Harrington Collection

Topics: Marketing, Cost, Brand Pages: 10 (3215 words) Published: March 22, 2013
Case Assignment #2 – Harrington Collection
Outlook for overall women’s apparel industry
Since the downturn that began in the early 2000s significantly impacted the women’s apparel industry, the increasing rate on overall sales had presented a slight decrease from 2004. Although it came up from 3.5% to 5.7% in 2004, it began to come down from that year as well with a relatively stable dropping rate. However, it led to a significant fluctuation among units that sold in different price ranges. Let’s take a look at Chart-1 below which is transformed from Exhibit-2 in the case to the form of increasing rate and proportion respectively. According to (a), units sold whose price is more than $200 and in the range of $100 and $200 increased well below the average increasing rate. While the units sold whose price ranged from $50-$100 and under $50 increased higher than the average increasing rate. What’s more, the growth rate of units sold under $50 had jumped to 11.50% in 2007 by 4.28% which is in great contrast with that of only 1.55% whose price ranged from $100-$200. Chart-1: (a)

Price Point| 2006 (growth rate)| 2007 (growth rate)| difference| $200+| 0.6508%| 2.8736%| 2.2228%|
$100-$200| -0.0457%| 1.5075%| 1.5532%|
$50-$100| 7.0548%| 9.0851%| 2.0303%|
Under $50| 7.2188%| 11.5010%| 4.2822%|
Total| 5.1272%| 8.1631%| 3.0359%|
According to (b), the units sold proportions presented little difference from 2005 to 2006. However, in 2007, we found that 2 points less of units sold pricing up from $100 and 2 points more of that were priced under $50 compared with previous year. Chart-1: (b)

Price Point| 2005 (proportion)| 2006 (proportion)| 2007 (proportion)| $200+| 10.7601%| 10.3020%| 9.7982%|
$100-$200| 17.0388%| 16.2004%| 15.2036%|
$50-$100| 34.0776%| 34.7025%| 34.9983%|
Under $50| 38.0456%| 38.8025%| 40.0000%|
Total| 100%| 100%| 100%|
Although the statistics suggests a slight increase of the total demand in the industry of women’s apparel, the shift in the structure of units sold in different price ranges indicates a downturn in the industry which led to a downward consumer purchasing behavior. Indeed the economic sluggish hit the segment targeted on upscale-class apparel pricing higher than $100, however, it provides a great opportunity for manufactures who engaged in the segments targeted toward “budget” and “moderate” classifications. As a result, consumers undergoing economic downturn would become more and more price sensitive, especially for those who were always purchasing “moderate” or “budget” apparel even before the economic sluggish began. Competition

Since the industry was moderately concentrated, it should belong to monopolistic competition market, under which sellers could differentiate their offers to buyers. Products can be varied in quality, features, or style, or the accompanying services can be varied. Sellers try to develop differentiated offers for different customer segments and, in addition to price, freely use branding, advertising, and personal selling to set their offers apart. Retailing Competition for the Apparel Market

In current years, department stores have been squeezed between more focused and flexible specialty stores on the one hand, and more efficient, lower-priced discounters on the other. It results in a markedly falling in market share which can be found in Exhibit-5. In the contrast, specialty stores with narrow product lines and deep assortment, and supercenters who are actually giant specialty stores with broader product lines presented an enlightening future trend. The fierce competition, as a result, gave rise either to merger and consolidations between retailers in order to gain bargaining power with suppliers, or to contracting directly with manufacturers to produce private label products. Manufacturers also expanded their roles by integrating forward into retailing so as to reduce...
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