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American Apparel: A case study in marketing, quality management, and reputation

Quality management and marketing are intimately related (or should be!) in any business. A large component of quality management is responding to customer feedback and implementation of that feedback in further product improvement and development. Marketing, on the other hand, relies heavily on the reputation of a business and customer perception of that business. It is much easier to pitch a product to a customer who is already satisfied with a related product and has high trust for a company.

Maintaining the sometimes tenuous relationship between marketing and quality management is more important in today’s economy more than ever. Consumers, consumer advocates, and watchdog groups have more power than ever over the “brand” or perception of a company, as the flow of information about companies is much more accessible than before.

The perceived reputation of a company

The perceived quality of a product is also much more complex than it used to be, and is also no longer separate from the perceived reputation of a company. These days, many customers assume, for instance, that a company’s policies in regards to compliance with industry rules and standards will be reflected in the quality of that company’s products. Take, for instance, the consumer demand for labels that state where a product was made, and the widespread skepticism of products made in countries where the work conditions – and therefore product quality — are perceived as low, and where companies do not have to follow U.S. labor laws.

The reverse also becomes true. Take American Apparel, for example. The apparent decision of the one-time clothing-industry-star early on to act socially responsible initially gave the company good PR and resulted in great business success. In the three years between 2006 and 2009, American Apparel saw the opening of 148 stores, the “fastest retail rollout” in American history, according to a 2009 CBS article on the company, “American Apparel: A Made-in-US success.” The company created a clear correlation between the conscientious practices of a business and the quality of that business’ product….

And it worked.

Everyone, from all the far-flung corners of fashion, was wearing American Apparel.

Quality management not a one-time deal

However, as can be seen by American Apparel’s example, both quality management and marketing are not a one-time, one-campaign deal in today’s world. According to an interviewee in the LA Times, “American Apparel Reports Loss, Sales Decline in 2010,” some people began to “think twice,” before buying from a company whose goody-two-shoes reputation was undercut by “grubby” overly-sexual advertisements and whose owner, Dov Charney, is known for indulging in unapologetic lasciviousness and unethical behavior.

As the spectacular rise and fall of American Apparel shows, the perceived quality and attractiveness of a company’s products depend heavily on marketing and reputation, especially in a modern world of widespread access to information and public evaluation via social media platforms.

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