Chapter Two The Fashion Market and the Marketing Environment

Chapter Two
The Fashion Market and the
Marketing Environment
2.1 Introduction
A market is a place for buying and selling, for exchanging goods and
services, usually for money. The fashion market is unusual because
until early in the twentieth century it was almost solely the domain
of kings, queens, aristocrats and other important people. As will be
seen, great changes, mainly due to technology and increasing glo-
balization, mean that we now have a fashion marketplace open to
everyone.
Fashion can be a refl ection of the time, from the utilitarian clothing
of the war years to the yuppie look of the buoyant 1980s. Fashion
also can be a refl ection of individuals. Clothes are often chosen to
refl ect among other factors our age, gender, lifestyle and personality.
Because fashion is both a refl ective and yet creative discipline, it is
necessary for fashion marketers to be aware of the factors surround-
ing the market and develop a broad understanding of the issues that
can affect the garments that are seen in any high street store.
2.2 The development of the fashion market
2.2.1 Origins of the modern fashion market
Until relatively recently, fashion had always been élitist and was used
by its adopters to show that they were above the common people.
Even the inventions of the eighteenth and nineteenth centuries; the
spinning jenny, the water frame and the sewing machine have not
had as great an effect on the market as have cultural changes and
the explosion of the media during the twentieth century.

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The Fashion Market and the Marketing Envir
The end of World War I, in 1918, really marked the start of mass fash-
ion. Style began to be infl uenced by the fashion designers of Paris,
Milan, New York and London. In the 1930s fi lm personalities and later
pop stars all played their part in spreading or even starting fashion
trends.
Some fashion styles are more easily explained than others. World
War II forced hemlines up because of a shortage of material. In
the 1950s newer freer styles made corsets less and less necessary.
However, other fashions are less easily explained and are regarded
by some as merely a whim or the market just looking for a change.
Technology played its part in advancing mass production methods,
so that from the 1930s onwards ordinary people could buy copies
of designer fashions from high street stores within weeks of the big
fashion shows.
The media started to become an important infl uence in the late
onment
1970s. People became more selective in what suited them, and mag-
azines and books advised them on creating their own style. Designers

could no longer dictate the styles as they had up to the 1960s. ‘Street
fashion’ styles, developed by young people themselves in towns and
cities, also affected designer clothes.
London was at the forefront of the fashion scene in the 1960s and
early 1970s. Mary Quant was in her heyday and her clothing was
famous the world over. It was the time of Carnaby Street, and Biba
made famous by Barbara Hulanicki.
The infl uence of royalty on fashion made a comeback with the
Princess of Wales in the 1980s as many women copied the lace and
ruffl es which she wore.
While not the fi rst to introduce lifestyle segmentation to the
market, George Davies, then chief executive of the Next chain, is
undoubtedly the best known. His retailing phenomenon, targeting
a particular age and lifestyle group, exploded onto the marketplace
and had many other high street retailers following suit.
Changes towards a healthier lifestyle advocated by the medical
profession and the increase in leisure time have encouraged people
to take up more sport, particularly jogging and aerobics. Membership
of health clubs and gyms has increased in recent years. So the cloth-
ing from this and other activities has moved into everyday wear.
The future for the fashion industry is mapped out, perhaps more than
at any time in its history. Infl uences from the demographic structure,
concern for the environment and further adoption of new technolo-
gies are all inevitable. These factors could stifl e designers if they are not
careful or could offer them greater challenges than any they have had
to face so far.
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Fashion Marketing
2.2.2 Recent developments in the fashion market
Consumer demand for clothing is now more fragmented and discern-
ing. Retailers are wary of carrying high levels of stock, major demo-
graphic changes are occurring, and many different styles and fabrics
are available. These have all resulted in the mass market for cloth-

ing being fragmented and are eroding the advantages of long-run
manufacture.
Previously the UK textile industry had a reputation for being
dictatorial and short on choice. This was blamed on the nature of the
relationship between retailers and manufacturers. Clothing retail-
ing was dominated by a few large groups who exercised enormous
power in the wholesale market for garments and fabrics. Retailers
emphasized basic garments with very little fashion content, and
Marks and Spencer in particular set very detailed specifi cations for
fabrics, making-up and quality. Manufacturers such as Courtaulds and
Carrington Viyella geared their production to large volumes of basic
fabrics for a few major customers. It became uneconomic to deal
with orders that either were small or required much design detail.
Competition among retail chains was over the price and quality of
garments.
Since then the market share of the multiple retailers (such as Bhs,
Debenhams and Marks and Spencer) has been affected fi rstly by the
emergence of smaller specialist chains (Benetton, Next) then gro-
cery supermarkets (‘George’ at Asda and Tesco). Mintel 2005 esti-
mates that ‘George’ sales in 2004 (excluding VAT) were £1.07 billion
and that non-specialist retailers of this type enjoyed an increase in
sales of 13% from 2003 to 2004, with this rising trend continuing.
Further European retailers (Zara, H&M) have also gained market
share in the UK by importing low-cost garments. To avoid compet-
ing with the abundance of low-cost imports, the big retailers have
responded by increasing the speed with which they introduce fash-
ion and style changes. This, in turn, has forced suppliers to manufac-
ture shorter runs of garments with higher design and fashion content.
In some parts of the market there has been a distinct shift in retail
competition away from an emphasis on garment price to non-price
factors, such as design, quality and fashion. However, this non-price
competition has had only a limited success with even Marks and
Spencer and its strong ‘British Made’ slogan, turning to importing
more cheaply from overseas. Value retailers such as Matalan, Primark
and TK Maxx, who have attracted the more price conscious shopper,
have enjoyed considerable success in other sectors of the market
(Table 2.1).
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The Fashion Market and the Marketing Envir
Table 2.1 UK trade in clothing (£ million), 2001–2005
2001
2002
2003
2004
2005
Imports
9 160
9 806
10 341
10 884
11 543
Exports
2 592
2 506
2 713
2 729
2 679
Balance of trade
6 568
7 300
7 628
8 155
8 864
% change year on
11.1
4.5
6.9
8.9
year
Source: HM Customs and Excise. © Crown copyright material is reproduced
with the permission of the Controller of HMSO (and the Queen’s Printer for
Scotland).
2.3 The fashion market: size and structure
onment
2.3.1 Structure of the fashion market
Apart from technology, another reason why fashion is now available

to the masses is that there are several levels at which fashion clothing
functions, as shown in Figure 2.1:
Trickle
Haute couture
down
Designer wear
Street fashion or
Trickle
mass markets
up
Figure 2.1 Levels of fashion.
◆ Haute couture houses are the major fashion houses of the
world, run by recognized, internationally famous designers.
They show their collections at least twice a year and sell indi-
vidual garments for thousands of pounds. For many designers
the catwalk shows are essentially a publicity exercise for the
many goods that are sold under their name such as perfume
and accessories.
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Fashion Marketing
◆ Designer wear is shown at pret à porter. The move into ready-
to-wear clothing by designers meant that they could offer
their stylish designs and high quality to a wider audience.
The garments are still highly priced, although in hundreds of
pounds sterling rather than thousands. They are to be found
in the designers’ shops, independent stores and some of the

more exclusive department stores. Designs are not unique,
but are still produced in limited numbers and, although some
garments are produced abroad, there is very strict quality
control.
◆ Mass market or street fashion is the market area in which most
people buy their clothes. New fashions can be in the high
street stores extremely quickly and what the customers lose
in exclusivity they can make up for in value for money. This is
one area of the market that is undergoing many changes and
this chapter will look at how it is being affected.
This three-tier view of the market is perhaps oversimplistic as there
are many strata and price levels between the ones mentioned. Many
customers do not stick to any one level when buying their clothes.
The more affl uent will buy several haute couture outfi ts but
turn to designer wear for every day. Women who mostly buy designer
ready-to-wear may occasionally splash out on a couture dress
for a very special occasion. Those who generally only buy mass mar-
ket clothing may still buy designer wear occasionally, if only from
the discounted rail. In the early twenty-fi rst century celebrity fashion
icons have moved to mixing their outfi ts with some designer pieces
and some from high street stores. At times it is diffi cult to iden-
tify the origin of our clothing and to decide who has the power in
the marketplace. Is it the fi bre and fabric industry that, after all,
make the cloth for the garments? Is it the designers? Or perhaps
the retailers are the power base in the market? Ultimately it should
be the customer, but traditionally the fashion market has been one
where the customer was dictated to and so merely followed along
almost blindly.
The fashion fl ow chart in Figure 2.2 illustrates the fl ow of goods
between the various participants in the marketplace. Later it will be
seen that there is even more choice in deciding where the goods
will be manufactured (see Section 2.5.2).
2.3.2 Size of the fashion market
All three levels of the market have shown some growth in domestic
clothing demand in recent years. Growth of the total UK market for
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The Fashion Market and the Marketing Envir
Fibre industry
Raw material suppliers
Research facilities
Fibre marketing companies
Fibre mills, etc.
Selling agents
Support services:
Fashion forecasting
consultants
Manufacturers
Advertising, promotion
Designers
and public relations
Fashion centres
agencies
onment
Wholesalers

Retailers:
Shops
Mail order
Catalogues
Party plan
Ultimate customer
Figure 2.2 Fashion
fl ow chart.
clothing has grown by over 16% from 1994 to 2004 and retail sales
for 2006 are predicted to be nearly 50 billion (Table 2.2).
UK imports now greatly exceed exports, having increased from
£9.1 billion to £11.5 billion from 2001 to 2005 with the main trad-
ers being Hong Kong, China and Turkey (see Table 2.1). UK exports
have remained steady at about £2.5 billion per annum over the same
period with about 73% of this output going to other European coun-
tries. As less UK manufactured clothes are sold in the home market
the proportion of goods being exported is actually increasing. The
fi gures become more complex as UK manufacturers are developing
their own production facilities overseas to take advantage of lower
wages and production costs (Table 2.3).
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Fashion Marketing
Table 2.2 Some major developments in fashion
Pre-nineteenth century
Fashions only for the rich and
powerful
1918 onwards
Start of mass fashion
1930s
Film personalities infl uencing
popular clothing

1939–1945
World War II – raised hemlines
1950s and 1960s
Freer styles, fewer control
garments
1970s to 1990s
Growth of multi-nationals and
mass media infl uence
1990s
Increase in branded and
designer label goods
2000 onwards
Growth of electronic
shopping
2002 onwards
Increasing infl ux of cheap
foreign manufactured clothing
Table 2.3 Consumer spending on clothes
Consumer Expenditure at Current Prices in £ Million
2000
2001
2002
2003
2004
2005
Clothing
31 048
32 103
33 927
35 689
37 112
38 067
Footwear
4 431
4 719
5 165
5 466
5 680
5 661
Total
35 479
36 822
39 092
41 155
42 792
43 728
% change on
6.3 3.8
6.2
5.3
4.0
2.2
year
Source: Consumption, The Blue Book 2006.
2.3.3 Employment in the fashion sector
Employment in the manufacturing of clothing textiles and leather
production in the UK has now fallen to rank 24th out of the 25 cat-
egories of manufacturing industry recorded by the Government. Two
main factors have reduced the numbers employed in the sector in
recent years to only 132 000 in 2006 (Table 2.4). New technologies
have reduced the need for many workers, particularly in the more
skilled areas of pattern cutting as much of this can be computerized.
The computer systems still need to be manned by a skilled workforce,
but retraining has to be done and still there will be redundancies.
The far more important factor has been the stiff level of cheap
competition from abroad. With an inability to raise prices in the face
of a depressed domestic market and crippled by large debts, many
fi rms have had to make savage cuts in their labour force and investment
plans as the alternative to going out of business. In the late 1990s
many major UK clothing manufacturers suffered as their customers
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The Fashion Market and the Marketing Envir
Table 2.4 Recent decline in employment fi gures in textile clothing and footwear
industries (in ‘000s, in June each year)
1998
1999
2000
2001
2002
2003
2004
2005
2006
331
304
273
230
205
169
149
136
132
Source: ONS.
Table 2.5 Production output indices of total manufacturing industries and textiles,
leather and clothing industries in the UK (index 2002 100, 2001, 2005)
2001
2002
2003
2004
2005
Total manufacturing
103.2
100.0
100.1
101.9
101.3
industries
Textiles, leather and
108.1
100.0
98.1
87.0
83.2
clothing
onment
Source: Monthly Digest of Statistics.

Table 2.6 Production of textile and textile products in UK, 2000–2006 (index
2003 100)
2000
2001
2002
2003
2004
2005
2006
122.4
107.2
99.7
100
98.1
90
89
Source: ONS.
chose to source garments from cheaper overseas suppliers. The UK
clothing industry is made up of small, medium and large manufac-
turers. The smaller manufacturers feed off the larger companies by
offering specialist fi nishing services. As the larger retailers turn to
overseas manufacturing or supplying, so the vulnerable smaller com-
panies suffer. Table 2.5 shows the fortunes of the fashion industry in
the context of the decline in manufacturing (Table 2.6).
2.3.4 The current role of London in the fashion business
Fashion centres of the world have always included London, even
before the era of Carnaby Street and Mary Quant, but recently design-
ers have been choosing not to show in London. Now that London
Fashion Week no longer has the fi nancial backing of the French
Chambre Syndicale (the French organization that decides which fash-
ion houses may join the ranks of the haute couturiers), the number
of exhibitions has declined. With it no longer being a requirement
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Fashion Marketing
to show in London, designers have taken the opportunity to save the
expense of showing at yet another fashion week, instead concentrat-
ing on the ones which they feel will be most prestigious and best
covered by the media.
This shift away from London is of concern to the industry, par-
ticularly for the knock-on effect that it will have on everything from

employment to tourism. Cities which are taking a more prominent role
in the fashion year are New York, Tokyo and, new to the list, Shanghai.
2.3.5 The British High Street
In contrast to Italy and most of the rest of Europe, UK has a much
more consolidated market sector with only a few players as the big
earners. Mintel (2005) stated that the top fi ve UK retailers account
for almost 45% of sales. The leading players by turnover being Marks
and Spencer, Next, Arcadia Group (comprising Top Shop, Etam,
Wallis, Dorothy Perkins, Burton, Miss Selfridge, Outfi t and Evans),
Matalan and Bhs. This dominance of the big players makes it hard
for independent stores to get a foothold into the marketplace. It is
hard to compete on price when dealing with high rents and cheap
imported clothes.
2.4 Marketing environment
Fashion is ultimately about change. Every season there are new fash-
ions that lead to obsolescence of last year’s clothes. Many of these
changes are brought about by designers trying to create some-
thing new to satisfy customers, but others are because of infl uences
beyond the control of designers or manufacturers. These are all gath-
ered together in what is called the marketing environment, as shown
in Figure 2.3. Some changes occur very slowly while others can affect
the market much more quickly; some are within a company’s control
and others are way beyond it.
2.5 Micro-marketing environment
Factors which ideally are within companies’ control are to a greater or
lesser extent their suppliers, marketing intermediaries (which help to
get the goods from the factory to the consumer) and the consumers
themselves. For customers the providers of fashion may seem to have
a variety of sources, for instance the designer who has the idea for
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The Fashion Market and the Marketing Envir
Macro-environment
Technology
Political
Demographics
Legal
Micro-environment
Competitors
Suppliers
Manufacturers
Intermediaries
Consumers
Publics
Social
Cultural
Economic
Environmental
Adapted from Kotler, P. (1994), Marketing Management, 8th edn.,
Prentice Hall International, New Jersey.
onment
Figure 2.3 The marketing environment. Adapted from Kotler, P. (1994), Marketing
Management, 8th Edition, Prentice Hall International, NJ.

the style, the manufacturer who makes up the garment or the retailer
to whom the consumer goes to buy the garment.
2.5.1 Designers
While Paris is often thought of as the fashion capital of the world in
fact there are fi ve main cities supplying designs and new ideas to the
international market.
Paris is historically seen as the fashion capital and has the edge
on many other cities as its fashion industry is taken very seriously
by government and citizens alike. The haute couture designers are
protected by the French Chambre Syndicale, which has strict codes
of practice for any designer wishing to style him- or herself as an
haute couture house. The main French designers are Yves St Laurent,
Chanel (now run by Karl Lagerfeld), Christian Dior, Pierre Cardin,
Jean Paul Gaultier, Sonia Rykiel and Christian Lacroix. The British are
also making an impact in France, with Julian MacDonald and John
Galliano securing senior designing roles in French fashion houses.
Milan is the other fashion capital of Europe, and Italians have
always taken fashion very seriously. There are probably fewer well-
known designers, such as Giorgio Armani, Franco Moschino, Muicca
Prada, Emanuel Ungaro and Versace, now headed by Donatella, sis-
ter to the founder Gianni who was tragically murdered in 1997, but
Italy is a country whose people and retail set-up, with many more
independent stores, is a successful environment for young designers.
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