MARKETING IV

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MARKETING IV

• Demand Visibility

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LEARNING OUTCOMES

• to understand the importance of demand
  visibility in being responsive to changing
  customer requirements
• to understand the value of supplier
  responsiveness to high street fashion retailers

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MANAGING DEMAND

• How do you cope with fluctuations in demand?
• Change demand
• Adjust output to match demand
• Absorb demand

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CHASE DEMAND

• Pull approach driven by the customer
• Absorb demand forecast, POS etc.
• Adjust output to match demand postponement,
  re-ordering etc.

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THE FASHION CHALLANGE

• Long lead times
• Unstable demand
• Decreased PLC
• Enhanced competition

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MERCHANDISING REQUIREMENTS

• Effective planning of the garment types
• Prioritises work load
• Critical path constraints
• Corrections and adjustments
• Excellent supplier relationship

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E.g. THE ZARA MODEL
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PRE-SEASON

• INTERNAL FACTORS
• constraints or potentials of internal assets
• within the control of a company
• EXTERNAL FACTORS
• most often beyond the control of the individual
  enterprise

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IN SEASON

• EDI (Electronic Data Interchange)
• Allow for open information flow between supply
  chain partners
• Immediate electronic transmission of changes in
  customer demand
• Allows for timely and appropriate action
• POS (Point of Sales data)
• Immediate electronic transmission of purchases
• Allows for effective inventory management
• Sets targets for reordering
• PCs (Personal Computers)
• Small size
• Allow for linkage to distant information
• Gives accurate and timely information

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DEMAND INFORMATION TRANSFER
No distortion (facilitated by ICT)
Based on actual order(risk for bullwhip effect)
Based on historical or estimated
demand(relationship dependent)
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THE ZARA MODEL
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BENEFITS

• Customer Responsiveness
• Customers pull the system, no designersthat
  push the merchandise to the market
• Decreased inventory levels
• Compressed lead-times

Inventory to sales ratio