Article submitted by Dr. Luigi Bertorelli, International Coordinator, Textile/RMG Component of BQSP, published in "The Daily Star" on 4 November 2006.
The readmade garment industry is a key sector in the Bangladeshi economy, With its population totaled 453.7 million and an average GDP per capita amounted to approximately 25,000 euros the EU Members States are among others the higher buyers and bigger consumers of the garments produced in Bangladesh, It is worth to have a close look at the marketing tools and threats the manufactures and exporters have to face to increase their volumes and turn-over
Although the European Union is already a fact, the most important aspect of the process of full unification is the harmonization of rules. In the EU contracts not all the regulations have yet been harmonised. Work is still in progress in the fields of environmental pollution, health, safety and quality.
Distribution channels differ greatly across the EU member states. The UK has a high concentration of distribution, which is reflected in the relatively low market share of independent retailers. The southern member states, Portugal, Italy and Spain, however, have high market shares for independent retailer. These retailers buy mainly from manufacturers and wholesalers/importers, contrary to Germany and The Netherlands for instance, where many independent retailers are members of buying co- operations.
Specialists (Independents and multiples) accounted for 57 percent of clothing sates, but a growing role is played by non-specialised distributors. Other important develops are the increasing integration in the value chain, increasing concentration and growing internationalization. This also means increasing competition between branded labels, private labels and even non-branded products.
For that reason most of the major retail organisations have set up their own buying organisations in low-labour-cost countries. Bangladesh is one of those. Germany is the greatest market for outerwear in the EU. The highest growth rates are In the UK and Spain, while France and Italy showed a moderate growth. For the other major EU markets including Norway, a moderate 2-3 annual growth is forecasted for the coming years. In recent years, a shift from dresses to trousers/jeans and skirts has occurred regarding women's clothing consumption. The focus on casual and leisurewear will be continued for the coming years, but to a much smaller degree. importer from developing countries are important and still rising in almost all product groups, in particular for casual and leisure product groups, but also for woven shirts, habits' garments and accessories like scarves.
Demand for outerwear in the EU will continue to increase and the number of garments purchased per head of population will continue to rise, but prices will not follow this growth rate.
To satisfy the requirements of European importing companies, the exporters in developing countries will be faced with increased demands for higher quality and environmentally friendly product.
In the EU, the role of wholesalers/importers will slightly decline, while the role of clothing and specialised outerwear multiples and, to a lesser degree, buying groups or franchise formula will increase in the coming years. In many European countries, the distribution of outerwear is dominated by a small number of retail organisations. On one hand there are specially multiple stores [like Etam Lingerie, Hunkemjoller) and on the other hand there are more generally oriented department (Debenham, Karstadt Quelle) and variety stores (Marks & Spencer, Hima), clothing multiples (Hennes & Mauritz, Zara, Etam, C& A), textile discounters (Zeeman), value retailers (Matalan, Peacock), hypermarkets (Hypermarches) and supermarkets (Aldi, Lidl, Tesco) just to give some example.
Depending on its position in the market, the functions if a particular distribution organisation will be linked with up-or-downstream organisaiions with the same kind of specialisation. It is also possible for a given organisation to take over [some of) the functions of the latter, in older to improve competitiveness (vertical integration). For Instance, manufacturers, agents and retailers may also function as importers, while wholesalers may also be manufacturers (vertical integration).
Each of these groups has a different approach to business and the market, with its own specific interpretation of the marketing mix.
