brands. This would not encourage the retailers to stock the product. But the provisionof trade promotion and advertising allowance might induce them to stock the product.
The company projected sales would be 10,000 displays within two years of productlaunch, of which 50% would be in discount stores, 25% in general merchandisestores, and 25% in sporting goods and apparel stores. We think that as the companyhas no experience in selling to these retail channels, it has to spend considerableresources to develop the channel.
The company would make the Guardian shirts available to its existing wholesaleclients for distribution to interested screen painter in a later period as it has currentlydecided to brand the product as “Guardian Apparel”.
Response of the Consumers
Based on the consumer research, 18.5% of the thousand respondents (185 respondent)were interested in the product. Based on past market research experience,
of therespondents who indicated they would definitely try (
) would do so (
)within the two-year introduction period. The company also predicted that at least 50%(
) would buy an additional shirt the following year.
3. Analysis of proposed marketing program:
They are launching the product in the sole brand name of ‘Guardian Apparel’, andhave decided not to include the name ‘Classic Knitwear’
The launch is scheduled in January 07, which might not be the perfect time to launchthis product as its sales are supposed to be seasonal, it would be better to launch at theend of winter so that the sales pick up instantly
The number of SKUs is 16 which include 4 designs in 4 different colors. As the product is specifically meant for outing, the number of SKUs can be reduced by usingonly the two most popular colors.
Retail prices are comparable to other national brands which is an apt decision to provide sufficient trade margin as the pricing is not supposed to hinder the sales
The market research is not extensive and should not be relied upon fully for makingimportant decisions
Initial distribution is planned through major sporting goods and apparel chains whichwould support the establishment of the brand in the introductory phase. The 3 No. of sales reps to focus on this sector might not be sufficient for the whole country.
4. License Agreement
This agreement forced Classic to meet series of steadily rising annual net sales targetover the first four years and target for 4
year must be met in each subsequent year. If it failed to meet the requirements then the license would be cancelled and void.