Macro Factors Affecting Business Environment In Australian Fashion Industry Essay.

Industry Background and Major Competitors

Discuss about the Macro Factors Affecting Business Environment.

The Fashion Industry of Australia represents 219 brands and has largely increased the number of responders to the brands in 2015. It is learnt that a number of companies have adopted a high number of actions in order to improve the wages given to the workers in the industry. Apart from this, two thirds of the brands have recorded growth since 2013 and 90% of all grading areas have seen and recorded improvements in the overall functioning. The structure involves a detailed supply chain of actions that include raw materials, input production, final stage production and brand recognition (Nimbalker, Mawson and Cremen, 2015). 

The Australian Laws provide strict Intellectual Property Rights as a tool that is used to protect the creativity of the designers. Apart from these, are a number of laws that have been put into place to help designers work better, provide best quality designs and clothing and protect the originality of designs from being copied. The brands are permitted to promote and sell their products through varied means such as direct selling, social media and collaborations with distributors across the globe. Designers get endorsements from celebrities and have been allowed the recent Bangladesh Accord that can be used to uplift the Bangladesh Industry and manufacturing units so as to reduce the cost of production and contribute to the cost and safety of the workers in these factories. The efforts of the industry have indeed made a large difference in the overall uplift and improvement in Bangladesh (Australian Fashion Chamber, n.d.).

Provide a brief situation analysis of the industry background including size, growth and structure, and identify the major competitors and their market shares.

The fashion world is a big business in Australia. The Australian Fashion Industry, textile, clothing and footwear sums up to a valuation of roughly $3 billion. The retail and wholesale sectors adds up another approximate $7.5 billion. The entire fashion industry in Australia employees over 200,000 individuals. The present day climate of the fashion industry is such that, small boutiques and departmental are facing a setback owing to the high demand for online shopping. However, Australian fashion designers are tougher than almost all other designers coming from various other parts of the world (The Australian, 2012).

The industry is dispersed. Increased costs in the prime locations of the cities in Australia leaves no choice but to move fashion houses to suburbs. Thus brands, designers and design all diversifies and spreads all over the country.  The position of the fashion industry in Australia is still unique with 85% of the business coming from small and medium scaled fashion brands. Across the entire nation small fashion entrepreneurs and designers are fast flourishing. On a global level the position of fashion emerging from Australia has spread widely and effectively (Webster, 2013). Some of the leading fashion brands in the country include Ellery, Romance was Born, Bassike, Jac and Jack, Zimmerman, Dion Lee, Malicevski and Camilla and Marc. 

Macro Environment

Factors which are external in nature to any business enterprise are technically termed as “macro-environmental” factors. These are, by nature, uncontrollable. Neither can an organization directly control it or influence it. However, these are powerful by property. Such external environmental factors comprises of people, groups of people, organizations, agencies, firms, events, conditions, policies, forces etc. With the proper speculation of macro-environmental factors the fashion organizations can make better business strategies and policies for coping with the changed external factors. The following paragraphs outline these factors:-

The fashion industry in Australia is affected by numerous political macro-environmental factors. For example workers rights are one such factor. In the various manufacturing plants, if wages of medical benefits are having a less favorable effect on workers then the union workers can interfere. Such worker picketing affects production. Delays can occur when the designer is working hard to be ready for the Spring or Fall fashion show in time. Problems like trade embargo forces fashion wholesalers for fetching new supplier thus affecting profit and sales.

There can be positive as well as negative effects of the economy on the fashion line. When the economy enhances there is more disposable income in the pockets of people and they indulge more into buying good clothes. Thus fashion industry an increased sale trend. Recessions on the other hand hits the industry negatively where sales become lower significantly and large inventory being stuck.

Fashion industry is a consumer industry and hence is affected by the sociocultural external factors as well. For an instance the fashion designing company might have to design apparels catering to different cultures and societies. Wholesalers and retailers cater to what is in the demand in the society for decades. The consumer group has a change in their fashion preferences as they hit their 40s and 50s. All such factors affect the industry in Australia.

Resource availability, demand of fashion range and clothes production all are technical macro environmental factors affecting the fashion industry. If suppose, a certain material is scarce then the entire clothing range suffers. They might have to use a substitute. The price of certain material might increase as well due to the shortage of such products (Suttle, 2014).

Some of the various studies related to people comes under the subject demography. There are many demographic factors which affects the fashion industry as these are relevant to the business for implementing or formulating business policies. Factors such as size of population, growth rate, age, sex, size of family, life expectancy, status as per occupation ,gender, pattern of employment etc all have an effect for demand for various fashion  goods (Aayush, 2012).

Political Factors

The demographic segmentation of any industry primarily includes the age and life cycle, gender, income, generation and social class factors (Larsen, 2010). With regards to the fashion industry of Australia, the brands cater to all genders. Any fashion industry cannot restrict itself to only one gender and hence clothing for all genders are designed and marketed well. When it comes to income groups, although the most popular brands cater to the high income groups; however, there is a large market for middle income and low income group individuals as well. Furthermore, clothing and fashionable clothes are available for individuals who belong to any generation. Whether it is infants, toddlers, children, adults, teenagers or elderly people, clothing can be availed at stores very easily. There are no evident social class factors that disturb the overall functioning of the industry.

Geographical segmentation on the other hand focuses on the diversification of customers into segments based on the different countries, states, regions, neighborhoods, cities etc (Larsen, 2010). Since the analysis is based on the fashion industry of Australia as a whole, it can be stated that the diversification of the fashion industry has not happened as yet. The major brands are restricting themselves to the major metropolitan cities; however, local brands tend to cater to small cities and localities.

Discussing the psychographic segmentation, it is basically based on two primary factors that include personality profiles and lifestyle profiles. The psychographic segmentation is adopted when the geographic and demographic factors are not sufficient to understand the perspective of the people or the potential of a company or industry in the market. It divides individuals on the basis of attitudes, interest and opinions largely (Larsen, 2010). With regards to the Australian Fashion Industry, it can be concluded that every individual has a different perspective when it comes to clothing. While some women might like dresses, the others might go for professional clothing largely. Hence, the psychographic characteristics of the industry are vague and cannot be graphed.

The Behavioral Segmentation on the other hand discusses the response received by the company or industry on the products or services provided by the potential consumers. Some of the behavioral factors include occasions, benefits, user status and rate, loyalty factors and attitudes (Larsen, 2010). Since the Australian Fashion Industry has grown to a large extent since its inception, it can be concluded that the industry has had a fair response. Though a lot of Australians are not starting to focus more on savings rather than spending; however, the fashion industry and the brands have recorded much higher sales as compared to records in the year 2013.

Economic Factors

Some controllable tools and tactics for marketing is technically termed as marketing mix which companies uses for producing desirable responses from their respective target industries. These are all those processes the company can use for having an influence over demand generation for their product or service. Marketing mix is an efficient tool helping entrepreneurs and marketers for years in the planning and execution of their marketing strategies. Today we will be discussing and comparing marketing mix of two different clothing brands based in Australia. These are AussieBum men underwear manufacturing company and Billabong sports clothing lines.

The company AussieBum deals in the manufacture of comfortable men undergarments. It was first established in the year 2001. The director of the company Sean Ashby initially launched this innerwear clothing line for giving swimwear style and grace. The brand started small at a lounge room in the suburbs of Sidney. By the year 2007 over 1000 orders started pooling in a day from varied destinations across the globe. Guyon Holland joined the company at around 2009 and from then there has been no looking back. By breaking classical rules and norms the company today stands high in the names of similar brands. Since 2001 onwards AussieBum witnessed a 20% growth in its each quarter. Today it is a multimillion dollar organization employing over 35 employees producing over 150 unique products for its strong user base within and outside Australia. We will discuss the marketing strategy undertaken by the brand.

Product –

• The brand uses its online store and offers 150 products.
• The AussieBum product line offers make underwear, swimwear, sportswear, leisurewear, towels, beanies and belts.
• It can be said that its primary USP product is promoted under the name Aussie cossie swimwear style range of years 1980s.
• The unique factor of their products is the use of color. It is the belief of Guyon Hollan, the brand’s co-director that the brand leads other names in the market in relation to use of colors in male underwear designs.
• Technology has a crucial role to play in the designing, manufacturing and promotion of AussieBum. The brand proudly states to be uses latest polymers and fibres like bamboo fibre based fabrics and the famous Micro Modal beechwood. The banana range promotes eco-friendly use of fibre based fabrics. In this ecofriendly banana range they use 27% banana fibre, 64% of cotton and a minimum of 9% use of Lycra.
• Some of the other renowned products are “Essence” which iuses fabrics with vitamin infusion possible in the skin when worn., “Wonderjock”, an inspiration made from the famous Wonderbra women range of innerwears, “Flame”, “Storm”, “Classic” and “Loose”.

Price – There is a cost involved in manufacturing products based in Australia. The primary of such costs is higher than that would be if overseas outsourcing was adopted. However, AussieBum understands the advantages of Australian production. The brand hnce never competes on price but on quality. Their objective is to provide quality products which acts as a value for money for the user. So almost 60% of their price is due to their quality. After years today the brand has a huge pool of happy repeat customers.

Place – The distribution strategy of AussieBun was simple in the beginning. Only online was the medium through which products were accessed, ordered and were shipped the day following. With the growth of the business and demand today other distribution channels are also used. My Space and Facebook are the two strong social networking medium used by the brand.  Today the company has retails in Harrods, Selfridges and House of Fraser in UK, at Universal Gear in NYC and at KaDeWe in Berlin and Harvey Nicholls located in Dibai. ASOS.com is the brands online medium to reach out to the world customers.

Sociocultural Factors

Promotion

• The branding tactics has targeted a particular male interest which is their base product range
• Their iconic images help promote their goods uniquely. Fir example the “Shearing the Rams” painting promotion of AusseBum.
• Celebrities and wel known faces promote the product. Daniel Radcliffe, Ewan MrGregor and Bully Connelly are some such names.
• Australian images and locations are all used for promotion of the brand
• The brand also sponsors some of the famous surf competitions and events in Australia. (Wiley, 2015)

Billabong Austrlaian brand was launched in the year 1973. The name of the founders is Gordon and Rena Merchant. The primary idea of these people was to create clothing range for surfers for wearing. Billabong sponsored contests like surfing and several other events like these.  Today over 100 countries the brand sells its products. In recent times the brand witnessed some underperformance and has taken up some marketing strategies to overcome it.

Product- Clothing range relates to sports at Billabong and these sportswear are extremely comfortable and reasonable. Target customers are of all ages. Every store of Billabong has variety of sports wear collections catering particularly to people from the surfing field. All the genders are catered here. The various products are T-shorts, Caps, Boards shorts, Accessories, Bags, Wallets, Belts, Sunglasses, Slippers etc.

Price – Prices of Billabong products are kept at an affordable and reasonable rate. The quality of the products is kept in compliance with the international product standards.

Place- The product if found in the best store in the world which is the Dubai mall. The Dubai mall is the most unique mall to attract global customers all under the one roof. The brand has chosen widely as it is a place where no one can get lost. The mall is centrally located. The more approachable the shop is the more are the chances of potential sale generation.

Promotion-In numerous ways the store promotes its products to the customers. Email registered customers for an example gets offers and latest updates about products in sms of customers.  The brand also takes part in events like annual summer festival of Dubai. Such events give the brand an exposure (Lyaliue, 2009).

The marketing mix and strategies undertaken by the brands are right and I agree with it. Successful marketing does not happen by chance.  Familiarizing with the product even before knowing the customer is of utmost importance. When correctly implemented it makes small investment brands like AussieBum and Billabong rise high and be successful.

Clothing is one thing that is bought without a specific occasion in mind. Ladies especially like shopping at any time of the day or any day of the month. Parents can never know when their child might need a new set of clothes for an occasion. Apart from this, clothing indeed offers a number of benefits to the people at large. It has not just become a status symbol today; however, it has also become the maximum used product in the market. It is known for a fact that if a person likes clothes of a particular store, the loyalty factor remains intact for generations together. Lastly, the attitude of the customers towards clothing is always positive in any country and in any industry.

References

Aayush. (2012). Macro factors affecting business environment. Australian Fashion Chamber. (n.d.). Fashion Law Handbook. Keys to Fashion Industry Success.

Larsen, N. (2010). Market Segmentation: A Framework for Determining the Right Target Customers. Aarhus School of Business.

Lyaliue,. (2009). Promotion - bu01billabong. Bu01billabong.wikidot.com. Retrieved from: https://bu01billabong.wikidot.com/promotion

Nimbalker, G., Mawson, J. and Cremen, C. (2015). The Australian Fashion Report 2015. Baptist World Aid Australia.

The Australian, (2012). The Australian fashion industry is adapting to tough times. Retrieved from: https://www.theaustralian.com.au/life/wish/a-stitch-in-time/story-e6frg8io-1226258017879

Suttle, R. (2014). The Macroenvironmental Factors Affecting the Clothing Industry. Retrieved from:https://smallbusiness.chron.com/macroenvironmental-factors-affecting-clothing-industry-37254.html

Webster, K. (2013). Global shift: Australian fashion's coming of age. Available at: https://theconversation.com/global-shift-australian-fashions-coming-of-age-19237

Wiley, J. (2015). Case Study AussieBum. concord-h.schools.nsw.edu.au. Retrieved from: https://www.concord-h.schools.nsw.edu.au/documents/447809/453821/AUSSIE%20BUMS.pdf