human wants that are backed by purchasing power. Customer perceived Value: The customer s evaluation of the difference between all the costs of a market offering relative to those of competing offers. Customer Satisfaction: The extent to which a product s perceived performance matches a buyer s expectations.

2 2.2 Various Philosophies of Marketing Normally the moment anybody talks of the term marketing people remember and think about how people sell on the street, traffic signals and door to door selling. But those are desperate measures and one method of selling. The evolution of marketing has history and it is a philosophy by itself. Let us examine the evolution of the concept. 1. Production Concept: The idea is that consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving the production and distribution efficiency. 2. Product Concept: The idea is that consumers will favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements. 3. Selling Concept: The idea is that consumers will not buy enough of the form s products unless it undertakes a large-scale selling and promotional effort. This is the concept normally which comes to our mind when we talk of marketing. But beyond a point it cannot market a product because consumers don t buy a product because marketers are offering a product. They will buy only when there is a need and a suitable product and other mix are also offered. Hence the need for an effective, practical approach is needed, which necessitated the next concept. 4. Marketing Concept: The marketing management philosophy is that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Selling and Marketing Contrasted Starting Point Focus Means Ends The selling concept Factory Existing Products Selling and Promoting Profits through sales Volume The Marketing Concept Market Customer needs Integrated Marketing Profits through Customer satisfaction Societal marketing Concept:- A principle of enlightened marketing that holds is that a company should make good marketing decisions by considering the consumers wants, company s

3 requirements, Consumers long-run interests, and society s long- run interests. As we see it has three considerations: Society (Human Welfare), Consumers (Want Satisfaction), Company (Profits). Today many companies follow this concept because mature consumers buy products or services from a company which has a concern for society in which they live and contribute to it. Even Governments (e.g. Indian Government) encourages the companies to spend some part of profit on the society itself through CSR (Corporate social Responsibility). 2.3 Components of Marketing The major tools or components of marketing are Four P s, also called as Marketing Mix, are important for the success of Marketing. Though there are various views on number of components or tools like 4,5,7 P s, we will follow Philip Kotler s model of 4 P s. The other P s which are mentioned by other authors on Marketing like people, process are dealt by Philip Kotler in personal selling, Customers and STP as the core of process and managing of marketing effort as part of Strategy. Philip Kotler defines Marketing mix as The set of Controllable tactical marketing tools - Product, Price, Place, Promotion - that the firm blends to produce the response it wants in the target market. Let us discuss in brief these components Product: Goods and Service combination that marketers offer to the target market. The products in apparel include Natural, Manmade; Outer& Inner wear; Tops, Bottoms; Men s, Women s and Children s wear; Formal,Casual, Semi Formal wears; Custom Made, Readymade; Accessories etc. For a fashion Customer, product includes Design, Variety (Assortment), Quality, Features, Sizes, Brand Name, Packaging, Services, Warranties, Returns etc. Price: Amount of Money customers paying to obtain the product. It includes List Price, M.R.P (Maximum Retail Price), Discounts, Allowances, Payment Period, Credit terms etc. Distribution/Place: The activities that make the product available to target customers. It includes channels of distribution, Coverage, Assortments, Locations, Inventory, Transportation, Logistics etc. Promotion: Activities that communicate the merits of Product/Service and persuade target customers to buy it. It includes Advertising, Personal Selling, Sales promotion, Publicity, Public Relations, for fashion Promotion. We can include also Visual Merchandising, Fashion Shows, In-store Communication as additional tools of Promotion.

4 Customer: In marketing, as Gandhiji equated customer to a VIP, the very purpose and existence of the company depends on the customer. As we know in Mass distribution customer is not one and alone, but many. Their needs, wants and expectations differ. There are 7 billion population in the world and as many types of customers. Hence marketer must divide the total market, choose the best segment and design strategies so that the customers are given better value and satisfaction than by the other competitors. In order to identify our company product/ customers we have to understand the concept of Segmentation (dividing the market based on bases like Geographic, Demographic, Psychographic, Behavioral etc.) then targeting them and positioning (How to put it in the minds of Customers). Core Concepts of Marketing Target Markets & Segmentation Needs, Wants, and Demands Product or Offering Value and Satisfaction Exchange and Transactions Relationships and Networks Marketing Channels Supply Chain Competition Marketing Environment The core concepts are must with out which there is no successful marketing. As we want to market, the first question that arises is to whom to market i.e. which segments and target markets we have to serve. Having decided we have to answer the next question what will we serve. It depends on what need, want and demand are there so that accordingly we can offer a product or service.no customer buys any product if he is not getting value and satisfaction. Having a product with value is one thing and facilitating exchange and transaction of it is another thing which a successful marketer accomplishes. For example, if a middle class young south Indian(Target) is feeling hungry(need) and wants south Indian food(want) we can serve idly, dosa etc(product). Fresh, hot tasteful idly at an affordable price at his door step facilitates exchange and transaction and gives value as well satisfaction. In marketing concept, if you want to be continuously in business take continuous feedback through relationships networks and thus the process will keep us to survive in the long run. By

5 developing superior, new innovative marketing channels and supply chain we can excel in business and surpass the competitors. By bench marking, managing competition and surpassing competition Marketers can be successful. Hence Understanding the core concepts help Marketers to overcome any hurdles. 2.4 Process of Marketing Having understood the concepts we have to study how marketing goal of satisfying customers needs and wants is achieved. It is achieved through Marketing process which will understand the environment and opportunities first and then selects the target market. The marketing mix i.e. Product, Price, Promotion, Place are developed and delivered through managing the marketing process. The following diagram of Philip Kotler (Principles of Marketing) depicts it very well. Factors Influencing Company Marketing Strategy Demographic/ economic environment Marketing intermediaries Product Technical/ physical environment Suppliers Place Target customers Price Publics Political/ legal environment Promotion Competitors Social/ cultural environment Internet Marketing Also known as online Marketing. It helps in: Promoting a brand, products or services over the Internet. Involves marketing, electronic customer relationship management and promotional activities via wireless media. Combines the technical and creative aspects of the World Wide Web such as advertising, designing, development and sales.

6 Types of Online Marketing Affiliate Marketing, Display Advertising, Marketing, Inbound Marketing, Search Engine Marketing, Search Engine Optimization, Social Media Marketing. Upcoming Trends Content Marketing, Image Centric Marketing, Advertisement Retargeting, Social Media Marketing, Simple is More. Relationship Marketing Definition: According to Philip Kotler Relationship Marketing has the aim to build mutually satisfying long term relationship with key parties in order to earn and retain their business. Basic Concept: Relationship marketing basically refers to Development, growth, and maintenance of long-term, cost-effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit. What is it all about? In RM Firms build long-term relationships in four ways: 1. Gather information about their customers 2. Analyze the data and use it to modify the marketing mix 3. Monitor interactions with customers 4. Use customers preferences and knowledge Major Features / Characteristics: 1. Focuses on long term rather than short term relationships. 2. Emphasizes retaining customers over making a sale 3. Ranks customer service as a high priority 4. Encourages frequent customer contact 5. Fosters customer commitment with the firm. 6. Bases customer interactions on cooperation and trust 7. Views customers as equal partners in transactions. 8. Encourages long-term relationships and repeat purchases. Levels of RM Basic Marketing: Here the salesperson sells to the final customers. This is also known as direct sales. Reactive Marketing: Here the salesperson sells the product and encourages the customer to call for any comments or enquiries.

7 Accountable Marketing: The salesperson calls the customers to ensure whether the product is working as per satisfaction and if there is any problem in the product. Furthermore he also asks the customer for any suggestions/feedback to improve the service/product. Thus, he is taking responsibility for the sales. Proactive Marketing: The company works continuously with its large customers to help improve performance. This is specially seen in financial companies wherein the movement in the financial market induces the company to make changes regularly. However at the same time, these financial companies have to take care of their customers as well. Thus they take regular feedbacks from their large customers thereby developing their products accordingly. Partnership Marketing: The company works continuously with its large customers to improve its performance. Ten Critical Players In RM: Suppliers, Distributors, End users,employees, Financial Firms, Government, Media, Allies, Competitors, General public. Why RM is Important? It costs five times as much to attract a new customer as it does to keep a current one satisfied. Viral Marketing It is also known as word of Mouth Marketing. Marketing phenomenon that facilitates and encourages people to pass along a marketing message. Viral marketing depends on a high pass-along rate from person to person. If a large percentage of recipients forward something to a large number of friends, the overall growth snowballs very quickly. Elements of Viral Marketing An effective viral marketing strategy: Gives away products or services. Provides for effortless transfer to others. Scales easily from small to very large. Exploits common motivations and behaviors. Utilizes existing communication networks. Takes advantage of others resources. Advantages of Viral Marketing An Enhanced Customer List. Remarkable Growth in Comparatively Lesser Time. You Gain More Credibility. You Gain More Credibility. Cuts your Promotional Costs.

8 Disadvantages of Viral Marketing Uncontrollable Hard to Measure Association with unknown groups Spam threats Keep away from making merely financial-based offer Network Marketing Network Marketing business model is the one in which a distributor network is needed to build the business. Usually such businesses are also multilevel marketing in nature in that pay outs occur at more than one level. Network Marketing is a strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation. Other terms used for Network Marketing include pyramid selling, multi-level marketing and referral marketing. Network marketing is a type of business opportunity that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America, including Avon, Mary Kay Cosmetics and Tupperware, fall under the network marketing umbrella. Network marketing programs feature a low upfront investment--usually only a few Thousands of Rupees for the purchase of a product sample kit--and the opportunity to sell a product line directly to friend, family and other personal contacts. Most network marketing programs also ask participants to recruit other sales representatives. The recruits constitute a Representative "downline," and their sales generate income for those above them in the program. This societal marketing concept is one of the most successful strategy among many neighbourhood Auntys and uncles who sell Saries, Home Furnishings and Garments near our homes. Even big companies like saree and fashion stores are using promoters, even auto & taxi drivers to introduce or bring customers and pay them commissions. 2.5 Conclusion To summarize, in this unit you have been introduced to the different philosophies of marketing, examined the components and nuances of marketing and understood its synthesis and application to fashion marketing.