Q1.

Do you think that introducing a new product line is suitable for Classic
Knitwear? Justify your decision by evaluating the product company fit?
Ans1: Introducing a new product line is suitable for classic knitwear because
 As classic knitwear has no brand recognition among retail customers which limited its
opportunities to differentiate its products. So aligning with Guardian which has higher
brand awareness will help classic knitwear.
 If the projected estimations were achieved, introducing a new product line will help
classic knitwear to gain a gross margin of 27.45% which will help them in increase of
their gross margin.
 Classic concluded that insect-repellent apparel under license with Guardian could be
launched successfully with a marketing investment of less than $3million

Q2. Will consumer and trade respond to the guardian marketing program?
Ans2: Company’s association with guardian which was actually in the business of insect repellent
product was the great business association strategy because of this each shirt would be labeled
with EPA category 4 thus winning the trust of the customer. Company wanted to display 10,000
boards it was very important to register a new product in the mind of the consumer’s. The location
of boards was also chosen according to percentage sales in different stores hiring new sales person
that have knowledge of penetrating and managing the sports-apparel market was very important
as specialized human capital always increased sales .Allowances and higher share to the retailers
is very important as they are the end of the supply chain or the end which will interact with the
consumer .Visual merchandising of product is very important there by placing 12 dozen shirts
across all four styles is also a good move and choosing apparel chains such as L.L Bean, Orvis
will help the firm as their personal goodwill should also add to the company’s product, consumer
should respond to these strategies.

Q3. Identify the product depth and consistency in case of new product line
launched by Classic Knitwear-Guardian.
Ans. Product Depth is the variety of products offered in each product line which have
distinguishing characteristics like size, type, flavor etc.
According to the consumer research made through consumer.com, following was the product
depth offered by Classic Knitwear-
Four shirt types:
 Short sleeve tee,
 Long sleeve tee,
 Polo-style sport shirts, and
 Heavy-weight fleece
Four colors in each style which also includes white color. Two pricing groups for all four styles:
Low and High.
Product Consistency means how the products are closely related to each other for example, in
terms of production, usage and distribution of the products.
* In the initial years, Classic sold more t-shirts than any other shirt style. However, now all the
four styles of Guardian shirts are expected to be equally popular among thr target audience based
on the consumer survey.
* New line of Guardian shirts were made available through the same distribution channels to the
existing wholesalers.
* They also gave the same profit margin of 45% to the retailers.

Q4. What sales volume is required to break even on classic’s 2 Year launch
period??
Answer: Following is the table showing the break-even sales based on Miller’s assumptions.
Assumptions:
Advertising = $3 Million
Trade Promotion =5% off on invoice
Royalty: 5% of net sales
10% advertising allowances for 20% retailers

Manufacture selling price ₹ 17.87

Marketing Investment ₹ 30,00,000
Salary (2*3*85000 =5,10,000) ₹ 5,10,000
5% of net sales as royalty A ₹ 0.89
5% off on trade invoice B ₹ 0.89
10% advertising allowances for 20% retailers C ₹ 0.36
Gross margin ₹ 7.05
A+B+C ₹ 2.14
Difference Margin ₹ 4.91
Break even Sales quantity 715508.8063
Classic Knitwear needs to sell 7, 15,509 shirts for break-even.

In Millions
men of age 15 n up 100
50% target awareness among males age 18-35 50
25% average awareness level at end of 2 years 12.5
185/1000 would be interested in product 2.3125
38% Would Definitely Buy in first year 0.87875
According to miller 60% of first year's Definitely would Buy for 2
years 0.52725
additional shirt 50% 0.1318125
Total Estimated Sales 0.6590625

Q5. What problems do you see in the proposed Guardian marketing

program?
A5. The problems in the proposed guardian marketing program were:
 Guardian shirts were offering 4 different styles each having 4 colors which was not an
appropriate decision, instead the 4 styles of shirts can be launched in 2 popular colors
according to the colors trend in the market, this will help in the cost-cutting of the
product and also consumers will get to wear the most popular color available for them.
 Miller’s idea of 10,000 displays was a problem in the guardian marketing program. Since
this was the new product about to launch in the market, so expecting a huge estimation of
10,000 displays within 2 years of product launch would not prove to be a good decision,
as there are chances that people may or may not like the product, also the market trend
keeps on changing very frequently, so estimating a large display can lead to a profitable
or a loss decision for miller.
 Miller wanted to hire 3 sales reps for the new product line as he felt that classic’s 20-
person internal sales force were not experienced enough to do the sales appropriately as
they lack relationships which are necessary to build a good position in the market which
will help penetrate the sporting goods and apparel stores. Miller should hire more sales
representatives, as only 3 sales representatives will not be able to handle such a big sector
efficiently; also a bigger sales-force will be efficient in doing their job and handling such
a huge sector.
 Classic in partnership with consumer.com conducted an online survey to understand the
purchase intentions of consumers for the new product, the problem with this survey was
that it was conducted for only registered users and not for others, had it been conducted
for large number of consumers, the response would have been even more than 185 and
the purchase intention of other consumers would have been known.