Subject: Apparel Marketing

Unit 3: Marketing environment

Quadrant 1 – E-Text

Learning Objectives

The learning objectives of this unit are to:

 Describe the structure of fashion businesses and players.

 Describe the micro marketing and macro marketing environment.
 Analyze the facts, figures and trends of the business environment.

3.1 Environment Structure, Players

The marketing environment consists of the actors and forces that affect a company’s capability to
operate effectively in providing products and services to its customers. It is useful to classify
these forces into the macro environment and the microenvironment. The microenvironment
consists of the actors in the firm’s immediate environment that affects its capabilities to operate
effectively in its chosen markets. The macro-environment refers to all forces that are part of the
larger society and affect the micro-environment. It includes concepts such as demography,
economy, natural forces, technology, politics, and culture.

The microenvironment consists of five forces close to the company that affect its ability to serve
its customers: Suppliers, Employees, Competitors, Intermediaries and Customers.

The macro-environment includes the major forces that act not only on the firm itself, but also on
its competitors and on elements in the micro-environment. The macro-environment tends to be
harder to influence than does the micro-environment. The main elements of the macro-
environment are: Cultural, Economical, Technological, Political, Legal and Natural.
Apparel Players flow Chart

Fiber producer

Textile manufacturer

Apparel manufacturer

Retailer

Consumer

India is the second largest producer of fiber in the world and the major fiber produced is cotton.
Other fibers produced in India include silk, jute, wool, and man-made fibers. India is the third in
production of cotton after China and USA.

The Indian textile industry is one of the largest in the world with a massive raw material and
textiles manufacturing base. Unlike other major textile-producing countries, India’s textile
industry is comprised mostly of small-scale, nonintegrated spinning, weaving, finishing, and
apparel-making enterprises.

The apparel manufacturing In India comprised of two distinct segments, one catering to exports
and the other to domestic requirements. Tirupur, Ludhiana, Bengaluru, Delhi, Mumbai, Kolkata,
Jaipur and Indore are the major garment production hubs.

Retail sector in India is witnessing a huge change as traditional markets make way for new
formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Indian
retail industry is one of the fastest growing industries in India, especially over the last few years.

The consumers are the center point of all marketing activities. They have become more
demanding, expecting a cost-effective deal in terms of both quality, and pricing. Fashion apparel
industry is one of the fastest moving industries and is more consumer driven.
Statistics on Exports

India's textiles exports were estimated at $40 billion in 2013, compared with China's $274
billion. Textiles include everything from fibre and yarn to fabric, made-ups and readymade
garments made of cotton, silk, wool and synthetic yarn.

Global textile exports ($bn)

Change in
S.NO COUNTRY 2012 2013 %

1 CHINA 246 274 11

2 INDIA 33 40 21

3 GERMANY 35 35 0

4 BANGLADESH 24 28 17

5 WORD 738 773 5

Source: AEPC

3.2 Micro Environment

These are the forces that can be controlled by the company. "Micro" level occurrences can affect
any firm's ability to serve or to respond, as needed, to its customers, suppliers, intermediaries,
selling markets and competitors.

Suppliers

Suppliers are individuals or businesses that provide goods or services from one party to the other
party. It supplies resources required to manufacture the product to the respective company or the
firm.

They are an important link in the company’s overall customer “value delivery system.”). One
consideration is to watch supply availability and another point of concern is the monitoring of
price trends of key inputs.

Employees
Top management is responsible for setting the company’s mission, objectives, broad strategies,
and policies. Marketing managers must make decisions within the parameters established by top
management .Marketing managers must also work closely with other company departments and
areas such as R & D, purchasing, manufacturing.

Competitors

Those who serve a target market with products and services that are viewed by consumers as
being reasonable substitutes. Company must gain strategic advantage against these organizations.
Marketing-orientated companies not only monitor and seek to understand customers but also
research competitors and their brands to understand their strengths, weaknesses, strategies and
response patterns.

Intermediaries

The intermediary is one part in distribution channel which connect the producers and buyers,
export intermediary is another branch of intermediary that connected domestic manufacturers
and foreign buyers. Intermediaries make it possible for a company to deliver its products to the
end user without needing to own the whole supply chain.

The intermediaries are the independent groups or organizations within the channel that make the
product available for consumption.

Customers

Customers are at the centre of the marketing philosophy and effort, and it is the task of marketing
management to satisfy their needs and expectations better than the competition. Changing
customer tastes, lifestyles, motivations and expectations need to be monitored so that companies
supply the appropriate targeted marketing mix strategies that meet their needs.

3.3 Macro Environment

These are the forces on which the company has no control. Hence, it has to frame its policies
within the limits set by these forces:

Culture

A cultural environment is a set of beliefs, practices, customs and behaviors that are found to be
common to everyone that is living within a certain population. India is one of the most diverse
countries on earth with hundreds of cultures, customs and traditions. The key challenge for
marketer here is to address the need of different regions with strategies tailor made for the
respective regions.
Economy

Economic environment consists of factors that affect consumer purchasing power and spending
patterns. A company can successfully sell its products only when people have enough money to
spend. Marketers need to monitor high inflation rates, high interest rates and low economic
growth etc.

Technology

Today's technology has largely impact most, if not all, aspects of our society. Fashion clothing,
fashion bags, fashion accessories, and everything that involves the fashion industry are greatly
influenced by developments and innovations in technology.

Natural

Involves the natural resources that are needed as inputs by marketers or that are affected by
marketing activities. A company has to adopt its policies within the limits set by nature. A man
can improve the nature but cannot find an alternative for it. Nature offers resources, but in a
limited manner. Companies must find the best combination of production for the sake of efficient
utilization of the available resources. Otherwise, they may face acute shortage of resources. For
example, Petroleum products, power and water.

3.4 Conclusion

To summarize, in this unit you have analysed and understood the fashion business environment.