Calculate marketshare for the "better" activewear segment needed to achieve breakeven units. (Hint - use data for total market size from page 5 of the case).
Options:
4.8% 9.3% 1.9% There is insufficient data in the case.
Harrington Collection targeted affluent, fashionable, college-educated, professional women ages 25 to 60 . Each manufacturing division focused more narrowly on a specific target consumer. Harrington Limited's target customer was interested in "sophisticated elegance," Sopra's customer was described as a "status seeker", Christina Cole consumers wanted to be "office chic," and Vigor consumers were labeled "trend setters." Exhibit 7 provides further details on each division's target customer. According to Huey, "Harrington products are aspirational in nature, and wearing a piece of clothing with one of the Harrington labels provides instant status. We were one of the first companies to successfully introduce a lifestyle-branding strategy. This brand equity fuels the premium prices that Harrington Collection captures." Harrington Collection differentiated its products through design, marketing, and outstanding service. Harrington Collection was known for its top in-house design staff, extensive national advertising campaigns, and its exceptional quality and styling. In company-owned stores, Harrington employed cutting edge technology to track inventory and sales information. This allowed the manufacturing group to quickly react to market demands, improve productivity and shorten manufacturing cycles. Harrington's expertise in analyzing market data helped to prevent overproduction in the manufacturing group. An added benefit of staying ahead of the product life cycles was reduced overstocks for the retail trade partners. Harrington Collection maintained a significant channel marketing budget and had an excellent relationship with the retail trade. Huey explained, "We focus on a push marketing strategy. We offer our channel partners more support and incentives than most manufacturers. We consider them a strategic partner. We offer retailers valuable inventory and sales advice based on decades of expertise and data from our retail group. The independent specialty stores find this invaluable. These smaller specialty stores are our most fervent supporters. They love dealing with us because they can count on reliable deliveries, help in selling the merchandise, and credibility that comes with carrying the Harrington labels." The Active-Wear Opportunity and Its Costs In recent years, several companies had launched stylish, active-wear lines sold in department stores. These lines often consisted of a matching hoodie, pants, and tee shirt and were meant to be worn everywhere, not just to the gym. The trend toward more contemporary, athletic fashions resulted in rapid growth for firms that offered these lines. Liz Claiborne's Juicy Couture was one of the early leaders in the "better" active-wear category. Popular with Hollywood celebrities, Juicy Couture focused its line on glamorous fabrics and sexy styling. Knock-offs in the "moderate" and "budget" classifications quickly arrived on the market. Harrington Collection estimated that over seven and a half million active-wear units 6 had been sold in 2007. This number was expected to double by 2009. In 2007, 80\% of this apparel was in the "moderate" and "budget" classifications. However, many brands were starting to trade-up and 40% of active-wear in 2009 was expected to be captured by the "better" classification. The successful "better" active-wear product lines focused on large-scale advertising campaigns, with average price points just below $100. Ongoing advertising for an active-wear line was estimated at $3 million per year, exclusive of launch costs. 6 Since active-wear was sold as separates, the ratio of hoodies to tee-shirts to pants was not equal. Historical sales in the market segment showed this ratio was one to three to two. Therefore, an active-wear "unit" was viewed as half a hoodie, one and one-half tee-shirts, and one pair of pants
