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MANAGEMENT AND MARKETING OF TEXTILES UNIT TUTOR: Johanna Bergvall-Forsberg The University of Manchester, UK [email protected] COURSE OUTLINE 1. 2. 3. 4. 5. 6. Introduction Strategic Management Operations Management Marketing The Fashion Operation Exam LEARNING OUTCOMES …to understand the strategic role of the textile manufacturing operation …to understand the importance of marketing in managing a fashion operation …to recognise the importance of added value to the textile and clothing industry MANAGEMENT AND MARKETING OF TEXTILES Interpretation of Expectations Strategic Decision Product and/or Service Specification Marketing Operations Expectations Product and/or Service Customer A CUSTOMER DRIVEN OPERATION “The process starts with the customer (customer needs and use situations) and ends with the customer (the customer’s level of satisfaction).” (Walters, 1999) Customer Needs Value Drivers Customer Use Situation Desired Benefits Value Creation Cost of Purchase Customer Satisfaction VALUE CREATION “A value strategy involves identifying, producing and delivering the combination of price and non-price related benefits the customer is seeking.” (Walters, 1999) “Our premise is that buyers will buy from the firm that they perceive to offer the highest delivered value.” (Kotler, 1997) THE TEXTILE AND CLOTHING SUPPLY CHAIN FINDINGS SECTOR CLOTHING SECTOR Clothing Findings Production Cutting RETAIL SECTOR Sewing Garment Finishing FIBER SECTOR TEXTILE SECTOR Natural Fibre Weaving Yarn Production Man-made Fibre Fabric Finishing Knitting Retail Sales MERCHANDISE CHARACTERISTICS Functional Products Innovative Products • Low demand uncertainties • High demand uncertainties • More predictable demand • Difficult to forecast • Stable demand • Variable demand • Long product lifecycle • Short selling season • Low inventory cost • High inventory cost • Low profit margins • High profit margins • Low product variety • High product variety • Higher volume per SKU • Lower volume per SKU • Low stock out cost • High stock out cost • Low obsolescence • High obsolescence (Fisher, 1997) FUNCTIONAL- PREDICTABLE Product life cycle - more than 2 years Contribution to overheads - 5 to 20 % Product variety - low Forecasting error - 10% Mean stockout rate - 1 to 2% End of sale mark down – not relevant INNOVATIVE - UNPREDICTABLE Product life cycle – 3 to 12 months Contribution to overheads - 20 to 60 % Product variety - high Forecasting error – 40 to 100% Mean stockout rate - 10 to 40% End of sale mark down – 10 to 25% THE TEXTILE AND CLOTHING INDUSTRY New market entrants Changes in consumer demand Shortened product lifecycles Globalisation of supply “In these short life-cycle markets, being able to spot trends quickly and to translate them into products in the shop in the shortest possible time has become pre-requisite for success” (Christopher et al., 2004) THE FASHION MERCHANDISE RANGE Basic Products Seasonal Products generally sold throughout the year shelf life of 12-25 weeks Short-Season Products shelf life of 6-10 weeks or less (Lowson, 2003) COMPETITIVE REQUIREMETNS DIFFERENTIATION Stuck in the middle COST LEADERSHIP FOCUS (added value) Source: Porter’s generic routes to competitive advantage