Segmenting the fashion industry

Erica Corbellini
Paola Varacca Capello
The meaning of
Segmentation:
the industry (product categories/channels/price ranges/
customers/)
the customer

Business Definition:
What a single company offers: which products, prices, customers,
channels,

Positioning map:
It is built on the basis of significant variables and includes brands
with similar/different positioning. It should be built from field
analyses and represent consumers perceptions.
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Segmenting the fashion industry - Fashion sectors
Clothing (manufacturing)
Jeanswear
Sportswear
Formalwear
.

Underwear
Hosiery
Knitwear

Textile (yarns, fabrics)
Finishing

Footwear
Handbags (LG)



Each sector is divided into key sub-sectors
that include different product categories,
group of clients, end uses



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Segmenting the fashion system: key variables
MATERIALS and ACTIVITIES: LEATHER, MAN MADE, WOOL,
COTTON, SILK-SPINNING, WEAVING, DYING

M
K
W
young
adult
young
adult
L H M-H M-L M
END USES
TECHNOLOGY
CLIENTS/
CHANNELS
PRICE
External
f
o
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m
a
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c
a
s
u
a
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a
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t
i
v
e
PRODUCT CATEGORY
APPAREL (JACKET, TROUSERS, SHIRTS, JEANS)
ACCESSORIES:
- FOOTWEAR (BOOTS, MOCASSIN, SANDALS)
- BAGS (HANDBAGS, BAGPACK)

Underwear
u
n
d
e
r
w
e
a
r
b
e
a
c
h
w
e
a
r
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Classic Updated Metropolitan Avangarde
RTW designer brands
Couture Maison
Diffusion designer
and industrial brands
Upper Bridge -
industrial brands
Mass - retailers
Market segmentation: Italian Womenswear Positioning Matrix
8-9%
11-12%
80%
Wholesale value
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The Better segment reflects the average market price. In
couture the price could be 10 times higher than the
average price; in PAP is from 5 to 3 times higher; diffusion
3-2 times; bridge from 2 to 1.5 times
Womenswear market:
Couture 1% of the market
PAP and diffusion 8-9%
Bridge 11%
Better 36%
Moderate 44%
The fashion pyramid
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Haute couture
Haute couture is a protected expression used for a limited range
of couture houses, satisfying a set of well-defined criteria in terms
of product and branding, laid down by La Chambre Syndicale de la
Couture, founded in 1868 to coordinate, study and defend the
economic, industrial and commercial interests of this prestigious
industry. Today the Fdration Franaise de la Couture is the French
fashion industry governing body and comprises three separate
entities: La Chambre Syndicale de la Haute Couture, La Chambre
Syndicale de la Mode Masculine and La Chambre syndicale du Prt-
-Porter des Couturiers et des Crateurs de Mode. La Chambre
Syndicale de la Couture is the regulating commission that
determines which fashion design houses are eligible to be true
Haute Couture houses and sets out the conditions that they have
to meet.
(D. Grumbach, Histoire de la Mode, Edition du Regard).

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Membership is still limited and members are bound by rules about the
exhibition of collections, the timing of these, possible copies of their
work and so on. Such houses are listed on a decree issued yearly by a
special commission of the Ministry of the Industry. Coutures strict
admittance rules, which had been laid down in 1945, were finally
revised in 1992 and again in 1997. Designers are required to have a
staff of at least 20 full time technical people in one atelier or
workshop, their salons had to have sufficient capacity for twice-yearly
shows featuring a minimum of 50 hand-sewn garments. Furthermore,
the HC collection had to consist of day as well as evening wear and
had to be shown on a minimum of three models. Needless to say that
the fulfilment of all these criteria contributed to make HC a highly
prestigious and exquisite affair.

Haute couture
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Haute couture (2010)
HC: Adeline Andr, Anne Valrie Hash, Chanel,
Christian Dior, Christian Lacroix, Dominique Sirop,
Franck Sorbier, Givenchy, Jean Paul Gaultier, Maurizio
Galante, Stphane Rolland
CORRESPONDENTS: Elie Saab, Giorgio Armani, Maison
Martin Margiela, Valentino
GUESTS



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Haute couture (January 2012)




ADELINE ANDR ALEXANDRE VAUTHIER
ALEXIS MABILLE ATELIER GUSTAVOLINS
BOUCHRA JARRAR CHANEL
CHRISTIAN DIOR CHRISTOPHE JOSSE
ELIE SAAB FRANCK SORBIER
GIAMBATTISTA VALLI GIORGIO ARMANI PRIV
GIVENCHY IRIS VAN HERPEN
JEAN PAUL GAULTIER JULIEN FOURNI
MAURIZIO GALANTE MAXIME SIMOENS
ON AURA TOUT VU STPHANE ROLLAND
VALENTINO VERSACE
YIQING YIN
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Haute couture (July 2013)
ALEXIS MABILLE ALEXANDRE VAUTHIER
BOUCHRA JARRAR ATELIER GUSTAVOLINS
CHRISTIAN DIOR CHANEL
ELIE SAAB CHRISTOPHE JOSSE
GIAMBATTISTA VALLI FRANCK SORBIER
JEAN PAUL GAULTIER GIORGIO ARMANI PRIV
MAISON MARTIN MARGIELA JULIEN FOURNI
ON AURA TOUT VU VIKTOR&ROLF
VALENTINO RAD HOURANI
YIQING YIN STPHANE ROLLAND
ZUHAIR MURAD VERSACE
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ARMANI PRIVE (GA, A Collezioni, EA, EA7, AX, A
Jeans, A Junior Home)
150 outfits and some dresses and bride dresses (data 2008)
Prices:
daily time = 25-40,000
evening = 60-120,000
bags = 2-17,000
shoes = 4-9,000
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Womenswear vs Menswear business
Fashionability, number of product categories and product
lifecycle are different
In Menswear higher level of vertical integration (production
standardization)
Shopping drivers: emotional vs rational (importance of
service)
The top of the pyramid: Bespoke for Menswear and Designer
brands for Womenswear
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Business segmentation: Italian market (Womenswear)
Classic Contemporary Avantgarde
Price (quality/image)
Chanel
Escada
Versace
Burberry Prorsum
Ferr
Valentino
DSquared
Giorgio Armani
YSL
Dolce&Gabbana
Armani Collezioni
Prada

Trussardi
Max Mara
Diesel
Designer Brands
Designer Brands Diffusion
Qualified Industrial
Brands
Mass Brands
Dior
Fendi
Gucci
Cavalli
Versus
D&G
Just Cavalli
Emporio Armani
Max&Co
Patrizia Pepe
Cheap and Chic
Miu Miu
C.National
Aspesi
Calvin Klein
Promod
LAltra Moda
Polo
Alberta Ferretti
Piazza Sempione
Etro
H&M
Armani Jeans
Fay
Liu Jo
Penny Black
Zara
Motivi
Sisley
Compagnia Italiana
Kookai
Mango Terranova
Stefanel
Benetton
Blunauta
Mass Brands
Conbipel
Caractre
Moschino
Style
CNC
Mass
High Fashion

Guess
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About luxury consumption
The best way to explain demi-couture is to give examples, and New York, which is best known for its ready-to-
wear designers, is a great place to find them.
Zang Toi, renowned for his exuberant designs that are richly textured and always bordering on couture thinks
of himself as a ready-to-wear designer. Yet season after season, his gowns are always seen on the Hollywood
red carpet, a testament to his artistry.
And he does not scrimp either when it comes to his creations. The pink & lacquer red hand loomed knit gowns
with hand embroidered & beaded flowers & butterflies (see photo above) from his Fall 2004 collection took 3
artisans a total of 3 weeks just for the embroidery & beading. It took another 3 days for another artisan to knit
the gown on a hand loomed machine and another day for his studio to do the finishing touches for each of the
gowns.
The gown is still considered ready-to-wear yet it took roughly a month to finish it. An haute couture gown
takes approximately three months to create.
With the price of a Zang Toi demi-couture gown starting at $10,000, it is very affordable taking into account
that it is hand beaded, hand embroidered and hand loomed. In comparison, haute couture gowns start at
$80,000.
Demi-Couture On The Rise
New fashion movement, demi-couture, makes the richly
detailed look of haute couture affordable.
New York Fashion Week Spring 2005
By: Mari Davis

Demi-couture
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Price/
uniqueness
Segmenting luxury
Lifestyle luxury
Series production (limited editions),
quality/style, heritage and brand
identity, selectivity (target, media,
channels)
Accessible luxury
High fashion content, price/quality,
accessibility (target, media,
channels), power communication
Absolute
luxury
Unique pieces, made-to-measure,
handcrafted, precious materials,
exclusivity
In recent years luxury leaders have segmented their offer according to exclusive, selective,
and accessible categories (trading down), with an eye to maximizing growth opportunities
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Same brand
Same company
Different brands
Same company
Roger Vivier
ABSOLUTE
LUXURY
ACCESSIBLE
LUXURY
LIFESTYLE
LUXURY
Brand strategy
Tods
Hogan
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Trading up in the luxury segment: uber premium
Uber premium is everything that is truly out of reach of the vast majority of consumers

Uber premium is increasingly found in services: an exclusive personal experience can provide
for hard-to-imitate uniqueness in ways physical (and uniform) products cannot
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Masstige
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
The blurring of the distinction between the prestige and mass end of the market
across many elements of the marketing mix
A fashion statement that mixes both mass-produced and prestigious clothes
Trading up in the mass market segment: masstige
Accessible
luxury
Price/
uniqueness
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MASSTIGE
Selective
extravagance
Entry lux
Fractional
ownership
Mix and Match
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Swarovski-bejeweled Treo 600, $929
by custom order
P. Diddy Gillette
M3Power, $16,000
Mini I-Pod with crystals by
Crystalmini
Godyva G Collection
chocolates gift box, $350
Mass market goes prestige: product
The ongoing democratization of luxury has created
powerful icons of new-style mass consumption

In a more and more crowded communication scenario
special products are often a way to create right story
angles for the press
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Mass market goes prestige: communication
Masstige brands compete primarily through communication:
elevating product status with the signature of designers and celebrities
choosing top models for testimonials in ad campaigns
creating (artificially) limited editions
occupying high-traffic locations
investing in huge retail space as a sign of visibility
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Jean Paul Gaultiers affordable look for the La Redoute
catalogue
Isaac Mizrahi and Alexander McQueen for Target
Kenzo Yum brand for La
Redoute
Cases in fashion: retailers
Colette for Gap pop up store
Partnership with designers Partnership with celebrities
Partnership with high-end boutiques
Madonna for H&M Jennifer Lopez for Yamamay
Kate Moss for Topshop Penelope and Monica Cruz for Mango
Zuhair Murad and Adam Lippes for Mango 24
Deeper Luxury versus Masstige
Excellent quality, no compromises



Tradition and heritage



Distribution exclusivity



Made-to-measure service

Masstige brands are not luxury because they offer a mass experience, one which is
not unique

Masstige brands can achieve differentiation by focusing on a single feature, but they can
not afford to offer a luxury system, i.e. to act on all fronts simultaneously and
synergistically
vs. mass market brands standardized quality


vs. mass market brands throwaway products



vs. mass market brands availability and accessibility


vs. mass market brands sell yourself formula
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http://www.youtube.com/watch?v=Iq0kGS
W7IAU
Patrizio di Marco Ceo of Gucci
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Take home
Business definition is multilevel (sub sectors, product
categories, price ranges, channels, consumers, styles and end
uses)
A very specialized industry from the point of view of
manufacturing
A world in continuous change
It is difficult to univocally position brands and collections
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