A New Look at Fashion Brand Management – product switching strategies in the face of imitation

Abstract

The fashion market today is characterized by rapid change. Demands fluctuate over time and customer taste is rarely stable. As Christopher, Lowson and Peck (2004) mentioned, today's fashion market is ‘chaotic’. With correspondence to the recent ever changing market conditions, it is of growing interest to investigate the ways that sellers should keep up with the market fluctuations. By formulating the market fluctuation as a stochastic process and making use of the optimal stopping theory, the present study examines the ways that a fashion retailer should sustain its brand value in a fluctuating market. The analysis reveals that a fashion retailer with brand value should introduce new items frequently if (1) the items of the fashion retailer are robust to his/her new items or vulnerable to imitations by other fashion retailers or (2) the market as a whole is less uncertain.