Harrington Essay Example

at Harrington enables efficient management of the new business venture. However, hiring specific roles such as a general manager, merchant, planning manager, and two design staff members is essential for the new product line with an estimated annual cost of $1 million for management salaries and support allocations. A successful launch of the active-wear line requires an effective advertising campaign involving print and TV advertisements, in-store promotions featuring sales staff wearing the active wear, celebrity endorsements to enhance quality and status perception, as well as a fashion parade cocktail party attended by professional photographers where guests are encouraged to share photos on social media. The success of previous 'better' active wear product lines can be attributed largely to extensive advertising campaigns.The ongoing advertising costs for the active-wear line of Vigor were estimated at $3 million per year, excluding launch expenses totaling $2 million. There were concerns about how the expansion into active wear would affect the brand of Vigor. However, a market research conducted by Harrington Collection showed that less than 2% of respondents believed this would happen. To ensure the success of Vigor's expansion, it is crucial to maintain the core values of the brand and provide customers with a consistent and reliable experience similar to previous products.

Harrington Collection is well-known for its top in-house design staff, extensive national advertising campaigns, exceptional quality, and styling. Thus, it is important for the new collection to meet the same level of quality as other Vigor products. Additionally, maintaining their advantage in producing superior quality items is also crucial for Harrington Collection. They understand that controlling the quality of their clothing is vital to protect their brand

name and value.

In a fast-paced fashion industry where demand for designs and styles constantly change, Jones Apparel Group and Liz Collarbone are leading companies with diverse brand portfolios. Both companies have recently launched luxury active-wear lines like Liz Collarbone's Juicy Couture, which has gained popularity among Hollywood celebrities. To gain exposure in the market, Harrington Collection should target sporting celebrities and TV personalities as part of their marketing strategy.The competition's response to Vigor's new active-wear line may include increased advertising, price reductions, improved quality, or expanded retail stores. However, there is a risk of overproduction leading to channel conflict issues and an excess of products. To effectively address these challenges and meet market demands, Harrington Collection must continue utilizing advanced technology for inventory tracking and sales data analysis. It is also crucial to maintain a substantial channel marketing budget and strong relationships with retail partners. Furthermore, if Vigor decides to offer their active-wear line online as well, it could potentially result in channel conflict issues. To avoid such conflicts in a click-and-mortar business model, it is essential to fully integrate traditional and online channels for customer clarity and the benefits of both channels (exhibit 9). Implementing the Vigor active-wear program is projected to generate an estimated increase in profits of $6.3 million for the manufacturing group, resulting in a profit margin of 15.8%. The start-up cost for the active-wear line is $12.7 million with ongoing and fixed costs totaling $11.5 million.The direct variable costs per product are as follows: hoodie ($20.55), T-shirt ($7.50), and pants ($16.40). Achieving breakeven requires selling approximately 289,847 units which is an attainable number.Furthermore, exhibit 9 demonstrates that as the production

volume increases, the per unit contribution also risesOver time, the Mexico plant achieves economies of scale which decrease the fixed cost per unit and gradually increase the profit margin per unit.