Fairchild Books

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Product Development

• The teaming of market and trend research, with
  the merchandising, design, and technical
  processes that develop a final product
• Is used by both wholesale manufacturers and
  retailers

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Product Development

• What is a product line and who develops it?
• Product development process
• Specializing by product
• Industry practices
• Advanced technologies and strategies
• Industry trends

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What is a Product Line and Who Develops It?

• Lines encompass the entire seasons production
  from a manufacturer
• Lines are divided into groups linked by common
  themes like color, fabric, or style
• Lines are used to describe moderate and popular
  priced apparel, while collections describe an
  expensive line in the U.S. or Europe
• Knock-offs are copies of expensive designs in a
  cheaper fabric
• Anchors are designs reworked from a prior season
  in a different color or fabric

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What is a Product Line and Who Develops It?

• Four to six lines are produced each year

• Spring
• Summer
• Transitional or fall I
• Fall or fall II
• Resort
• Holiday

• Merchandisers, designers, and producers create
  the product

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Seasonal Lines
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Role of Merchandisers

• Merchandisers have been described as the glue
  that holds the whole product development process
  together
• They are the link among the design staff,
  production facilities, and sales staff
• They conduct research to produce a line for the
  right customer

• The six rights of merchandising product
  development
• The right merchandise
• At the right price
• At the right time
• In the right place
• In the right quantity
• For the right customer

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Role of Designers

• Designers are categorized into three types
• High Fashion
• Name designers, i.e., Ralph Lauren
• They are responsible for designs, fabric,
  texture, and color
• May also be involved in the development of
  production model and promotion of the line

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Role of Designers
A patternmaker cuts garment pieces.
Designers inspect their work on live models.
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Role of Designers

• Stylists
• Take name designer styles and adapt or change
  them from high fashion
• Come in at late rise/early culmination stage
• Usually not involved in production or promotion
• Freelancers
• Show sketches to various houses
• Once sketches are delivered they are finished
  with their responsibility

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Role of the Producers

• The manufacturer does it all, from buying
  fabric to cutting, sewing, selling, and shipping
  finished garments
• The jobber handles the designing, planning,
  cutting, selling and shipping, but not the
  sewing
• The contractor does the reverse of the jobber
  and only does the sewing

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Contract Manufacturing

• Advantages

Disadvantages

• Investment capital not required
• Hiring and training issues eliminated
• Capital savings due to no payroll
• Faster delivery during peak times
• Unnecessary to keep factory busy year round

• Responsibilities get confused
• Other manufacturers may get priority
• Quality can be uneven

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The Product Development Process
6 Steps

• Plan line
• Create design concept
• Develop design
• Plan production
• Produce
• Distribute

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The Product Development Process

• STAGE 1
• Planning a line
• Designers and merchandisers research trends,
  colors, and fabrics using forecasters
• Budgets are set and advertising planned

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The Product Development Process

• STAGE 2
• Create design concept
• Sketch and drape garments
• Select initial colors, initial fabrics
• Cost out the product
• Styles are judged on
• Individual merit
• Suitability to the line as a whole
• Many designs are discarded here

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The Product Development Process

• STAGE 3
• Develop design
• Develop all specifications needed to produce the
  design and create samples of the designs most
  likely to succeed
• Both costing and fabrication receive intense
  scrutiny
• CAD, computer-aided design, gives designers
  freedom to explore and manipulate designs easily
  and inexpensively
• Linked with CAM, computer-aided manufacturing,
  and CIM, computer-integrated manufacturing,
  information is provided to supplier and retailers
  globally

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The Product Development Process
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The Product Development Process

• STAGE 4
• Plan production
• Examine and sharpen sourcing options
• Contract to purchase fabric and components
• Exact costing is developed
• Samples are made for shows where retailers place
  orders, determining successes and failures
• Production contracts are often finalized as
  garments are being shown to retailers

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The Product Development Process

• STAGE 5
• Production
• Cutting involves
• Grading, where sizes are made
• Markers, where patterns are laid out on paper
  markers
• Spreaders, machines where material is carried
  along a guide on either side of the cutting table
• Bundling, where sleeves, collars, fronts and back
  pieces are tied together, often by hand

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The Product Development Process

• Sewing has been dramatically altered by
  technology
• Single-hand operations still exist, where one
  person sews the entire garment
• This is usually for very high-priced garments of
  a limited quantity
• The majority of production occurs using modular
  manufacturing systems, where cross trained teams
  complete garments

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The Product Development Process

• Finishing requires various tasks to prep the
  garment for the selling floor
• Sewing labels in
• Adding buttons or buttonholes
• Washing to prevent shrinkage
• Wrinkle resistant processing
• Garment dyeing
• Inspection occurs along the way
• Fabric, dye, cutting, sewing, fabric, thread,
  buttons, snaps, zippers, hem tape, linings and
  shoulder pads are all subject to quality
  assurance, or QA.

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The Product Development Process

• STAGE 6
• Distribution
• Distributing the line requires sales tickets and
  bar codes to be added
• Floor ready procedures may include carton
  labeling, shipping documents, and other tasks
  being performed to speed the movement to the
  selling floor
• Floor ready also occurs during the finishing
  stage

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Specializing by Product

• The industry is generally divided into three main
  categories based on gender, age, size, and by
  classification
• Womens
• Mens
• Childrens

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Specializing by Product

• Brands and labels can be classified into five
  main categories
• National/designer brand
• Private label
• Retail store brand
• All other brands
• Nonbrands

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Specializing by Product

• National/designer brands or labels are owned by a
  manufacturer who advertises nationally
• Private labels are owned by a retailer and found
  only in their stores
• Retail store labels are used by chains as an
  exclusive label on all items in their stores or
  catalog
• All other brands not in the first three
  categories are used by sports teams, cartoons,
  colleges, and cultural institutions
• Nonbrands are usually found in discount or off
  prices stores

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Industry Practices

• Manufacturers acting as retailers
• It affords control of presentation, service,
  space and atmosphere, and increased profits
• Ralph Lauren paved the way for other designers
• Department stores and specialty stores have
  reacted against the trend
• Manufacturers outlets allow manufacturers to
  dispose of poor sellers, overstocks, and seconds
  and make more profit than selling to discounters

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Industry Practices

• Licensing
• Royalties of 2 to 15 percent, greater exposure,
  and little investment make it an attractive
  proposition for designers
• A potential drawback is the loss of some quality
  control in manufacturing and exclusivity in the
  eyes of the consumer
• Corporate licensing, as exemplified by Nikes
  swoosh and Harley Davidsons T-shirts, are
  part of a rapidly growing segment of the
  licensing market worth 15 billion

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Industry Practices

• Private label and specification buying
• Private label manufacturers are allowed to
  design product by the retailer (Federated
  Department Stores does this)
• Specification buying is when the retailer tells
  manufacturer their standards (JCPenney does
  this)

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Industry Practices

• Offshore Production
• Offshore production is the practice of producing
  goods out of the country or offshore to take
  advantage of cheap labor in foreign markets
• 807 is when garments are designed, cut, and
  finished domestically with only sewing taking
  place abroad
• Duty is paid only on the value added offshore
• NAFTA has substantially shifted offshore
  production from China to Mexico

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Other Industry Practices

• Factors fund the deals by purchasing accounts
  receivable or lending money
• Chargebacks are the retailers way of
  financially penalizing the manufacturer for
  late, incomplete, mistaken or wrong ticketing
  issues on garments
• They are contentious issues, with both sides
  arguing the other side is too inflexible in
  their interpretation of the order agreement

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Advanced Technologies and Practices

• CAD, CAM, and CIM all make use of computers to
  aid in the process of manufacturing, integrating
  or designing
• QR, or quick response, shortens the time from raw
  materials to design to production to finished
  product to consumer
• It requires manufacturers, suppliers, retailers
  and customers to have closer associations to all
  parties

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Advanced Technologies and Practices

• Barcodes make tracking easier and the 14 digit
  UPC (Uniform Product Code) automatically
  identifies items scanned at cash registers
• Bar codes keep information flowing, from push
  marketing where products are pushed on
  customers to pull marketing, where information
  about what consumers want are mined
• Scanners promote the instantaneous capture of
  accurate data and are integral in almost every
  step of the production, inventory and sales cycle

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Advanced Technologies and Practices

• EDI, electronic data interchange, sets standards
  for data transmittal that make date migration
  possible across disparate platforms
• Mass customization is the idea that individual
  garments for people are created at the pace and
  cost of mass production
• Body scanning customizes patterns to fit an
  individuals body

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Advanced Technologies and Practices
Free-standing Intellifit booth in a mall
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Industry Trends
Brand Extension

• Brand extension allows a company to use its name
  to launch or modify products
• Fossil extended from watches to handbags and
  belts
• Chanel and Schiaparelli paved the way for
  clothing manufacturers to create fragrances
  during the 20s and 30s
• Accessories, men's, women's, and lately,
  children's have seen brand extension initiatives

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Industry Trends
Brand Extension

• Home furnishings, led by Bill Blass and followed
  by Ralph Lauren, became popular in the 90s due
  to a downturn in womens wear and growing sales
  of home furnishings
• Price lines blur as designers move into different
  price levels
• Donna Karans Donna Karan line sales do not
  suffer from the lower-priced DKNY line
• Eddie Bauer allied with Ford to sell over 700,000
  select Eddie Bauer versions of Ford vehicles

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Industry Trends

• Industry co-operation is key to the future
• Producers, manufacturers, and retailers must take
  advantage of the prevailing technology to reduce
  costs
• Two efforts to meet this goal include
• VICS, the Voluntary Inter Industry Communication
  Standards Committee, who set standards for UPC
• ANSI, which is the standard for EDI, directly
  effecting QR capacity