Review for Exam ICTE 3809 Trend Analysis and Forecasting (Spring 2013)* 20 Multiple Choices (20 x 1 point = 20 points) + 10 Short Answer Questions (10 x 2 points = 20 points) = 40 pointsCh 1. The Fashion Forecasting ProcessForecasting: The process of anticipating future developments by watching for signals of change in current situations and events, and applying the forecasting frameworks to predict possible outcomes. Forecasting is a creative process that can be understood and practiced. Forecasting provides a way for executives to expand their thinking about change, anticipate the future, and project the likely outcomes. Developing a forecast: (Brennon p. 8-9) There are 7 steps to developing a forecast.1. Identify the basic facts about past trends and forecasts.2. Determine the causes of change in the past.3. Determine the differences between past forecasts and actual behavior.4. Determine the factors likely to affect trends in the future.5. Apply forecasting tools and techniques, paying attention to issues of accuracy and reliability.6. Follow the forecast continually to determine reasons for significant deviations from expectations.7. Revise the forecast when necessary.A trend forecast should identify the source, underlying pattern, direction, and tempo of the trend. Classic: An item or style that is introduced, gains visibility, generates multiple purchases or replacement purchases, and reaches a plateau level of widespread acceptance that persists over a long time period; an item or style that delivers at least the core attributes desirable to the consumer while avoiding extremes in style. This is part of the fashion curve and is considered the longest trends. Classics may be adopted at a slow rate in the beginning but the telltale sign of a classic is its staying power. Example: Chanel suits, turtle neck sweaters, pearl necklacesFad: A trend of short duration that is introduced, gains rapid visibility and acceptance among a relatively small contingent of consumers, and fades quickly because it is not supported by corresponding lifestyle changes. This is part of the fashion curve and is considered the shortest trend. Fads reach its peak quickly and then suddenly dies out. Example: mini skirts with leggings and wide belts popular in the mid 2000sFashion: A style that is popular in the present or a set of trends that have been accepted by a wide audience. Fashion is a complex phenomenon from psychological, sociological, cultural, or commercial points of view. Kim’s model of the forecasting process (2011)1. The environment is scanned to search for current and near future trends in the economic, political, social, and culture arenas. An understanding of the long term direction of the society can also be helpful. 2. The information is then analyzed, interpreted and synthesized. Trend: Identifiable similarities across information sources related to styles, details, or other aspects of appearance characterized by a building awareness of this new look and an accelerating demand among consumers. Forecasting attempts to project past trends into the future. (Brannon). A trend refers to a general direction or movement. Example: if you see a fashion magazine that says “there is a trend toward faux furs” it means that upscale designers have shown faux fur coats on the runway, apparel retailers have started to introduce them in their catalogs or stores, and some fashion forward consumers are wearing faux fur items (Kim). Diffusion curve: (Kim) May indicate whether the style is growing, reaching market saturation, or beginning its decline. A forecast can then be made on the basis of the current extent of diffusion, as indicated by the curve and the amount of consumer demand remaining. (Brennon) A visualization of diffusion of innovation as a bell curve showing the progressive participation of consumers, beginning with innovators and early adopters, proceeding to majority adoption, and concluding with laggards. Pendulum swing: Refers to the periodic movement of fashion between extremes. Example: fluctuations between long and short hemlines, fitted and oversized silhouettes, dressed up and casual looks short narrow long wideLong-term forecasting: (five years or more) a way to explore possible futures and to build a shared vision of anorganization’s direction and development. A compelling vision draws people toward a preferred future. Focuses on the directions of the fashion industry, particularly in materials, design, production, and retailing. Long term forecasts contribute to a fashion firm’s development strategies and help it make decisions related to repositioning or extending product lines, initiating new business, and reviving brand image. Short-term forecasting: (one year ahead) involves periodic monitoring of the long term vision and revisions as circumstances dictate and acts to coordinate the operations of a company within the context of the industry and the marketplace. Predicts trends one to two years in the future and focuses on new products, especially color, textile and style.Trend analysis: Drawing on fashion and consumer scans, and on identification of social and economic trends, trend analysis detects short and long term trends that affect business prospects. Trend analysis looks at the interaction of shifts in fashion, consumer lifestyles, and culture. Trend analysis is also the preliminary stage of product development. During this stage, ideas for products are collected from a variety of sources. As part of their in-depth search for sources of inspiration, planners give careful consideration to seasonal predictions related to color, fabrication, surface design, silhouette, style and the overall direction of fashion. Cohorts: A group of consumers who share preferences and demographic characteristics- the basic unit of consumer research.Megatrends: A trend so fundamental that it indicates a critical restructuring of culture. It involves shifts in lifestyles, reflect changes in generational cohorts, or mirror cycles in the economy. Trends of this magnitude may be felt over the period of a decade, from the first time that they surface to the time that they influence purchasing decisions on a mass scale. Example: A move toward an information based economy, dual compensations of high-tech and high-touch products.Time frame. DecadesThe techniques for gathering signals. Content analysis of 6,000 local