1. Introduction


Fast changes in technology as well as customers'expectations make a producer keeps improving his/her fashion products andquality in order to keep his/her position on the market. It is not necessaryonly to apply the latest technological achievements in the production of highquality garments, although garment production IS a very complex process.Quality of each garment production asks for:


  1. quality of a product,
  2. quality of a textile material,
  3. quality of a process of production - quality of a market research, quality of a design, quality of a material purchase, quality of a production as well as of sale.


Working expenses in southeast Europe are still attractivefor European conditions, so efforts are made in order to satisfy market demandsas well as to accept challenges of Asiatic producers both by quality andprices. Many use know-how (available technical knowledge) and flexibility aswell as closeness of thr WestEuropean market. In order to survive in Europeanfashion industry, existing factories should pay attention to the following 5(five) rules [I]:

  1. innovation of products,
  2. authenticity of fashion designers' creativity,
  3. small series,
  4. flexibility,
  5. production of special products (sport wear, special and protective clothes) and the use of special markets instead of standard products supply - industrial production to measure, garments for special ages and height.


Today, consumers have objective possibilities to satisfytheir needs concerning products better than they had in the past thanks tostandard, social-economic development, technological progress, moderninformation systems, culture and educational advances. Permanent changes infashion stand for creativity of designers team.


Depending on the purchase ability consumers react atfashion. Fashion trends cause economic, psychological and sociological effectamong consumers. Consumers will often buy new and prestige products that areabove their spending capacity, especially "branded" pieces ofgarment, wanting to identify themselves with the special social group and toachieve the status in the society by wearing such garments.

The increasingly global nature of the fashion industry meansthat making all the right moves has never been more important for success.Today competitive advantage springs from the ability to quickly identify andexploit new trends. Garment manufacturers in fashion industry are divided intoleaders and those who copy (copyist). Leaders design a new product, impose anddictate new fashion helped by powerful centres of design and modern technologytogether with marketing company. Manufacturers who copy are late withproduction, but find their place in satisfying a large garment productionmarket. Often they don't strike back with the quality of products but there isalso a completion between them. The most successful manufacturers in fashionindustry are those with organized and expert teams in design and marketing,because they dictate a cycle of current fashion and introduce new fashiondesigns surprising competitors.


Designers in a Serbian fashion industry get information onfashion trends, colours, materials and lines from case to case, by readingfashion magazines, visiting seminars held by the Association of Germandesigners from time to time and but not very often visiting fairs and fashionshows abroad. The choice of colour, model or textile material is often limitedby designer's subjectivity, by his/her not being informed, by materialexpenses, impoverished market claims etc. [2]


 

Market research stands for an activity aimed to study all factors relevant to the decisions that would provide effective business on one side and satisfaction of consumers' needs and demands on the other side. The idea of life cycles of products is of a great help when deciding what market strategies are best to special phases in a development of a product.



2. Methods, Technic and tools of market research


There are great problems in our fashion industry as far as market research, following competition, investment in its own development, making its own designs, and scientific way of introducing fashion products on the market are concerned, so the first step is to analyze a consumer, study information on sale and estimate trends in fashion.


Marketing research includes the analysis of problems and appearances for directing marketing activities of and the aims succeeded by combining marketing instruments that deal with research on product, price, ways of promotions and sale. On the bases ofthis one must do researches on customers and consumers as well as on their needs, existing products, market and its segments, on market competition, communication and on testing them throughout the analysis of advertising in the media and measuring these performances.



Marketing mix IS a group of marketing variability's that garment manufactures combines in odder to fulfil a desired wish of a target market. Four groups of variability's (4P) are [3]:


  • product - forming production program, design, brand name and quality (projected both to satisfy consumers' needs and to be competitive),
  • price - fixing price, conditions of payment, discount and conditions of selling on credit,
  • placement - marketing of products and services to consumers' door
  • promotion - advertisements, promotive sale, games on chance, personal sale etc.


 

Survey is a very spread technique of collecting information. Depending on a target, survey can be either general or specific. A general survey collects information important for general business organisation while a specific survey is directed to fashion products i.e. to the consumers' opinion and taste. Two approaches can be considered, while doing the research on products [2]:


  • survey in order to analyse existing garments and
  • survey in order to get ideas for new garments.


To do market analysis, it is necessary to collect many information e.g.:


  • to analyse previous business and prices of fashion products,
  • to analyse the quality of fashion product,
  • to analyse the quality of fashion products and competitors' prices,
  • to collect information on garment industry,
  • to collect information on competition,
  • to collect information out of Serbian chamber of commerce, Union of textile experts,
  • magazines, internet and from other available sources,
  • to collect information on prices of textile materials, accessory materials (interlining, lining, thread, buttons, zippers etc.) and sources of energy,
  • to make contacts with customers and suppliers,
  • to do researches into the field (by surveys, mail questionnaires or by telephone).


In order to take all advantages and to eliminate garment producers' weaknesses, it is necessary to use SWOT analysis. This analysis is the method of a strategic planning that enables the analysis of estimate and the combination of internal factors with the information from external sources on the market and in a business environment i.e. to realize strengths, weaknesses, opportunities and threats. On the basis of SWOT matrix one can determine four alternative strategies [4]:


  • WT strategy is directed to reduction of internal weaknesses of avoiding threats from the environment and internal weaknesses (struggle for surviving, merger, narrowing of business and liquidation) .
  • WO strategy stresses an overcoming of personal weaknesses in order to take advantages of opportunities i.e. changing weaknesses into forces able to respond to known opportunities .
  • ST strategy uses forces within organisation to reduce or to avoid the influence of external threats .
  • SO strategy uses forces of the organisation to achieve opportunities from the environment. All productive - business systems long for this strategy and the basic aim is to come from the others (WT, ST, WO) into this position on the matrix.



 

VRIO is a strategic tool used to make preconditions in order to maintain competing advantage and to enable determination for identified resources (abilities) that will stand for organisational advantages of competition. Barney developed the frame in the year 1991, and the title originates from the first letters of the English alphabet for [5]:


  • Value - if a corresponding organisational ability or resource enables garment manufactures to neutralize threats and to take advantages of opportunities
  • Rareness - if one of competitors possesses an ability or a resource (fashion industry manufactures the same or similar fashion products)
  • Impossibility to imitate (Inimitability) - if competitors who do not possess resource are able to manufacture the same garment without great expenses and investments
  • Organisations - if recourses are used in an optimal way


It is necessary to keep balance between existing key competition and the development of new ones. SWOT matrices and VRIO frame are used during the process of building business strategy because SWOT matrix is used to determine future strategic focuses, and VRIO frame is used to organise business processes that are in the service of creating chosen strategies.


Good distribution network besides marketing of goods on domestic market should plan a foreign market as an aim. There are possibilities that a poor economic force and a great competition can cause a failure of fashion manufacturing-business systems so PEST analysis (political, economic, socio-cultural and technological factors) enables preparation of marketing process i.e. deals with 4 factors [6]:


1. Political factors (How stable is political environment? What is the influence of government on laws that regulate or tax garment production? What is the influence of government policy on the economy? The influence of government on a region?).


2. Economic factors (interest rates, the level of inflation, and long term economic prospects in domestic garment production).


3. Socio-cultural factors (How dominant is the region? What are consumers' opinions about old products? How much leisure time have consumers? What language IS important when products are promoted? How long do target population live?).


4. Technological factors (Does technology offer a new way of communication with consumers, e.g. CRM - Consumer Relationship Management?).


Ansoffs matrix is a marketing tool used for planning development (since 1957 when the paper was published in Harvard Business Review). This matrix offers four categories of choice to achieve objectivity [3]:


1. Market stability (market penetration) - market of an available product for existing consumer (an increase of income e.g. by promotion of products, marketing of brand name).


2. Market development - market of an existing product on a new market (the same product but a new market; export of products in a new region).


3. Product development - new products for existing customers.


4. Diversification - new products for new customers.

 



Gap analysis is a simple and effective tool helping marketing managers to decide what strategy and tactic to use.



This tool is the answer to two questions: Where are we now? And where do we want to be? The difference between these two questions is gap i.e. How to make it? Ansoffs matrix is used to make a gap analysis while marketing mix is used to carry out tactics showing if price of a product or promotion or perhaps all elements of marketing mix should be changed. [6]


In a fashion industry there is a portfolio of products i.e. producers have more product lines as well as more types of products (shirts, blouses, dresses, trousers, children wear, working clothes, etc.)


Portfolio plan of Boston Consulting Group (BCG) that has been developing SlI1ce 70's is based on the assessment analysis of existing products, possibilities of modifying products or manufacturing new ones. Starting from researches done by BCG, it has been concluded that a strategic position of business is determined In accordance with a relative market participation and a market growth rate.


A relative market participation is considered to be a market participation of a product in relationship with a leading competitor in the production of similar garments and is calculated:


 

Relative market participation:


Market growth rate stands for an attraction of market and is calculated like this:



Growth rate can be positive (meaning growing market), nought (standing for stagnated market) and negative (i.e. falling market in future). Market growth rate is indicated with "low" and "high" in BCG matrix meaning that market growth rate of that garment manufactures is lower or higher than growth of an entire economy of the region.

At so called Boston matrix, products are indicated as follows (picture 6.):


  • Stars - products with a high participation on a market and a high market growth rate (garments that bring profit but needs a large investment in textile material as well as a technological process of production).
  • Cash cows - garments that are main sources of profit
  • Dogs - products with low growth rate and low rate of market participation (garments with low participation on a market that stagnates - stops producing them).
  • Problem children (question mark) - products with a high growth rate and a small market participation (garments that bring small profit, but are promising so they cannot be neglected)



According to this matrix an integral indicator of all market characteristics stands for a growth from the following reasons:


  • growth is the best measure of life cycles of a product,
  • it is easier to win a market share when product attracts new customers, it is easier to keep than to conquer a market,
  • market is larger and non-competitive on a growing market,
  • new competitors can be discouraged by aggressive appearance on a growing market.


 

Trying to remove the shortage of BCG matrix, Boston Consulting Group has designed a new portfolio matrix. New BCG matrix has a changed coordinate of relative market participation with "a great advantage that is going to be designed in regards to other competitors", and a market growth rate has been changed by "a large number of unique ways used for creating advantages". A matrix with four fields is made and it represents four categories of business [7]:


  • Fragmented businesses - give priority to garment manufactures, because good results are not in a correlation with the size of garment manufacture but are conditioned by its abilities to accept distinctive advantages.
  • Specialised businesses - advantage of garment manufactures is great but there are many possibilities of gaining additional advantages (planned to produce for consumers on a specialized market segments - special garments, Made to measure).
  • Businesses with a complex scope - bring great advantages but with small possibilities for gaining these advantages. Profitability of these businesses is in a direct correlation with a market size (a large series of garment production, mass production of fashion accessories).
  • Businesses in a pat position - neither bring great advantages nor there is a great possibility for gaining these advantages.


Bowman's Strategy Clock is a comparative analysis of strategy and a garment producer's position in relation to a competition (on the picture 7).



Strategy clock cons its of 8 options [6]:


  1. option - low price/ low added value (for a specific segment),
  2. option - low price (risk of "price war" on a market),
  3. option - differentiation (reinvestment in low prices and differentiation),
  4. option - differentiation without premium (changeable added value, benefits of market share) or with a price premium (positive balance of changeable added value),
  5. option -focussed differentiation (changeable added value like a "special segment" of guarantee for a premium price),
  6. option - increased price/standard (loss of market share because not following a value),
  7. option - increased price/ low value (monopoly market) and
  8. option - law value /standard price (a bad market share).


 

The model so called Model 5 forces developed by Michael E. Porter is the one used mostly among many authors who try to recognize industry in which there is manufactures. These Five Forces Analysis or Porter's model of competitor's forces is often used with PEST analysis to determine a position and possibilities on a market [7]:


  • strength of competition among manufactures that operates within fashion industrysophisticated technology, highly qualified personnel, greater capital for buying modern sewing machines (CAD/CAM) and positive influence of market growth,
  • existence of other producers of garments who are ready to enter a market, investment in technology and development, emotional connection with fashion industry and an easy strategic movement ahead,
  • customers start to change fashion products - sophisticated technology, necessary training of personnel and on the other side global accessibility of some products by internet,
  • consumer's negotiation ability -a large demand and sophisticated technology and
  • supplier's negotiation ability - sufficient great and growing market and a global access by internet.



Conclusion


The problem that exists in our garment industry is that we analyze and follow trends that have already taken place on the fashion scene so while a collection is being accepted and the preparation for production is getting completed a new fashion demand is here, and the old one hasn't got accustomed yet. Fashion companies that do not invest in the development of products and production technology get into danger and can't "keep place" with fashion trend although they try hard.

Markets researches, consumers' wishes, requests, and criterium mean inevitable and dominant task for a producer of garments, because by obtaining all these information a production can be directed, business planned with advanced defined aims and strategies. Marketing enables greater flexibility and better organisation for more successful reaction to market demands.


Market analyses are perhaps difficult procedures for fashion industry, because they need time to see strong sides and opportunities although they are too eager to identify weaknesses and threats. It is important to be aware that once when weaknesses are identified, some steps to change them can be taken by training, so there is possibility to make it a strong side. That's why SSC and SWOT are useful techniques used to find out strong and weak points in a fashion industry. The way Levi Strauss & Company succeeded by their own efforts to impose a new product LEVI'S ENGINEERED JEANS (redesigned denim trousers that follow contour of a body ergonomically), it is an example how to use BCG matrix and GAP analysis that show us how market methods and techniques can be also used in our garment industry in order to meet demands of flexible production.


 

Bibliography:


  1. Paunovic, D., Colovic, G. (2006), Primena virtualne tehnologije u "online" prodaji odece po meri, Tekstilna industija, br.7-9, str.(48-50), Beograd
  2. Colovic, G., Paunovic, D. (2005),Agencije za modna predvidanja uSCG, III Skup privrednika i naucnika "Logistika kao komponenta operacionog menadzmenta", Zbornik radova, str. (60-64), I nstitut za operacioni menadzment, Beograd
  3. Gasovic, M. (1998),Modni marketing, Institut ekonomskih nauka, Beograd
  4. Colovic, G., Paunovic, D. (2005), The application of swot analysis in designing of garments, Menagement, 37, p71-77, Faculty of Organizational Science-Belgrade
  5. Kotler, P.(2006), Marketing menadzment, Beograd
  6. www.marketingteacher.com


About the Authors:


The authors are associated with The College of Textile-Design, Technology and Management, Belgrade, Faculty of Industrial Management, Kruevac.


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