This chapter addresses how fashion brands innovatively manage the “country of origin” (“made by” and “made in”) variable, as well as the consequences in terms of brand image, reputation, and competitiveness. This empirical work gives an account of the fashion brands Spanish millennials wear. Then, the authors assess their degree of brand literacy through their knowledge of the country of origin of the said brands (“made by”) and of the manufacturing country (“made in”). Last, they evaluate how their awareness of “made by” and “made in” affects the millennials' image and feelings.
TopIntroduction
The millennial generation is the widely accepted term to refer to the population group born between 1980 and 1999. Millennials, also known as Generation Y, are one of the recently most analysed social groups regarding consumption, social networks and communication. As Young & Hinesly (2012) point out, further research is needed on this generation to gain insights into those who are called to be the consumers of a new era.
The geographical origin of a brand (‘made by’) and its manufacturing country (‘made in’) might be over the years two factors of growing awareness by the millennials, due to their affinity with the commitment and social responsibility of the company or of the brand. Under this premise of social responsibility, following McElhaney (2008), Jones (2005) and Pakseresht (2010), these two aspects (‘made by’ and ‘made in’) could become part of the brand equity or the set of attributes that favour differentiation and affect the added value of a brand (Kotler & Keller, 2006).
Phau, Teah & Chuah’s (2015) work is a point of reference due to their choice of topic and variables. They carry out an analysis of the consumers’ attitudes towards sweatshops and labour conditions in developing countries and the way these impact on consumers. This research also examines how these variables affect purchase decision and, ultimately, their willingness to pay more for luxury fashion garments. Besides, it focuses exclusively on luxury fashion brands, ignoring the most widely known fast fashion brands (low-priced clothes that take in new trends and do not last long in shops). Furthermore, this analysis does not target the millennials. By contrast, our research takes on board the millennials and all fashion segments: luxury, premium or fast fashion (Bruce & Daly, 2006), in addition to various types of fashion brands: manufacturer’s brands (MB) or private-label brands (PLB).
Public opinion has recently begun to take an interest in what is in the backstage of the phenomenon of the relocation of the production of global companies in the fashion industry – especially fast fashion – and also in the employment and environmental impact on sweatshops in developing countries. It was in the mid-1990s when it became publicly known that Nike was hiring children in Indonesia to manufacture soccer balls. This issue attained international visibility and prominence in April 2013 after the collapse of a building in Savar (Bangladesh) that housed manufacturing workshops for fashion brands1, with a death toll of 1,000 people.
Several non-for-profit organisations have reported that some suppliers for Inditex (parent company for Zara) have applied abusive work conditions in several developing countries (Delgado, 2015). The casual fashion sector –and especially low-cost– is one of the most delocalised and present in Third World countries. Such relocation – so customary since the 1980s – begins to give rise to certain social rejection, as it is often associated with extreme working and environmental conditions, low wages and even child labour.
Inditex, world’s leading Spanish fashion firm, classifies its suppliers into two groups: close factories (55% of production) and far factories (45% of the production). Close factories are located in the following countries: Spain, Portugal, Morocco and Turkey. They resort to these factories for fashion products, fads, new fashions that have broken into the market or certain products that they suddenly decide to include in their collections because they notice a growing demand. The remaining 45% is made in far factories in India, Bangladesh, China or Brazil (Delgado, 2015).