FASHION MARKETING AND ERCHANDISING
This caption does not touched retailing or this has the following sub -divisions.
Retailing is defined as businesses primarily engaged in the final sale of tangible goods to individual, ultimate consumers and householders. Of course customer service is also an important component of merchandise retailing.
We are impressed by the growth, the real growth, of retail business over the years. Retail sales have advanced substantially. Retail sales per capita are adjusted for inflation; in short the actual amount of goods purchased per ultimate consumer has grown steadily since at least 1948.
This growth occured in spite of an increase in recent decades in the share of consumer income directed towards the purchase of services rather than goods. As already noted the census defines retailing as the business of selling goods. Any increase in the service share, will have negative effects, on the census retail sales figures.
Not only the American retailing system has grown, larger over the years, it seems to have grown more complex. It probably contains more formats, and perhaps more variations within formats, than ever before. Although two basic forces, one external and one internal to retailing, account for these changes, they probably have conflicting implications for the future.
The external factor is the level of the economy. A high level economy will have a more elaborate pattern of goods and services than a low level one.
The growth in the retail volume has had important and beneficial implications for all types of retailers. Even the so called single store 'mom and pop' retailer, has gained in actual volume over the years, although at a much lower rate than the multiunit chain store retailer. Consequently, single unit enterprise market share has steadily declined. But the total business has grown. Stores of this type will have to find a special location merchandise, or service niche in which to prosper.
There are several factors that suggest, continuation of multiunit market share growth during the foreseeable future. Technological improvement facilitates the type of centralized management that char-acterizes these organizations. The economies of scale that results from increasing store count and the ability to divide tasks between store operations and central merchandising put them in very powerful positions vis-�-vis both their customer and their suppliers.
Costing is the process of estimating the total resource investment required to merchandise, pro-duce, and market a product. Product costs accumulate from all functional divisions of a company.
Costs have a major impact on a firm's success and thus must be managed. The key to successful cost control is information and the ability to use that information to manage a firm.
Cost of goods sold, represents all expenditures associated with the manufacture of the product line including material costs, labour costs, and factory and administrative overhead expenses.
This process consists of the following:
Manufacturing costs include all the expenditures that are incurred in making a finished product available. These costs are summarized as cost of goods sold on the income statement.
Direct materials costs include fabric, thread, trim, and findings used in garments.
Direct labour costs include wages of employees who work on the product in the plant, including cutters, sewers and finishers. Direct materials and labour are direct variable costs. The cost varies with the quantity of goods produced.
Overhead costs consist of both non variable and variable indirect manufacturing costs. Over-head costs are unique to each firm, but they generally are subdivided into (1) indirect labour, (2) occupancy, and (3) other overhead. Indirect labour costs consist of service personnel, quality control, material handlers, mechanics and maintenance workers, and security. The work of these individuals is essential to efficient manufacturing of a product line. But none of them work directly on the product. Nonvariable or occupancy overhead costs include rent, depreciation, insurance, property taxes ,and security .Examples of variable overhead costs are machine parts and repairs, marker papers, and needles. Other overhead costs include materials management, machinery and equipment costs, and cost of compliance with regulations.
Managers use costing to determine (1) the product ability of a design within an established price range, (2) the profit potential in a design, and (3) whether a design should be added to the line.
Costing may be done at several different stages throughout manufacturing: (1) preliminary or precosting is done during the creative design phase of product development before samples are made;
(2) cost estimation is done prior to line adoption; (3) detailed costing is done during the technical design phase prior to production; and (4) actual costs are determined during and following production.
Preliminary costing is a rough estimate of costs of producing a particular style. Fabric type, yard-age, and quantities are estimated, as are trims and other materials costs. Labour costs are estimated based on production of similar styles.
Cost estimating determines the expected investment in materials, direct labour, and overhead required to produce a single unit of a style. Specific materials have been determined, and fabric yardage requirements must be refined. Labour costs are estimated based on the time required to produce a style and the average hourly wage.
DETAILED COSTING FOR TECHNICAL DESIGN
Detailed costing is done after styles are adopted into the line and refined for production. It pro-vides the opportunity to pick up any cost that may have been missed during cost estimating, such as an overlooked label or an extra button. It also picks up changes that were made by technical designers, such as fit changes that reduced the amount of fabric needed or a complex operation that may have een simplified.
Actual costs are determined by the collection of data from production. Once a style reaches the sewing floor, an engineer may find some rates are too tight and that more time is needed to complete specific procedures. If a rate adjustment is needed, it will inevitably affect costs. Actual costs must be monitored throughout production.