The United Kingdom Fashion and Luxury Industry: a Marketing Strategy - Research Paper Example

Introduction Consumer behaviour entails the psychological processes that consumers go through in the recognition of their needs, in finding ways of resolving these needs, when making purchasing decisions, when interpreting information, when making plans and when implementing these plans. In other words, consumer behaviour can be described as the study of “why people buy’’. Therefore based on this premise, it becomes easier for companies to develop strategies to influence consumers Dann, Stephen (2007). Charles & Benjamin (2000) argue that by studying consumer behaviour, firms are able to understand the psychology of how consumers think, feel, reason, and select between different alternatives of brands. Barbar & Uchitelle (2008) shows consumer behaviour theory is also essential in the understanding of how consumers shop and make other marketing decisions. Minder (2009) shows firms are in a better position of understanding how consumer knowledge or information processing limitation influences decisions and marketing outcome. Curtis (2000) puts it that consumer behaviour is essential in the understanding what motivates and helps in decision making for products with many benefits. The subject is important in helping marketers adapt and improve their marketing campaigns and marketing strategies to reach the consumer effectively. Smoluk & Irena (2009) describes that consumer behaviour is applied as a marketing strategy to make better marketing campaigns; in public policy, in social marketing and to get ideas to consumers rather than selling something making people become better consumers (Minder 2009). Therefore, this study seeks to evaluate the extent, to which the sale of luxury clothing could have been affected by this economic crisis, with a focus on how the buyer behavior of the UK luxury and fashion clothing buyers was influenced by the crisis. Additionally, the study seeks to evaluate whether the 2007 economic crisis changed the spending patterns of the UK population in regard to luxury commodities and clothing, while also assessing the marketing and pricing strategies that have been applied by the luxury clothing sellers to overcome the impact of the crisis on their sales, and thus foster an increased sale of luxury clothing in the UK markets. Aim Is luxury clothing in the UK still achieving high sales during the recession? Objectives This study will mainly focus on analyzing the impact of the economic crisis on consumer behavior. Therefore, the key objectives of the research will include: i. To assess how economic crisis in the UK has affected the sale of luxury clothing by various industry players such as diesel, Dior, Armani. ii. Investigate whether consumers have changed their spending habits due to the economical crisis. iii. Determine whether luxury clothing brands have adopted new pricing strategies since 2007 in order to maintain sales. iv. To recommend the appropriate strategies that the luxury clothing sellers should apply to ensure that their sales remain high. Rationale of the study This study will greatly benefit different parties for instance; current investors, potential investors, scholars, the government and consumers themselves. The current players in these industries will be able to gain knowledge on how their products are faring in the market and with this they are able to develop strategies on how to improve their position. To scholars, this study will enable them to gain knowledge as well as understanding as to why luxury clothing is still being purchased despite the economic crisis. The government will also gain a better understanding of the standards of living and with this develop suitable policies. For the potential investors, they are well-equipped to make decisions concerning venturing into such industries. Additionally, this study remains relevant due to its timeliness in evaluating the robust growth of the UK luxury clothing industry; with a view to benefit unearth the reasons behind the continued growth of the UK fashion industry, despite the economic crisis. Lastly, the study will also provide essential data for future researchers. Methodology Research Design and Data Collection This study will use a quantitative research design, as it will be appropriate. This involves collecting data from secondary methods. Data will be collected from various sources such as books, journals, newspapers and internet sources. These will help to analyze influences of consumer behavior and the changes in the buying behavior since 2006 to 2012. This method of data collection will yield much result, as it will provide much data showing the effects of economic crisis on consumer behavior. The other secondary method used is the inclusion and exclusion review. The major expectations will be to know establish accuracy in the area of study. This also involves establishing that the new brand of a particular product in the market attracts more consumers than other brands despite the tough economic crisis. However, various reasons show that this is only true for consumers earning a certain amount of money. This gives knowledge for establishing inclusion and exclusion method. The inclusion criteria will involve consumers under study and will be defined in an objective way. This study will include consumers who have access of accessories in the luxury fashion market and whether this creates a perception of luxury showing that the amount of income spent on necessities declines as income increases (Majima 2008). The data analysis method includes a qualitative analysis that will enable the researcher to have a better understanding about the impact of economic crisis over consumer behaviour. Since this is a quantitative study and requires researcher interpretation of the data gathered from secondary data, a more objective position will be taken in analysing the data, with bits and pieces of relevant respondent words used in order to ensure valid and viable results from data gathered from the books. Internet sources will also be essential in the analysis of data showing economic crisis. This includes analyzing web journals and articles on consumer buying behavior and the effects of economic crisis. The method will be effective as it is quick to formulate and the researcher is capable of segmenting quantitative data with qualitative results. The method is also free and authentic; therefore, anyone with access to the internet can participate in the research. The exclusion criteria will involve excluding consumers from the study and aiming on analyzing the economic crisis. The study will show how social factors affect consumer decisions such as the women and at different ages have affected the decision of others in purchasing luxury goods. Gavin (2009) shows control factors affect the buying decisions and are beyond the control of consumers. Isakovich (2009) shows marketing strategies should therefore target all people influencing the decision making process to reduce social factors and the control factors should be worked out though strong product branding and advertising. The study also shows that personal importance comes into effect. Consumer behavior theory is necessary in marketing research activities and in understanding potential consumers in a better way (Hanna 2004). Literature review The UK fashion industry has grown immensely in the recent past, to emerge as one of the giant industries in the UK economy. However, the growth of the fashion industry is not unique to UK alone, with the global fashion industry growing at a faster rate compared to other major industries. The relevance of this industry in the world economy is great, such that it is estimated that the industry will grow by over 70% in the next five years, raising the global market value of luxury and fashion commodities from £37bn to £107bn, by the close of 2015 (Easey, 2011 p33). Nevertheless, the economic crisis of 2007 caused an economic shakeup, which affected virtually all industries in many countries of Europe and even globally. The significance of the UK fashion industry in the global arena cannot be overemphasized, considering that its growth is expected to grow by a massive 57%, raising the value of the UK luxury goods from the current £6 billion to £9.3 billion by the end of the year 2015 (Easey, 2011 p35). With the improvement in the standards of living, the rise in large number of the UK middle class and the possession of a sizeable income by the UK population, allows it to focus on the emerging fashions and the trends. This has allowed the UK fashion industry to experience a rise in the demand for luxury commodities, prompting the rise in profit margins earned by the industry players. This can be illustrated by the example of Mulberry, a major a player in the UK fashion industry, whose profits rose by four times for the financial year ending 2010, according to a report that was released by The UK Luxury Benchmark (Easey, 2011 p43). This explains, to a large extent, the exponential growth of this industry currently. Another major player in the UK luxury clothing market is Diesel, which appears to survive the effect of the economic crisis and continued to increase its sales. The sales value for Diesel has risen from an annual value of €1.2 billion in 2005 to €1.3 billion in 2009 (Easey, 2011 p37). Further, diesel has continued to expand its presence in the UK market, with 37 diesel luxury stores already operational in the UK by 2009. Christian Dior, commonly known as Dior is yet another luxury clothing market player, whose presence is greatly felt in the UK. Dior has managed to survive the effect of economic crisis, and it continues to grow its revenues and also expand its operations in the UK luxury market. Similarly is Giorgio Armani, a player in the UK luxury clothing, which has consistently expanded its operations despite the economic crisis, raising the overall revenues of the company to an annual tune of $1.69 billion, by the close of 2005 (Okonkwo, 2007 p26). The British fashion industry has been on the rise, due to the tendency of Conspicuous consumption by its population (Petty & Wegener, 1999 p65). Conspicuous consumption refers to the purchase of expensive commodities either from ones income or accumulated wealth, for the sake of display and feeling good about one’s ability to own valuable, luxurious and expensive items (Barthes, 1957 n.p). Despite the economic recession of 2007, which was predicted to bring the conspicuous spending of the UK consumers to a halt, the UK fashion and luxury industry has continued to grow and expand at a surprising rate. Most of the major players in the UK luxury market have expanded their operations, while others have registered high growth in their profitability margins (Bamford & Grant, 2000 p12). This scenario has painted the UK luxury industry as recession-proof, since it continues to grow stronger and stronger by the day, begging the question as to why it is not responsive to the economic crisis. According to a report released by The UK Luxury Benchmark, the value of the UK luxury industry is estimated to be well over £6 billion, with an estimated growth of the market value to £9.3 billion, by the end of the year 2015 (Okonkwo, 2007 p22). This unusual trend can be explained by various scenarios that are most peculiar to the UK. There is the tendency and the love of the UK population to stand out, notwithstanding how much it will cost them to achieve Quirkiness (Jones, 2006 p7). This has always meant that the UK population will always go for the luxuries and fashion, despite the economic situation that is prevailing. A different scenario is explained by the large number of wealthy foreign guests, who visits the UK mostly during the summer, with the tendency to spend much on fashion and luxuries, boosting the UK fashion industry (McRobbie, 1998 p52). According to the myth of consumerism by Piere Bordoux, tastes are not elements of individual choices, but a conditioned social concept, which is determined by the social hierarchy structure, with the higher classes which dominate the society entrenching and enforcing their tastes and preferences on the rest of the society (Bourdieu, 1984 p27). The lower classes are forced to follow the entrenched social path, since they perceive the tastes and preferences of the upper hierarchies of the society as more superior. Therefore, the luxury clothing and fashion preferences of the society will become the tastes of most of the society, due to the perceived superiority of such commodities. This can force even the middle and the lower classes of the society to conform to the tastes, by purchasing the luxury and fashionable clothing anyway, even when they do not have much of the income. This is in contrast to an explanation offered by Moise-Braun on Maslow hierarchy of needs theory, which observes that man, will start by satisfying the basic needs, and then advance towards the secondary needs, and then, up the ladder towards self actualization (Barthes, 1957 n.p). Considering that the UK fashion and luxury industry is estimated to be worth well over £21 billion, its relevance in the UK economy cannot be ignored, since it is a peculiar industry, which manages to survive the tough times, and still remain profitable and expansive even during recession. The UK fashion industry is estimated to account for 9% of the global fashion industry market value (West, 2004 p36). References Barthes, R (1957). Denotation – Connotation lecture notes outline. Bamford, C. G., & Grant, S. (2000). The UK economy in a global context. Oxford, Heinemann. Bourdieu, P. 1984, Distinction: A Social Critique of the Judgment of Taste (Cambridge, MA: Harvard University Press) Easey, M. (2011). Fashion Marketing. Chichester, John Wiley & Sons. Jones, R. M. (2006). The apparel industry. Ames, IA, Blackwell Pub. McRobbie, A. (1998). British Fashion Design: Rag Trade or Image Industry? Routeledge: Taylor & Francis Group. Okonkwo, U. (2007). Luxury fashion branding: trends, tactics, techniques. Basingstoke, Hampshire: Palgrave Macmillan. Petty, R. E., & Wegener, D. T. (1999). The Elaboration Likelihood Model: Current Status and Controversies. In S. Chaiken & Y. Trope (eds.), Dual Process Theories in Social Psychology (pp. 41–72). New York: Guilford Press. West, P. (2004). Conspicuous Compassion: Why Sometimes It Really Is Cruel To Be Kind. Civitas Institute of the Study. Read More