Sales Promotion Techniques Used in Term Paper

  • Length: 44 pages
  • Subject: Economics - Economists
  • Type: Term Paper
  • Paper: #53541405

Excerpt from Term Paper :

Since the 1970s, the global retail clothing industry has experienced intense international competition and major shifts in the pattern of consumer demand. These pressures have had far-reaching implications for the clothing industry in the areas of pricing, design, quality, manufacturing processes and employment (Rath, 2002). According to this author, "In the 1970s, traditional manufacturers, particularly High Street retailers with their own manufacturing capacity, found themselves unable to compete with low wage producers in newly industrialized countries. Standard garments such as suits, rainwear and jeans, where seasonal fashion changes tended to be minimal, were particularly susceptible to competition" (p. 77).

The early 1980s witnessed a 'retail revolution' which was occasioned by demands for more frequent style changes and garments with a high fashion content. Retail clothing stores such as the Burton Group, Sears, Storehouse and Next tried to lure consumers away from relatively cheap mass-marketed clothes by promoting a new coordinated look combining high fashion with value for money, with an accompanying shift towards 'niche marketing' and 'customer differentiation' (Phizacklea, 1990, p. 15). Not surprisingly, clothing manufacturers have been profoundly affected by these changes, which have generated considerable pressure to organize production more flexibly. As retailers moved away from long standardized runs with an emphasis on 'economies of scale' associated with mass production, they insisted that manufacturers provide improvements in design and quality, shorter lead times, smaller batches and frequent style changes (Rath, p. 77).

Buyer-Seller Relationships Used for Promotional Support in the Clothing Sector.

Fashion retailing is constituted by a distinctive set of interconnecting networks of production, promotion, sales, consumption and regulation. These buyer-seller networks are spatially fragmented and exhibit markedly asymmetrical power relations. The fashion industry is positioned within a nexus that connects design, promotion and display with clothing production and retailing. This nexus is highly differentiated; it works itself out in different ways to produce and sustain multiple readings of the fashion industry, which depend on very different geographies of design, clothing production, promotion and retailing (Crewe, 2003; Entwistle, 2000). The retail clothing sector is markedly segmented and is striated along organizational and quality lines (Power & Scott, 2004).

Networks of creativity and design exhibit distinctive spatial structures, centered on four key cities: Paris, Milan, London and New York. The organizational ecology of networks of creativity and design is complex and conventionally conceived as bi-polar, characterized on the one hand by small, fledgling, independent designers, often recent graduates from fashion institutions who attempt to "go it alone" and on the other hand by large organizations such as LVMH and Prada who wield considerable amounts of market power and control (Power & Scott).

Networks of production in the fashion industry are also segmented and striated. There are two dominant spatial fixes at work here. First, spatial agglomeration as illustrated in the case of garment production clusters in New York City, London's East End and the Sentier district in Paris, for example. All three are important centers of production characterized by small, highly flexible and responsive production units employing poorly paid, frequently immigrant labor (Rath, 2002.

Volatile fashion demands and a marked division of labor encouraged manufacturers to seek proximity to fabric suppliers, cutters and ancillary suppliers. The second production spatial fix is more global in orientation. Global supply chains have been a long-established feature of the fashion industry, with Export Processing Zones (particularly in the Far East and, most recently, China) being particularly important sites of garment manufacture. Despite the labor-cost benefits of such overseas production sites, the rapidly changing fashion cycle and, in particular, the requirements for rapid response and "fast fashion" have made women's wear in particular less prone to spatial relocation (Entwistle, 2000). The third fashion network is that associated with promotion, distribution and dissemination. It comprises cultural intermediaries involved in the selection and promotion of fashion (such as fashion editors, photographers, journalists and the like), who exercise control over the dissemination of fashions through the global media (Power & Scott).

Typically the production of fashion has been thought about in terms of the "trickle down" of styles, from catwalk to high street (from designer to mass-market retailer). In part it is clear that this dynamic is still at work, as is evident through the twice-yearly staging of world fashion weeks showcasing the coming season's styles and concepts. It is at such events that the different geographies of fashion unfold and are connected through the nexus of London, Paris, Milan and New York - spaces for the display, performance and enactment of "fashion." These are highly charged and influential meeting grounds for a number of actors who shape fashion consumption, including designers, the collections themselves, supermodels, media pundits, photographers, magazines and the trade press (Power & Scott).


Haesun (2002)

The Long-Term Impact of Loyalty Programs on Consumer Purchase Behaviour and Their Loyalty.

According to Hofmyer and Rice (2000), in their ongoing efforts to develop comprehensive databases of consumers, whether computer-based or otherwise, "Some marketers attempt to get rid of customers who have a low value to the brand or under-market to them. This could be a serious mistake. Low value to the brand often correlates with low commitment. Among uncommitted customers we often find those who are the heaviest users of the product category, with the highest growth potential for the brand" (pp. 181-182). Generally speaking, while such consumers are uncommitted, they are still involved with the given brand. Consequently Hofmyer and Rice emphasize that, "Brand choice does matter, but they spread their purchases over a range of brands. These are the consumers we would like to be able to identify so that specially tailored marketing programmes for them can be launched" (p. 182).

The importance of identifying consumer brand commitment and involvement in the retail clothing sector is illustrated in Figures __ and __ below.

Figure ____. Clothing retailer's percentage of customers.

Source: Based on pie chart data in Hofmyer & Rice, 2000 at p. 182.

Figure ____. Respective percentage of customers: value to clothing retail store.

Source: Based on pie chart data in Hofmyer & Rice, 2000 at p. 182.

As can be seen from Figures __ and __ above, for committed customers, fully 81% of their spending is dedicated to the preferred retail store; however, these figures also make it abundantly apparent that the major loss that would be experienced by the retail store in terms of share of spending in absolute terms is from those who are uncommitted but for whom retail store choice still matters (Hofmyer & Rice).

According to Lodovico, Lewis, Palmede and Sankhe (2001), "India's current policy regime, at the sector level, has five features that are especially damaging to competition and therefore to the productivity of the country's industries" (p. 28). Approximately 830 products are currently reserved for manufacture by firms below a certain size. Producers of certain types of clothing and textiles, for instance, face limits on their spending for new plants -- limits that protect clothing makers that are below efficient scale. As a result, typical Indian clothing plants have only about 50 machines, compared with more than 500 in a typical Chinese plant. Restrictions on imports of clothing from more productive countries protect the domestic markets of these subscale Indian players (Lodovico et al.).

Furthermore, Indian exports are currently protected as well. Several countries, including the United States, import a guaranteed quota of Indian clothing each year. Not surprisingly, India's share of garment imports in countries without such quotas is much lower than it is in quota countries. As all such quotas are to be removed over the next five years, Indian exports will be highly vulnerable unless the sector can become more productive (Lodovico et al.). In addition, of India's total employment, retail trade accounts for 6% -- four-fifths in formats such as street markets, kiosks, and rural counter stores. Regulations, including limits on foreign direct investment, restrict the spread of more modern formats. According to Lodovico and his colleagues, "India's apparel sector comprises three segments: tailors making custom garments for domestic consumers, manufacturers for the domestic market, and exporters. The law limits the size of domestic apparel manufacturers, thereby restricting this segment's growth. In fact, tailors today account for almost 70% of employment in the industry" (p. 28).

The Impact of Loyalty Programs on Repeat Purchase Behaviour.

Consumer's Perception Regarding Quality, Fashionability, Product Assortment, Extent and Quality of Consumer Service, Convenience of Location, Payment Options, National Brands and Store Layout.

While there is a growing body of research concerning the global retail clothing sector, even as recently as the closing decade of the 20th century, though, there were few available studies concerning the state of marketing in India. The studies that had been conducted generally emphasized the paucity of marketing and customer orientation on the part of Indian organisations. In this regard, Findlay and Paddison (1990) report that by and large, Indian consumers are exploited in a variety of ways such as sale of products that are of inferior quality and at times hazardous, creation of…

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