Price Difference Depends on the Brand in Fashion - Research Paper Example

? Price Difference Depends On the Brand In Fashion Price Difference Depends On the Brand Introduction The fashion refers to popular styles and trends in clothing, footwear, make up, accessories, body piercing or tattooing, and even furniture trends. The fashion industry is therefore very big and has a wide range of products (Steele, 2000). Various products in the fashion industry have different prices depending on the value that people attach to specific brands. Valuable brands in the industry cost higher while relatively known brands or newer brands will often cost less (Steele, 2000). A brand refers to a name, sign, symbol, term, or design, or a combination of them, which identifies and differentiates products of one firm from those of others (Breward, 2003). Branding refers to the marketing practice involving creation of names, symbols and designs that identify and differentiate an organization and its products from others. Price differences in the fashion industry depend on the value attached to brands by consumers. This paper aims at studying the impact that brands have on prices in the fashion industry. Prices of various fashion products in the industry often tend to depend on the type of brands themselves. Valuable brand often have the highest prices while less valuable brands often cost cheap. This essay therefore aims at studying the impact of branding in the fashion industry on prices of commodities and services in fashion. Research question how do brands contribute to the differences in prices of products in the fashion industry? Industry overview The fashion industry is one of the largest industries in the global economy. The industry mostly depends on the availability of disposable incomes among individuals, since most fashion items are considered luxuries. Fashion is part of the popular culture and the latest and best fashion trends are often portrayed in movies and film, music, fashion show and concerts as well as in advertisements in the media. The latest fashion trends and designs are often promoted by respected celebrities and public figures, who often influence peoples buying decisions in the fashion industry. Some of the popular fashion brands in the US and across the world include; Louis Vuitton, H&M, Dolce and Gabana, Kelvin Klein, Christian Dior, Levi Strauss, and Richemont among others. The impact of brands on product prices Branding is very important in the fashion industry since people like to be associated with valuable brands. Fashion brands give consumers certain social classes and they would want to be seen wearing clothes and other accessories with notable and valuable brands. Prices of brands in the fashion industry will therefore vary according to the value that consumers attach to the particular brand. Most fashion companies therefore endeavor to push their brands to the level that they can attract more consumers who can be loyal to them (Breward, 2003). Demand for most fashion products is different from that of other goods and services because for most fashion products, an increase in price does not lead to a decrease in demand, as it is the case with products in other industries. With a loyal base of consumers, the companies can always manipulate the prices and still manage to attract more consumers(Steele, 2000). ABranding process involving research, defining and establishing brands that consumers can relate, associate and identify with. Brand identity is a very important element of branding and marketing in general. It refers to the ability of target consumers to identify with and relate with a particular brand. Brand identity has to do with the ability of a particular brand to get noticed among the targeted consumers. This therefore includes the packaging process and publicity accorded to the brand through advertising, CSR and sponsorship (Steele, 2000). Fashion brands can increase their brand identity through advertising, engaging with the community through CSR activities, sponsoring various events and having a great presence among the targeted consumers, both online and offline. Brand identity often leads to customer loyalty in the long run.The concept of brand identity is very significant in the fashion industry as it helps to inform pricing of fashion products(Fan, 2002). Brands with a greater identity will often coast more than those with insignificant brand identity. Brand identity can be measured in terms of the popularity of the brand among target consumers, and how frequent the consumers buy the brand and how they associate with the brand(Breward, 2003). Coveted fashion brands will often have a higher value attached to them and are likely to cost a lot more than less coveted brands in the fashion industry. Brands play a very vital role in the marketing process of fashion companies and businesses. A brand is the center of all marketing activities in the fashion industry since all marketing strategies are geared towards making the brand popular among target consumers (Steele, 2000). This can lead to a huge base of loyal customers who relate with the products and use them from time to time. Branding is often a value adding expense for fashion companies since a lot of money is put in the branding process to help promote the brands. The companies therefore have to get a return on their investment through good pricing strategies (Douglas, 2002). The costs involved in branding and packaging will often be transferred to the consumers in order for the companies to make profits. Popular brands imply that a lot of efforts in terms of time and money have been put in the marketing of such brands to their target groups. This therefore accounts for the differences in prices among fashion brands (Douglas, 2002). According to Douglas Holt (2002), brands that are more popular will cost a lot more that less popular brands in order to help the businesses get a return on the investment put in the branding and marketing process. The more popular a brand becomes, the more it will cost in the future. A fashion brand is very important to the business because it can also be used to communicate with the consumers through advertisements where companies deliver their brand messages effectively to their target market. Brands also help to confirm credibility associated with a particular firm (William,2010). This is because when a particular company or its products become popular, people would be attracted to them and brands can easily be used to confirm these credibility if the brands actually meet the consumers’ expectations. A brand can also be used to affect the emotions of consumers in order to make them feel vulnerable without the brand(Breward, 2003). This makes the consumers attach themselves to the brand in the long run since they feel the brand gives them a certain sense of security or social status. Brands also motivate buyers to purchase products of a company. Product names, designs and symbols should be carefully chosen and created because they can easily motivate consumers to buy the products if they like the names and symbols associated with the product(Fan, 2002). A brand is seen as the link between the company and the consumers. Given the significance that brands have to companies in the fashion industry, more businesses will invest a lot in branding(Cumming, 2004). Investment in branding involves changing the marketing strategy of the company to help the company enjoy these benefits associated with brands. This often requires a lot of resources in terms of both finances and time and a return on this investment is necessary for the company to ensure profitability. This therefore makes the difference in pricing among the products in the fashion industry in that better brands always cost a lot more(Cumming, 2004). Better brands are those, which play a vital role in helping the company, achieve its objectivesand link the consumers to the company. These brands are seen as the face of the company. In the fashion industry, brands are invaluable. This is because competition for consumers intensifies each day as new brands spring up to bring in competition. Fashion is all about the latest trends. This makes it very difficult for a fashion company to stay at the helm of the industry for a long time since newer brands often come with such a strong wave. However, some firm have managed to maintain and even increase their market share in the industry over the years(Breward, 2003). This is because of the value that consumers attach to their brands. Fashion brands are able to increase their value through self branding, which is the practice of organizations, individuals and products marketing themselves to their target audiences as being ideally different in terms of appearance and packaging in a manner that people can easily identify with and relate to (Cumming, 2004). When brands become valuable among their target consumers, the prices of the fashion brands will be affected to a great extent. An increase in value leads to an increase in the price. Value addition comes because of improvements made to the brand in terms of its shape, ingredients, texture and color among others (Breward, 2003). Fashion products have a certain social value attached to them because they give individuals an enhancement in terms of their looks, clothing or accessories. Valuable brands therefore give individuals a higher social class (Fan, 2002). Most consumers want to be seen as belonging to the high class and would therefore be willing to pay expensively for valuable products and services in the fashion industry. Fashion companies and businesses exploit this economical concept to manipulate prices of their products depending on the value attached to them. Brands therefore play a major role in the pricing of fashion products and services. Successful branding occurs when a particular product, company name or symbol is easily identifiable and common among the target group to the extent that they relate with it. Successful brands influence consumer decisions in terms of what they wear, what they eat and what they associate themselves with (Schmidt and Chris, 2002). Different approaches are usuallyused by companies and businesses in the fashion industry to bring out their brand messages to the target masses through various media and try as much as possible to appeal to their emotions and impact on their actions and decisions regarding the brand. Each person has their own natural desire to express their own feelings and identify with the things they like. With this proposition in mind, fashion companies have learned to position themselves and their brands in a manner that they can be relied upon by the people to express their character and identity (Schmidt and Chris, 2002). Once this is achieved, a brand can be said to have been successful. At this level the brand is able to manipulate the emotions of the consumers and encourage them to buy the products bearing the brand name or symbol. The brands can present themselves as being the best and most valuable in the industry. Once the consumers are convinced in this regard, they will be willing to pay any amount to get the fashion brand. Brands therefore play a very important role in the fashion industry in informing pricing strategies of fashion businesses. Self-branding is an aspect of branding that aims at promoting the brand as the single most important product in the industry and one that consumers cannot do without. Self-branding requires a lot of preparation, planning and attention to detail (Fan, 2002). The use of technology such as social media and the internet in establishing useful relationships is also fundamental in eliciting meaningful discussions and interest in a brand. The message created in an advert can have very different meaning for different individuals and key discussions about the brand and the message are also important in clearing the intended message and enabling it to sink in to the minds of the people for a very long time. The emotional appeal of brands is the other most significant element of branding. Advertisements are effective only if they are able to arouse certain emotions from the target people and how the message passed across can be persuasive (Fan, 2002). People are most likely to identify with brands that they have emotional attachment with and those whose images are stuck in their brains through psychological effects brought out from the advertisement.Self-branding therefore enables companies to affect people’s emotions and feelings and manipulate such emotions to motivate the consumers to buy the brands at the specified price. Conclusion The fashion industry is growing and expanding very fast and most businesses feel the need to position themselves and their brands in the market ahead of emerging competition. Businesses take a lot of factors in to consideration when creating pricing policies for their products (Schmidt and Chris, 2002). Some of the factors may be similar across the industry. The difference in prices of most products in the fashion industry is the value of the brand in question. Valuable brands often cost more than those with little or no value. Companies are therefore investing more in brand development to add more value to their fashion brands in order to reap the benefits through the price of the enhanced brands (Schmidt and Chris, 2002). A table of statistics in fashion the industry showing top brands in the industry by revenue as well as the various trends is shown below, Fashion Industry Statisticsin the US Number of Fashion Designer Jobs Held in 2013 19,300 Median Annual Earnings for salaried fashion Designers $62,610 Number of people employed in the fashion industry 4,200,000 Amount spent on fashion in the U.S. each year $250,000,000,000 Annual global fashion industry revenue $1,200,000,000,000 Top Fashion Brands by Revenue LVMH Moet Hennessy – Louis Vuitton S.A $37,140,000,000 H&M $18,820,000,000 Kering $15,650,000,000 The Gap $15,650,000,000 Christian Dior $11,910,000,000 Richemont $11,830,000,000 Estee Lauder $9,710,000,000 Phillips-Van Heusen Corp $6,040,000,000 Coach, Inc. $4,760,000,000 Levi Strauss $4,670,000,000 Abercrombie & Fitch $4,510,000,000 Jones Group $3,800,000,000 Tiffany & Co $3,790,000,000 Hermes $3,680,000,000 American Eagle Outfitters $3,480,000,000 Table adapted from statistic brain, fashion industry statistics Reference list Breward, C. (2003).The culture of fashion: a new history of fashionable dress, Manchester: Cumming, V. (2004).Understanding Fashion History, Costume & Fashion Press. Douglas H. (2002). Why Do Brands Cause Trouble? A Dialectical Theory of Consumer Culture and Branding. Journal of Consumer Research, pp. 70-90. Fan, Y. (2002) “The National Image of Global Brands”, Journal of Brand Management, 9:3, 180–92. Manchester University Press. McDermott, K. (2010). Style for all: why fashion, invented by kings, now belongs to all of us.New Jersey: Wiley and Sons. Nagle, T. and Holden, R. (2002), The Strategy and Tactics of Pricing. New Jersey: Prentice Hall. Paull, J. (2009).The Value of Eco-Labelling, Saarbrucken: VDMVerlag. Schmidt, K. and Chris L. (2002).Inclusive Branding: The Why and How of a Holistic approach to Brands.Basingstoke: Palgrave Macmillan. Steele, V. (2000).Fifty years of fashion: new look to now. New Haven: Yale University Press. William P., (2010), Priceless: The Myth of Fair Value (and How to Take Advantage of It). New York: Hill and Wang. Read More