fundamentals of fashion merchandising
TRANSCRIPT
Fundamentals of fashion
MerchandisingUnderstanding Fashion,
Merchandising,Merchandise Management of Retail, Export
& Buying House.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Fashion
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Fashion Accepted by a substantial group of people
at a given time , in a given place.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Understanding Fashion Movement
Fashion movement is the ongoing change in what is considered fashionable from acceptance to obsolescence (the rejection of a fashion in favor of a new one)
A fashion trend is the direction fashion is moving
OBSOLETE
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
The fashion cycle
•Fashion cycle: The ongoing introduction, rise, peak, decline, and obsolescence in popularity of specific styles or shapes.
•All styles that come into fashion rotate through the fashion cycle.
•Fashion acceptance can be illustrated using a bell-shaped curve.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Overall Fashion Cycle Variations . . . From Flop to Classic
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
The Fashion Cycle
IntroductionNew style is introduced (colors and textures)
RiseSlowly increases in popularity
DeclineDecreases in popularity (saturation)
ObsolescenceDiscarded for a newer style
PeakHeight of popularity; Worn by the majority of people (culmination)
ALSO KNOWN AS THE MERCHANDISE ACCEPTANCE CURVEPrashanth KC- Fashion Merchandising,
AD VI, NIFT- Bengaluru.
The fashion cycle (cont.)
•The cycles for some styles are exceptions to the bell-shaped curve.
•Flops: Fashions that are introduced and expected to sell but that are not accepted by consumers.
•Fads: Temporary, passing fashions that have great appeal to many people for a short period of time; styles that gain and lose popularity quickly.
•Classics: Styles that continue to be popular over an extended period of time even though fashion changes; styles that remain in fashion year after year.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Kurtis
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Skirts
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Fashion Classics
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Fashion Fads
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Cycle within Cycles
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Recurring Cyclic Fashions
PLAT FORMS SHOESHOTPANTSPrashanth KC- Fashion Merchandising,
AD VI, NIFT- Bengaluru.
Stages of the fashion cycle (cont.)
Introduction: The first stage of the fashion cycle when new styles, colors, textures, and fabrics are introduced.
The new style may be accepted by a small number of people called fashion leaders.
Promotional activities include fashion shows and advertising in high fashion magazines.
Fashions are produced in small quantities at high prices. Retail buyers purchase limited numbers to see if the style
will be accepted.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Stages of the fashion cycle (cont.)
Rise: The second stage of the fashion cycle when consumer interest grows and the fashion becomes more readily accepted by consumers.
Mass production brings down the price of the fashion, which results in more sales.
Styles are manufactured in less expensive materials and in lower quality construction than the original style.
Promotional efforts are increased in high fashion magazines to heighten consumer awareness.
Retail buyers order items in quantity.Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Stages of the fashion cycle (cont.)
Peak (Culmination stage): The third stage of the fashion cycle during which a style is at its height of popularity.
The fashion is demanded by almost everyone because it is now within the price range of most consumers and is mass produced in many variations.
Each retailer tries to persuade customers that its version of the style is the best.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Stages of the fashion cycle (cont.)Peak (Culmination stage)
The style may have a long or short stay at this stage. Short-run fashions: Styles that are popular for a brief period
of time. Fads, usually lasting only one season Accepted and rejected quickly Teenagers’ fashions change the fastest and have the most
trends. Styles are easy for the manufacturer to produce and are
relatively inexpensive to the consumer. Styles typically have more details than seen in classics.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Stages of the fashion cycle (cont.)Peak (Culmination stage)
Long-run fashions: Styles that take a long time to complete the fashion cycle.
Classics, basics, and/or staple fashions Slow introduction, long peak, slow decline Styles have simple lines, minimal detail.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Stages of the fashion cycle (cont.)
Decline: The fourth stage of the fashion cycle when the market is saturated and popularity decreases.
The fashion is overused and becomes dull and boring.
As the fashion decreases in popularity, retailers mark down their prices.
Promotions center around major clearance or closeout sales of the fashion.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Stages of the fashion cycle (cont.)
Obsolescence: The fifth stage of the fashion cycle when the style is rejected, is undesirable at any price, is no longer worn, and is no longer produced.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Lengths of fashion cycles Cycles have no specific lengths. Recurring fashions: Styles which have been in
fashion at one time, gone out of fashion, and come back in fashion again. Fashion trends seem to recur about every generation or
every 20 to 30 years. Fashion cycles are less distinct now than in the
past.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Theories of Fashion Movement
TRICKLE UP TRICKLE ACROSS
TRICKLE DOWN
Fashion trends start at the top of the “social ladder”
Fashion trends start with the young or lower income groups
Fashion moves horizontally through similar social levels
Lower $
Higher $ Royalty Rich
White collar
Blue collar
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Trickle-Down Theory18th-19th Century
Source of fashion ideas designers catered
to wealthy Fashion leaders
highly visible elite served as models for lower class
Direction down from elite
class to working class
Change of speed how quickly the
lower class could obtain and copy the elite
Dynamics of change drive for
differentiation and imitation
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Mass Market Trickle-Across Essentials
Mass production Newest looks available
quickly Fast-paced
communication and mass media Style information
available to all at same time
Each social group has own fashion leaders
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Trickle-Up Theory
Starts with young trendsetters
May be lower income groups
Fashion defined by street wear
Examples may include: Tattooing, body piercing,
“grunge” looks
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
1960’s Trickle-Across Within group at similar social level Vietnam Civil rights Integration Mass communication Mass media Growing middle class Availability of quick, easy knockoffs Mass production makes fashion
available at all price levelsPrashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Merchandise
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Types of Merchandise Staple Goods – items that are constantly in
demand by customers. Examples are toothpaste, milk, or bread. Used consistently and replaced on a regular basis Sales are easily predictable because they are bought on
a consistent basis. Convenience Goods – small, inexpensive items
that customers purchase frequently. Examples are gum, bottled water, or magazines. Found in convenience stores, grocery stores or gas
stations.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Fashion Goods – items that are popular at a certain time. An example is clothing. Includes any item that comes in or out of style Retailer will maximize sales by acquiring the
product as it is gaining popularity Seasonal Goods – products that are
popular only at a certain time of year. Examples are swimsuits, boxed chocolates, or snow skis.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
The Merchandise Mix Businesses must pay close attention to
their target market and must obtain, develop, maintain, and continually improve upon their merchandise mix. Components of the Mix
Merchandise Mix – made up of all the products that a business sells
Product Line – a group of closely related products that a business sells
Product Items – the products that make up a product line. A specific model or brand
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Types of Merchandise Merchandise Mix Strategies
Development – develop new products to bolster the company’s image or to expand their market share.
Expansion – businesses can choose to add either new product items or new product lines.
Modification – altering a company’s existing product.
Deletion – may occur when a product is no longer useful, obsolete, not fashionable, or room is needed for another product.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Merchandising
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Definition
AMA defines “The planning involved in marketing the right merchandise at the right place at the right time in the right quantities at the right price.”
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Mantra of Merchandising Achieving the five Right is the key to
successful merchandising and many a times, this remains an elusive goal for most retailers.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Definition 2 Merchandising management can be
termed as “Planning, analysis, acquisition, handling and control of the merchandise investments of a retail operation”
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Explanation of the Definition Analysis: because retailers must be able
to correctly identify their customers before they can ascertain consumer desires and their needs/requirements for making a good buying decision.
Planning is important because merchandise to be sold in the future must be bought now.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Contd. Acquisitions because the merchandise
needs to be procured from others, either distributors or manufactures.
Handling involves seeing that the merchandise is where it is needed and in the proper condition to be sold.
Control is required since the function of merchandise involves spending money for acquiring products it is necessary to control the amount of money spent on buying
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Merchandise Planning
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
THE CARDINAL SIN OF FASHION MERCHANDISING IS TO BE OUT OF TREND
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
MAIN PRINCIPLES AND DYNAMICS OF FASHION
The constant in fashion is change Changes in fashion are gradual and
evolutionary rather than revolutionary. Fashion is cyclical Customers make fashion Acceptance level of fashion vary Fashion depends on place and reflects
lifestyle
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
INTERPRETING INTERPRETING CONSUMER CONSUMER DEMAND DEMAND
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
TARGET MARKET
BUYING MOTIVATIONS
Elements of Customer Demand
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Identifying Target Market
Behavioral
Geographic
Psychographic
Demographic
Market Segmentation
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Demographic SegmentationMainly grouped on the basis of:- Population Age Income Sex Occupation Education
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Geographic Segmentation
Mainly grouped on the basis of:- Cities States Regions
Climate plays an important role
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Psychographic Segmentation
Grouped on the basis of the lifestyle- Social activities Interests leisure pursuits needs and wants
People having similar lifestyles can make up a target market group.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Behavioral Segmentation
Grouped on the basis of opinion on specific products or services-
Rating of usage of products & services.
Help in improving the service/product and make it different from others.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
DETERMINIG WHY CUSTOMERS BUY
BUYING MOTIVATIONS
RATIONAL MOTIVATIONS EMOTIONAL MOTIVATIONS
•Durability
•Dependability
•Comfort
•Economy of Operation
•Price
•Imitation
•Emulation
•Prestige
•Pride of Appearance
•Distinctiveness
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
FASHION PURCHASESSPECIFIC SELECTION FACTORS
Silhouette- Degree to which an item is considered moderate or extreme in form in relation to the currently popular shape or form of such products.
Decoration or trim- Presence or absence of all types of ornamentation
Material/Fabric-Quality of fabric
Surface interest- Texture, Hand feel
Color-Actual hues used
Workmanship- construction, stitching, finishing
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Size- Preciseness of Fit
Sensory factors- Touch, Taste, Smell, etc.
Ease and cost of care
Brand- Identity of manufacturer or distributor of an item
Utility- Extent of usefulness and service
Appropriateness-Degree of suitability and acceptability
Price- Value placed by individual customerPrashanth KC- Fashion Merchandising,
AD VI, NIFT- Bengaluru.
The Uniqueness of Fashion Merchandising Obsolescence factor. Higher markdowns Faster turnover Seasonal factor Sales promotion.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Key targets of a merchandiser Sales
By Units By Rupees ( Dollars)
Inventory Stock turnover Percent Shortage to net sales Old goods Vs. new Goods
Margin results Initial markup ( cost- original retail) Gross margin ( net sales- cost of goods sold) Controllable margin ( gross margin- direct department
expense) Operating profit ( Gross margin- ( cost of sales+ operating
exp.Prashanth KC- Fashion Merchandising,
AD VI, NIFT- Bengaluru.
Functions of Merchandisers at Shopper’s stop
Inventory-turn Management Achieving Sales & Margins Plans Merchandise Availability
Management, as per range plan Merchandising strategy & planning Processing of purchase orders Analysis of Data & Sales Budgeting Profitability Targets & Expense Control Vendor/Supplier relations for both, in-
house products as well as for brands.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Fashion Industry- Levels of Merchandising
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Fashion Industry- Types of Merchandising
Retail Organization Merchandising
Buying Agency Merchandising
Export House Merchandising
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
What is Merchandising?
IN RETAIL ORGANISATION- Merchandising is a specialized management function within the
fashion industry. It is the business that moves the world fashion from designers showroom to retail sales floor and into the hands of consumers.
It is the internal planning that takes place within a retail organization in order ensure adequate amount of merchandise are on hand to be sold at prices that the consumers are willing to pay to ensure a profitable operation.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Marketing Vs Merchandising
Marketing functionMarketing function Focuses on broadly defining a company’s market and characteristics. It pinpoints new opportunities for growth through self analysis and market research and promotes company’s image and products.
Merchandising functionMerchandising function is more specific concerning itself with the development, execution and delivery of the product line with its close ties with the market it serves. Merchandising is not only able to adjust to market variations rapidly but is capable of actually anticipating and helping to create market changes.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
MerchandiserMerchandiser is a person who get converted inspiration into design , use technology to conceptualize and address the planning , production, promotion and distribution of products in the fashion industry to meet the consumer needs and demands
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
FASHION RETAIL ORGANISATIONS
Organizational Structure & Responsibility
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Organizational structure includes the clear understanding of the authority and
responsibility for each job to be done.
Organizational system differs with the difference in type of merchandise, size of retail firm, and
target customer.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Various Fashion Retail Businesses
Three basic Formats- The Small Single- Unit Store The Departmentalized Store The Chain Store
The Specialty Store, Discount Store are also few of the other formats
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Major Divisions & Responsibilities
Merchandising division- buying, merchandise planning and control, selling, fashion coordination
Sales and promotion division- advertising, visual merchandising, special events, publicity and public relations
Finance and control division- credit, account payable, and inventory control.
Operational division- maintenance of facilities, stores and merchandise protection, personnel, customer service and receiving and marking of merchandise.
o Personnel and Branch Store Division may function separately if the store operations are very large.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Stock holders
Board of Directors
President
Vice President and General Manager
Merchandisingdivision GMM
Sales PromotionDivisionSales Promotion Manager
Finance andControl DivisionTreasurer &Controller
Operating DivisionStoreSuperintendent
Personnel DivisionPersonnel Director
Branch storesExecutive in charge of branches
STAFFLegal counsel research department
STAFFOther advisory services
-BUYING OFFICES-COMPARISON BUREAU-DIVISIONAL MANAGERS -department managers -assistant buyers -sales people-FASHION COORDINATORS-HOME PLANNING BUREAU-MERCHANDISE PLANNING & CONTROL-MERCHANDISE RESEARCH
-ADVERTISING DEPARTMENT -artists -copywriters -direct mail -layout -radio & television-DISPLAY DEPT. -Interior displays -sign room -window displays -exterior displays-PUBLIC RELATIONS -news releases -public fashion shows -special events -use of auditoria
-ACCOUNTING OFFICE -a/c payable -cash office -general a/cing -inventory taking -insurance & taxes -payroll office -sales audit -statistical-CREDIT OFFICE -bil ling customers -cashiers in office -charge a/cs -charge authorization -credit interviewers -defered payments-CREDIT UNION-EXPENSE CONTROL-LAYAWAY OFFICE-MERCHANDISE STATISTICS
-ADJUSTMENTS-ARCHITECT’S OFFICE-CUSTOMER SERVICE -sales people -service desk -telephone & mail orders -bridal registry-DELIVERY-ELEVATORS-MAIL DIVISION-MAINTENANCE-PACKING & PICK UP-PRINTING-PURCHASING DEPT.-RECEIVING & MARKING-RESTAURANTS-STORE PROTECTION-TRAFFIC DEPT.-WAREHOUSE-WORKROMS
-EMPLOYMENT OFFICE -interviewing -placement -termination-HOUSE ORGAN-PERSONNEL BUDGETS-PERSONNEL TESTING-RECORDS & REVIEWS -budgets & records -job analysis -rating & reviews-TRAINING -induction & system -on the job-WELFARE & HEALTH
-Audit-credit-store planning-maintenance-receiving-transfer of merchandise-employment training-merchandising-sales planning-advertising-displays-special events-liaison with main store
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
The Merchandising DivisionGeneral Merchandise Manager (GMM)
Divisional Merchandise Manager (DMM)
Merchandise Managers (MM)
Buyers
Assistant Buyers
Trainees
Hard Line
Soft Line
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Qualities of a Fashion Buyer
Dedication Enthusiasm Awareness Stamina Foresight Creativity
• Product Knowledge• Decision-making skill• Mathematical ability• Communication skills• Negotiation skills• Managerial skills
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Work Area of a Fashion Buyer
Liaising with suppliers (immediate vendor) Liaising with internal departments
Quality Control/Tech
Finance
Marketing/PR Retail Sales people
Fabric technology
Design
Buying Colleagues
Buyer
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
THE BUYER’S JOB
Planning Buying Selling
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Planning Based on 2 factors
-How much the store expects to sell?-How much inventory is needed to achieve that sales goal?
The buyer must plans stocks so that the store image is reflected in the merchandise.
Preparation of 6 months buying plan with knowledge of fashion trends, market conditions, economic factors, other records of the past seasons.
Flexibility is the most important factor to be kept in mind.
Includes provision for constant adjustment to actual results.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Buying
Adequately stocking the department’s price lines and securing the best possible mark ups on all purchases.
Supervising the physical inventory or stock counts to verify the accuracy of stock records.
Establishing and maintaining effective buying relationships with vendors.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Selling
Communication and promotional activities.
Determining the selling features of the merchandise for promotion purposes and the timing of these promotions.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
What is the difference between Buyer & Merchandiser ?
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
The buyer’s role in USA includes the administrative and financial input part also besides core buying responsibility.
In USA buying is often a subdivision of the merchandising team, whereas in many companies in UK, Buying is perceived as central role and merchandising as parallel department to buying.
Job Details for both these profiles are different with different organizations and are quite overlapping but all fashion buyers are responsible for overseeing the development of range of products aimed at a specific type of customer and price bracket.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
BUYING PATTERNS
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
CENTRAL BUYING
The centralization of all buying activities from a central headquarters with the authority and responsibility for the selection and purchase of merchandise limited to buyers of particular merchandise categories
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Three Forms of Central Buying
The central merchandise plan The warehouse and requisition plan The price agreement plan
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
The central merchandise plan
Central buying assumes complete authority for buying the assortment of goods, pricing, warehousing and distribution to the many stores.
Central make their purchases and have the merchandise delivered to the warehouse. Buyer has an opportunity to check the goods to be sure they have been shipped as ordered.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
ADVANTAGES- It provides a steady flow of merchandise provides
for specialists in each merchandise category. Goods are inspected before delivery. It allows better stock control.
DISADVANTAGES- Adjustment to local conditions is difficult Cooperation may be lacking An enthusiastic selling force may be lacking
The central merchandise plan
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
The warehouse and requisition plan The central buyer arranges for the initial
assortment and has the merchandise shipped to the individual stores. Used for staple goods.
The store manager is provided a list of the stock that is inventoried in the warehouse where the central buyer will see it is properly filled.
The store manager has the responsibility for ordering enough merchandise to carry the store through the buying season.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
ADVANTAGES- Gives the store manger some responsibility in merchandise
selection. Reorders or fill-ins are usually filled promptly.
DISADVANTAGES- There is little control over the composition of the merchandise
selection. Poor warehouse control may lead to an imbalance in store
inventory.
The warehouse and requisition plan
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
The price agreement plan
Central buyer working with vendors and manufacturers will agree on the retail price, color, size, style and assortment of staple types of merchandise as well as the terms of shipping.
The merchandise is illustrated and described adequately in catalog to be given to store manager.
The central buyer is responsible for prearranging the minimum amount of goods to be purchased by the entire chain, keeping the store catalog up to date, adding new items, canceling old items.
The store manager has complete authority for the composition of the stock and orders can be placed directly with the vendors concerned.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
ADVANTAGES- It develops a feeling of responsibility on the part of the store
manager. Reduces the expense of warehouse and the necessity of keeping
detailed records of each unit.
DISADVANTAGES- Problems arise with tardy deliveries and with high transportation
cost.
The price agreement plan
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
SOURCING
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Suppliers of Fashion Goods
Suppliers of Fashion Goods
Suppliers from Domestic Market Suppliers from Foreign Markets
Local ManufacturersImporter wholesaler
Exporter Foreign selling agentsResident buying Office
Import trade fairs
Buying trips abroad to market & Manufacturers
Foreign Buying OfficeForeign trade fairs
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Advantages of Domestic Manufacturers
Delivery Proven specification Availability of merchandise in selected quantities Availability of reorder Very close control on the merchandise planning and production Accommodation of changes due to any reason is easy Planning and control of stock relatively easy Permit the stock adjustment to new trends
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
BUYING FOREIGN MERCHANDISE
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Objectives Of Foreign Buying
Prestige- image store & Uniqueness
Better quality
Lower cost
Specification buying
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Foreign Buying Problems
Variation of quality standards
Deliveries and reorders
Size discrepancy
Monetary problems
Time involved
Other conditionsPrashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Other Problems Language Barriers
Unethical practices (e.g. Child Labor)
Political unrest
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Methods Of Buying Foreign Merchandise
Domestic importers
Resident buying office
Foreign selling agents
Import trade fairs
Domestic sources
Liaison Offices
Foreign buying offices
Foreign sources
Direct Exporters
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Domestic Importers/Wholesalers
Stockers of foreign merchandise Prove to be more useful for smaller stores Goods can be bought closer to the time of need Risk involved lies with the importer Costs higher than direct buying Offers less exclusivity No concessions are offered Very small qty. of merchandise can also be purchased. Sells through showrooms or directly from warehouse
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
RBO situated in the same place where the retailers are. RBO has many retailers as their members. RBO also offers trend inputs in forms of periodicals and catalogues
to the members. Goods are sourced keeping the member stores and their target
customers in mind. The orders can be large or small as they can absorb Group purchasing plan is also offered which lowers the cost for the
participants. Commitments must be made far in advance of the selling season Risk & problems of off shore sourcing are managed by RBO.
Resident Buying Office (RBO)
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Foreign selling agents They are a group of foreign manufacturers who may or may
not carry stock in the importing country.
They make periodic trips abroad to be up to date with the foreign market developments.
Buyer can actually see the merchandise with the styling and uniqueness.
Orders need not be large as many orders are compiled together before sending
No guarantee of quality standards, size discrepancies etc.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Import Trade Fairs
• Fairs organized in the importing countries with the goods from the exporting countries
• Some trade fairs feature the fashion merchandise of only one country, such as Italian Donna Moda.
• Although there is an advantage in being able to view so many lines in one place, because of space limitations ,most manufacturers can only show a small portion of what they can manufacture.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
LIAISON OFFICE
• Store owned foreign buying offices• Located in major fashion centers & in exporting
bases of the world• Advise buyers about new trends• Accompany buyers on their market visits acting as
interpreters and planning market itineraries• Because of their broad & strong base in the local
market they get the best resources according to the need of the buyer
• Function as a follow up service to ensure prompt delivery and quality control
• Each liaison office works as a separate profit centre• Types of stores that have such offices are –
GAP,NIKEPrashanth KC- Fashion Merchandising,
AD VI, NIFT- Bengaluru.
Foreign Buying Offices
Generally located in a major city of the foreign buying area and facilitates indirect exporting
They are independent buying agencies and are also known as Foreign Commissionaires
They work for many buyers/retailers They often organize buyer manufacturer meet in their offices and
also take the buyers to visit manufacturer's’ facilities. They must have very strong vendor base with them. They do not make purchases for the client unless authorized to do so The client pays them fee usually a percentage of the first cost They then follow up to make sure the delivery is made on time and
the quality is checked
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Direct Exporters The manufacturer- exporter undertakes the entire
export process. Increases its profit margin by saving on payments to
an intermediary Develops a closer relationship with the overseas
buyer. Cost of establishing another market may overweigh
the monetary benefits of direct exporting The exporter may be exposed to more direct risks.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
MERCHANDISING RESPONSIBILITIES IN BUYING & EXPORT HOUSES
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Export House
Coordinator of all activities at the manufacturer's end
Correspondence with buying Agencies Could be handling many buyers at a time Takes care of PD, sampling, costing, negotiations,
delivery schedules, production planning, fabric and trim orders, regular follow up.
Sources of information are limited as compared to buying house merchandiser
Is directly responsible for the merchandise Ensuring inspections and quality levels.
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.
Buying House
• Could be looking after one account/ one division of a buyer but many vendors
• Product exposure is much more• Depends for all information on vendors• Are responsible for- PD, sampling, costings,
negotiations,delivery schedules, production planning• Responsible for vendor selection and development
Prashanth KC- Fashion Merchandising, AD VI, NIFT- Bengaluru.