Management of Fashion Companies Flashcards by Sandie Huang

The brand identity (theoretical framework) drivers for creating a brand signature are?

Heritage

Stylistic identity

Retail identity

Communication identity

Combined, the brand identity affects how the brand is perceived by consumers as the result of the four pillars a brand can use to impact the market’s perception of it.

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What is NOT one of the five segments in the fashion pyramid framework?

A) Haute couture: high fashion
B) Ready-to-wear
C) Masstige
D) Diffusion: the second-line of the ready-to-wear brand
E) Bridge: mid-market 
F) Mass market

The fashion pyramid is the tool that companies (especially womenswear) look at to position themselves. In the pyramid, we have five different segments

Haute couture: high fashion
Ready-to-wear
Diffusion: the second-line of the ready-to-wear brand
Bridge: mid-market
Mass market

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What is NOT one of the contemporary industry trends?

A) Circular economy & sustainability
B) Omnichannel experience
C) Influencer marketing
D) Fast fashion
E) Collaborations
F) Customization
G) Gender naturality and inclusivity
H) Transmedia storytelling,

Industry trends: circular economy, omnichannel experience, influencer marketing, transmedia storytelling, collaborations, customization, gender natural, inclusivity, end of ownership

I.E., Fast Fashion is NOT a current industry trend - the industry is moving away from it

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What is NOT a component in a business model in the fashion industry?

A) What: the value proposition
B) Whom: the target audience
C) How: level of vertical integration
D) How: the stylistic identity
E) Who: the corporate governance of the company
F) Who: the creative director

A fashion business model is comprised of:

A) What: the value proposition
B) Whom: the target audience
C) How: level of vertical integration
E) Who: the corporate governance of the company

Following are NOT a component in a business model in the fashion industry:
D) How: the stylistic identity
F) Who: the stylistic director

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Fashion is made of four pillars: Which?

A) Non-verbal communication: a type of language
B) Planned obsolescence and seasonal cycle: artificially shortening of product-life-cycle by creating the need for “newness”
C) A business made of companies with little variety of business models
D) A business made of companies with a variety of business models (different price ranges and business models)
E) Dream factor: the creation of an association between the brand and something inspirational, emotional, a lifestyle

Fashion is made of four pillars: Which?

A) Non-verbal communication: a type of language
B) Planned obsolescence and seasonal cycle: artificially shortening of product-life-cycle by creating the need for “newness”
D) A business made of companies with a variety of business models (different price ranges and business models)
E) Dream factor: the creation of an association between the brand and something inspirational, emotional, a lifestyle

NOT: C) A business made of companies with little variety of business models

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Which of the following is NOT one of the business models in fashion?

A) Luxury brands
B) Fashion designers
C) Premium brands
D) Italian model
E) Retailers

WRONG: D) Italian model is not a business model by itself

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What is (are) the key success factor in the luxury business model?

A) Style and trends
B) Product excellence and premium price
C) High level of vertical integration
D) Mostly owned by luxury conglomerates (some are still family-owned)
E) The marketing mix
F) Supply chain management is the real backbone of this business

The key success factor in the luxury business model:
B) Product excellence and premium price
C) High level of vertical integration
D) Mostly owned by luxury conglomerates (some are still family-owned)

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What is (are) the key success factor in the Premium brand business model?

The key success factor in the premium business model:

E) the marketing mix

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What is (are) the key success factor in the Retailer business model?

The key success factor in the retailer business model:

F) Supply chain management is the real backbone of this business

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What is (are) the key success factor in the Fashion Designer business model?

The key success factor in the Fashion Designer business model:
A) Style and trends

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What is a trademark?
A) a component of a brand: logo, design, and symbol associated with the brand under legal protection
B) a distinctive stylistic identity that creates an association with products to the brand
C) “a promise well delivered”

A trademark: A) a component of a brand: logo, design and symbol associated with the brand under legal protection

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What is a brand NOT?
A) A promise: a value proposition that needs to be different from that of other competitors while being relevant to the market
B) A delivery of the promise: the execution and consistency in everything a brand does
C) Determines association that allows charging of higher prices due to higher willingness to pay for consumers
D) All of the above

D) All of the above

A brand determines specific associations that allow charging of higher prices due to higher willingness to pay for consumers given specific style and brand. Concurrently, it is a “promise well delivered”.

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A brand is an asset defined by consumer associations, which can be both tangible and emotional.

What is meant by tangible?

A) The brand’s visual language, name, logo, slogan, lettering, colors
B) Values and benefits as perceived by consumers
C) Functionality of the products of the brand
D) Music, wifi, service, entertainment, design, interior, lightning, etc. all affect the consumer experience connected to purchasing goods of a certain brand

A) The brand’s visual language, name, logo, slogan, lettering, colors

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A brand is an asset defined by consumer associations, which can be both tangible and emotional.

Which of the following is NOT true for intangible/emotional branding?

A) The brand’s visual language, name, logo, slogan, lettering
B) Values and benefits as perceived by consumers
C) Functionality of the products of the brand: “when I buy/use this brand, I obtain…”
D) Music, wifi, service, entertainment, design, interior, lightning, etc. all affect the consumer experience connected to purchasing goods of a certain brand. “when I buy this brand, I feel”
E) Emotion/ meaning: for most fashion brands, everything is about the STATEMENT that you make. This relates to: “when I buy this brand, I am…”

A) The brand’s visual language, name, logo, slogan, lettering refer to the tangible part of the branding

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What is NOT true about a LINE extension?
A) Expanding the current market segment by introducing diffusion brands (new spin-off brands)
B) Expanding the product assortment to new categories
C) Is advantageous bc. you can stay in your current specialty field which allows you to leverage your current network, capabilities, competencies, etc.
D) Is advantageous if you are already perceived as a legitimate brand good at what you are doing - so customers put trust in your new lines (brands)
E) A risk is that you might dilute the image of your brand

Line Extension: refers to expanding the market segment. To aim for new groups of consumers with the same/similar products. (Diffusion: labels that target another market segment). E.g., Marc by Marc Jacobs and Weekend by Max Mara

WRONG: B) Expanding the product assortment to new categories

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What is NOT true about a BRAND extension?
A) Expanding the product assortment to new categories
B) Expanding the current market segment by introducing diffusion brands (new spin-off brands)
C) Is the main approach of the way French brands have expanded
D) Advantageous because no dilution of the brand image
E) Increases efficiency of communication costs: all investment resources can focus on one brand only (stores, marketing, etc.)
F) Increases product diversification and therefore product-specific risks & financial risk
G) Opens up for new consumers: who may not be able to afford a bag from Chanel, but can afford beauty from Chanel

Brand Extension: refers to expanding the product portfolio, introducing new product categories under the same brand. This is more common for high-end French luxury brands such as Chanel and Hermes.

WRONG: B) Expanding the current market segment by introducing diffusion brands (new spin-off brands)

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What is meant by “trading down” in the context of luxury?
A) Enlargement of the luxury customer base by introducing more accessible products
B) Mass-market brands can ‘copy’ some elements from the marketing mix of the luxury brands in order to create appeal more to masstige segment
C) Luxury brands upgrading to couture

A) Enlargement of the luxury customer base by introducing more accessible products

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What is NOT the case for a “trading up” strategy in the context of luxury?
A) Enlargement of the luxury customer base by introducing more accessible products
B) Mass-market brands can ‘copy’ some elements from the marketing mix of the luxury brands in order to create appeal more to masstige segment
C) Luxury brands upgrading to couture
D) Adding a higher-priced, higher-quality version of a product to the range, generally to increase sales of the lower-priced model through consumer association of its image with the more prestigious model.

Trading up: Adding a higher-priced, higher-quality version of a product to the range, generally to increase sales of the lower-priced model through consumer association of its image with the more prestigious model.

WRONG: A) Enlargement of the luxury customer base by introducing more accessible products

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Trading-up is sometimes necessary if a company also pursues a trading-down strategy because this allows luxury brands to maintain their position on the top of the fashion pyramid - i.e., to make sure that the market still perceives the luxury brand as something exclusive, even though affordable product categories/lines are offered.

TRUE/ FALSE?

TRUE

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What is NOT true about masstige and how it is this achieved?
A) Prestige + mass = masstige
B) A retail category that includes brands and products that have high-end, prestigious characteristics but with prices and locations that make them accessible to a mass consumer audience
C) Masstige is mainly achieved by increasing the quality of the product
D) Masstige is NOT luxury because they offer a “mass” experience, one which is not unique in the same way as in luxury.
E) H&M Limited edition collaborations with high-end designers is an example of masstige

WRONG: C) the quality of the product is seldomly improved. Rather, the masstige perception is mainly created through communication and the creation of a sense of exclusivity (e.g., through limited editions).

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What is (are) the competitive advantage(s) of LVMH (LV)?
A) mainly a business of basic carry-over products
B) affordable products in the luxury world
C) pioneer in terms of line-extension
D) collaborations and experimentation
E) pure retail-identity; no wholesale
F) all of the above
G) one of the options are wrong

Competitive advantage of LV: mainly a business of basic carry-over products (same monograms are sold today as in 1800s). Also, in the world of luxury, LV is relatively affordable, making LV widely diffused. The main success factor lies in the fact that the company has been able to inject creativity through collaborations and experimentation etc.

WRONG: C) pioneer in terms of line-extension

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What is (are) the competitive advantage(s) of CHANEL?
A) quality, comfort and flexibility
B) simplicity and freedom
C) started from the adoption of mens’ sportswear to womens’ dresses
D) conglomerate ownership
E) created a symbolism from the color black and introduced suit-pants to women

WRONG: D) Chanel is a privately held company - not owned by conglomerate

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What is NOT a key characteristic of the French Model?
A) couture as an image platform rather than a profitable business
B) focuses on line extension
C) branding to new generations
D) conglomerate strategy
E) high level of vertical integration and supply chain control
F) growth through brand extension

B) is wrong

French model:

Couture as an image platform (not a real business)
NO second lines; growth through brand extension (beauty, leather goods, jewels, and eyewear) and NOT line extension
Conglomerate strategy
High level of supply chain control
Branding to new generations

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The origin and success of “Made in Italy” lie in three peculiar factors: which?
A) the creative impulse originated from the designers
B) a promise of sustainability
C) the textile industry
D) the entrepreneurs

WRONG: B) “Made in Italy” does not necessarily mean that the product is sustainable

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What is the greatest opportunity for the Italian textile industry? A) Sustainability B) Reshoring C) Decreasing production costs in Italy D) Rise of a new creative generation in Italy

The greatest opportunity for the Italian textile industry: RESHORING - many fashion brands have started to move production back to Italy.

What is the greatest challenge for the Italian textile industry? A) "Fake made in Italy" - no guarantee of quality and sustainability B) High production costs compared to less developed countries C) Rising demand on quality and sustainability D) A+B E) B+C

D) A+B are correct: The greatest challenge for the Italian textile industry: higher cost for production in Italy compared to e.g., China and; "fake made in Italy". That is the "made in Italy" label does not guarantee quality, sustainability, etc.

What is(are) the main competitive advantage(s) of D&G? A) strong and unique brand concept B) sustainability C) coherence in the pillars of its brand identity (heritage, stylistic identity, communication identity and retail identity) D) efficient use of social media marketing

A) Strong and unique brand concept (Sicilianity) C) coherent in everything that D&G stands for and does: Their heritage, stylistic identity, communication identity, retail identity

Following is(are) NOT true about the growth path of the Italian model: choose 1- 5 A) initially based on clothing being the core business B) Initially, Italian brands executed line extension but later moved to brand extension C) Initially, Italian brands executed brand extension but later moved to line extension D) from creative individual designers/ entrepreneurs using licensing --> vertically integrated companies E) Corporate governance include mostly conglomerates

WRONG: C) Initially, Italian brands executed brand extension but later moved to line extension - no, they started with line extension and later started extending the brand E) corporate governance include mostly family-run business, even thought we also see conglomerate ownership

What is(are) NOT true about Make-to-Order? A) only seasonal products that have already been sold to retail clients are sent to production B) unsold stock is a significant disadvantage C) it is mostly used in high-end fashion segments D) advantage is that traffic is created in stores

WRONG: B) unsold stock is NOT a significant disadvantage D) traffic in stores are NOT created from this logic Firms following the “make-to-order” logic produce only the portion of the seasonal offer that has already been sold to retail clients. This process allows the firm to minimize unsold stocks that would be out of fashion the following season. Make-to-order is the traditional logic of high-end fashion designers. Make-to-order stages: building the seasonal sample collection, presenting the collection, acquiring orders, launching production, and delivering products.

What is(are) NOT true about Make-to-Stock? A) products are produced based on forecasts of sales for the season B) advantageous because delivery time (lead time) is shortened C) mostly used by fast fashion companies and for products that are "basic" D) advantageous because the unsold stock is minimized by this approach E) frequently used by high-end fashion and luxury brands

WRONG: D) advantageous because the unsold stock is minimized by this approach - no, unsold stock is a huge disadvantage about make-to-stock E) frequently used by high-end fashion and luxury brands - no, they have recently started to use the approach for some of their "basic" products, but it is not "frequently" used by them Firms following the “make-to-stock” logic produce the offer that is planned for the season on the basis of sales FORECASTS. This process guarantees a much more rapid delivery time compared with the make-to-order logic. Thus, make-to-stock applies both to companies working on basics (styles and volumes can be forecast in advance) and to fast fashion companies that produce mini-packages in order to shrink lead time. Make-to-stock stages: sales forecasts, production planning, production launch, sales, and delivery.

``` Which of the following is NOT a characteristic of the fast-fashion business model? A) Rapid design process B) Minimal lead times C) Highly responsive supply chain D) High fashionability E) Make-to-order logic F) Pull-oriented G) Very strong at SCM ```

The Fast Fashion business model: Rapid design process combined with a quick response supply chain, utilizing minimal lead times, low prices, high fashionability, and high volume sales, pull (not push), and very efficient in supply chain management WRONG: E) Make to order logic is not the case - it is make-to-stock that is typically applied

What are the main disadvantages of make-to-order? Choose 2: A) Long lead times B) Difficulty of creating traffic in store due to few seasonal collections C) Large quantity of unsold collections D) Lack of sustainability

A) Long lead times B) Difficulty of creating traffic in store due to few seasonal collections

Fashion and luxury brands ONLY use the make-to-order logic. | TRUE/ FALSE?

NO -fashion brands MOSTLY utilize the make-to-order logic. However, in recent times, they have started to concurrently utilize the make-to-stock logic in order to introduce more collections (e.g., pre-fall, pre-summer, etc.) to generate more traffic in stores

What is NOT a main difference between H&M and Zara? A) H&M is fast fashion, Zara is not B) H&M is less vertically integrated than Zara C) H&M is less geographically diversified than Zara D) H&M is more considered as a masstige brand than Zara

A) H&M is fast fashion, Zara is not - WRONG Both brands are fast fashion H&M is less vertically integrated than ZARA H&M is considered a masstige brand more than ZARA is because of collaborations with high-end designers

Which two factors distinguish brands' DRESSING STYLE? A) Price and Quality B) Distance from previous collections and Visual impact C) Classic and Avant-Garde

Distance from previous collections: how much is innovated, how much is reused Visual impact: strong or discrete visual impact – how recognizable is it?

In terms of dressing styles, what does Modern mean? A) Brands are more understated: the idea is not about having big logo exposure or very strong stylistic codes. They are more masculine in style: suits, products that are not strongly differentiated, high quality. E.g., Armani, Tom Ford, Jacquemus B) The customer is at the center. value-for-money: considered as investment pieces – the pieces are classic and therefore never out of fashion, and there is high attention to details. C) High level of continuous innovation, making the brand less wearable – much more use of special material rather than traditional material – this is a niche market. It is challenging the common idea of what beauty is – not necessarily consensus of whether it is pretty or ugly. D) Interest in fashion and luxury brands, awareness of the communication potential associated with a dress, details evident, strong colors, constructed materials, and dresses.

Modern dressing style is characterized by: high distance from previous collections and a low degree of visual impact. A) Brands are more understated: the idea is not about having big logo exposure or very strong stylistic codes. They are more masculine in style: suits, products that are not strongly differentiated, high quality. E.g., Armani, Tom Ford, Jacquemus

In terms of dressing styles, what does Characterized mean? A) Brands are more understated: the idea is not about having big logo exposure or very strong stylistic codes. They are more masculine in style: suits, products that are not strongly differentiated, high quality. E.g., Armani, Tom Ford, Jacquemus B) The customer is at the center. value-for-money: considered as investment pieces – the pieces are classic and therefore never out of fashion, and there is high attention to details. C) High level of continuous innovation, making the brand less wearable – much more use of special material rather than traditional material – this is a niche market. It is challenging the common idea of what beauty is – not necessarily consensus of whether it is pretty or ugly. D) Interest in fashion and luxury brands, awareness of the communication potential associated with a dress, details evident, strong colors, constructed materials, and dresses.

Characterized dressing style is characterized by: low distance from previous collections and a high degree of visual impact. D) Interest in fashion and luxury brands, awareness of the communication potential associated with a dress, details evident, strong colors, constructed materials, and dresses.

In terms of dressing styles, what does Avant Garde mean? A) Brands are more understated: the idea is not about having big logo exposure or very strong stylistic codes. They are more masculine in style: suits, products that are not strongly differentiated, high quality. E.g., Armani, Tom Ford, Jacquemus B) The customer is at the center. value-for-money: considered as investment pieces – the pieces are classic and therefore never out of fashion, and there is high attention to details. C) High level of continuous innovation, making the brand less wearable – much more use of special material rather than traditional material – this is a niche market. It is challenging the common idea of what beauty is – not necessarily consensus of whether it is pretty or ugly. D) Interest in fashion and luxury brands, awareness of the communication potential associated with a dress, details evident, strong colors, constructed materials, and dresses.

Avant-garde dressing style is characterized by: high distance from previous collections and high visual impact. C) High level of continuous innovation, making the brand less wearable – much more use of special material rather than traditional material – this is a niche market. It is challenging the common idea of what beauty is – not necessarily consensus of whether it is pretty or ugly.

In terms of dressing styles, what does Classic mean? A) Brands are more understated: the idea is not about having big logo exposure or very strong stylistic codes. They are more masculine in style: suits, products that are not strongly differentiated, high quality. E.g., Armani, Tom Ford, Jacquemus B) The customer is at the center. value-for-money: considered as investment pieces – the pieces are classic and therefore never out of fashion, and there is high attention to details. C) High level of continuous innovation, making the brand less wearable – much more use of special material rather than traditional material – this is a niche market. It is challenging the common idea of what beauty is – not necessarily consensus of whether it is pretty or ugly. D) Interest in fashion and luxury brands, awareness of the communication potential associated with a dress, details evident, strong colors, constructed materials, and dresses.

Classic dressing style is characterized by: low degree of distance from previous collections and low visual impact B) The customer is at the center. value-for-money: considered as investment pieces – the pieces are classic and therefore never out of fashion, and there is high attention to details.

What is a "core" product? A) products that are always present in the collection – NOOS (never out of stock). It entails high efficiency due to economies of scale and learning effects. B) this is where the companies either lose or make money – the part of the collection to complete the range. C) the part of a collection that is the highest level of innovation – the pieces shown at fashion shows. Prices are highest (high cost connected to design effort) and very small quantities. These are the most important products in order to create the image of the brand.

Core product refers to: B) this is where the companies either lose or make money – the part of the collection to complete the range; to cover different needs and uses. Usually, it consist of carry-over products of 2-3 years

What is a "Basic"/ "icons" product? A) products that are always present in the collection – NOOS (never out of stock). It entails high efficiency due to economies of scale and learning effects. B) this is where the companies either lose or make money – the part of the collection to complete the range. C) the part of a collection that is the highest level of innovation – the pieces shown at fashion shows. Prices are highest (high cost connected to design effort) and very small quantities. These are the most important products in order to create the image of the brand.

Basic products refer to: A) products that are always present in the collection – NOOS (never out of stock) and carry-over products more than 3 seasons. It entails high efficiency due to economies of scale and learning effects.

What is an "image" product? A) products that are always present in the collection – NOOS (never out of stock). It entails high efficiency due to economies of scale and learning effects. B) this is where the companies either lose or make money – the part of the collection to complete the range. C) the part of a collection that is the highest level of innovation – the pieces shown at fashion shows. Prices are highest (high cost connected to design effort) and very small quantities. These are the most important products in order to create the image of the brand.

Image products refer to C) the part of a collection that is the highest level of innovation – the pieces shown at fashion shows. Prices are highest (high cost connected to design effort) and very small quantities. These are the most important products in order to create the image of the brand.

``` Brand equity (or brand differentials) is the premium price created by the willingness to pay more for a branded product. The higher the brand equity, the higher the willingness to pay. TRUE/ FALSE? ```

TRUE

Brand awareness is: A) the capability of having people spontaneously (top of mind) recall to associate a name to a product. B) the more high-end the brand is, the higher brand awareness C) it is the same as brand image and recognition

CORRECT: A) brand awareness is the capability of having people spontaneously (top of mind) recall to associate a name to a product. Usually, the more you go high-end, you have a DECREASED awareness (in the overall population), but the level of recognition and image (positive association) is higher - B is wrong It is DIFFERENT from brand image/recognition - C is wrong

Which are the levels of communication? A) Trickle-up, trickle-down, horizontal B) Brand awareness, image, reputation C) Product, brand, corporate

C) Product, brand, corporate - Product: Fashion companies want to sell more for every season. Thus, most communication tools are used to focus on the products: fashion shows, look-book, window displays, etc. However, merely communicating the product is not enough. - Brand: products are changing, and by only focusing on the product in communication, it is difficult for consumers to refer to the lifestyle connected to the brand. Hence, companies must communicate the brand behind the product: the heritage, logo creative director, celebrity connection - elements that relate to the brand in long term. - Corporate: when companies become big enough, different people are responsible for the corporate tasks and the product/brand communication. In the latter department, you are speaking the language of esthetics, where the reference is the creative director. On the contrary, if a question from an investor was asked to the corporate department of the brand (e.g., strategy outlook and financials), this language and content are very different from the brand communication.

What are the three goals that communication can have for a fashion brand? A) Trickle-up, trickle-down, horizontal B) Brand awareness, image, reputation C) Product, brand, corporate

B) Brand awareness, image, reputation

Which of the following is NOT something that makes communication in the fashion industry different? A) Most fashion brands’ communication is very product-centered (product focus). B) Visual Communication: campaigns are universal and non-verbal, appealing to emotions more than rationality C) Usage of KOL and influencers D) Very informative and friendly tone-of-voice

WRONG: D) Very informative and friendly tone-of-voice this may be the case in cosmetics brands communication

Fashion shows are an important tool of communication for a fashion brand, where the objective is not to necessarily show off the clothing to be sold, but more to embody the envision of the designer to the future; to create a dream. Designers have turned into image-makers. TRUE/ FALSE

TRUE

KOC refers to key operational competencies and relates to the strategic and financial aspects of fashion management. This is what determines whether a brand is profitable. TRUE/ FALSE

FALSE KOC: key opinion customers: more brands are building communities, with people influencing each other (e.g., friends), which can have a much larger impact than simply seeing an advertisement. KOC is customers who are able to impact other people close to them.

KOL refers to key-opinion leaders, who became famous for their digital content creation ability within multiple digital media. Examples include IG influencers and YouTubers. TRUE/ FALSE

FALSE: Key-opinion leaders (KOL): are famous in a specific field (actors, singers, politicians, etc.) Today, most people have an IG account, and can then become digital influencers. These people became famous OUTSIDE of digital media. INFLUENCERS: people who became famous from digital content creation: can be on YouTube, IG. Mostly, they were born within the digital field.

Plot the options in correctly: Today, influencers are becoming the new___; magazine publishers are becoming the new____, and brands are becoming the new___ A) Retailers/ brands B) Media C) Communication agencies

Today, influencers are becoming the new retailers/ brands (A); magazine publishers are becoming the new communication agencies (C); and brands are becoming the new media (B)

What is true about conventions? A) rules that make sense and are applied by most brands B) conventions especially benefit smaller brands with low awareness C) a way to make communication memorable without losing intangible values of the brand

A) conventions are rules that make sense – because of that, they tend to be applied by most brands. NOT B: conventions work well for the leading companies with an already strong position in terms of awareness. So, if the brands with weaker positions in the market were to follow the same convention, that would have an enforcing effect on the message of the leader. NOT C: DISRUPTION is a way to make communication memorable without losing intangible values of the brand. Hence, companies with lower awareness could benefit from searching for disruption.

What is true Disruption? A) disruption is about shaking up the culturally embedded biases and conventions that shape standard approaches. B) must be embodied in the long-term vision of the company to reposition the brand C) allows setting creativity free to forge a new vision of a product, brand, or service. D) it is about reacting to change rather than creating it E) all of the above except D F) all of the above except C

E) all of the above except D CORRECT: Disruption is about uncovering the culturally embedded biases and conventions that shape standard approaches. It refers to overturning conventions and shaking up the marketplace. It is essentially about shattering those biases and conventions and setting creativity free to forge a new vision of a product, brand, or service. It’s about LEADING change rather than reacting to it.

What is the disruption roadmap is about: 1) identifying and question conventions that govern the existing market place 2) disrupting it 3) creating a vision of the brand in the future - a strategic destination TRUE/ FALSE

TRUE

What did NOT make Luxottica become the number one company in the eyewear industry? A) Geographical expansion: internationalization B) Licensing C) Acquisition of preparatory brands D) Strong brand awareness of Luxottica in B2C market E) Vertical integration

WRONG: D) Strong brand awareness of Luxottica in B2C market A) Geographical expansion: internationalization B) Licensing: Luxottica was one of the first companies to sign a deal with Armani C) Acquisition of preparatory brands (e.g., RayBan) to compensate for the risk of losing licensing and dependency on licensing partners E) Vertical integration: Luxottica controls every single step from R&D to sale in stores

Which of the following is NOT a reason for fashion companies to transform into retailers, given retail is an expensive endeavor? A) To control the service offered to customers: B) To transmit a coherent identity of the brand into the store C) To make a profit: if the store is unprofitable, it closes D) to know better the final consumer and to get access to customer information E) to be more profitable in the sense that the mark-up will be larger if you remove intermediary that is present in wholesale distribution

WRONG: C)To be profitable - this is important for every store. Oftentimes, a store is kept open even though it generates huge losses for the brand because it has a communication value and purpose rather than simply providing product distribution.

``` What is showrooming? A) Research offline and purchase online B) Research online and purchase offline D) A significant disadvantage of retailing E) A+D F) B+D ```

e) a+b Showrooming: research offline in-store (try size and colors etc.) and go home to purchase the product online at the cheapest distributor.

What is ROPO? A) Research offline and purchase online B) Research online and purchase offline D) A significant disadvantage of retailing

ROPO: research online and purchase offline

``` What is NOT one of the (3) 5 Ps in Sustainability? A) Planet B) Performance C) Peace D) People E) Partnership F) Profit ```

B) Performance is NOT one of the 5Ps in sustainability 5P: People, planet, partnership, profit, peace

What are two of the biggest challenges in terms of fashion and design in China? A) Made-in-China and Designed-in-China associations to low quality B) Poor sustainability and labor rights associated with China C) Difficulty finding a manufacturer willing to produce smaller quantities - especially a problem for innovation, avant-garde, and entrepreneur designers in China E) Lack of IT advancement and omnichannel possibility

A) The challenge is to show that ‘Made in China’ if combined with ‘Designed in China’ can be high quality. C) The main problem for Chinese avant-garde (and design in general) is to find a manufacturer that has the flexibility and willingness to manufacture smaller quantities of designs

What is NOT a reason why the Chinese luxury industry has not developed yet? A) Economic: lack of capital and talent in China’s manufacturing and creative industries because most of the money and talent have rushed into the booming financial market and property sector B) Social: people mostly are seeking short-term windfall profits, very few are willing to engage in the manufacturing of fine products. Fast-moving consumer goods are more profitable C) Legal: lack of IP right protection D) Digital: lack of IT advancements making omnichannel distribution difficult E) Cultural: no clear consensus among Chinese designers on China’s style

Digital - this is an area where China is doing well

What is TRUE about radical fashion? A) radical fashion is a niche market: expensive for customers, difficult/uncomfortable to wear B) difficult to find a manufacturer to produce small quantities C) Japan has been/ is very strong in radical fashion D) very difficult to be a consistently successful radical designer without also having operations of traditional business E) all of the above

All of the above are true - It is a niche, expensive to buy for customers, given the difficulties to have access to fabrics and manufacturers, and difficult to wear because of the stylistic experimentation. - To become successful radical designers, you have to compromise with the mainstream business logic, and besides pursuing radical design, you could need to extend the brand into accessories and fragrances, do partnerships with established brands, and launch sporty/casual lines

Clienteling is a technique used by sales associates to establish long-term relationships with their customers based on data about their preferences, behaviors, and purchases. TRUE/ FALSE

TRUE

What are the 3Rs in Clienteling? A) Recruiting, Refacilitate, Recover B) Recruiting, Retention+reactivation, Reinforce C) Recruit, Retention+reactivation, Recover D) Recruit, Retention, Reactivation

B) Recruiting, Retention+reactivation, Reinforce

Luxury brands mainly rely on clothing as the most important source of revenue TRUE/ FALSE

FALSE - Luxury brands rely more on accessories, beauty and leather goods/ bags as the source of revenue - clothing is more of an image builder than a revenue-generator

Earned media is publicity or exposure gained from methods other than paid advertising. It is essentially online word of mouth, usually seen in the form of 'viral' tendencies, mentions, shares, reposts, reviews, recommendations, or content picked up by 3rd party sites. TRUE/ FALSE

TRUE

Luxury brands have heterogeneous governance models (PE, family-run, listed, conglomerate) TRUE/ FALSE

TRUE

X has the shortest life-cycle. It is typically a style that is adopted by a particular sub-culture or younger demographic group for a short period of time. X= A) Fad products B) Normal (fashion product) C) Classic products

X = Fad products

X is a style of the time. A large number of people adopt a style at a particular time. When it is no longer adopted by many, the product life cycle ends for X, after which there is a steep decline once they reach their highest sales. Once the product becomes last-season, it is adopted by the laggard consumers who buy the products on sale, which gives rise to a new product-life-cycle of the product X= A) Fad products B) Normal (fashion product) C) Classic products

X = Fashion (normal) products

The overall sales of X products are the highest of the three types of products, and their life cycles are generally the longest. A) Fad B) Fashion (normal) products C) Classic

X = Classic

Those who try out new unconventional styles that may eventually become a trend for the mass market are: A) Trendsetter/ pioneer B) Fashion victim/ conformist C) Laggard/ no hope

A) Trendseet/ pioneer

Those who follow the trends set by the pioneer are: A) Trendsetter/ pioneer B) Fashion victim/ conformist C) Laggard/ no hope

B) Fashion victim/ confromist

Those who are more ignorant about the changing trends and do not put effort into keeping up with the latest fashion are: A) Trendsetter/ pioneer B) Fashion victim/ conformist C) Laggard/ no hope

C) Laggard/ no hope

What is NOT true about Haute Couture? A) High-fashion garments created as one-of-a-kind pieces for specific clients B) High quality, expensive, and craftmanship (extreme attention to detail) C) Very time-consuming production process D) Very profitable for fashion houses E) seen as a long-term investment augmenting brand image and raising the profile of the other collections.

WRONG: D) Very profitable for fashion houses is not true - actually, fashion houses might lose money from HC. The goal of HC is not to generate profit, but build image.

Under the American Model, fashion designers pursue line extensions rather than brand extensions. True/ False

TRUE: | American brands tend to create sub-brands rather than product extensions.

Is it correct to say that many small Italian brands limit themselves from becoming successful globally because they are more product-driven rather than retail-driven? YES/ NO

YES - TRUE Strong focus on the design and the product itself. Rather than the go-to-market strategy focus, Italian brands tend to be much more product-centered. This is also oftentimes one thing that hinders local smaller Italian brands from becoming global is that they are more product-driven rather than retail-driven.

``` What is NOT one of the main criteria for segmenting companies in the fashion industry? A) Price B) Client C) Technology D) End uses E) Creativity ```

NOT E: creativity A) Price: Define the given product to analyze – look at core prices (not entry prices or top prices like fashion show – they present the extremes, and therefore not representative for the brand’s usual pricing). B) Clients: demographic matters, age, gender, etc. C) Technology: the production side technology D) End uses: the purpose of the product (e.g., a sneaker that has a stylish purpose rather than comfort or exercise)

DIFFERENT SEGMENTS OF LUXURY ``` Unique pieces, made-to-measure, handcrafted, precious materials, exclusivity are referred to as____ Series production (limited editions), quality, style, heritage and brand identity, selectivity (target, media channels) are characteristics of ____ High fashion content, price/quality, accessibility, power communication are focus points of ____ ``` A) Lifestyle luxury B) Absolute luxury C) Accessible luxury

B; A; C

Uber premium is everything that is truly out of reach of the vast majority of consumers. It is increasingly found in services: an exclusive personal experience can provide for hard-to-imitate uniqueness in ways physical (and uniform) products cannot. TRUE/ FALSE

TRUE

``` Brands with X business model focus more on style, creative vision, being seen as trendsetters every season. They strive to be the first to introduce a trend (which is difficult and very competitive). Which business model is this? A) Luxury B) Fashion designer C) Premium D) Fashion Retailer ```

B) Fashion designer

``` For brands with a XX business model, marketing is the main value driver. Meanwhile, industrial and commercial know-how is crucial for their success. The style is trendy and updated, but not fashion-forward nor anticipating the trend, not innovative. They target a bridge segment, are have strong in digital engagement, and are very accessible since service is key for such brands. A) Luxury B) Fashion designer C) Premium D) Fashion Retailer ```

C) Premium

Brands with X business model were often born as stores – but later integrated design and manufacturing into their value chain. These brands are responsive and reactive (pull and not push), and they typically get weekly deliveries of new fashionable products. Stores tend to be large and welcoming, and prices are convenient. The key value driver of such brands are is their innovative value chain and value chain management, which entails the ability to quickly respond to new trends through the integration of retail and manufacturing. A) Luxury B) Fashion designer C) Premium D) Fashion Retailer

D) Fashion Retailer

Is the following statement true? Retailers only have sell-out activity, while wholesale-oriented companies are often sell-in-driven. TRUE/ FALSE

TRUE

Multichannel distribution refers to when the brand can sell directly to end customers throughout their own operating stores, but also sell through other distribution partners. In this case, the company knows about the sell-in (what and how much the brand sells to their external distributors), but not about the sell-out (what is sold to the end customer). TRUE/ FALSE

FALSE

In ____ distribution, the brand has different separate distribution formats that are used to reach the customer. In ____ distribution, the brand has a distribution network, where each link is interconnected with the customer in the center. A) Omnichannel B) Multichannel

In (Multichannel) distribution, the brand has different separate distribution formats that are used to reach the customer. In (Omnichannel) distribution, the brand has a distribution network, where each link is interconnected with the customer in the center.

What is NOT a characteristic of Transnational distribution? A) It is travel-related B) Before the pandemic and the restrictions, this was one of the most profitable sources of brands with physical retail shops, because, with limited space, the brands can sell easy-to-buy products (e.g., through airline railway stations and duty-free stores). C) When a brand's distribution is present in more than one country D) These locations are increasingly becoming destinations of shopping, because travelers often have plenty of time waiting for their departure, and because they can save the VAT.

C) When a brand's distribution is present in more than one country

Creating the buzz: communication is where a brand may dare more. The purpose of the communication is to create interest and buzz. This leads to companies communicating rather provocative, extravagant, quirks. Here, you can be more extreme. TRUE/ FALSE

TRUE

Using macro-influencers is always more efficient than micro-influencers. TRUE/ FALSE

FALSE Raising awareness a lot by their large reach enabled through the use of macro-influencers. However, these influencers have larger bargaining power, because there is a high demand for collaboration with them, which means that this is often very expensive. You also risk being diluted if the influencer has many campaigns at the same time. Also, followers of celebrities are often more interested in the celebrity’s life and are less impacted by the product promoted

Under licensing agreements, the brand owner (licensor) gives another entity (licensee) permission to use its name and design for production and/or distribution of one/more product category, within a specific territory and distribution channels, for a certain period. For this, the brand owner is paid a royalty (% of wholesale revenues) and a contribution to communication (% of wholesale revenues) TRUE/ FALSE

TRUE

In terms of sustainability: ____ is about converting discarded materials into equal or higher value products (more desirable) ____ changing items considered as waste into new products to prevent waste of potentially useful materials and reduce the consumption of fresh raw materials ____ converting valuable products into low-value raw materials (less desirable) A) Downcycling B) Upcycling C) Recycling

Upcycling, recycling, downcycling

____ everything is handmade ____ production process is partly industrialized A) Bespoke B) Made to measure

Bespoke: everything is handmade | Made to measure: production process is partly industrialized

Management of Fashion Companies Flashcards

(91 cards)