Internal

Classic Knitwear and

Guardian: A Perfect Fit?
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Problem Statement:
• The problem facing Classic Knitwear is the need to improve gross margins to
meet the expectations of its growth-hungry board. While the company has made
strides in reducing the gap in gross margins, it still lags behind leading branded
manufacturers. The proposed solution involves launching a line of insect-
repellent shirts under a licensing partnership with Guardian Inc., aiming to
capitalize on the growing demand for functional apparel and differentiate
Classic's product offering.
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Product Differentiation Market Strategy and Value Proposition:

• Classic Knitwear seeks to differentiate itself in the market by leveraging
Guardian's patented insect-repellent technology to create a unique product
offering.
• The value proposition lies in providing high-quality apparel that not only meets
fashion and comfort standards but also offers functional benefits in insect
protection. By partnering with Guardian, Classic aims to tap into growing
consumer concerns about insect-borne illnesses and dissatisfaction with existing
prevention products. The Guardian Apparel line promises long-lasting protection
through innovative technology, backed by the Guardian brand's reputation and
positive customer associations. This differentiation strategy targets outdoor
enthusiasts, particularly males aged 18-35, who prioritize performance and
convenience in their apparel choices.
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4 P's of Product Range:

1. Product: Classic Knitwear plans to introduce a line of insect-repellent shirts branded as "Guardian Apparel."
The product range includes short-sleeve tees, long-sleeve tees, Polo-style sport shirts, and heavyweight
fleeces. These shirts are treated with Guardian's patented insect-repellent technology, providing long-lasting
protection against mosquitoes, ticks, flies, and "no-see-ums."
2. Price: The pricing strategy aims to match those of other national brands of comparable quality, providing the
trade with a 45% margin. Pricing reflects the higher of the two price groups tested in consumer research.
Additionally, mass retailers are expected to implement some discounting.
3. Place: Initially, Guardian shirts will be distributed through major sporting goods and apparel chains, general
merchandise chains, and discount chains, representing a new outlet for Classic. The company plans to
eventually make the shirts available to its existing wholesale clients for distribution to screen printers.
4. Promotion: The marketing program includes print and television advertising targeting men aged 18-35, with
a projected investment of $1.2 million to achieve a 25% unaided awareness of the Guardian product among
the target market within two years. Trade promotion allowances and advertising allowances are also offered
to encourage retailers to set up display units and promote the product prominently.
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SWOT Analysis:
Strengths • Established brand reputation and market presence in the non-fashion casual knitwear industry.
• Strong manufacturing efficiencies and cost advantage due to offshore production hub in the Dominican Republic.
• Potential partnership with Guardian Inc., offering innovative insect-repellent technology and a recognized brand name.
• Comprehensive marketing program to support product launch, including advertising and trade promotion.
Weaknesses • Limited financial resources for significant marketing investments and product development.
• Lack of experience and relationships in penetrating sporting goods and apparel stores, requiring additional sales reps.
• Risk associated with launching a product based on unproven technology.
• Reliance on a single product line to drive margin growth and compete with leading branded manufacturers.
Opportunities: • Growing national awareness of insect-borne illnesses and dissatisfaction with existing prevention products.
• Expansion into new retail channels, such as sporting goods and apparel stores, through the Guardian partnership.
• Potential for differentiation and competitive advantage in the market with the introduction of insect-repellent apparel.
Threats • Intense competition from established branded manufacturers with higher gross margins.
• Potential backlash or skepticism from consumers regarding the effectiveness of insect-repellent clothing.
• Risk of not achieving desired awareness levels and sales targets within the projected timeline.
• Uncertainty in consumer preferences and willingness to pay premium prices for insect-repellent apparel.
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Porter's Five Forces Marketing Strategy:

1. Threat of New Entrants: Moderate. While the non-fashion casual knitwear industry is competitive, the
barrier to entry may be lowered by outsourcing production and establishing strategic partnerships, as seen
with the Guardian collaboration.
2. Bargaining Power of Buyers: High. Retailers such as Wal-Mart and Dollar General hold significant buying
power, impacting pricing and negotiation terms. Moreover, consumers have access to a wide range of
alternatives, affecting brand loyalty.
3. Bargaining Power of Suppliers: Low to moderate. Classic Knitwear benefits from established relationships
with suppliers and its offshore production hub, providing cost advantages. However, reliance on Guardian for
insect-repellent technology could increase supplier power.
4. Threat of Substitutes: Moderate to high. Insect-repellent apparel faces competition from traditional insect
repellents, outdoor clothing brands, and alternatives such as citronella candles or sprays. Consumer
perceptions of effectiveness and convenience influence substitution.
5. Intensity of Competitive Rivalry: High. Classic Knitwear competes with both established branded
manufacturers and private-label merchandise. The Guardian Apparel initiative aims to differentiate and
compete with leading brands by offering innovative insect-repellent technology.
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SWOT Analysis:
Strengths • Established brand reputation and market presence in the non-fashion casual knitwear industry.
• Strong manufacturing efficiencies and cost advantage due to offshore production hub in the Dominican Republic.
• Potential partnership with Guardian Inc., offering innovative insect-repellent technology and a recognized brand name.
• Comprehensive marketing program to support product launch, including advertising and trade promotion.
Weaknesses • Limited financial resources for significant marketing investments and product development.
• Lack of experience and relationships in penetrating sporting goods and apparel stores, requiring additional sales reps.
• Risk associated with launching a product based on unproven technology.
• Reliance on a single product line to drive margin growth and compete with leading branded manufacturers.
Opportunities: • Growing national awareness of insect-borne illnesses and dissatisfaction with existing prevention products.
• Expansion into new retail channels, such as sporting goods and apparel stores, through the Guardian partnership.
• Potential for differentiation and competitive advantage in the market with the introduction of insect-repellent apparel.
Threats • Intense competition from established branded manufacturers with higher gross margins.
• Potential backlash or skepticism from consumers regarding the effectiveness of insect-repellent clothing.
• Risk of not achieving desired awareness levels and sales targets within the projected timeline.
• Uncertainty in consumer preferences and willingness to pay premium prices for insect-repellent apparel.
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Recommendation:
1. Move forward with the licensing agreement with Guardian, leveraging its patented technology and brand
recognition to introduce the Guardian Apparel line and emphasizing the unique value proposition of long-
lasting insect protection.
2. Implement the comprehensive marketing program to support the product launch, focusing on building
awareness and driving sales among the target market.
3. Strengthen distribution channels by expanding into new retail outlets, such as sporting goods and apparel
stores, while also leveraging existing wholesale clients for distribution.
4. Monitor consumer feedback and market response closely, iterating marketing strategies and product offerings
as needed to maximize success.
5. Investing in training and hiring experienced sales representatives for the sporting goods and apparel sector
can facilitate market penetration.