Product Lifecycle Management project – Travel Dress
MissionIn modern business mission and vision statements are overwhelmingly accepted as an essential part of the strategic management process in all types of organizations. It is largely used in the public, non-profit sector, as well as in private enterprises of all sizes. In general, people believe that mission and vision of the business have great impact on strategy and the organizational performance.
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For the mentioned reasons, most of the companies have their mission and vision statements. In case company does not publish a mission and vision statements, they are usually implied indirectly. The above argument is being supported by several studies (e.g. Bart et al. 2001), that shows the mission statements had consistently been rated as the one of the most important management tools deployed by managers in the course of each of the 10 years prior to this study.
According to Mullane (2002) mission and vision statements are also useful for practical day-to-day operations, which argues with those who assert that mission and vision are only the archaic documents which are typically presented as wall hangings.
Mission statements are believed to be a background to the strategy formulation. More fundamentally, the company’s mission statement is thought to capture the principal purpose of an organization in agreement with the values, standards and expectations of stakeholders. A typical mission statement should include answers for the following questions: What business are we in? and What is our business for?
To the extent of these arguments, mission statements are claimed to capture the corporate level strategy in terms of scope, boundaries and value creation. Another definition of the mission statements presents them as a wide-ranging framework for the evolution of the other strategic concerns, such as vision, strategy, objectives, goals, core values, standards, business models, etc.
The mission of my business is to bring inspiration to the women around the world and provide them with high-quality, multifunctional dresses perfect for active women who love to travel. Our products combine the comfort, functionality and elegance, that let the customers look good anytime and anywhere. Our travel dresses are made of non-crumbling, natural materials, have many hidden pockets for money, documents etc. Our dresses have also the ultimate, unique design, that makes every woman feel and look special every day.
Travel dresses – research and development
New product develo2pment is “the overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product”. It is worth to notice, that a full integration of engineering, design, marketing and finance is very important. Figure 1 presents a cross-functional integration with the major interactions shown by arrows.
According to several studies, marketing should go together with research and development according to customer needs, and the R&D’s role is to design a product that fit clients’ requirements. Nevertheless, research and development have to prepare a design of a product that is possible to be manufactured at low cost and high-quality levels. Engineering and research and development must make effort to apply some innovations to the process of manufacturing and design. As a final point, finance interrelates with marketing, R&D and manufacturing when financial resources are necessary.
As the first phase of the new product development, marketing team supported by R&D and market research team will prepare the product concept. The principal idea is to create functional and beautiful dresses perfect for travelling. As women are travelling more and more often for many reasons – from holidays to business trips, it is becoming an important issue to pack light and be able to wear the clothes immediately after taking them out of the suitcase.
For those reasons, the target market for this product will be travelling women of all ages. To comply the customers’ needs and price point determined by the market research team on the basis of the market research, the research and development team will design the material and the fashion designers’ team will prepare the project of couple of variations of the travel dress. Each variant will be available in various colours and patterns to comply the customers’ taste. Colours and design will be based on the results of the current trends research.
After accepting the projects, and the production phase will start. Imported from India materials will be manufactured in the local factory. At the same time a marketing campaign will start. The product lifecycle will be managed in accordance to the typical product lifecycle in textile industry.
Our product will be sold in the stationary brand’s stores and on-line. In the introduction phase, the dress will be available only to customers of the on-line store. Fashion leaders will adopt the new item. Initially, the producer will give a lot of prominence to the newly launched product on the company’s website, for instance, by linking the new items directly with the homepage and sending weekly newsletters to the customers from the mailing list.
During the growth stage, company needs to guarantee suitable stocks not to disappoint customers. As the products moves into the growth stage the marketing campaign will become more aggressive, and customers will be able to see the new products in newspapers and magazines.
At the maturity stage, producer will remind the customers about the product online, using for example trend features and its newsletter. It can also require to order more dresses to ensure supply. As the market reaches the saturation point, the company till reduce prices of the remaining products. Sales will provide an opportunity to free space in the shops and magazines for new products.
On the decline stage, when people will become tired of the product, it will be replaced by the new items.
Costing can be described as the process and technique of determining costs of the certain project. The idea of every costing method is same but the techniques of analyzing and presenting the planned costs differ according the nature of business.
Textile costing must include all the activities such as acquisition of raw materials and accessories, knitting, processing and finishing the fabrics, sewing and packing of complete clothes, transport and storage, shipping, operating costs, banking charges, commissions, marketing campaign, etc.
To perform a unadulterated garment costing, it is important to know about all the activities performed throughout all the process and about their costs, as well as procedures, benefits and risk factors. It is also important to know how to resolve the unexpected problems and to take appropriate alternate decision.
To compute the costing of a garment, it is important to calculate the following elements:
- fabric consumption;
- gross weight of other components of garment;
- fabric cost per kg;
- fabric cost per garment;
- other charges (print, embroidery, etc);
- cost of trims (labels, tags, badges, twill tapes, buttons, bows, etc);
- cost of accessories (hangers, inner boards, polybags, cartons, etc);
- cost of a garment;
- price of a garment;
While working on the new product, the target costing will be used. Target costing technique describes the process of assessing a target price in the beginning, and then designing a product to meet the primary established price.
Usually, the process of target costing is described using the examples from the assembly industry. Many researchers highlight the target costing is most beneficial to this kind of business activity.
Also, it is claimed to be suitable for industries with frequent product changes and short product lifecycle. These criteria fit perfectly to the fashion-driven apparel industry, where products change every season, and these changes drive the industry more than any other factors. Also, the processes in the clothing industry are assembly-oriented, although the number of necessary components is smaller than in for example automotive sector.
The process of target costing is thought to be very interactive, as most of the process activities occur simultaneously or parallel. Despite of this codependency of various activities, it is possible to distinguish three basic levels of the costing process (Figure 3.):
- market level;
- product level;
- component level.
During the first phase of the target costing process the target price of the product is being established. This is a main difference to traditional costing techniques. Target costing is price-based, therefore it is rooted in the market. In many cases it can be a price of a new product or it can be just a re-evaluation of the price for a product existing on the market.
The starting point for the price is in the market rather than internal cost standards or cost estimates. Also it is important to anticipate the potential price reductions in the market and take necessary actions early, to avoid mistakes. It is essential to analyze the market the new product is supposed to serve.
Target costing should be prepared in accordance with the long-term company strategy. For the new products the costing process begins with finding the market niche the company wants to address. Also, it should consider the basic needs of the potential customers the product is dedicated to. For this reason, it is important to perform a detailed competitive analysis to see what kind of products are already available on the market and what changes and innovations clients expect.
The final activity in the market level phase is establishing a target profit, which is basef on long-term profit strategies for the company and short-term market share strategies for the product. It should be based on historical returns on sales and returns on assets, as well as on profit planning goals. The actual target cost of the product can be based on the simple formula:
Target Cost = Target Price – Target Profit
The second phase, Product Level, deals with designing the product so that it will meet the target cost. The first step is to define the status quo and computing the total costs of the new product based on the experiences from current and past products.
Data for this calculations is usually generated by a traditional costing techniques, so it requires some additional work to break down the costs by components. In the following step cost has to be designed out of the product, it means the costs considerations drive the designing process. On this step all costs need to be considered, including materials, manufacturing, distribution, marketing, and customer service.
The third phase, component level, in many cases runs parallel with the product level target costing. This level typically includes close cooperation with suppliers, and includes all the aspects of supplier selection and supplier management to reduce the costs of purchasing materials and accessories.
The garments are factory-made in many sizes so they can fit for everybody. Normally they are produced in sizes: Small (S), Medium (M), Large (L), Extra-Large (XL) and Double Extra-Large (XXL). The quantity ratio or assortment can be any one of the following approximate ratio. Usually to measure the average quantity of material needed for the products the measures of the size L are taken for calculation. To prepare the projects and to calculate the amount of the material the Adobe Illustrator for Fashion and Evolution Textile Design Software will be used. Both are CAD programs.
Another software used in our offices will be the Microsoft Office package, as the functional tool for preparing presentations, projects and calculations.
In order to make the product management easier, introduce innovations in profitably and efficiently centralize product data, simplify processes and launch quality products faster the company uses the PLM software – Agile PLM.
According to Corey (2003), marketing strategy is the creation of a inimitable and valuable position, that involves a different set of activities. It is a strategy that incorporates the company’s marketing goals into one piece.
A marketing plan for a textile industry company firstly sets out a specific market strategy that detects marketing objectives with time-specified actions for their achievement. As a consequence of the wide range of distribution channels and the variety of products, the marketing plan needs to cover all the company needs to maximize the profits.
The key role in the product marketing plan plays the communication. For this reason the company creates the effective communication channels with the target market. To communicate with the clients the company uses several online and offline tools.
The most powerful offline tool is direct communication with clients visiting the stationary shops. To attract the customers, the window displays are often modified. The products presented in the shop window are shown in a creative way. Additionally, the company uses a simple method with large lettering, simple typography and a clear message (for example: “Mid-Season Sale! – 50% on selected items”).
Organization is also conscious about the importance of the online existence. For this reason the company has its own on-line store, where you can buy the new products before they appear in a regular sale in stationary shops. Online store has also some unique promotions and outlet for the items that are not available in regular stock anymore.
Company also inform the customers about new products and promotions available (online and offline) on its website as well as on the Facebook and Instagram profiles.
Another tool used in the marketing campaign for the travel dresses are advertisements in the fashion and tourism related magazines.
To increase the sales there are organized several promotions and discounts. For example clients who enrolled for the newsletter receive the 10% discount on the new collection. Also, the discount coupon will be attached to the magazines advertising the store and the new collection of travel dresses.
The term risk refers to the economic loss triggered by a great nonconformity due to some subjective, uncontrollable features which are placed between actual results and expected damage of parties. According to this definition, risk management means the identification, calculation and prioritization of different kinds of risk followed by synchronized economic use of resources to diminish, monitor and control the possibility and the impact of the unfortunate events.
One of the most important risks are the economic and exchange rate risk. The company depends on international suppliers in terms of materials and accessories, so any changes in the world economics can increase the costs or reduce sales. To prevent this kind of risk, that can occur during the development phase, company cooperates with trusted suppliers and sign contracts for the deliveries with the materials’ prices previously agreed.
As the law is being updated and changes are introduced regularly (especially in the terms of taxation), company is also exposed to the legal risk. There is a chance that new rules will interrupt the business or increase expenses and losses because of a legal dispute. It can affect all the stages of the project and implementation of the new product.
Another risk that may affect all the stages is the strategic risk that arises when the implementation of the project does not go in line with the business plan. Over time the company’s strategy becomes less effective, for this reason the company has two strategies: long-term strategy updated every 5 years and the short-term strategy that is prepared every year. It helps to achieve the objectives and apply correcting actions if something does not go according to plan.