CTD 231 Midterm: CTD 231 Exam #1 Review

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Clothing, Textiles and Interior Design
CTD 231

EXAM 1 REVIEW: Ch. 1 - 4 61 questions → True and false, matching, multiple choice *Pay particular attention to chapter tables* Chapter 1 • Key terms • Apparel supply chain structure (traditional vs. present-day) ➢ Traditional – the apparel supply chain was linear; roles of each industry segment were distinct, each with its own product and customer ➢ Present day – new competitive global environment results in a complex network of suppliers/vendors. Must respond quickly to constantly changing consumer preferences • Types of growth strategies ➢ Vertical integration – strategy that consolidates the supply chain by acquiring a company at another stage in the supply chain o When a retailer controls more than one stage of the supply chain ➢ Horizontal integration – acquisition of companies that make or sell similar products to expand market penetration and reduce competition o Acquiring brands at the same price point or penetrate multiple price points (Gap, Banana Republic, Old Navy) ➢ Globalization – production could be developed in the U.S. and contracted offshore, purchased directly from foreign producers, or produced in U.S.-owned plants in foreign countries • Variations of product brands: wholesale vs. private (store and private label) ➢ Wholesale brands – proprietary label, sold at wholesale to retailers that also carry other wholesale brands. o Carried by department stores, specialty stores, chain stores, and discount stores (Hanes, Lee, Champion) ➢ Private label – private brands developed to compete with wholesale brands o most developed by retailer’s own product development team (Target’s Merona, Arizona Jeans, Macy’s INC) ➢ Store brands – developed for stores that only sell private brands (Victoria’s Secret, Hollister, Express) Chapter 2 • Key terms • 5 basic business functions ➢ Merchandising – planning, developing, and presenting product line ➢ Production – making the product ➢ Finance – all accounting activities ➢ Operations – upkeep of equipment and facilities, shipping ➢ Marketing – advertising, promotional objectives, sales goals, marketing programs and tools • Strategic planning ➢ Focuses on a company’s business direction based on its mission and vision statements ➢ Develops a financial plan and budget that anticipates monetary income and expenditures of the firm o Brand image and portfolio o Product mix o Price points o Channels of distribution o Strategic partnerships o Growth and divestment • Sustainability ➢ Challenges for achieving sustainability within today’s textile and apparel firm are: o Social, such as promoting the safety and health of employees o Economic, such as providing reasonable wages o Environmental, such as preserving natural resources and responsible recycling of waste • 4 areas of apparel product planning ➢ Merchandise planning – line/merchandising planning, line development, and presenting product lines for identified target markets with regard to pricing, assorting, styling and timing ➢ Creative planning – tracks trends and interprets them for a company’s target market o Color combinations, textiles, and basic design of the products to be produced ➢ Technical planning – further defines styles by developing fit standards, materials, and construction specifications ➢ Production planning – links merchandise decision with design and technical decisions o Costs, timeline, quality, schedule, production, transit, imports and tariffs • Stages of apparel product development ➢ Line concept – results from trend research and includes the mood, theme, and key elements that contribute to the identity of the line ➢ Line development – begins as the design team translates the line concepts into groups of garments to be delivered throughout the selling season ➢ Line presentation – consists of showing the proposed line of products to the technical design staff and sourcing managers, for selection of styles to include in the season’s product line • Classification of products and product categories (different price points for women’s, men’s, and children’s) ➢ Couture – made to order; client goes to the designer’s salon for custom fittings ➢ Designer ready-to-wear (RTW) – designer brands available off the rack in a range of sizes ➢ Contemporary designer – a price point similar to that of bridge or a bit higher; this category includes many new designers who target a younger, fashion-savvy customer ➢ Bridge – a price point between better and designer, with a focus on career wear and weekend wear ➢ Better – products with wide market appeal, often the highest price point available in department stores ➢ Moderate – large, price-conscious market. Styling appeals to more mature customers ➢ Low-end contemporary/fast fashion – a relatively new category that offers fast fashion at a moderate to better price point ➢ Juniors/tweens – apparel with styling and fit geared to teenagers ➢ Mass merchant – a variety of brands that appeal to many different market segments, all at low affordable prices (Sonoma, Merona, Faded Glory) • Branding and licensing ➢ Tools that product developers and retailers use to drive repeat business ➢ Brand – distinctive name or logo used to identify products or services to influence consumer behavior ➢ Branding – planning direction, inspiration, and energy a brand represents that immediately implies value to the customer ➢ sagreements – grant a business partner exclusive rights to produce or sell products under a propriety brand’s name Chapter 3 • Key terms • Consumer analysis and market segmentation (e.g., demographics, psychographics, generational cohort groups) ➢ Demographics – statistics about a given population and used to reach target market effectively by learning about preferred customers o Age, gender, marital status, family size, income, spending habits, occupation, education, religion, and ethnicity ➢ Psychographics – the study of social and psychological factors that influence consumer lifestyles o Social aspects of a lifestyle – reference groups, life stage, and activities o Psychological aspects – personality, attitudes, level of class consciousness, and motivation o Obtained from actual reports or by data mining but are difficult to measure because they are subjective ➢ Generational cohort groups – each generation is characterized by its own unique set of values and behavior; shared life experiences in formative years o A product and marketing approach that reaches one generation may be ineffective with another • Market research tools used in quantitative and qualitative research ➢ Quantitative research – objective methodology in which data are collected about a sample population and analyzed to generalize behavioral patterns o Online-web, face-to-face, phone, FedEx mail, and general location intercept ➢ Qualitative research – more subjective and relies on methodology such as observation and case studies in which experiences are recorded as a narrative to describe observed behaviors o Online forums, online communities, web survey/chats, groups, and depth interviews • General consumer trends ➢ Long-term recessionary impact ➢ Time as a commodity ➢ Fashion independence ➢ Comfort ➢ Importance of fit ➢ Masstige – convergence of mass market and prestige retailing ➢ Quality vs. quanitity ➢ Importance of brands ➢ Wear-now clothing ➢ Ethical fashion Chapter 4 • Key terms • The fashion cycle ➢ Introduction – worn by fashion innovators, including designer fashions and street fashion o Designer boutiques and high-end specialty stores ➢ Growth – fashion leaders pick up on trend and popularize o Fast-fashion retailers, contemporary boutiques, and specialty stores ➢ Acceleration – the trend interpreted for a mass market lifestyle and purchased by fashion followers o Moderate and better labels at department stores, mass merchants, and specialty stores ➢ Saturation – the trend finds mass acceptance and looks timely to wear or buy among fashion followers o Primarily found at moderate retailers and mass merchants ➢ Decline – fashion followers still wear trend but are not longer interested in purchasing ➢ Obsolescence – looks dated to wear; no one wants to buy it • Different theories of fashion innovation ➢ Trickle-down theory – a theory based on the observation that many new fashion ideas start on designer runways appealing to fashion leaders who have the money and taste level to wear new looks. As new ideas gain visibility, they are interpreted at lower and lower price points. Once a fashion idea is available to all, affluent customers seek to differentiate their fashion image through the adoption of a new trend o Runway to fashion leaders to everyone, then cycling over again with a new trend ➢ Trickle-across theory – a theory that explains how digital technology has democratized fashion by making runway styles available for all to see before they appear in stores and giving lower-priced brands a window of opportunity to knock off runway looks, offering similar looks at lower prices in the same season o Runway to designer stores and knockoff stores at the same time ➢ Trickle-up theory - a theory that explains the phenomenon of street fashions that originate with avant-garde consumer groups rather than a designer or product developer and are reinterpreted by designers and mass marketers. These unique looks put together form items found in resale stores and at flea markets and army surplus stores o Street fashion to runway • Environmental scanning for long- and short-term trend forecasting ➢ Environmental scanning – the ongoing process of surveying a variety of resources for economic, political, social, technological, and cultural conditions for insights into the future ➢ Long-term forecasting – seeks to identify ongoing trends such as: o Major shifts in domestic and international demographics o Changes in industry and market structures o Changes in consumer interests, values, and motivation ➢ Short-term forecasting – analyzes immediate current events and pop culture that can be communicated to the customer through seasonal collections o Current events o The arts o Sports • Shopping the market to watch for new trends ➢ Trend forecasters shop a cross section of their own stores to understand how their products are being merchandised, where they are selling best, and where they are not resonating with the customer o Benchmark brands - competing labels and/or stores that share a target customer, particularly those whose goods, services, and processes are the best performing in their class o Aspirational brands – higher-priced labels or looks from which a brand takes inspiration in part because its target audience admires the label or look but for economic reasons cannot afford to buy it • Color, fabric, and silhouette ➢ Color – one of the first stimuli to which customers respond and one of the first decisions made in the product development process. Must be interpreted for specific markets ➢ Fabric – seasonal fabrics researched simultaneously with color research in order to determine a color story. Fabric is a medium that must be touched and draped to be appreciated ➢ Silhouette – outline or shape of the garment. In modern fashion, silhouettes change least from season to season • Seasonal trend forecasts ➢ Trend forecasts must be interpreted by the product developer for each seasonal collection ➢ 2-6 collections a year timed to correspond to wholesale markets or in-store delivery date ➢ Each collection revolves around a theme defined by a color and fabric story along with important silhouettes and details Chapter 1 • Key Terms ➢ Acting vertical – the internal collaboration that breaks down the barriers between functions, external collaboration with manufacturers and suppliers without owning them, and ongoing collaboration with consumers in order to reap the rewards of a continuous conservation ➢ Apparel supply chain – the network of fiber, textile, and findings (trim, thread, labels) suppliers, apparel product developers, manufacturers and vendors, and all the channels of apparel distribution that work together to bring apparel products to the ultimate user ➢ Auxiliary businesses – businesses that provide expertise to improve the efficiency of the core apparel supply chain. Includes software providers, trend services, design bureaus, patternmaking services, sourcing agents, factors (credit agents), testing labs, consultants, and advertising agencies ➢ Collaborative supply chains – interactive networks of independent manufacturing specialists that join forces operationally to integrate complementary resources to respond to a market opportunity through the creation of a particular product ➢ Core competencies – the business functions that a company is best equipped to execute ➢ Differential advantage – a competitive edge that comes from lower price, superior quality, speed to market, or unique product features, or some other desired quality ➢ Diversification – a growth strategy in which a firm expands its product mix to capitalize on brand recognition, increase sales, and thus enhance efficiencies for greater profit ➢ Growth industries – industries that make products that have not yet saturated the marketplace. Growth products utilize emerging technology that commands a relatively high price, placing these products out of reach for some consumers ➢ Horizontal integration –a strategy that prioritizes the acquisition of companies that make similar products in order to expand market penetration and reduce competition ➢ Market penetration – increasing market share relative to total sales volume of all competing products ➢ Market saturation – increasing market share relative to new customers ➢ Mature industries – industries that product products that are characterized by relatively stable sales from year to year and by a high level of competition ➢ Outlet stores – brand-owned stores that product developers use to broaden their customer base as well as sell excess goods, overruns, and irregulars at discounted prices ➢ Private brands – products developed and merchandised for exclusive distribution by a particular retailer ➢ Private label brands – describes products that are developed and merchandised with labels that are owned by a retailer, for exclusive distribution by that retailer to compete with branded products also carried by the retailers ➢ Product development – the strategic, creative, technical, production, and distribution planning of goods that have a perceived value for a well-defined user group and designed to reach the marketplace when that group is ready to buy ➢ Signature stores – stores that are owned and managed by a wholesale product developer. Used to build brand image, test new styles, and learn more about their customers’ preferences ➢ Sneakerization – the process of transforming an inexpensive commodity product into high-tech, cutting-edge specialty product ➢ Sourcing – the process of procuring materials and production ➢ Store brands – a complete assortment of privately developed products under the store’s own label(s) for exclusive distribution in its own stores, catalogs, or both ➢ Supply chain management – an evolving management philosophy that integrates the business function of one firm with the competencies and resources of supply chain partners into a competitive supply system, focused on solutions for synchronizing the flow of products, services, and information ➢ Ve
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