Case analysis - Harrington Collection

Topics: Marketing, Brand management, Cost Pages: 13 (2518 words) Published: November 12, 2014

Case analysis-Harrington Collection

Problem identification
In 2008, Harrington Collection, a large manufacturer and retailer of U.S. high-end women’s apparel, was facing opportunities and challenges whether to launch of active-wear products to meet the market and customers’ needs. But according to the macroeconomic environment, the target market, competitors and its own financial condition, Harrington needed to take careful consideration and then make the best decision for their own development. The U.S. women’s apparel industry

Market trends
From the data of U.S. Apparel Market Sale (2002-07), we could find out that, even when subjected to the impact of the economic downturn, the U.S. women's apparel industry remained in a mature and stable state and held by continued growth momentum. The Retail Sales increased from $106 billion in 2002, to $133 billion in 2007. The average annual growth rate is 4.7%. It showed that the total sales of the women's apparel industry did not receive the macroeconomic impact. Consumers still had a high desire to go shopping. At the same time, analyzed the data from U.S. Apparel Market Units, influenced by the economic downturn, consumers were more interested in less than $100, low-priced women’s apparel. From 2005 to 2007, the growth rate of units sold in more than $200 is 3.4%, the product growth rate of between $100-200 is 1.4%, and $50 to 100 product growth rate is 14.3%, while less than $50 low-priced products have the highest growth rate of 16.1%. The low-cost market has a great opportunity for manufacturers. Characteristics and competition

The value chain of the women’s apparel industry is about: (1) branding; (2) design; (3) buying; (4) production; (5) channel marketing; (6) distribution; and (7) retailing. In the era of apparel products are relative homogenization, price war seems to become a common method to erode the market share of each other between brands. Each brand need to face how to effectively reduce costs. Many brands established overseas plants or outsourced to overseas factories. This could reduce their cost of production and labor. Through effective monitoring, the overseas factory’s products also have a good quality. This makes the increased competition on the market. Women’s apparel retailers included department stores, mass merchandisers, specialty stores, and warehouse clubs/supercenters. Among them, the specialty stores got the 1st position, 58.6% share of channel, changed 11% from 2005 to 2007. The 2nd place is department store, 19.0%. Mass merchandisers got the 3rd position with 11.4%. In the retailing women's apparel for the U.S. market, the most important distribution channel is specialty store. Harrington Collection

Company’s background
As a nearly 50-year history of the women's apparel brand, Harrington Collection has a clear market positioning. Targeted at the high-end market is the original intention of Harrington Collection. The 1980s, the Harrington Collection expanded Vigor and Christina Cole brands, the product line aimed at the younger customer market. Because of their superior quality, knowledgeable sales staff and designer styles, they have a group of loyal customers. Four product lines

Harrington Collection targeted affluent, fashionable, college-educated, professional women from 25 to 60. This company has four product lines, covered three classifications (Designer, Bridge, and Better) of the women’s apparel market. They targeted women of different ages, different background, and different family income. The Harrington Limited, as the “Designer” classification. This product line focuses on the Designer Collection, targets the customer as “Sophisticated Elegance”. Their age is from 35 to 60, an average household income is more than $200k. The retail price range is $500-$1000+. And it has 20% of Market Share, as the “Cash Cow”. It shows Harrington Collection’s market position is a high-end brand....
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