3431 FINAL Chapter One The Role of Product Development Product Development the strategic creative technical production and distribution planning of goods that have a perceived value for a well defined user group The most critical point in production development calendar is delivery of product to the consumer What they do Design Apparel Styles Write Specifications for construction of apparel styles Understand customer needs and wants using techniques to track shopper behavior Coordinate style selection to develop a product line The Role of Product Development and its variations Consumer driven Goal is to eliminate non value added steps such as warehousing Defines the product through detailed standards and specs Requires partners who share the responsibility and risk for producing a quality product Lends itself to multiple channel distribution o Stores Internet and Catalog Creative Planning tracking and interpreting trends for the company s target market and developing style to be produced Merchandise Planning identifies the resourced needed to meet company profit sales and margin objectives for a specific season by company division The merchandise calendar controls the events required to get the planned apparel products to the customer at the right time Traditional calendar 52 weeks Today s basics core merchandise 35 weeks Fast fashion 18 weeks Product Planning function that links merchandising decisions with design and technical decisions in order to plan the activities related to making the product Line Concept the mood theme and key elements that contribute to the identity of the line Line Development translating trend information into actual sketched of styles Line Presentation showing the proposed line of products to sourcing managers and technical design staff for selection of styles to include in the season s product line Firms need Product Categories defined by the use for the product Example lingerie yoga wear career wear updates sportswear Price Categories Cost vs Quality There is an implied relationship customers have a high expectation for more expensive products Couture designer contemporary bridge better moderate low end contemporary fast fashion junior mass merchant Sizing Categories size range is one of the first decisions made Includes a sense of overall shape body dimensions and garment ease preference of a firm s target customer Traditional Linear Supply Chain 1 Fiber Production 2 Yarn Manufacturing 3 Textile Production 4 Apparel Manufacturing 5 Retailers 6 Final Consumer Today s Supply Chain 1 More complex and flexible than traditional 2 Builds on core competencies 3 Digital technologies make it possible for companies to coordinate their core competencies into a single effort Retail Product Supply Chain seeks to bypass the profit center of the wholesale brand apparel manufacturers and procure exclusive product at more competitive price Supply Chain Strategy SCM is a competitive customer enriching supply system Includes Customer centric and market driven Supply Chain Strategy Logistics Product Lifestyle Management Procurement Asset Management Supply Chain Enterprise Applications Supply Chain Planning Sourcing determining the most cost effective vendor of services materials production or finished goods or a combination of these at a specific quality and service level for delivery within a identified time frame 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 PLM software Product Lifecycle Management developed as an add on to SCM to focus on product info and data Captures manages visualizes and disseminates product related information from initial concept to a product s retirement throughout a company and it s supply chain Addresses the areas of Seasonal Concept business and marketing plans Concepts moods color palette and materials trim silhouette Line Development merchandise plans line boards material usage market calendars and product tracking Definition initial specification adopted specification production specification special size specification and multichannel specification Sourcing costing vendor collaboration vendor allocation multi sourcing estimate costing and quality Vertical Integration seeks to consolidate a supply chain by acquiring companies at other stages in the supply chain Controls processes previously handled by specialized firms Signature Stores manufacturer owned stores give the brand a direct line to their ULTIMATE customer full price Outlet Stores provided a means of controlling excess goods off price Horizontal Integration done through mergers and acquisitions Taking over a company that makes similar products to expand market penetration and reduce competition Diversification a firm expands its product mix to capitalize on brand recognition and increase sales thus enhance efficiencies for greater profit May also be achieved through licensing or the acquisition of related or unrelated companies Think Tory Burch first only sold ballet flats then expanded into handbags and other goods 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 cutting edge specialty product For example Nike and Adidas both develop expensive high tech function specific products Keds transformed a dated product and made it more fashion forward Globalization major growth opportunity retailers are expanding overseas Requires a strong understanding of a more diverse consumer The Result with fewer links in the supply chain cycle times are reduced Enables the ability to achieve getting o The right clothes to market o At the right price o At the right time Wholesale Brands created and sold at wholesale for distribution to retailers that carry other wholesale brands including Department stores Discount Stores Specialty stores Chain stores Private Brand s aka Private Label products are developed and merchandised for exclusive distribution by a particular retailer For example INC in Macy s Private Label developed to compete with wholesale brands May make up 15 to 50 percent of a store s mix Store Brands Victoria Secret is a Store Brand Widely recognized due to their runway shows The Strategic Business Plan 1