Fashion Design Fashion Business and Marketing 2 — Questions and Answers
Question 1: What is 'private label' merchandise in fashion retail?
- Luxury goods with highly visible logo branding
- Products designed and branded exclusively for a specific retailer (Correct answer)
- Vintage garments with the original manufacturer's label removed
- Limited-edition collaborations between two designers
Correct answer: Products designed and branded exclusively for a specific retailer
Private label merchandise is designed and manufactured for a specific retailer and sold exclusively under that retailer's own brand, giving retailers higher profit margins than national brands.
Question 2: In fashion wholesale, what does 'FOB' pricing mean?
- Fashion Object Branding — a type of logo licensing agreement
- Free On Board — the price of goods at the point of origin before shipping costs (Correct answer)
- Final Order Budget — the last price after all discounts
- First Order Bonus — a discount for new retail accounts
Correct answer: Free On Board — the price of goods at the point of origin before shipping costs
FOB (Free On Board) in fashion wholesale means the seller's price covers the goods to the shipping origin point; the buyer assumes transportation costs from that point.
Question 3: What is a 'capsule collection' in fashion?
- A very large collection of hundreds of garments
- A small, focused collection of essential, versatile wardrobe pieces (Correct answer)
- A collection designed specifically for children
- A spring collection featuring light, airy garments
Correct answer: A small, focused collection of essential, versatile wardrobe pieces
A capsule collection is a curated, small set of versatile wardrobe pieces that work together cohesively, typically 10–30 items that can be mixed and matched.
Question 4: What does 'sell-through rate' measure in fashion retail?
- The speed at which new styles reach stores from manufacturers
- The percentage of inventory sold versus the initial inventory received (Correct answer)
- The number of customers who make a purchase after entering a store
- The rate at which markdowns occur throughout a selling season
Correct answer: The percentage of inventory sold versus the initial inventory received
Sell-through rate is calculated by dividing units sold by units received, expressed as a percentage; a high sell-through rate indicates strong demand for a product.
Question 5: In fashion licensing, a licensor grants rights to use a brand's name or design in exchange for what?
- Equity ownership in the licensee's company
- Royalty payments typically calculated as a percentage of sales (Correct answer)
- Co-branding credits on all marketing materials
- Exclusive distribution rights in specific territories
Correct answer: Royalty payments typically calculated as a percentage of sales
In licensing agreements, the licensor (brand owner) grants the licensee the right to use their brand identity in exchange for royalty payments, typically 5–15% of net sales.
Question 6: What is 'influencer marketing' in the context of fashion promotion?
- Hiring celebrity designers to create special collections
- Partnering with social media personalities to promote products to their followers (Correct answer)
- Using data analytics to influence buyer purchasing decisions
- A marketing strategy that influences competitor brands to change pricing
Correct answer: Partnering with social media personalities to promote products to their followers
Influencer marketing leverages social media personalities with established audiences to authentically promote fashion products to their followers, often more cost-effective than traditional advertising.
Fashion Design Fashion Business and Marketing 2
What is 'private label' merchandise in fashion retail?