Question

Imagine that you are a member of management at a successful high-end adult clothing and accessories retailer that is considering launching an exclusive line of high-end children's clothing. This is a new venture for your company, which has until now been focused completely on the adult market. Before committing resources to fully developing a marketing plan for the proposed children's clothing line, you have called for research that will help you better understand customers' wants and needs as well as the competitive environment.

In an essay:

1. Describe the issues that the market research should explore. What would you want to know?
2. Explain why this information would be needed to help develop a marketing plan for the proposed line of high-end children's clothing. How would this information be used to make better decisions?

To ensure immediate feedback, please submit a response between 100 and 1000 words. Essay length alone will not necessarily result in a high or low score.

Answer 1

a) The Issues for Starting a Children's Clothing Line which should be addressed through Market Research are as follows:

- Barrier to Entry:

Entrepreneurs hoping to enter the children's clothing industry need more than just great designs. Starting a line of clothes requires finding a wholesaler of fabric and sewing factories for large-scale production. Opening up a storefront to distribute or sell children's wear adds other obstacles. For instance, the owner needs financial backing and a marketing plan. A new store also need to differentiate itself from the big players in the market, such as Gymboree and Toys R Us.

- Location

The income of the surrounding community can impact a children's clothing store's viability in the market. Middle-class communities usually purchase children's clothes from discount retailers like Target and Wal-Mart. Parents that come from old money usually shop at stores with a little better name recognition, such as The Gap or TJ Maxx. Communities with lots of young, wealthy individuals often shop for high-end children's clothing, such as Calvin Klein and Jessica McClintock, according to "Entrepreneur" magazine. The Location for Adult Clothing Line changes significantly as compared to that of Children's.

- Trends:

Like any fashion industry, trends in children's clothing can come and go overnight. Animal prints and other designs often fall out of demand due to seasonal changes. Thus, ordering too much of one style of children's wear can lead to low inventory turnover, which might require offering deep discounts to eliminate it from the stockroom. Achieving a good turnover rate requires a mix of the latest designs and staples of children's clothing, such as light blue, pink and green.

- Considerations:

Despite its negatives, IBISWorld listed children's clothing as the safest specialty clothing industry in its 2010 report because any family with a child needs this product. However, entrepreneurs must do their homework before starting a children's clothing business. Clothing trade associations, such as the American Apparel & Footwear Association, can help connect businesses with suppliers or offer general advice on starting a store. Other small-business children's clothing stores might offer advice on the challenges to entering this market.

b) How this information can be used to make better decisions:

Before launching any new segment, it’s imperative you do your research. If you want to be a successful in establishing new line of business, you have to put together your SWOT (strengths, weaknesses, opportunities and threats) analysis, business plan, and marketing plan – none of which can be done without reliable and professional market research.

If you are looking to grow your business, find out the mindset of your customers or potential customers, look for new revenue streams, growth projections, potential customers.

1. SWOT Analysis

Strengths, weaknesses, opportunities and threats – information you need to know to succeed. Your strengths are what give you a leg up over other businesses. Weaknesses are the exact opposite – your disadvantages as a company relative to others. Opportunities are components that your business can use to its advantage, while threats could put your business in trouble. Determine where your business is today and where it could be in the future. Market research will provide you with the information necessary to determine these factors.

2. Business Plan

Outline the next 3-5 years for your business. A business plan includes information about your competitors, costs, plans for growth, target market and an executive summary, plus more information. This is where you will also include your SWOT analysis. A guideline for writing a business plan can be found on SBA.gov. Market research reports will play a big role in your business plan. Data collected from reports will help contribute to information about competitors, plans for growth, your target market and more.

3. Marketing

First and foremost, you have to decide what your marketing purpose and budget are for your clothing line. As described in one of our previous posts, "5 Steps for Using Market Research to Advertise Your Product," your purpose is all about your intention of advertising your product. Networking is essential in any marketing plan. As smallbusiness.chron.com explains, to start marketing, you need to compile a contact list of fashion buyers, media editors, merchandisers, boutique owners and clothing distributors. These will be the people to whom you send invitations for your shows, as well as your lines sheets, look-book and press releases. Start making pieces from your first collection for a look-book and line sheet. Market research will be helpful when developing line sheets to help determine recommended retail prices or best sellers. Researching competitors will influence your decision on pricing and what to sell.

In addition to your competitors, you also need to understand your target market i.e. Parents' choice and Understanding and learning behaviors, when, where and how to reach them through marketing will be critical to achieving success. Once you have learned the behaviors of your target market, consider your budget and organize the most effective advertising campaign.

No matter where you may be in the process of launching childrens' clothingline, whether you have already started the process, or are just starting out, even well after your company is established – market research is necessary every step of the way. The apparel industry is constantly changing with new trends, and you never want to fall behind or you’ll find yourself becoming a part of that 80%.