The Business of Textile and Fashion 7.5 ECTS

Ladok code: 51EI01

The exam is given to: Exchange students Textile Management VT16 Exam Code:

Date of exam: 2016-03-23 Time: 09.00-13.00 Means of assistance: calculator

Total amount of point on exam: 60

Requirements for grading: A 53

B 48

C 42

D 36

E 30

FX Below 30

Additional information: Question 1-23 should be answered with an X in the table on page one. Question 24-32 should be answered in the space below each question. Try to limit your use of extra sheets but if you need to use them it is ok, don’t forget to write your exam code on each sheet you hand in. No names!!!

Next re-exam date: May 19th 2016

The results are for the most part posted within three weeks after the exam. Good Luck! Katrin 0709-665594

A B C

Q 1

Q 2

Q 3

Q 4

Q 5

Q 6

Q 7

Q 8

Q 9

Q 10

Q 11

Q 12

Q 13

Q 14

Q 15

Q 16

Q 17

Q 18

Q 19

Q 20

Q 21

Q 22

Q 23

1. What are the characteristics of the ready-to-wear industry? (1 mark)

A. The industry is characterized by a number of large corporations that operates though a vertically

integrated marketing channel from processing the fiber to finishing the garment

B. The industry is characterized by mass production techniques, standardized sizes and a diversity

of companies

C. The industry is characterized by a monopoly of chain stores, fast fashion supply chains and

standardized sizes

2. Which statement is correct regarding an Branded Marketer (1 mark)

A. A company that buys or sells a brand on a specific market, it has no product development, no

production and no own stores

B. A company that carries inventory for ready-made shipment to retailers and sells only through whole sale business

C. A company that develops and produces its own brand, produces with outsourced production and has its own retail stores or sells to other retailers through whole sale business

3. In fashion retailing one of the most critical elements that affect the success of a seasons line is normally: (1 mark)

A. Forecasting

B. Marketing

C. Pricing

4. Which statement is correct regarding a fashion company’s decision to integrate forward in the value chain? (1 mark)

A. The company wants to create a private label to gain partial or full control over the manufacture of the product

B. The company wants to find an easier and faster way to produce the product

C. The retailer wants to gain partial or full control over the communication to the end consumer

5. Which statement is correct regarding what SKU is? (1 mark)

A. The name of the process of disassembling stacked cut fabric pieces and reassembling them grouped by garment size, color and quantity

B. A computer program whereby retail sales/stockout data are reviews by the manufacture and replenishment are ordered as often as required

C. A number or a code used to identify each distinct product and service that can be purchases and systematically tracked

6. There is an expression in the fashion business –“you are only as good as your last line” which means that the company’s success is measured by how well the previous season’s line is sold. How can it be measured? (1 mark)

A. Number of items shipped to retail stores

B. Sell-through at retail level

C. The mark-up price on the items

7. What does the abbreviation CMT stand for? (1 mark)

A. Consumer Marketing Trend

B. Corporate Management Tool

C. Cut Make Trim

8. Which statement is correct regarding what a counter sample is? (1 mark)

A. Sample for styling and fitting purpose. It should be made in correct quality, stuk and wash and in

similar or correct color. It should also be made in similar artwork, such as check, stripe, print etc

B. Sample sewn by the supplier and send to the apparel company/production office for approval before production starts. Should represent bulk production and quality test will be performed on this sample

C. Sample in each size or a jump size set. This sample should be made in correct quality or in a quality similar to bulk fabric

9. Which statement is correct regarding the definition of “market weeks” (1 mark)

A. Are the times of the year when fashion designers, brands or design houses show their collections and latest trends on catwalks in the main fashion capitals like New York

B. Are the times of the year when wholesalers and buyers meet at showrooms or trade shows to sell and buy the seasonal fashion lines

C. Are the time of year when special merchandise are being sent to stores for specific marketing campaigns

10. Which statement is correct regarding a Trunk Show? (1 mark)

A. It is a specialty event when a designer’s or a whole sale company brings its entire collection to a retail store for a day or two for customers to view

B. It is the most elaborate type of fashion shows which requires music, choreography, scripts and models

C. It is a specialty event offered only by upscale fashion emporiums where designers meet to show and discuss their latest collections

11. Which statement is correct regarding samples? (1 mark)

A. Making samples is an inexpensive process and will take much less time to produce than the mass-produced final version

B. Product developing companies and retailers rely heavily on their suppliers to perfect and develop samples for them, it’s an expensive and sometimes long process

C. All fashion companies produce their samples in-house before they are sent to manufactures and suppliers

12. Which country is considered to be the global “hub” for trims and accessories? (1 mark)

A. Bangladesh

B. Turkey

C. China

13. What is meant with the by the term upcycling? (1 mark)

A. It is the practice of using clothing that was headed for landfills and turning it into salable fashion.

B. The process of making sure all products are up to standard

C. It’s a termed used when fashion companies in the ready-to-wear industry starts to produce

more fashionable and “high-end” clothing

14. What statement is correct regarding target price?: (1 mark)

A. It is the full price that a product is sold to at in the retail store to the end consumer

B. Once all costs have been assessed, the manufacture gives the buyer a target price. The target price is the difference between the manufacture cost and the wholesale price

C. It is the price indicated from buyer to the manufacture based on the buying company’s

profitability

15. What statement is correct regarding the term ”value driver” that is used by many fashion

companies? (1 mark)

A. It is a term used to indicate the most important thing that gives a style the correct look and right appearance in order to make it valuable for customers

B. It is a term on the person who makes predictions long before the designer and sets out a path, “drives” the process of creating a new collection

C. It’s a term used to describe a garment’s process from raw material to finished product, in each step of process value is added to the product

16. Which statement is correct regarding what an assortments broadness mean: (1 mark)

A. It means how many different categories are included in the overall assortment

B. It means how many different styles there are in each category

C. It means how many different colors and sizes are included in each category

17. What kind of sourcing concept is this? (1 mark)

The company here in Sweden makes specifications of the product and sends it to the production company in Bangladesh. The production company buys all materials trimmings and attachments and deliver the ready-made product to the company in Sweden. A. CMT

B. Full Price

C. Private label

18. Sometimes you hear about companies which has a lead-time on only 3 weeks, from ”design

to the retail shelf”. Which statement is correct or best fitting regarding the companies sourcing process? (1 mark)

A. The material supplier/producer has to be located in the same country and the fabric is always

being shipped by air to the garment factory

B. The material should be produced before the production starts and the stock/supplier has to be located in the same part of the world as the retail store

C. The design has to be produced in advanced and this can only be applied to knitted garments

19. Selling price for a T-shirt is 55 SEK. The margin is 23%. How much is the mark-up? (1 mark)

A. 12,6 kr

B. 32,6 kr

C. 47,2 kr

20. Which statement is correct regarding a subcontract supplier: (1 mark) A. A subcontact supplier has the garment production process is ’in-house’ but fabrics are sourced

from out-side

B. A subcontract suppliers is handling order, price, sampling and export but doesn’t produce

C. A subcontract supplier buys all materials trimmings and attachments, produce and deliver the ready-made product to the buyer

21. Which statement is correct regarding the definition of a company that can be classified as Fashion Leaders (1 mark)

A. It’s a company that produces knock-offs or similar designs of fashion that has received media attention. Catwalk trends are translated to high street

B. A company run by “top-end” designers who are famous for their previous work at a design house or companies with creative business models

C. Companies that look at successful innovative trends from other companies for their own target market. Communicating the design is important

22. In the article about Burberry’s business model you can read about the company’s attempt to re-position Burberry as a relevant, contemporary and also credible high fashion brand? Which statement is correct regarding what they did to re-position the brand? (1 mark)

A. For product sourcing, Burberry increased its reliance upon licensees for product design and manufacture

B. Burberry launched a slightly different advertising strategy that sought to change perceptions of Burberry

C. Burberry restructured its sourcing and pricing and eliminated unnecessary product variation

23. A part from ‘Key activites and ‘key resourses’ which other building blocks forms the resource-

drive in Oster Walder’s Business Model Canvas?

A. Revenue Streams

B. Customer Relationships

C. Key Partners

24. According to the book The Business of Fashion, creating an apparel line from the inception of a line until it reaches the ultimate end consumer involve a series of steps which is also illustrated in the so called “ Textile Management Fashion Loop” below.

a. Name and briefly explain each of the 8 step in the process in the correct order (4 marks)

b. What is the difference between the flow “A” and “B” in the model? Explain and give an example of a company that operates with a flow like A and one with B. (2 marks)

c. Describe what the green arrow indicates and name four components should be represented in the green arrow (2 marks)

25. It is important to differentiate the various businesses or functions in the fashion and textile industry. Fill in the gaps to describe the three different marketing channels in the industry. (3 marks)

Direct Marketing Channel

_______________________ __________________________

Limited Marketing Channel

______________________ _______________________ ____________________

Extended Marketing Channel

______________________ ____________________ ___________________

______________________

26. Name 6 aspects that must be considered in assortment planning of a clothing collection. (3 marks)

27. Supplier selection can be done in different steps and with different methods. Mention 3 methods

which can be used to evaluate a supplier. (3 marks)

28. Quality control is an important part of the production stage. A factory can conduct quality control

in different stages. Name 6 different stages under the production that it can be made.

(3 marks)

29. The decision to outsource operations involves a great deal of investigation by a fashion company. Many areas have to be research before entering into a contractual agreement with an outsourcing partner. Describe 4 areas of concern that will need to be in investigated. (4 marks)

30. The initial product cost of goods for a suit is 475 SEK. The selling price is 2135 SEK. Calculate the margin percentage. (2 marks)

31. You are working as buyer at a large retail chain in Sweden that has approximately 500 stores. The company produces and sells affordable women’s fashion with a sustainable thinking as a part of their business model. You are going to order 7000 pair of jeans (one style), 15 000 basic T-shirts in 4 different colors as well as 5000 heavy knitted sweaters (one color) for the fall 2016 season. One of the orders should be delivered within 120 days, one 90 and one less than 60 days. From which country would you place your different orders and how would you ship the order. Motivate each answer thoroughly. (6 marks)

Country of origin Cert. Pref. duty % Licence Country of origin Cert. Pref. duty % Licence

EU Supp declar. 0 None Turkey- TR Atr + Supp.decl* 0 None

China- CN None 12 (Ord.duty) None Vietnam (VN) GSP 9,6 None

India- IN GSP 9,6 None Hong Kong-HK None 12 Ord.duty None

Thailand (TH) GSP 9,6 None Sri Lanka-LK GSP 9,6 None

Bangladesh-BD GSP 0 None South Korea-KR Export.decl. 0 None

Pakistan-PK GSP 0 None Indonesia-ID GSP 9,6 None

Myanmar/Burma GSP 0 None Cambodia-KH GSP 0 None

32. You are working at a fashion retail company and you got the assignment by the head of marketing to analyze the company’s retail outlets. The purpose is to streamline the marketing operations. Motivate and describe the items/methods you can use to make such a retail analysis. (5 marks)