Activity: Pricing a New Line of Womens Jeans

You are the Product Manager for a small but fast-growing NYC-based womens fashion company. Your company is making inroads into the highly competitive fashion world by targeting the following market segment with the following demographic characteristics:

• Females aged 25 to 54 years
• Both single and married
• Working professionals & stay-at-home moms who are highly engaged in their childrens lives
• Engage in personal fitness/training and live health-conscious lifestyles
• Household incomes: $60,000+ for single women & $150,000+ for marrieds

Your company has a well-developed website, sells online and is also making inroads in brick and mortar retail stores. Most retail stores that carry your clothing lines are independently owned businesses located in cities and affluent suburbs in Mid-Atlantic & New England (e.g.: Metro NYC area, Southern CT, Bergen County NJ, Boston MA, Philadelphia, PA, Washington D.C/Northern VA).

The company founder and CEO wants to add a line of blue jeans and turned to you to make it happen.

Most stores your company works with, or wants to add to its retail channel, do not currently sell jeans because of limited in-store space and the fact that large retailers already offer a wide selection of jeans to your target market.

Market research indicates that women who choose your brand and clothing value its quality, fit and comfort; primarily because of their lifestyles. Many in your target market like to wear jeans, including in the office or when working from home. They are not highly loyal to any brand of blue jeans. These women buy jeans from companies such as LL Bean and Lands End, or well-known brands sold in department stores.

Answer the following questions:

• Estimate your production costs, including manufacturing (fixed & variable), marketing & distribution costs. (Note: Do some research and make assumptions on manufacturing costs, wholesale, retail price points, sales volume, etc.)