CTE 3431 FINAL EXAM STUDY GUIDE Product Development Strategic Creative Technical Production Distribution Planning of goods having a perceived value for a WELL DEFINED USER GROUP ROLE OF PRODUCT DEVELOPERS Design apparel styles Write specifications for construction of the apparel styles 1 Creative Planning Coordinate style selections a Spring and fall trends drive both marketing and in store visuals 2 Merchandise Planning a Merchandise budget objectives for a specific season Line or range plan b c Assortment plan preferences identifies the resources needed to meet profit sales and margin sets sales and margin goals for lines beaks down the line plain into components that address customer i What product ii How much of it iii What colors iv What sizes v Delivery within what seasonal calendar d Merchandise calendar to customer at right time 3 Production Planning controls the events required to get the planned apparel products a Connects merchandising creative design and technical design decisions to the actual construction of products b Actual garment production takes place in distant offshore location c Production planners i Understand the cost of materials trims and value added finishes and processes ii Determine quantity and quality of products iii Specify assembly processes to create a successful product 4 Technical Planning a Defines styles further by developing i Fit standards ii Materials iii Construction specifications Line concept contribute to the identity of the line Line development b Technical designers evaluate a prototype garment before its approved for production o Results from trend research and includes the mood theme and key elements that o the design team translates the line concepts into groups of garments to be delivered throughout the selling season Line presentation o Shows the proposed line of products to design staff and managers for selection of what to include in the season s product line CLASSIFICATION OF PRODUCTS Firms need 1 product categories 2 pricing categories 3 sizing categories to be able to define day to day activities and the positioning of their products in the marketplace 1 Product Categories a Apparel product category is usually defined by the use of the product b Mens wear has evolved over the past century c Childrens clothing are being produced in scale from adult styles 2 Price Categories a Cost vs quality 3 Sizing Categories Implied relationship i ii Customers have a higher expectation for more expensive product a Size range is one of the first decisions made b Sense of overall shape body dimensions and garment ease preferences of the firm s target customers APPAREL SUPPLY CHAIN Traditional Linear Supply Chain 1 Fiber Production 2 Yarn Manufacturing 3 Textile Production 4 Apparel Manufacturing 5 Retailers 6 Final Consumer Apparel Supply Chain Structure Today More complex and flexible than the traditional linear model Builds on CORE COMPETENCIES Retail Product Development Supply Chain Seeks to bypass the profit center of wholesale brand apparel manufacturers And procure exclusive products Digital technologies make it possible for companies to coordinate their core competencies into a single effort Collaborative Supply Chain 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 Supply Chain Management SCM a competitive customer enriching supply system Li Fung The 7 KEY principles to their supply chain management philosophy Customer centric market demand driven Focus on one s CORE COMPETENCY and OUTSOURCE noncore activities Develop a close RISK PROFIT SHARING relationship with business partners Continuously IMPROVE the work flow physical flow information flow cash flow in the supply chain Top TECHNOLOGY to optimize operation of supply chain Shorten production lead time delivery cycles Lower costs in sourcing warehousing transportation o Business marketing plans o Concepts mood color palette and materials trims silhouettes o Merchandising plans line boards material usage market calendars and product o Initial specification adopted specification production specification production specification special size specification Sourcing Costing o Vendor collaboration vendor allocation multi sourcing estimate costing quality PLM Software Seasonal Concept Line Development tracking Definition Differential Advantages Lower price Superior Quality Unique Product Aesthetic Minimal Carbon Footprint Unique Fit Speed to market Walmart Lands End Burberry Patagonia Not Your Daughter s Jeans H M Growth Strategies Marketplace not yet saturated New customers or markets Emerging trends create new opportunities Increased market share in a given market Sneakerization the process of transforming an inexpensive commodity product into a cutting edge specialty Vertical Integration acquires companies at other stages in the supply chain through a common owner Signature stores Manufacturer owned stores give the brand a direct line to their ULTIMATE customer Outlet stores Provide a means of controlling excess goods Horizontal Integration licensing of companies or brands that make or sell similar products to expan market penetration Occurs when a firm expands its product mix to capitalize on brand recognition and increase sales enhancing efficiencies for greater profit May also be achieved through licensing or the acquisition of related or unrelated companies Major growth opportunity retailers are expanding overseas REQUIRES a strong understanding of a more DIVERSE consumer Products sold at wholesale prices for distribution to retailers that carry similar wholesale brands Diversification Globalization Wholesale Brands o Department stores o Specialty stores o Chain stores o Discount stores Private Brands Private Label Store Brands o Developed and merchandised for exclusive distribution by a particular retailer Ex Gianni Bini at Dillards Simply Vera at Kohls o Competes with wholesale brands o Brands developed for stores that sell only private brands Ex Victoria s Secret Couture Designer RTW Highest level of fashion and works of art Chanel Haute Couture Armani Gucci Prada Accessibility appeals to the busy lifestyles of today s luxury customer Trend Forecasters look to designer RTW for o Hot color o New fabric developments o Newest silhouette o Detail accessory Contemporary Designer Clothes with a younger vibe at a somewhat