Classic Knitwear and Guardian: A Perfect Fit?
Classic Knitwear, a publicly traded company, is a manufacturer and distributor of unbranded casual knit apparel. Some of their products include T-shirts, sport shirts, sweatshirts, fleeces, and many others. Classic focuses on the non-fashion casual knitwear that has gained the company $550 million in revenues in the year 2005. Classic had concentrated its’ market on this segment of casual knitwear because CEO, Ortiz and CFO, Chong had believed it offered faster growth potential than ordinary retail. With a substantially lower gross margin of 18% versus the leading branded product manufacturing at an average of 30%-40%, Classic was aware of the need for improved gross margins. After the marketing team of CMO, Brandon Miller began researching a number of proposed product innovations, they landed an interesting idea of a branded line of insect-repellent clothing, which seemed like the most expedient way to increase brand recognition and help differentiate the Classic brand among the rest. With the current and growing fears of insect-borne illnesses and the drastically low supply of insect-repellent options, the alliance between Guardian, Inc. (the creator of chemically-treated knitwear to repel insects) and Classic seemed like a wise decision. Given some preliminary consumer research, the “Guardian” name was found to deliver over 50% of unaided brand awareness among males, age 18-35. Not only that, 95% of those males held positive perceptions of the brand. Given the brand’s high level of awareness and positive customer associations, Classic knew that the apparel being treated under license with Guardian could be launched successfully. Classic Knitwear’s advantage of minimal product costs combined with Guardian’s brand awareness and innovative product creates an opportunity for an achievable alliance that should assist both companies in developing and reaching their long term goals. Product-market...
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