Unit 2: Product, pricing, distribution & promotion
Survey of Apparel Marketing and Merchandising notes · PTU syllabus (BSTD 302-20)
On this page
Unit summary
Product, price, place and promotion decisions shape every fashion collection. This unit covers the product mix, product life cycle, new product development, pricing objectives and methods, distribution channels and the promotion mix.
After this unit you can
- Describe the product mix and fashion life cycles
- Explain new product development
- Choose pricing methods
- Design distribution and promotion
PTU syllabus topics
- Product mix
- product life cycle
- new product development
- pricing objectives and methods
- distribution channel types and levels
- promotion mix
- 1. Introduction: Trendsetters adopt
- 2. Rise: Early majority picks it up
- 3. Peak: Mass market
- 4. Decline: Markdowns, clearance
- 5. Obsolescence: Out of fashion
Topic 1
Product mix
- Product mix (portfolio): all product lines a company sells — width (number of lines: menswear, womenswear, kidswear), length (total items), depth (variants of each item — sizes, colours) and consistency.
Topic 2
Product life cycle (PLC)
- 1. Introduction: Low sales, high costs, build awareness
- 2. Growth: Rapid sales growth, profits rise
- 3. Maturity: Sales peak, competition intense
- 4. Decline: Sales fall; modify, harvest or drop
| Stage | Strategy |
|---|---|
| Introduction | Build awareness, skimming or penetration pricing, selective distribution |
| Growth | Improve quality, add features, wider distribution |
| Maturity | Modify market, product or mix; price competition |
| Decline | Cut costs, harvest, or discontinue |
Fad
Very short; sudden rise and fall
Viral prints
Fashion trend
One or a few seasons
Wide-leg trousers
Classic
Long-lasting
White shirt, denim jeans, trench coat
Topic 3
New product development
A product is anything offered to a market for attention, acquisition, use or consumption that satisfies a want or need. Levels: core benefit, actual product (features, design, brand, packaging) and augmented product (installation, warranty, after-sales service).
- 1
Idea generation
- 2
Idea screening
- 3
Concept development and testing
- 4
Marketing strategy development
- 5
Business analysis
- 6
Product development
- 7
Test marketing
- 8
Commercialisation
Topic 4
Pricing objectives and methods
Objectives: survival, profit maximisation, market-share leadership, quality leadership and return on investment.
Cost-based
Cost-plus, mark-up, target return
Demand/value-based
Perceived value, what customers will pay
Competition-based
Going-rate, sealed-bid
New product strategies
Skimming (high) or penetration (low)
Product-mix pricing
Product line, optional, captive, bundle pricing
Adjustment strategies
Discounts, psychological (₹999), promotional, geographical pricing
Cost-plus
Price = cost + markup
Keystone markup
Retail price = 2 × wholesale cost
Markup on retail
(Retail − cost) ÷ retail × 100
Markdown
Reduction from original price for clearance
Example
A kurta costs ₹500 to produce; wholesale price ₹800; keystone retail price ₹1,600; markup on retail = (1,600 − 800) ÷ 1,600 = 50%.
Topic 5
Distribution channel types and levels
A distribution (marketing) channel is a set of interdependent organisations that make a product available to consumers.
Zero-level (direct)
Manufacturer → consumer
D2C websites, Amway
One-level
Manufacturer → retailer → consumer
Cars through dealers
Two-level
Manufacturer → wholesaler → retailer → consumer
FMCG products
Three-level
Manufacturer → agent → wholesaler → retailer → consumer
Rural FMCG distribution
Functions of intermediaries: information, promotion, contact, matching, negotiation, physical distribution, financing and risk-taking.
- 1Zero level
Brand to consumer — own stores, website
- 2One level
Brand → retailer → consumer — department stores, marketplaces
- 3Two level
Brand → wholesaler → retailer → consumer
- 4Omnichannel
Stores, website, app and marketplaces integrated
Topic 6
Promotion mix
Advertising
Paid, non-personal, mass reach
Personal selling
Face-to-face persuasion
Sales promotion
Short-term incentives: coupons, discounts, contests
Public relations
Building goodwill and image
Direct and digital marketing
Email, social media, targeted messages
Integrated marketing communications (IMC) coordinates all promotional tools so that they deliver a clear, consistent and compelling message about the company and its brands.
- 1
Identify the target audience
- 2
Set objectives
Awareness, knowledge, liking, preference, conviction, purchase
- 3
Design the message
AIDA: attention, interest, desire, action
- 4
Choose channels
- 5
Set the budget
- 6
Measure results
Key terms
- Product mix
- All product lines and items a company offers
- Fad
- Very short-lived fashion
- Keystone markup
- Doubling the wholesale cost to set retail price
- Distribution channel
- Route from producer to consumer
- Promotion mix
- Advertising, sales promotion, personal selling, PR and direct marketing
Quick revision
- Width, length, depth, consistency.
- PLC stages; fad, trend, classic.
- NPD stages.
- Pricing objectives and methods; keystone; markdowns.
- Channel levels; omnichannel; promotion mix and IMC.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.Define product mix width and depth.
- Q2.Distinguish a fad and a classic.
- Q3.Name the stages of the PLC.
- Q4.What is keystone pricing?
- Q5.What is a zero-level channel?
- Q6.Name the elements of the promotion mix.
Long-answer questions
- Q1.Explain the product life cycle and fashion cycles.
- Q2.Describe new product development for apparel.
- Q3.Explain pricing methods with examples.
- Q4.Explain distribution channels and the promotion mix.
Stuck on this unit?
Message SBS on WhatsApp for help with Survey of Apparel Marketing and Merchandising, or to ask about studying B.Sc Textile at Synetic.