Richard Schilo is the owner-operator of Richard's T-Shirts, a manufacturing business. The business has been in operation for two years. Richard has discovered through marketing research that teenagers desire his T-shirts. As a result of this research, Richard introduced a sports line of T-shirts with the endorsements of professional franchises. Richard has had tremendous success with this product line. His business has become highly profitable, having grown 100 percent from the first year's $150,000 in sales to a current level of $300,000 in sales.
Additional marketing research has indicated that the collegiate market offers high growth potential. In the fall, Richard plans to introduce a line of collegiate sweaters at a retail price of $29.95. These sweaters will be sold in college bookstores around the country and will be priced competitively with other comparable sweater lines. The sweaters will be unique in appearance, with embroidered college insignias in school colors and the school mascot on the sweater sleeve.
Each sweater will be packaged in a gym bag highlighting the athletic program of the student's choice. An exclusive brand name will be selected for each college and university. The plan is that the brand name will feature that school's athlete of the year. In the future, Richard plans to introduce his product line to a nationwide network of retail establishments. His pricing strategy will continue during this expansion. His projections show that he will continue to build volume, especially in the retail discount sector, where much growth has taken place in recent years.
Questions
1. Describe the target market for Richard's T-Shirts
2. Identify and explain some common methods Richard is planning to use to differentiate his sweaters from other competing products.
3. What is the current stage of the product life cycle for these T-shirts?
4. Discuss the pricing strategy that Richard plans to use when he introduces the sweaters.