Standardized examples of pricing criterion which currently exist in the industry are outlined below.

Off-Price
Low priced merchandise. This price range includes samples, close-outs, discontinued, previous season and irregulars.

Budget
This is the lowest price classification in which one would find advertised brand names. Prices are below average. Promotion of this price range to consumers is often based on value. Budget labels include firms such as Ship' n Shor and Wrangler Jeans. This approach may be relevant if you are trying to reduce inventory and do not have a long term commitment to the market. You will, no doubt, impede competition but also produce low profit margins.

Moderate
Medium priced merchandise a step above budget. This is the price classification that most goods fall into. Labels like Levi-Strauss, Gitano, and Van Heusen for Men fall into this category. The majority of Children's wear falls into this category. You should be able to match competitors prices, build a market position and produce reasonable profit margins. In general this will be extremely difficult given the small quantities a start-up will be dealing with and the cost of an in-house or independent sales rep.

Better
Medium to higher priced merchandise. These products are slightly higher profile lines that are found in department stores like Macy's. Promotion of this price range to consumers is often based on the implication of higher quality. An example of Better lines would be Liz Claiborne, J H Collectibles or Perry Ellis. Again, you should be able to match competitors prices, build a market position and produce reasonable profit margins. In general this will be extremely difficult given the small quantities a start-up will be dealing with.

Contemporary
Contemporary is currently one of the hottest categories in pricing. It represents street wear and trendy fashion conscience merchandise, at below Bridge pricing. Often tends to represent misses and juniors sizing. This price range is also referred to as Popular. Contemporary lines include BCBG, XOXO, Isabel Ardee, Bisou Bisou, and Michael Alexander. This is one of the fastest growing pricing categories in the industry.

Bridge
Bridge is usually the lower priced or secondary lines of designers. Bridge products have the look of designer products but are made from less expensive fabrics. Examples are Donna Karan's DKNY line, Emmanuel Ungaro's Emmanuel line and JOE for Joseph Abboud.

Designer
Designer Clothing is usually the product into which a designer pours his or her heart and soul. At this level, the designer can give free reign to creativity without concern to cost as in a bridge line. Designer clothing usually sells in specialty boutiques, or boutique sections in department stores. Examples of designer clothing are Joseph Abboud, Bill Blass, Calvin Klein, Geoffrey Beene and Oscar de la Renta. Although most of these designers produce a bridge collection as well, the designer collection is usually tagged "[Designer Name Here] Collection". There is a distinct difference in price and garment construction between designer and bridge although both may appear to carry the same designer name. Designer products cater to the high priced prestige or luxury market.

Couture
The highest priced garments carry the classification of couture (Literal French translation: The finest dressmaking). These are mostly original designs, hand made, measured and cut to fit an individual's specific body measurements. In many cases, couture designs are one-of-a-kinds and usually run several to tens of thousands of dollars in price. This approach may be appropriate if your company is selling a new product or if you are trying to position your product or service at the upper-end of the market. However it is feasible only if you are planning direct sales to customers. There are not enough applicable retailers in this category to make your start-up profitable.

Date Published
June 2008

Region
USA

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