How do name brand clothing companies justify their high prices?

Question

Levi's, Abercrombie and Fitch, Hollister, Le Coste, Banana Republic - when you check the label, they all say "Made in Bangladesh" or something like that. How do they justify charging $75 for a t-shirt or $100 for a pair of jeans??? (And why do people buy these clothes when they can find the same clothes at Target or Salvation Army?)

Answer 1

There are a few aspects about Brand-Image, as has been correctly dwelt by many, as above, those are in the game for many years now. Thanks to the power of advertisement that foreign brand-names are household words here which were unknown even a few decades ago in our part of the world.

However, I would like to add the following: As we all know that the world has become a 'global-village' due to explosion of communication (electronic as well as transportation etc.). Therefore, any exportable goods made in a country far away than its place of use does not necessarily mean that the quality aspect is different in any way, save the pricing thing.

This is because as we know that for any type of production or manufacture (Mfgr) there are 3 basic elements needed. Such as:

1. Men (read Women too)
2. Machines and
3. Materials

Only the first component ‘Men’ has been supplied from 'local' markets, in this case from Bangladesh. The remaining two were almost 100% Imported from the country and Mfgr of choice of the Buyers.

Having satisfied with the quality and prices of products and services Imported from Bangladesh since 1980s, these Buyers and their respective governments were insisting to have 'backward linkage' installed and functioning from 1-1-2005. Meaning that the Mfgrs here in Bangladesh are now requiring almost everything produced 'locally' to have market access in their respective countries. Broadly speaking, our Mfgrs are now supposed to do the following:

a) Production of cotton or fibers and such raw materials (RM).
b) Spinning or processing them into Yarns & Threads
c) Weaving or Knitting them into Fabrics or finished RM
d) Cutting & Sewing them into Garments or whatever the Buyer wants.
e) Packing & Wrapping materials are to be made locally

Now coming to the issues of quality and other regulations as set forth by the foreign Buyers, these are strictly adhered to by the local Mfgrs as per set international norm/standard. These all measures are making production quality of any branded items as good as if they were produced by their traditional Mfgrs in any of the developed countries.

So, what is happening now is that the profit margins may have increased for the middlemen (Buying House) and the Importers (Buyers) in developed countries (which may slightly be offset by the increased prices of RM), the bargaining power these buyers are having has increased many fold and the Mfgrs are operating at breakeven point. On the other hand these Buyers are pressing hard on local Mfgrs to give same or similar facilities as those are prevailing in the developed world.

Therefore, I personally feel that justice must be meted out first to the Mfgrs in Bangladesh who are producing under some sort of compulsion or duress (though this is a hard word, but it is what they are undergoing now), since they can not roll back their investments made through bank Loans, and then to the End-user in their respective countries who are sometimes fleeced by the MNCs and such large buyers by way of sharing the profit margin with the retailers.

Disclaimer: I am in no way associated with Garments business, but saw its rise in Bangladesh since 1980 and its gradual fall since 2005 when the ‘Quota’ system was abolished. Out of about 4,500+ Garments producing factories at their peak, there are 50% shutdowns and 2,000+ are barely making any money after retrenchments and reduction of salary to their employees.

Answer 2

No and the reason I say no, is because quite often the clothes made by a famous house brand name are sometimes made in the same sweatshop factory somewhere in deepest China or Injah who make the same sweatshop cheapo clothes we can buy at Primark. Unless you are a fashionista hooked on fashion, what's the point in wearing something with the name PRADA on it? The only purpose is to show that such as person has more money than sense. There was a time when it was vulgar to show labels, now it seems everyone must show a label. Not me pal - I know a rip off when I see one. In my local 99pence shop, I can get three pairs of throw away socks for that price. In Primark you can get six for a couple of quid, same price really. But you go into M&S they want £4 or £5 for the same throw away junk. Take my advice and to Hell with up market labels - just not worth it. What puzzles me most is why kids, esp of the working class, hoot and holler at each other about the label on their clothes or the type of trainers they are wearing. Listen up - trainers are bad for your feet. If a person wants to run, buy the cheapst plimpsoles possible. Why? Because they force the wearer to run on the balls of his/her feet and not on the heal which causes leg muscle and bone damage over time. In fact to be honest, our ancient ancestors ran barefoot and were probably damn sight quicker over the same ground than we are today - a bunch of fat fashionista slobs.

Answer 3

You aren't paying for the cost of producing the jeans, you are paying for the branding or image. If a Gucci product cost the same as an unbranded one, the brand would have no value, because everybody could afford one. you are buying into the exclusivity of the brand.

The value of a brand can be partly quantified by comparing how much someone would be willing to pay for two products of equal specification, one being branded and one unbranded. People will pay more for the branded product beacause the company has paid more to market the product to the consumer so it has a higher perceived value

Answer 4

1) Supply and demand.
2) They do it as long as people pay the higher price and it's profitable.
3) MTV says you're not cool unless you have expensive "bling-bling" for everything (Sweet F******* Sixteen. Yick!) (See #1).
4) The actual cost of the design. Better designers require better salaries. For example, consider the cost of a painting by Joe Schmo vs. the cost of a Van Gogh or Picasso.

Cost is not related to the "better materials" used. Again, think about art materials -- if more expensive paint is used on Joe Schmo's art, it still wouldn't sell for as much as the Mona Lisa.

Answer 5

based on the companies starting and continuing reputation...most companies like A&F charge high prices because they are made of good material...famous name brands who hold fashion shows have relli good quality things and therefore charge higher.. Levi's has an old rep for being the first denim jeans ever made and that is y they are pricier than other brands.

Answer 6

It has a lot to do w/ the quality of the fabric and the quality of labor that made the materials. Most designer brands are not mass produced so therefore they may be more expensive

Answer 7

To me its worth paying because they are for the most part made with better material and last longer.

Answer 8

If people will buy, they will produce and capitalize on it. I have no problem with designer gear - as long as you don't pay full (or even half price for it). 60% or more is acceptable. It all goes on clearance anyway...

Answer 9

1

Answer 10

Its all about the brand!

and about looking cool with your friends


but some people may buy those brands because they fit better