Online Lesson

What Do People Want to Wear?

Key Economic Concepts:

• Demand
• Equilibrium Price
• Price
• Quantity Demanded
• Quantity Supplied
• Supply

Description:

To stay in business, fashion merchandisers must be able to anticipate what consumers want. By looking at different retail websites, students will look to anticipate what consumers are demanding. Students will then go through the market scenarios for each product and try to anticipate the effect the scenario will have on the demand and price (assuming constant supply) for the product they have chosen.

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Lesson Objectives:

Students will:

• Analyze market scenarios to determine their effect on the demand and price for the identified product.
• Determine the relationship between a change in demand and a change in price.

Introduction:

Purchasing agents work to identify market trends for retailers, trying to predict items that consumers will demand. In this lesson, the students take on the role of purchasing agents; as purchasing agents they try to anticipate the impact of certain market scenarios on the demand and price for clothing items they have selected. The lesson builds upon students' prior knowledge of determinants of demand and how they impact changes in that demand. The impact of interest is the effect on price. Make sure to tell students that market prices are set by the interaction of demand and supply (be aware that they should be more concerned with the marketing merchandise with short product life to a discriminating public). By trying to determine what is "hot" and what is "not", students will be learning about determinants of demand and ultimately, price.

The determinants of demand for this lesson include: tastes and preferences, income (normal and inferior goods), price of related items, goods and compliments, future expectations, and number of consumers in the market.

Resources:

• Reebok Footwear: Here is the homepage for Reebok Footwear.
  www.reebok.com/US/# ^[1]
   
• Nike Sportswear: Here is the homepage for Nike Sportswear.
  www.nike.com/main.html ^[2]
   
• Adidas Sportswear: Here is the homepage for Adidas Sportswear.
  www.adidas.com/ ^[3]
   
• Ann Taylor Apparel: Here is the homepage for Ann Taylor Apparel.
  www.anntaylor.com/home.jsp ^[4]
   
• Eddie Bauer Apparel: Here is the homepage for Eddie Bauer Apparel.
  www.eddiebauer.com/eb/default.asp ^[5]
   
• Wet Seal Apparel: Here is the homepage for Wet Seal Apparel.
  www.wetseal.com/home.jsp ^[6]

Process:

How do different market scenarios affect the demand and price for clothes? The students have a list of items to sell. The list includes these items: dress pants, winter coats, ski sweaters, and athletic shorts. The students will need to select examples of these products online.


Potential web sites include but are not limited to the following:

• Reebok Footwear Web site ^[1]
• Nike Sportswear Web site ^[2]
• Adidas Sportswear Web site ^[3]
• Ann Taylor Apparel Web site ^[4]
• Eddie Bauer Apparel Web site ^[5]
• Wet Seal Apparel Web site ^[6]

Remember, they want to enter a market in which there will be an increasing demand for the given product. Students should discover that changing the price point on a demand curve changes sales. This is a supply shift.

Student will go to different web sites and identify different types of clothing listed above: dress pants, winter coats, ski sweaters and athletic shorts. Then they need to complete both interactive activities and print their responses. The responses can be used to assess the students' learning. The students should use what they find on the Web site(s) to create the "market scenarios" that are described in the extension activity.

Again, the determinants of demand for this lesson include: tastes and preferences, income (normal and inferior goods), price of related items, goods and compliments, future expectations, and number of consumers in the market.

 

 

 

 

Here are the questions and answers for the two interactive activities. Make sure to discuss the correct answers to the questions with the class after they have finished the activities.

Winter Coat:
1. Unsually mild winter [decrease demand and price]
2. Winter begins [increase demand and price]
3. Relocate to Southern California [decrease demand and price]
4. Rock stars make it trendy to wear winter coats [increase demand and price]

Ski Sweater:
1. Skiing becomes more popular [increase demand and price]
2. Ski sweaters help increase weight loss [increase demand and price]
3. Unusually mild winter [decrease demand and price]
4. Celebrity endorsements [increase demand and price]

Athletic Shorts:
1. Famous people wear athletic shorts in public [increase demand and price]
2. Schools ban the wearing of athletic shorts [decrease demand and price]
3. Working out becomes trendy [increase demand and price]
4. Unusually cool summer months [decrease demand and price]

Dress Slacks:
1. The move to a more casual workplace [decrease in demand and price]
2. Increase in per capita income [increase in demand and price]
3. Warmer weather [decrease in demand and price]
4. Increase in employment in the professional sector [increase in demand and price]

Conclusion:

Based on the information gathered in the market selected for online research, list the demand determinants that would currently affect it. Students should be prepared to answer these questions in a class discussion about demand and price.

• What happens to price when demand increases?
• What happens to price when demand decreases?
• What type of relationship do you see between demand and price?

During this discussion, the students should recognize the direct relationship between price and quantity demanded when supply is constant. As demand increases, so does price. As demand decreases, so does price.

Assessment Activity:

The printed answers to the market scenarios provide immediate assessment.

Also, have the students answer these questions as they relate to the issues learned in the lesson.

1. Why do businesses advertise their products? [To increase the number of consumers in order to increase demand, or to increase people's taste for that good in order to increase demand.]
2. Why might you advise a business to have a sale? [A sale lowers the price. Price is not a determinant, but would change the quantity demanded.]
3. How do seasonal expectations influence demand and price? [Warm clothes demanded in cold times of the year; lighter clothes demanded in warmer times.]
4. In your work purchasing products, how might you be influenced by what you have learned? [Answers will vary.]

Extension Activity:

1. Have the students create their own market scenarios. Have them use their scenarios to quiz others in the class about the relationships they have been studying. If these markets are defined by listed internet sites, teachers can invite explanations of price differences among brands of specific products. Encourage discussion of price similarities and reasons why tastes for some (such as running shoes) allow manufacturers of those products to extract premium prices. These web sites offer sufficiently broad examples of seasonal sales tactics by line of production.

2. For a quick evaluation activity, have each student use a note card with an arrow on it. After the students hear a report on a market scenario, they are to hold their cards so that the arrows point up or down, showing the predicted change in demand. This provides a basis for immediate feedback and discussion.

3. Encourage students to look at newspapers and find headlines that signal changes in demand. Teachers could provide news headline links or let the students search on their own. Housing, commodities, entertainment, and other markets also lend themselves to be analyzed in terms of changes in demand.

Links Used:

1. ^{^ ^} "Reebok Footwear" - (www.reebok.com) The homepage for Reebok Footwear.
2. ^{^ ^} "Nike Sportswear" - (www.nike.com) Here is the homepage for Nike Sportswear.
3. ^{^ ^} "Adidas Sportswear" - (www.adidas.com) This site is the home of Adidas Sportswear, and provides prices of Adidas items.
4. ^{^ ^} "Ann Taylor Apparel" - (www.anntaylor.com) This site is the homepage for viewing prices of Ann Taylor items.
5. ^{^ ^} "Eddie Bauer Apparel" - (www.eddiebauer.com) Here is the homepage for Eddie Bauer Apparel.
6. ^{^ ^} "Wet Seal" - (www.wetseal.com) This is the home page for the teenage girl clothing store.

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