Harrington Case
1) How well does active-wear fit with the Vigor division (e.g. target customer, advertising
and sales strategy, production capabilities)? What possible impact could this new
product line have on the Vigor brand name? How well does active-wear fit with the
Vigor division
The Product line focus of Vigor brand of Harrington collection was on Career wear dresses,
skirts, blouses, pants and coats. It was usually classified in better product classification. The
retail Price range of Vigor of Harrington collection was between $150-$500. The Target
customer of Vigor of Harrington collection is a Trend Setter Women aged between 25 to 50
years whose average house hold income was around $75k. These primarily are college
educated professionals who want comfortable clothing for work.
They maintained
production capabilities in near shore areas with large scale advertising used for selling
products in speciality stores as well as company owned retail stores. The customers
preferred Vigor brand of Harrington collection due to their superior quality, knowledgeable
sales staff and Harrington brand being a symbol of high class fashion.
The Active wear category was about stylish lines which are sold in departmental stores and
in budget and moderate class of apparels. The average price points in “better” category
were around $100 with the category going on rise. The customer research told that
customers wanted something which was more about contemporary and athletic fashion.
The customer research also told that the target customers of vigor of Harrington collection
and active wear were same and showed considerable interests in purchasing clothes in this
$100-200 range if it had superior styling, fitting and fabric like that of vigor of Harrington
collection was present.
If the new active wear category was introduced having different products like hoodies, t
shirts and pants at different price ranges within Harrington collection, customers are going
to buy them. The Active Range of products including pants, hoods and t shirts should be in
alignment with Vigor of Harrington collection has current pricing, sales and advertising
model, then ten precent of Harrington customers will buy the new active range. This will be
$3.3 billion dollars of new sales generating for Harrington in the new active wear segment.
Since, it is a trading up category, all the new products will be in “better “classification. This
will also give a lower point entry for new customers of Vigor Brand of Harrington collection
at lower price point and can be pushed up to the complete brand portfolio.
Also, Active wear customers have shown their preference for buying in speciality stores;
hence the current distribution channel of Vigor of Harrington Collection will give the push to
Active wear category with its 50 exclusive speciality store network. Also, push promotional
strategy will help in launching volumes of new active wear category. Since, the market is
moving from professional attire to casual wear, this will complement the current line as well
as pricing and distribution strategy of Harrington collection.
2) What are the potential retail trade and competitor reactions? Are there any potential
channel conflict issues?
With the launch of Active wear brand by Vigor of Harrington collection, the brand will
compete fiercely for market share as well as shelf space in retail stores. The Apparel
industry was moderately concentrated in USA. Multiple companies like Jones Apparel Group
and Liz Claiborne have already captured much of the market with their huge brand
portfolios having multiple product lines as well as multiple sales and promotional channels
like specialized departmental stores, discount stores and company owned stores of
Harrington as well as other competitors. The competitors will react by integrating both
horizontally as well as vertically. Harrington will be beneficiary as it has already company
owned stores which has specialised staff as well as well-equipped team to tackle all
customer queries. They need to lower their price points as active wear category is below
$100 category, hence outsourcing is necessary for them , hence manufacturing via Mexico is
a good decision.
Since, Harrington collection has always maintained a major budget for marketing channel
and has maintained an excellent relationship with retail partners. Harrington collection has
always maintained a push marketing strategy which will help them in launching the new
active wear category under the Vigor brand as initial push will be done to retail partners.
This will ensure that sales are being done by channel partners and initial breakeven is
reached as early as possible. Harrington collection has always considered retailers as their
special partners. This thinking will benefit them in launching the active wear category now.
They should help retailers will advise on how to sell and increase inventory turnover based
on the analysis of data done by them. This valuable insight will help them to position
themselves differently and make their channel partners their supporters for Active wear
portfolio and will push the sales down the channel. Since, channel partners can count on
Harrington Collection will base themselves on the reliable deliveries done by them as well as
help in selling merchandises along with active wear. The credibility which is along with
Harrington brand will attract the newer channel partners to come in network of Harrington
collections.
Harrington Collection shall not divulge its premium status and brand equity by selling active
wear in discounted stores. They should maintain their premium image by maintaining same
network partners but should position a new product line distinctively so that its brand
equity isn’t diluted.