Harrignton Collection Case - Essay Example

Harrington Collection Case Problem Harrington Collection had been facing declining sales starting from 2005 to 2007 (Blais 1). The clothing company began to look at ways for re-strategizing and boosting its revenues. They decided to do this by creating a new clothing line for active wear to follow then current and rising trends. They proposed to retail their pieces of the active wear line at $100 per hoodie, forty dollars for tee shirts, and eighty dollars for a pair of trousers. Harrington’s key issue was to determine whether these were the optimal prices to help them accrue higher profits for their new line.

At what price should they introduce the new line? They could introduce the new active wear at the proposed prices or introduce it at a price twenty percent above their proposed price. The criteria they developed in coming up with the price were high margins of profit, market share potential, sales potential, brand perception, and customer satisfaction (Blais1). Analysis The first alternative was selling the Vigor active line at the proposed prices (Blais 1). Given that women’s active wear units were expected to, increase by double by the year 2009 and Harrington intended to take advantage by introducing the active wear to stores that carried their vigour line.

Majority of the customers who purchased items with price points between one and two hundred dollars, did not believe that cheaper active wear would lead to cheap brand perception. Alternative two involved raising the proposed price by twenty percent (Blais 2). Given it is a moderately expensive clothing brand; customers would be less sensitive to a hike in price compared to those who were shopping on a budget. Therefore, Vigor will be able to maintain the majority of its market share. Decision Harrington’s decided to sell at 20% above proposed price and target trend setters aged between 20 and 25, as well as women seeking comfortable and edgy design.

To develop their product, they introduced their new product into an already existing market. Harrington also pursued a product differentiation strategy, which entailed a push-and-pull strategy for promotion. They also used an indirect channel strategy by selling their new wear at all their fifty Vigor store locations. Works CitedBlais, Rachel. Harrington Case Brief. 2011. Electronic.Accessed on 9 October 2012,From www.scribd.com/doc/54539746/Harrington-Case-Brief>