Despite these increases in consumer demand and clothing preferences, Harrington still has many concerns to address in order to effectively develop and implement new looting lines, primarily dealing with industry markets, maturation, and the general competitive nature of the industry. The following addresses the main issue facing the Harrington Collection, which is how to remain competitive in a changing market without compromising or undermining their established brand quality and image. Based on our analysis of the launch criteria and expectations, we feel customers will have a positive reaction to this potential new line.
Juice’s example give our company confidence in attracting customers in both “moderate” and “budget” product lactation’s. Since Harrington already has a great reputation on the high end appeal market, the stylish active wear set would be a significant product addition to market to consumers as an extension of the brand. Furthermore, our survey findings indicated that 10% of customers purchasing apparel between the price ranges of $100 – $200 would buy a stylish or good quality active-wear set.
In 2007, the annual sale for products in the $100-$200 range in women’s apparel was $222. 2 Million. As a result, it can be anticipated that 10% of customer purchases would translate into 22. 2 million sales, given the aforementioned survey results and historical sales reference. Although the total quality of the active wear is lower than other Harrington apparel, as 95% of purchasers were satisfied with the products’ durability, feel, fit, and look, we would conclude that more customers would be attracted to this product category (Exhibit).
Analyzing the financial for Harrington Collection’s prospective launch shows a favorable breakable analysis for the new line to be launched in the Vigor division. Conservatively estimating a sustained 7% in market hare for the company will create a profit of Just over $6 million. Further taking into account the indirect and direct costs, an analysis shows that 289,873 units would need to be sold in order to break even with the initial startup costs and investment (Exhibit 2).
When this break even analysis is translated into a timeline with respect to the estimated profits, the product launch would break even three years before it depreciates making it a successful and profitable launch. When launching a new product, research is exceedingly valuable to that new product development and implementation into the relevant market or industry. Based on the aforementioned analysis of the brand and consumer preferences, launching the active wear line would be best for the Vigor brand division.
The brand already has a more relaxed image, in addition to a very low percentage of consumers who felt this element of the Drank Olathe ten value AT ten Drank. In regards to ten tatterdemalion survey findings and overall analysis of consumer preferences and brand position, it was noted that 10% of customers were willing to purchase the new product (Exhibit 3). Furthermore, when considering the pricing options, the new product line compliments Vigor’s existing pricing strategy with an estimated price ranging from $100-$200.
Following with Harrington established strong brand image, store support, and heavy advertising, Harrington should launch its new product line within the Vigor division, focusing on retail trade and further building off their already strong relationships and brand recognition. As the previous arguments and exhibits demonstrate, this new product line launch will broaden Harrington already extensive consumer base by attracting additional consumers to this “moderate” price range product selection without diluted the already established value of the brand image.
Furthermore, our financial timeline analysis indicates the new product lunch would be break even 3 years before any depreciates, making this launch in the Vigor division a profitable venture for Harrington Collections, in consideration of the current price complementation of the expected price range of both current product, as well as the new active wear products. As a result of our financial, consumer, and racket analysis, we support the launch of this new active wear product line. Harrington Collections: “Increasing the Demand for New Action” Exhibit 1: The Competitive Reaction *Moderate and Budget classification have higher Units sold. By launching the new line (active wear) we could attract more customers from Moderate and Budget classifications and make more sales. Exhibit 2: Break Even Analysis When the breakable analysis above is compared with an estimated profit of Just over $6 million, the conclusion is that the amount of units would pay itself back in Just over 2 years.