Copyright Goodheart-Willcox Co., Inc.
74 Fashion Marketing & Merchandising
Market Growth and Share
All parts of the industry want market growth. Market growth is an increase in
the size of the entire market; more products are sold and there are higher total
dollars of sales. This usually happens because of population growth and/or
good economic times.
Additionally, companies within the industry strive to have growth of their
own market share. Market share is the part of the total market controlled e
by a fi rm. It is usually computed by sales, and indi- fi
cated as a percentage in relation to the total industry,
as in the size of a pie wedge, Figure 5.1. When suc-
cessful companies gain market share, that amount of
increase is lost by other combined companies that sell
to that market.
Stiff competition results between companies trying
to increase their market share. In addition, the com-
pany with the largest market share usually has the low-
est per-item costs because its total costs spread across
more products (economies of scale). Lower costs usu-
ally lead to lower selling prices and even more sales,
increasing the market share even more and forcing
less successful competitors out of the market. Thus,
companies in all industries continually try to increase
their market share.
Market Segmentation
Market segmentation involves dividing the total mar-
ket into smaller groups that contain similar character-
istics. These are market segments. Since no business
is able to serve all consumers in a market, each busi-
ness must decide which customers it can serve best to
achieve the highest success. The company identifies the customers to whom fi
it can sell the most and make the best profit. fi Target marketing defines g the fi
specialized niche of the market to which the company wishes to make its
greatest appeal.
Each fashion company should defi its target market well. The company fine
should make or carry products specifi directed to customers in its one or fically
more identifi market segments. For instance, a producer of children’s wear fied
might make colorful playsuits with large pockets liked by children (one target
market) that can also stand up to tough wear and many launderings to satisfy
the parents (another target market).
In addition to the right products, each firm should develop communica- fi
tions and services that help to sell and maintain the patronage of their selected
market sectors. Retailers should aim their location, atmosphere, image, and
policies at the desired level of style, quality, and price to correspond with the
character of the segmented market of consumers.
Mary G. Wolfe
Figure 5.1
If the market for an entire industry grows,
there is market growth (A). If a company’s percentage of a
particular market becomes larger, that fi rm has growth of its
market share (B).
B
A A
Growth in
market share =
a larger percentage
of the total market
Market growth gr h = = increased s ed d
dema mand for fo produc od od uc uct s of
the e e en tire r r e indust e i du str str y y
Market Growth and Share
Te Tex tile/apparel rel
m m mar ket ket et