Fashion MarketingPricing Price Value to Price Ratio the

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Fashion Marketing-Pricing

Fashion Marketing-Pricing

Price • Value to Price Ratio: the relationship between the perceived quality and the

Price • Value to Price Ratio: the relationship between the perceived quality and the expected satisfaction with the garment and the price • Setting the Price: – Manufacturers to wholesalers to retailers – Wholesale: manufacturer’s price to the retailer – Retail: price final consumer pays for a garment

Pricing Terms and Strategies • Markdown: price reduction taken from the original retail price

Pricing Terms and Strategies • Markdown: price reduction taken from the original retail price to speed up sales • Markup: percentage added to the cost of the wholesale price to create a profit for the retailer and cover operating expenses • Operating Expenses: salaries, advertising, building maintenance, cost to cover damage & stolen merchandise, cost of security

Pricing Terms and Strategies • Margin/Gross Profit: difference between the selling price and the

Pricing Terms and Strategies • Margin/Gross Profit: difference between the selling price and the cost of the fashion item • Net Profit: balance left after operating expenses are paid • Formula: Selling Price-cost of itemsoperating expenses= net profit

Wholesale Price Retail Price Operating Expenses Net Profit Margin, Gross Profit, and Markup

Wholesale Price Retail Price Operating Expenses Net Profit Margin, Gross Profit, and Markup

Pricing Terms and Strategies • Markup: the amount added to the cost to cover

Pricing Terms and Strategies • Markup: the amount added to the cost to cover the operating expenses and the desired profit • Retail $-Cost $=Markup $ • Markup %=Retail $-Cost $ Retail $

Pricing Policies • Competition: other businesses selling similar items • Market Share: percentage of

Pricing Policies • Competition: other businesses selling similar items • Market Share: percentage of the total market represented by a customers in a target market

Pricing Categories • Price Range: used to identify th equality of the fashions –

Pricing Categories • Price Range: used to identify th equality of the fashions – Discount: low end price line represented by high-volume sales items and close-outs (Ross) – Budget: below average prices (Wal-Mart) – Value-Priced: good quality, not high fashion – Moderate: middle-priced items – Better: middle to high prices, sold in specialty shops or department stores

Pricing Categories • Bridge: low-price end of a designer line of fashions (young designer,

Pricing Categories • Bridge: low-price end of a designer line of fashions (young designer, up & coming or special line designed for lower price like Polo) • Designer: high-price end and carries a brand name with an image that allows the high price (established-Chanel, Gucci, Ralph Lauren) • Couture: original, luxury items that are one of a kind and made of the top quality materials, hand-made (Chanel Couture)