In order to start a successful clothing business, entrepreneurs allocate their initial scarce resources. This includes having a theme/look to the company, quality and price of the product, and effective advertising
In order to attract customers, entrepreneurs create a certain theme to their company. Giving the product a certain “identity” persuades the customers that want to be looked at with the certain “identity”, purchase it. For example, if you want to be looked at as a yogi, you would buy Lululemon to present that look. Another example of a company that demonstrates this strategy is Vineyard Vines. Vineyard Vines was designed to have the image of a preppy style so that people who look for preppy clothing know to shop at Vineyard Vines.
Entrepreneurs have found that quality and price go hand in hand. This is because people tend to assume that if a product is more expensive the quality is better, which causes them to buy it. Knowing this, companies raise the price of their products assuming that they will accumulate a better profit and have more sales.
Lastly, effective advertising is very important to make the company and products known by many. Instead of spending a big amount of money on one advertisement, a better strategy is to spend little to no money on multiple advertisements. The CEO of Nasty Gal made sure the clothing looked exactly how they did online including good quality. The word of the company starts to spread and next thing you know thousands of girls are buying products from this firm all because of the free advertisement that Sophia produced. “Social media is built on sharing, and Nasty Gal was giving girls something amazing to share each and every day.”
