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ASSIGNMENT

ON
Topic: The Impact of Environmental Forces on
Apparel
Goods Marketing
Course Code & Title: MKT 1203-Principles of
Marketing
Prepared For:
Md. Idris Ali
Assistant Professor
Department of Business Administration
Prepared By:
Sazzat Hossain Tushar
ID: 121-258-0-45
B.Sc honours
Batch: 121 AMT-2
Date: 1-07-2015

The Impact of Environmental


Forces On
Apparel Goods Marketing

Sazzat Hossain Tushar


July 01

Acknowledgement
At first we desire to express our deepest sense of gratitude of
almighty Allah.
With profound regard we gratefully acknowledge our respected
course teacher MD. IDRIS ALI
For his generous help and day to day suggestion during
preparation of this report. He is so much an inspiration and
guidance to us that we are, sort of words in expression our
gratitude.
We like to thanks specially thank our friends and many individuals
of
apparel
merchandiser
group
for
their
enthusiastic
encouragements and helps during preparation of this report by
sharing ideas regarding this subject and for their assistance in
typing proof reading this manuscript.
And finally, we thank to all of our classmates as they all were
serious while studying about the topic and prolific towards making
this assignment.
Once more time to sir, we owe more than we mention mostly for
teaching us to see the silver lining in every hard work and for
showing us the practical life and self inspiration in every work.

Executive Summary

Introduction
Objective of the study
Methodology
Limitations
Overview
Environmental forces
Problems/Challenges

Acronyms

FTAR- Fiber, textile, apparel and retail


NAICS- North American Industry classification system
BGMEA- Bangladesh garments manufacturers and exporters
association
BD- Bangladesh
GDP- Gross domestic Product
MFA- Multi fiber agreement
RMG- Readymade garments
EPZ- Export processing zone

Table of Contents

Title
page
.. 1
Acknowledgement
..2
Executive
summary
.3
Acronyms
4
Table of
contents
..5
Introduction
.6
Objective of the
study..7
Methodology
..8
Limitations
.9

Overview
.9
Environmental
forces..12
Problems
..14
Challenges
15
Recommendations
.16
Conclusion
17
References
..17

Introduction
The apparel industry is a segment within the fiber, textile, apparel, and retail
(FTAR) Complex. This FTAR complex represents a supply chain or pipeline
from design ideas through fabrication to sale to a final consumer. The
contribution of these textile and apparel industries to
The Bangladesh economy is significant when evaluated in terms of its share
of the BD gross domestic product and its related employment. Apparel,
shoes, and accessories products, sold (at the retail level) in the Bangladesh,
amount to over $129.86 billion a year (Trading economics, 2013).
Consumption of apparel only (at the wholesale level) reached more than 6.71
%on garments in 2011 (Trading economics, 2011).
The apparel market, also known as the fashion market, is always facing rapid
change therefore; the success of any business in this market depends on
how the company responds to Turbulent and volatile changes within the

market. As a consequence of various changes in business environment,


many companies have experienced a need to change their business
strategies (Christopher & Lee, 2004; Dickerson, Oh, & Park, 2004; Jacobs,
2006; Pan & Holland, 2006; Su, Gargeya, & Dyer, 2004). Birtwistle, Fiorito,
and Moore (2006) found that factors affecting the business environment
within the textile and apparel industries include globalization, difficulties in
getting customers, and increased competition. Sridharan, Caines, and
Patterson (2005) stated that globalization, customers changing
expectations, and advances in technology have brought changes in
companies new supply chains and their associated activities. Power and
Sohal (2002) noted that new developments of technology, changing
customer demographics, globalization, and requirements for customized
products have demanded new strategies for companies through optimization
for their whole supply chain. In the textile and apparel industries, a
companys management activities and performance outcomes are impacted
by the external environmental factors, such as rapid development of
technologies, globalization and competition, and competitive strategies
(Stapleton, Hanna, & Ross, 2006). Even in the early 1990s, Kincade and
Cassill (1993) recognized that environmental
changes for the textile, apparel, and retail industries had occurred in the
areas of competition,
customers, and technology. In the study of the consumer merchandising
field, Shim (1998) stated 2 that technological advancement and the
development of a global economy created major changes in consumers
demands, and that these changes are among the most important factors to
affect the global marketplace. Earlier in the 1980s, the report from a BD
government study noted that technology improvements, growth of
international trade, changing patterns of consumer demand, and a shifting
regulatory environment had affected BD textile and apparel industries (Office
of Technology Assessment, 1987). These researchers explored various
business strategy and performance issues related to the business
environment in the textile and apparel industries and found that changes in
business environments can affect companies strategic management
practices. The decline of BD manufacturing firms dominance in the apparel
industry began in the 1970s. Changes in the business environment in apparel
industry and the reactions of associated firms have continued to affect the
profile of the industry over the past 30 years, including some dramatic
changes over the past ten years. Although managers in the BD. apparel
industry have become increasingly aware of the needs for efficient and
effective business strategies, there remains a lack of research focusing on
these issues. Therefore, a detailed exploration about the business
environment of the BD. apparel manufacturing industry and the resultant
interpretations and reactions of apparel firms is needed.

Objective of the study


1. Competition: competition refers to the numbers of similar competitive

2.

3.
4.

5.

6.

product brands marketers in your industry, their size and market


capitalizations. You as a marketer might not have direct influence on them,
but its important that you monitor their activities, and then design effective
strategies using your controllable variables.
Governmental policies: the government policies refers to the laws and
legality that guilds the land, they go a long way to affect your business
operations as a marketer. For instance, government restriction on the
importation of a particular product might hinder the marketers playing in that
particular field.
Natural forces: this refers to the physical environment, it comprises of the
available or lacks of natural resources that can vacillated or hinder your
production output.
social and cultural forces: the social and cultural forces refers to the
structure and dynamics of individuals and groups and their behaviors,
believes, thought patterns and lifestyles, friendship etc many of this trends
goes a long way to affect your marketing operations.
Demographic factors: demography refers to study of people, such as their
age, sex, marital status, occupation, family size etc. Though, demography is
uncontrollable because you cannot control the sex, age, marital status in your
external environment, but accurate forecast of it goes a long way to enabling
you as a marketer forecast future trend and consumptions of your product.
Technological changes: technology post much challenges to marketers, it
affects the kind of product that you as a marketer can offer, For instance,
technology have changed products like typewriting machines into a more
proficient computer systems. You cannot stop the advancement of
technology, but you can learn to adapt to it changes.

Methodology

Validity : Several terms are used in judging quality and credibility of


qualitative study including validity, trustworthiness, reliability,
conformability, generalizability, objectivity, consistency, and dependability
(Ritchie & Lewis, 2003; Ross man & Rallis, 2003). From this extensive listing
of terms, the researcher decided to use the concept of validity and reliability
to review the quality and credibility of the study because these two concepts
are most commonly used in both quantitative and qualitative research.
Although often used, some confusion is created when these concepts are
applied in qualitative research because the concepts of validity and reliability
were developed in the natural sciences. This study, thus, will follow the broad
concepts of these terms as identified by Ritchie & Lewis, that is, validity
meaning well grounded and reliability meaning sustainable (p. 270).
Reliability: Reliability of a qualitative study is generally understood by the
terms consistency or sustainability and dependability, or replicablility of
research (Ritchie & Lewis, 2003).
Consistency or sustainability means that the results of study are meticulously
or rigorously derived by the researcher. Dependability or replicability means
the extent to which the research conduct is agreed to or replicated by
another study (Baker, 1999; Ritchie & Lewis).
Data collection: Data was collected from a variety of sources. Data from
government offices including BD Department of Labor, BD Department of
Commerce, BD International Trade Commission , Also, the data from
statistical publications published by trade and industry associations (e.g.,)
In addition, previous academic literature in related areas including business
environment, apparel industry, and business strategies were used. Articles
from relevant trade journals and magazines (e.g) were also collected as
important data sources for this study. In addition, the leading business
newspaper including Wall Street Journal, Fortune, Business Week, The
Economist, were used for any articles relevant to the research topic,
especially on business strategies in the apparel industry and information
specific to the sample companies.

Limitations
This research has several limitations. The first limitation was availability of
data. In computer searchers, lack of data especially for the 1970s and the
1980s was a weakness of this study. In these decades the apparel industry
was not often reported in general business literature so that the researcher
was limited to apparel trade literature and any available company literature.
The second limitation was the interpretation process conducted by the
researcher. In this study, the researcher collected data and interpreted the
meaning through a particular procedure of content analysis. Although the
data analysis was based on a comprehensive literature review and a
research framework, the interpretation process was dependent on the
researchers analysis skill and ability. In consideration of this weakness, the
researcher has several working experiences in the apparel industry, course
work in qualitative study, and knowledge about the related fields (i.e.,
apparel industry, merchandising, and business). These researcher skills
reduced this potential weakness. Other weaknesses regarding the validity
and reliability of a qualitative study as previously discussed (e.g.,
generalizability of small number of sample, limited method of data analysis)
are also limitations of the study.

Overview
Apparel manufacturing industry:

The structure of the apparel manufacturing industry can be understood in


the context of the fiber; textile, apparel, and retail (FTAR) structure. As
previously stated, the apparel industry is one sector of the FTAR complex.
Apparel products are manufactured from fiber and textile components, and
final products are distributed through retailers to consumers.
Sub-sectors of apparel manufacturers traditionally have included (a) apparel
contractors performing one or more cutting or sewing operations on raw
materials (e.g., textile fabrics) owned by others; (b) jobbers performing
entrepreneurial functions (e.g., buying fabric, sourcing production) involved
in apparel manufacture; and (c) tailors, who manufacture custom garments
for individual clients. The description of these apparel manufacturing subsectors according to the NAICS definition, the apparel industry is also
classified by several variables, such as gender (e.g., mens, womens), age
(e.g., womens and girls, childrens and infants), services (e.g., folding and
packaging, pressing), and levels of processing (e.g., manufacturing,
wholesalers, contractors, retailers).

Employment:

Bangladesh apparel manufacturing within the employed approximately


284,800 workers in 2004 (Plunkett Research, Ltd., 2006). This employment
level represents a dramatic decline since 1973. In 1973, the peak year of
apparel manufacturing employment, more than 2.4 million employees were
working in textile and apparel manufacturing in the United States; 58 percent
of these worked in the apparel industry. Because of the labor intensive
aspect of apparel manufacturing the proportion of workers in apparel is
necessarily hired than workers in textiles.
This figure dropped to 1.5 million by 1996, which is a 39 percent decline from
the year of 1973. Along with the drop in employment, the industry has seen
a reduction in the number of companies and BD. plants that produce apparel.
In conjunction with the decline of BD. apparel manufacturing, the BD. textile
industry has been forced to close 367 textile plants since 1997, and more
than 440,000 BD. jobs have been cut.

Globalization:
Globalization is defined as a set of economic and political structures and
processes deriving from the changing character of the goods and assets that
comprise the base of the international political economy in particular, the
increasing structural differentiation of those goods and assets (Cerny, 1995,
p. 596). Globalization is the concept commonly recognized as growing
international interconnectedness (Hirst & Thompson, 2003, p. 17) in terms
of increasing international trade, investment, and communications across the
nations. It has been identified with various aspects of information, finance,
industry, politics, or culture. Some researchers argued that the scope or
definition of globalization has been misinterpreted and tried to redefine its
nature and characteristics (Hirst & Thomson; Perraton, 2003; Sutcleffe &
Glyn, 2003). When globalization is applied to the area of business, many
issues emerge from the economic activity across the worlds countries.
Although various researchers have different positions and perspectives on
globalization, one common point emerges from these authors
Globalization results in increased levels of international economic activities,
especially since the
1970s.
In the apparel industry, companies from many countries have increasingly
played bigger roles in the production aspect of the business than previously
noted in the industry. Numerous issues emerged related to textile and
apparel products as they have crossed international boundaries, and many
researchers have discussed related topics. Abernathy, Dunlop, Hammond,
and Weil (2002) divided the globalization in apparel and textile industries
into old issues and new issues. Old issues include (a) the movement of
products between nations that have different levels of economic value and
its impact on product costs, (b) flow of goods mediated by changes in
international exchange rates, and (c) foreign competition with quotas and

tariffs. New issues about globalization in apparel industry are factors related
to the distribution of products, which originate from international trade.

Technology:
Technology is the physical combined with the intellectual or knowledge
processes by which materials in some form are transformed into outputs
used by another organization or subsystem within the same organization
(Hullin & Roznowski, 1985, p. 47). In a study of apparel industry, Ko et al.
(2000) stated in their QR technology study that technology can be both the
use of new equipment and the implementation of new processes. This
statement is particularly true in the apparel industry, where technologies
include new process (e.g., methods for shared information, product planning
with customer, receiving point-of-sale data) as well as new equipment (e.g.,
computers for design, automated sewing equipment) (Kincade et al., 2001).
Because technology is closely related with productivity and the associated
production costs (Lin, Kincade, & Warfield, 1994), it has always been a key
factor for competitive survival in the apparel business. Moreover, the apparel
industry has an extraordinarily complex structure; the supply chain from
production and final consumers is very long, and its products exhibit
constant changes in style, tastes, and production technologies. For this
reason, each participant of the apparel supply chain has a unique history,
business structure, and management style; and each has adopted various
types of technologies (Office of Technology Assessment, 1987).

Consumer:
Consumers exert extreme pressures on businesses through their shopping
and buying behaviors as determined by various factors (e.g., trends,
weather, media, social, political, economic environments) and through the
consumer movement (e.g., consumer advocates, consumer organizations,
consumer legislation, consumer education) (Hicks, Pride, & Powell,
1975). for any business to make profits, understanding consumer is essential
part of doing business (Peter & Olsen, 1999). Bennett (1995) defined
consumer behavior as following three things: 1. the dynamic interaction of
affect and cognition, behavior, and the environment by which human beings
conduct the exchange aspects of their lives 2. The overt actions of
consumers and 3. The behavior of the consumer or decision maker in the
market place of products and services.

Business Strategies:
Strategy or strategic management in the business world is referred to as the
overall plans and purposes dominating the companys decision making
processes and functions (Hamermesh,
1983). Christensen, Andrews, and Bower (1978) discussed several key
concepts regarding corporate strategy. First, strategy is defined as the

pattern of purposes and policies defining the company and its business
(Christensen et al., 1978, p. 131). This strategy can be deduced from
examining the companys behavior including their pattern, purposes, and
policies. Second, there are four components of strategic choice that a
company should consider: environmental opportunity and threat; a
companys resources and their strength and weakness; personal values,
aspirations, and ideals; and expectations of society. Third, to implement
strategies, a company must consider their resources including organizational
structure, organizational processes and behavior, and the personal
leadership.

Environmental forces
In environmental forces there are
1. Micro environment
2. Macro environment

Micro environment:

The suppliers: Suppliers can control the success of the business when
they hold the power. The supplier holds the power when they are the
only or the largest supplier of their goods; the buyer is not vital to the
suppliers business; the suppliers product is a core part of the buyers
finished product and/or business.

The resellers: If the product the organization produces is taken to


market by 3rd party resellers or market intermediaries such as retailers,
wholesalers, etc. then the marketing success is impacted by those 3rd
party resellers. For example, if a retail seller is a reputable name then
this reputation can be leveraged in the marketing of the product.

The customers: Who the customers are (B2B or B2C, local or


international, etc.) and their reasons for buying the product will play a
large role in how you approach the marketing of your products and
services to them.

The competition: Those who sell same or similar products and services
as your organization are your market competition, and they way they
sell needs to be taken into account. How does their price and product
differentiation impact you? How can you leverage this to reap better
results and get ahead of them?

The general public: Your organization has a duty to satisfy the public.
Any actions of your company must be considered from the angle of the
general public and how they are affected. The public have the power to
help you reach your goals; just as they can also prevent you from
achieving them.

Macro environment:

Demographic forces: Different market segments are typically impacted


by common demographic forces, including country/region; age;
ethnicity; education level; household lifestyle; cultural characteristics
and movements.

Economic factors: The economic environment can impact both the


organizations production and the consumers decision making process.

Natural/physical forces: The Earths renewal of its natural resources


such as forests, agricultural products, marine products, etc must be
taken into account. There are also the natural non-renewable resources
such as oil, coal, minerals, etc that may also impact the organizations
production.

Technological factors: The skills and knowledge applied to the


production, and the technology and materials needed for production of
products and services can also impact the smooth running of the
business and must be considered.

Political and legal forces: Sound marketing decisions should always


take into account political and/or legal developments relating to the
organization and its markets.

Social and cultural forces: The impact the products and services your
organizations brings to market have on society must be considered.
Any elements of the production process or any products/services that
are harmful to society should be eliminated to show your organization
is taking social responsibility. A recent example of this is the
environment and how many sectors are being forced to review their
products and services in order to become more environmentally
friendly.

Problems
This compendium provides a comprehensive overview of marketing issues
related to environmental protection and pollution prevention. It is organized
around these eight topics:
Current business trends in environmental strategies
The relationship between product manufacturing, packaging
and environmental marketing
Consumers attitudes and willingness to pay for
environmentally sensitive products
Trends in advertising and marketing of environmentally
conscious products
Strategic approaches to marketing green products

Consumer perception and government regulation of marketing


claims; corporate
communications
The value of good corporate citizenship
Partnerships with environmental organizations
This compendium was developed for college professors interested in
incorporating any or all of these topics into an existing course on marketing
or in developing a full course on environmental issues in marketing. Faculty
in other disciplines strategic management, government regulation of
business, business law, public relations and communications, or
manufacturing operations may also find this compendium a useful source
of information to use in augmenting existing courses with one or two
sessions on environmental topics. Resources cited include books, academic
and trade journals, industry-specific case studies of pollution prevention and
marketing, and Internet websites. Environmental protection is a relatively
new topic in marketing. Prior to the mid 1980s, few firms touted their
products environmental benefits or considered publicizing their
environmental conduct or achievements.

Challenges
Finding Resources:
The Resource List will help you choose relevant publications (both written
and electronic) for yourself and your students. It includes information on
obtaining case studies and other materials not usually found in college
libraries. (Note that most of the readings used in this compendiums syllabi
are cited in the Resource List.) From there, use the descriptions in the

Annotated Bibliography to further refine your list of things to read and/or


assign. Also, feel free to contact professors listed in Resource List for ideas
on how to integrate environmental issues into your marketing course. The
Resource List and Annotated Bibliography both cite a total of 26 recent cases
published by the European Case Clearinghouse, Harvard, the Management
Institute for Environment and Business, and the NPPC. Case studies can be
excellent springboards for class discussion and student assignments. For
instance, two of the cases depict The Body Shop and Ben & Jerrys firms
that have generated continued controversy over the validity of their claims
of environmental responsibility. Introducing such controversies to your
students adds considerable realism to your course and highlights the fact
that strong claims of environmental friendliness may bring about increased
scrutiny and subsequent negative publicity if serious concerns are raised.

Planning Courses:
This compendium includes recent syllabi for two environmental marketing
courses. Santa Clara
University professor Gail Kirby outlines an undergraduate business course
with 30 meetings under a quarter systems; I describe an MBA-level elective
course within a module system of 7-week courses. Besides being adapted
by professors who are introducing one or two topics into traditional
marketing courses, these syllabi can also serve as models for business
faculty developing entire new courses with environmental themes; the table
below suggests several environmental topics to use within existing courses.
Dr. Kirby and I are both willing to assist colleagues who are developing
courses on this topic. Other faculties who have taught similar courses and
are good contacts for current cases or readings include Betty Diener (UMass
Boston), Donald Fuller (University of Central Florida), Thomas Klein
(University of Toledo), and Michael Jay Polonsky (University of Newcastle);
to learn how to contact them, see the Resource List. Another source for
developing new syllabi is the Management Institute for Environment and
Business Teaching Module series (1996; ISBN 1-56973-119-5) its Marketing
and the Environment section was edited by Dr. Diener.

Recommendations

This study was designed to explore the business environment and general
business strategies of the BD apparel manufacturing industry from 1990 to
2013 and to investigate the specific business strategies for selected major
BD apparel manufacturing companies in response to the environment from
1990 to 2013. Based on the current study, a number of recommendations
are made for future studies. First, this study employed a qualitative method
using content analysis and case studies. With limited previous research on
the BD apparel industry, the researcher concluded that it was more
appropriate to use a theoretical approach at this point than an empirical
approach in exploring the two main issues (i.e., business environment,
business strategy) as applicable to the time frame from 1990 to 2013. With
the conclusion of this study, a quantitative study using a large sample of
apparel companies could be also conducted. Research using more samples in
various industry groups besides the two major companies studied in the
current study could provide a more comprehensive and inclusive perspective
of the BD apparel industry.
Second, this study explored the issues of environmental factors and business
strategies in a historical context. Based on the result of this study, a crosssectional study at a point in time to investigate the same or similar issues
more deeply could be conducted. In particular a study with a survey using
the variables identified in Figure 25 could be made.

Conclusion

The impact of environmental factors on business strategies for BD apparel


manufacturing companies has constantly changed from 1990 to 2013. In
addition, the three main environmental factors (i.e., globalization,
technology, and consumer) have an increasingly stronger interrelationship
with these business strategies and have required more sophisticated
business strategies.
Based on the analyzed data about the business environments of the BD
apparel manufacturing industry and the general business strategies that
have been implemented from
1990 to 2013, the researcher investigated the impact of environmental
factors on business strategies in selected major BD apparel manufacturing
companies from 1990 to 2013. To understand each companys specific
strategies in response to environmental changes, the two theories about
organizational interpretation process and organizational adaptation were
employed.
The model of the study provided the support for the idea that companies
interpret business environments in their own way, and the interpretation
process, in turn, influences the companys response to the environment.
From 1990 to 2013, environmental changes have significantly affected BD
apparel companies overall plans and major policies, demanding changes in
business strategies in response to a changing environment.
Additionally, the framework suggested that the response or results for
individual companies can be different according to a companys internal
resources.

References
http://www.tradingeconomics.com/bangladesh/gdp-growth
http://blog.oxfordcollegeofmarketing.com/2014/11/04/the-impact-of-microand-macro-environment-factors-on-marketing/

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