The Value of Fashion: Beyond Material to Brand Association

Value can be quantified in a number of ways. Theoretically, value can be assessed by the amount of money an item is worth based upon its composite parts. In such a way, a 1 carat diamond ring set in white gold has more value than a 1 carat cubic zirconium set in sterling silver. In addition, some find value in the rarity of an item. Some gemstones are more rare or more beautiful and thus considered more valuable. However, the capitalist economy has come up with another way to assess value which has nothing to do with the actual worth of the parts of the item.

Instead, some items have come to be valued because of their associations with fame, glamour, and wealth. Nowhere is this discrepancy in value more marked than in the fashion industry. The fashion industry operates basically on the premise that the name inside the garment (or sometimes blazoned across its front) can hold as much value, if not more, as the fabric or artistry itself can.

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Thus, Wark’s statement, “A piece of cloth, like a sheet of paper, can be a mass-produced commodity of little value, or it can be a rare and highly sought after product – depending on what is written on it” is affirmed.

Fashion as an artistic and quality medium has given way to capitalistic goals. While it may seem that the value of a simple name on a soda can, automobile, kitchen appliance or t-shirt may only reside amorphously in the minds of consumers, business analysts have actually devised a formula to determine the monetary profit of a name brand.

New York University, Stern School of Business professor and widely-published author, Aswath Damodaran (2006a), argues that brand name value accounts for the majority of profits of some businesses.

While he admits that this type of intangible value is difficult to assess in many cases, he argues that “Perhaps the simplest measure of brand name value is obtained by comparing the cash flows of a brand name company with an otherwise similar company (in terms of product and scale) without a brand name. The difference in cash flows then can be attributed to the brand name and the present value of these cash flows should generate a value for the brand name. ” He uses the following formula to give value to a name brand apart from the product it actually represents:

Value of brand name ={(V/S)b-(V/S)g }* Sales (V/S)b = Value of Firm/Sales ratio of the firm with the benefit of the brand name (V/S)g = Value of Firm/Sales ratio of the firm with the generic product Damadaran (2006b) uses the example of Coca Cola as a brand name soda and applies his formula to determine that of the $115 billion dollar value of Coca Cola as a company, $102 billion can be attributed to the name brand of the soda as compared to a Canadian brand of soda of similar ingredients and taste.

It stands to reason that similar correlations can be found in the fashion industry. Once brand names are established as desirable in the minds of the consumer, companies can seize upon these emotional compulsions to purchase, which have little to do with actual quality. According to SDR Consulting, companies hope that their customers become loyal to their brands: “Consumers see a particular brand name as a contract. A brand's name may reduce consumers' sense of uncertainty, allowing them to purchase uncertainty reduction, or trust, thus improving their sense of value.

a brand's value is directly related to customer loyalty…That is, if a particular brand maintains a significantly higher perception of value to a consumer than any other brand in the category, that consumer will consistently purchase that brand and consistently recommend that brand to others” (Measuring Brand Value, 2002). This loyalty is established over a period of time, and it is very important that retailers keep their customers’ happy. “As the cost of getting a new customer is about six times that of keeping an existing customer happy and loyal; that alone justifies investment in supporting brands” (Lesson Two: Fashion Brands).

Thus, cost effectiveness alone makes developing this brand image very important, even at the cost of higher-quality fabrics and details. But where does this brand worship begin? One of the biggest sponsors of brand name bonanzas take up residence each fall at Fashion Week in New York City. There, the big name designers set up intricate and expensive shows to lure in more and more customers who can afford to wear their labels. The talk at these runway shows is all about the look of the garment rather than the fabrics or details, in many cases.

For example, one reporter commented on the up-coming stars and their choices of apparel: “The coat is Gucci… The fitted white leather boots she had on were made for me at Costume National. The sequined handkerchief-hem wrap dress was a vintage one from a Diane Von Furstenberg collection” (Trebay, 2005). Here the stars are adorned in horrifically expensive labels, but a little bit further down the pecking order come those that have to settle for the slightly less but still unimaginably expensive garments that tout the very same fabrics and detail as those that do not carry the desired label.

This brand worship even has a trickle down effect to the common mall fashionista. Even though these more expensive brands declare themselves to be high in quality, the real value is in less obvious areas in the minds of the consumers. “Brand names when linked with lifestyle, self-expression, and aspirations epitomize intangibles that are desirable to the consumer. Market research firms explore this kind of connection when they ask teens to name the “coolest” brands, because the question taps into the emotional significance of wearing certain brands of clothing and footwear (Lesson 25. , 2008). J. K.

Fiorello notes that shoppers, teens especially, feel the need to prove their worth through their fashion choices. “A teen being able to wear the more expensive label lines shows to their peers that they are worthy of being with them. The status symbols of brand named labels have metamorphosed into separating teens into various social classes” (2007). The kids could not tell you the fabric content or what the buttons are made of if they had to. The design of an Abercrombie t-shirt and a Target t-shirt do not differ that much. In fact, the lower priced brands are quite adept at making their shirts look just like the more expensive ones.

But the kids are not fooled. They just know the value is in the name brand, and everybody knows the name brand. However, the quality of these name brand articles of clothing is not any higher than that of a lower priced article. One way to notice this fact is through the concept that many designers have adopted called mega-niching. This practice targets three levels of consumers – those at the designer level, the most expensive level; the bridge level, a moderately expensive level; and what is called a ‘better’ level, which is the least expensive.

Designers such as Tommy Hilfiger, Donna Karan, Calvin Klein and Ralph Lauren are considered mega-nichers. However, the only difference is in the design and purpose of the garments, not in the quality of the fabric or detailing (Lesson 25, 2008). Essentially the same garment is marketed in three different ways, to three different groups at three different prices. Clearly the brand name is making the money, not the quality or artistic value of the garments. So what happened to the artistic side of fashion? Many fashion critics debate this issue.

Clearly, the clothing industry of the United States resides within a capitalistic economy, so it must function in that way. Brand names are the best example of getting more profit out of the same basic material. However, some fashion critics still maintain that art does reside in the designers offerings. Zandra Rhodes, who operates a fashion museum in London, is quick to point out that “the same amount of artistic expression goes into clothes, a piece of pottery or a painting” (Is fashion a true art form? , 2003).

She further argues that simply because fashion is also functional, it should not be dismissed as an art form: “Because the same amount of artistic expression goes into clothes, a piece of pottery or a painting. Fashion can tell you what people wore at a certain period just as pottery can tell you what their tea parties were like. I don't think the fact that these things were designed to be practical distinguishes them from fine art. You could say a painting is designed to go on the wall, but if it were made as a fresco, where it was part of the wall, would you say it was not art because it was practical?

” However, it is just this argument that draws other critics, such as Alice Rawsthorn, to contend that this is precisely where fashion falls short. She notes that fashion can only reflect culture to a point, but “unlike art, fashion rarely expresses more than the headlines of history” (Is fashion a true art form? , 2003). Thus, it makes no sense for the designers to focus on the artistry of their pieces beyond the shock value of the runway. Fashion is an extremely important part of the American (and European) way of life.

It allows consumers to create a sense of self and personality while secure in the knowledge that the brands they choose will make a statement about them. The companies know that making these statements as positive as possible lies in the brand name and its emotional associations. As noted above by Damodaran, this emotional association can now be quantified into thousands and millions of dollars for the companies. Thus, the capitalist rewards for fashion labels has defeated the need for an artistic aesthetic or for a clear differentiation in quality of clothing. REFERENCES Damodaran, Dr. Aswath. 2006a.

Dealing with Intangibles: Valuing Brand Names, Flexibility and Patents. A Paper Presented to the Stern School of Business, New York Damodaran, Aswath. 2006b. The Value of a Brand Name: From Net Income to Operating Income and Equity to Value. Lecture presented at New York University, New York, viewed 16 Oct. 2008 <http://pages. stern. nyu. edu/~adamodar/New_Home_Page/lectures/brand. html> Fiorello, J. K. 2000. Teens and the Consumer Culture: Why Brand Names Matter so Much. Associated Content. Viewed 15 Oct. 2008 <http://www. associatedcontent. com/article/217077/ teens_and_the_consumer_culture_why. html? page=3&cat=7>

Is fashion a true art form? 2003. The Observer. July 13: viewed 16 Oct. 2008 < http://www. guardian. co. uk/artanddesign/2003/jul/13/art. artsfeatures1 Lesson 25: Brand Names. 2008. Fashion Forecasting. Course Work for Rai University, Delaware. Viewed 15 Oct 2008 <http://www. rocw. raifoundation. org/fashion/BAfashion-mktg/fashionforecasting/lecture-notes/lecture-25. pdf> Measuring Brand Value (2002). Synergy. Discovery. Results. SDR Consulting. Viewed 15 Oct. 2008 <http://www. sdr-consulting. com/branding3. html> Trebay, Guy. (2005). Brand-name Goddess Basks in the Moment. New York Times: Fashion, February 8.