Final Report To Management
Economic Review for Unique Fashion Company Products
Introduction
The establishment of fashion trends and industry greatly depends on economic factors including economic growth, recession, and inflation. Furthermore, in poor economic times, it is usually challenging for customers to keep up with the latest trends as compared to good economic times when customers purchase clothes without considering a cut down. However, for fashion companies to survive locally and internationally, it is ideal to consider economic conditions surrounding the products manufactured or distributed in other countries as the business is considered to be temporary cyclical. Although clothing industry has become majorly globalized since the 20th century, the trends are commonly affected by the fluctuating demands across the globe. In order to clearly understand the international marketplace of the fashion products especially the products produced by the Unique Fashion Company in the United States, this paper aims to address economic conditions within the US and across the globe to aid in the understanding of the industry’s profitability and the economic pace within the country. In this case, this paper aims to focus on GDP, Employment Indicators, Consumer Price Index, Central Bank Minutes, and Purchasing Manager’s Index.
Despite the recent economic challenges brought through by the pandemic, COVID-19, the United States economy is known to have grown or evolved continuously having significant and creative effect on the fashion industry. With the increasing number of great-value jobs as well as high wages, fashion is believed to have significant impact on both the fashion centers and the cities within the country. Fashion industry that is worth about 1.3 trillion dollars considers spending 250 billion dollars annually on fashion alone in the US, according to fashion industry analysts (Gazzola et al., 2020). Although fashion industry is known for its greater number of employees across the globe, one of the elements worth understanding as well is its representation in economic force. That is, the industry is marked as one of the substantial drivers of the worldwide Gross Domestic Product (GDP), moreover, it is known to have employed more than 300 million workers across the world (Gazzola et al., 2020). The industry, which operates in a greatly competitive environment is also known to have attained ideal growth and vital transformations despite financial crisis in the past decade. Across the globe, however, fashion industry is known to contribute about 16,300 US dollars GDP per Capita or 4% of the global GDP. Additionally, in the United States, the real GDP is known to have increased at a rate of 6.6% annually in the 2nd quarter of 2021, an indication of a continuous economic recovery, response towards the pandemic, and reestablishments (Bureau of Economic Analysis (n.d).
The other element that aids in the understanding of the international marketplace related to fashion industry is the employment indicators, which includes unemployment data, payroll, and labor force. In the United States, the number of civilians unemployed who are seeking employment is known to fluctuate across different periods. Although about 160 million people are unemployed in the United States based on the 2020 statistics, fashion industry is recognized for its critical role of creating job opportunities for the U.S. citizens. For instance, in 2021 alone, the industry has contributed to about 2.2% employment growth. That is, more than 30, 539 fashion designers have been employed in 2021 within the industry. Apart from the current number of employees, the industry is also known to employ more than 300 million people from different occupations across the globe, a process that represents an ideal economic force towards the worldwide GDP. Based on the dramatic change of the industry over the years, the industry has managed to create high-fashion designed with high-value thus attracting higher wages (Thorisdottir & Johannsdottir, 2019). Form this analysis, it is ideal to note that despite the economic challenges faced across the globe, fashion industry have managed to employee many US citizens alongside other employees across the world. Additionally, the industry have managed to increase wages paid as a result of the establishment of high-value in fashions.
Consumer Prince Index (CPI), which measures changes in prices of consumer goods or services, Central Bank Minutes, and Purchasing Manager’s Index can also be used to aid in the understanding of an industry or a country’s economic health. However, the prices that Americans pay for clothing goods and services varies depending on situations. Furthermore, in poor economic times, the CPI rates are known to reduce as consumers try to cut down on amount spend on clothing. While most sectors including transportation and shelter experiences increment in prices year-over-year, the clothing industry has its CPI grow slower as a result of lower prices in products such as women’s clothing alongside slowdown in price development for goods. Furthermore, in the U.S, the CPI was reported at 122. Based on CPI statistics on clothing, it is clear that the growth rate has slowed down in some instances especially as a result of low prices; however, it is as a result of this inflation that the economy of the United States is considered to have experienced economic challenges, which she is pulling from (Brewer, 2019).
Central bank minutes, which mainly contains important economic commentary have also been produced by various banks including World Bank, Organization for Economic Co-operation and Development (OECD) alongside the International Monetary Fund (IMF). Concerning the banks’ comments, on their 2019 data on economic stability, it is clear that there has been a slower growth in relation to fashion industry especially in developed markets (Gazzola et al., 2020). In developing countries, however, the industry is seen to experience a flat growth curve. These challenges are equated to political instability, economic uncertainty, and a decline in the level of spending especially towards fashion products. Although the spending on fashion is declining, the demand for personalized fashion is increasing, an indication that the industry will grow in future. Based on the percentages gained from the manufacturing and service sectors in the United States, it is clear that the Purchasing Manager’s Index is more likely to change. Furthermore, in August 2021, the data of the Manufacturing PMI was at 59.9, an indication of positive development within the sector.
Overall, based on the analysis of the economic conditions, the fashion industry in the United States experiences a positive economy despite the mentioned economic challenges, an element that is more likely to assist in the expansion of other fashion companies.
Summary of the Company
Unique Fashion Company operating in the United States offers high-end and medium-priced products in the fashion industry. A primary focus on women fashion is emphasized by the company to ensure it resonates and serves its customers effectively. Unique Fashion Company is a highly competitive firm in the fashion industry committed to ascertaining the highest customer satisfaction. Every customer is guaranteed of after-sales service where they are allowed to return their products should there be any inconveniences or problems developed after the purchase of any product from the company. Also, Unique Fashion Company ensures its employees are often trained in customer relations and management tactics to ensure they offer their customers the best services and products. An emphasis in quality products is critical as women customers in the fashion must feel and experience their needs and desires have been satisfied (Gazzola, Pavione, Pezzetti & Grechi, 2020). Therefore, Unique Fashion Company shows profound commitment in how it handles every customer that walks into the store either physically or online. Furthermore, to mitigate the shortcomings that comes with online buying of Unique Fashion Company’s products, the company has vast network of delivery persons to reach the clients within the shortest time possible. Any queries, concerns, and demands needs a response from the company is handled effectively to ascertain customer satisfaction.
Summary of the Product
The product sold by Unique Fashion Company comprise of women fashion items. Women fashion is a fast selling product in the fashion industry. This is influenced by the nature of impulsive buying by women customers and extensive nature in which women purchase clothes as compared to men. There is a profound need to appeal to the feelings and desires of women in ascertaining the success of women fashion products’ success (Thorisdottir & Johannsdottir, 2019). First in offering the best services is the assurance of quality women fashion products. This is vital to create customer retention and loyalty. As well, women desires in fashion products is influenced by the perceptions of the first buyers. Therefore, the company ascertains that every customer is satisfied and feels adorable purchasing fashion products from the company. Also, it is fundamental to note that women fashion products sold by Unique Fashion Company ranges from official to casual wear, dresses, trousers, and skirt-suits, tops and inner wears, as well as, jewelry and hats resonate with the current trends. The capacity to keep up with the current trends in the women fashion industry is crucial to retaining customers and building a wide customer network (Alves, Moyano & Angnes, 2021). Women fashion industry is constantly changing requiring that Unique Fashion Company remains innovative and creative to satisfy their customers with the products they introduce to the market.
Summary of Economic Conditions
In general, the performance of the fashion industry is affected by the state of the economic conditions both locally and globally. Despite the fashion industry in the United States being highly competitive and fast-selling, it is essential to note that, good economic conditions attract continuous and unlimited purchasing of women fashion as compared to bad economic conditions. Research indicates that, an assessment of the performance of the following factors is key to determine the state of economic conditions thereby affecting the performance of the fashion industry both in the United States and globally. These key factors include the GDP, Employment Indicators, Consumer Price Index, Central Bank Minutes, and Purchasing Manager’s Index.
In a nutshell, the GDP comprises of economic condition allowing surpluses or deficits that impact on the spending rate in the fashion industry. An increase in the GDP indicates that many consumers have more economic capacity to frequently purchase fashion products as compared to decrease in the GDP that calls for conditioned spending of financial resources. The employment indicator in itself serves as the ambassador in promoting women fashion products. That is, the more women and creation of employment opportunities shows that there is access to high-value income that allows frequent spending on fashion sustenance. The consumer price index, Central Bank minutes, and purchasing manager’s index regulates the market prices of the fashion industry. This is fundamental to ensure continuous women purchasing of fashion products as the prices remain moderate even in the wake of economic fluctuations.
Formal and Informal Institutions Impact of the Product Launch
The launch of women fashion products by Unique Fashion Company will be essential in accelerating the competitiveness of the market in the fashion industry. Institutions such as textile and garment manufacturers, fashion designer companies, distributors and transit companies will be profoundly impacted by the launch of the women fashion products. This is as a result of the high demand for the products and increase in the volumes requiring production, transit, and delivery. The economic cycle is fundamental to the sustenance of the fashion industry. To ascertain customer satisfaction, every part of the women fashion products must be articulate and continuously innovative (Pro, Arrigo & Fionda-Douglas, 2020). This impacts on the capacity of the institutions to keep up with the changing trends in the market – locally and internationally. Such factors influencing the affected institutions include supply and demand variations, market changes, current trends, and economic conditions.
Summary of Marketing Approach
The marketing approach for women fashion products launch will utilize two critical initiatives. The first approach entails the use of women celebrities to create more awareness for the products. The use of celebrities appeals to a wide range of women that adore the individuals. This a crucial marketing strategy as celebrities are paid to serve as brand ambassadors for particular products. The nature of exposure for different women products is bound to create more awareness and desire to purchase the very products the company uses to dress the individuals. The more appealing and adorable the celebrity the higher the customer attraction is on the products (Castelo & Cabral, 2018). Also, this helps in setting the market trends in demand for creative and innovative women fashion products. The capacity for Unique Fashion Company being the first to introduce new women fashion is vital to retaining of customers continuously.
The second marketing approach entails the use of premium and moderate pricing rates on women fashion products. This is associated with selling quality and high standard products bound not to disappoint the customers. This is marketing strategy utilized by companies such as Gucci, Nike, and Adidas in selling their products. To ensure Unique Fashion Company sells enough products and creates more revenue, premium and moderate pricing range is essential. Also, the approach enables the diversification of the customer base from middle-class income earners to high-class income earners. The desire to be associated with Unique Fashion Company products is, hence, created impacting on the buzz to purchase women fashion products from the company (Fan, 2018).
Conclusion
In conclusion, the launch of women fashion products by Unique Fashion Company is a major initiative. This is due to the high competition in the fashion industry. Despite the fashion industry showing a high potential in launching new products. The launch of new women fashion products is bound to impact on the market as a pace-setter in the creation of trends of products that women desire. The capacity to cope with the economic conditions indicates the resilience of the company and its capacity to operate in the highly competitive and saturated fashion industry. Therefore, every measure and risk assessment in launching every product must be done to ensure the products are a success in the industry. Furthermore, to maintain continuous appeal and popularity of the Unique Fashion Company products in the market – creativity and innovativeness as well, as customer satisfaction must be sustained.
