Harrington Case
1. ISSUE AND DEFINITION OF SUCCESS
Issue: After three years of unimpressive sales and low margins, Harrington Collections must evaluate launching a new active-wear product line in order to increase profits and maintain industry leadership.
Definition of Success: Break-even must be achieved within one year of new product line introduction and sales must bring net profit back to 2005 level of $154 million in the long-term.
Positioning Statement: Harrington Collection provides high-quality professional and stylish attire for affluent, fashionable, college-educated, professional women ages 25 to 60 entering the workforce. 2. RECOMMENDATION
Harrington Collections should launch an active-wear line to be sold within the Vigor product line. Manufacturing will be conducted in Mexico and product will be distributed through Vigor’s current distribution channels with hoodies priced at $100, pants at $80 and T-shirts at $40. 3. KEY CONCLUSIONS
Alignment with Vigor’s current pricing, distribution and marketing models: * 10% of Harrington’s current customers said they would purchase an active-wear set in the $100-$200 price range. This is $3.3 billion of potential sales within Harrington’s target market. * Brands are beginning to trade up and 40% of total active-wear sales are forecasted to fall within the “better” classification in the next two years. * Active-wear is an appropriate introduction into the Vigor line with its lower price point and “better” classification. * Industry trends show customer preference for shopping in specialty stores, which aligns with Harrington’s current distribution channels of 120 specialty stores, 50 exclusively sell Vigor. * Harrington currently relies on a push promotional strategy, which will coincide, and be needed, in the launch of a new product line.
Despite the departure from traditional professional attire, casual active-wear complements the current line well, both in pricing and distribution with
Issue: After three years of unimpressive sales and low margins, Harrington Collections must evaluate launching a new active-wear product line in order to increase profits and maintain industry leadership.
Definition of Success: Break-even must be achieved within one year of new product line introduction and sales must bring net profit back to 2005 level of $154 million in the long-term.
Positioning Statement: Harrington Collection provides high-quality professional and stylish attire for affluent, fashionable, college-educated, professional women ages 25 to 60 entering the workforce. 2. RECOMMENDATION
Harrington Collections should launch an active-wear line to be sold within the Vigor product line. Manufacturing will be conducted in Mexico and product will be distributed through Vigor’s current distribution channels with hoodies priced at $100, pants at $80 and T-shirts at $40. 3. KEY CONCLUSIONS
Alignment with Vigor’s current pricing, distribution and marketing models: * 10% of Harrington’s current customers said they would purchase an active-wear set in the $100-$200 price range. This is $3.3 billion of potential sales within Harrington’s target market. * Brands are beginning to trade up and 40% of total active-wear sales are forecasted to fall within the “better” classification in the next two years. * Active-wear is an appropriate introduction into the Vigor line with its lower price point and “better” classification. * Industry trends show customer preference for shopping in specialty stores, which aligns with Harrington’s current distribution channels of 120 specialty stores, 50 exclusively sell Vigor. * Harrington currently relies on a push promotional strategy, which will coincide, and be needed, in the launch of a new product line.
Despite the departure from traditional professional attire, casual active-wear complements the current line well, both in pricing and distribution with