|Classic knitwear questions: | |Does the “ product” fit Classic’s needs and capabilities? | |What sales volume will break even on Classic’s 2-year investment and what is the | |estimated demand for the new line over the 2yr launch? | |What problems do you see in the proposed marketing program? | |The major problem with the marketing plan is lack if research to indentify a viable | |target market for the product. | |Construct a “positioning” statement for “Guardian” line. |
In order for Classic Knitwear to remain competitive in the private label and unbranded knitwear market, executives feel they must raise their gross margins from 18% to 20%, with the potential of reaching margins of 30 – 40 %. To raise margins to 20%, Classic must differentiate the brand and increase brand recognition. Producing insect repellent clothing will provide an avenue for Classic to increase margins by capitalizing on their current production advantages. Classic will be able to sustain long term margin increases in a niche market that is currently unsaturated. The main marketing strategy would be to create a product line in an unsaturated niche market, where demand for the specialized product is increasing. Due to the growing concern of insect-borne illness, combined with consumer dissatisfaction with current insect repellents, we feel that Classic should develop an insect repellent clothing line. The combination of Classic’s clothing production efficiencies coupled withwith Guardian’s brand recognition and approval, a pioneer in insect repellent clothing item, provides an opportunity for a partnership that will help both brands grow theirenable business growth and expansion. businesses. Based on the preliminary research on long term profitability of the product line, entry strategies for the Guardian/Classic product should be as follows:would be: • Design product for both men and women.
• Reduce the number of SKUs in the original line. • Create ideal pricing for future dozens orders.
• Include Feature a wide variety of distribution channels. According to preliminary market research, 185 males expressed an interest in insect repellent clothing. The product is currently being marketed towards male, outdoor enthusiasts from ages 15 to 35. The female market provides an unrealized opportunity given that women also participate in outdoor activities. In order to incorporate women’s clothing into the line, as well as test the long term growth opportunities of the insect repellent line, Classic should reduce the number of SKUs that they initially introduce to the market. The current line includes four styles designed for men. Reduce The company could that toreduce options to two two styles for the first season, a fleece and short-sleeve shirt and incorporate styles for both men and women. Limiting the number of styles introduced would allow the brand to incorporate men’s and women’s clothing, capturing a greater demographic, while reducing initial investments in production capital that would be required across the four lines. Once productthe lines haves been developed, Classic must devise a plan to sell the product to retailers. To operate efficiently, Classic should give price discounts to retailers who place future orders for a dozen unit packs, thus incenting more sales and recovering on its investment. or more. Currentmore. Without this improvement, ; Current margins on singles and dozens purchases are insignificant. are relatively the same. Increasing margins on single unit purchases would promote retailers to take the risk of purchasing bulk orders to meet a seasonal forecast. instead of purchasing singles on a fill-in basis. Along...
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