Denim Enterprises

Denim Enterprises, the hypothetical jeanswear firm that is the subject of this brief product launch case study, wants to increase sales through a new brand targeted to consumers that represent the greatest untapped potential for its business.

Previously, the firm developed strategies for targeting new consumers based on responses to consumer segmentation studies by its marketing research department. While this method had proven successful, it left some uncertainty. Were the firm's strategies right on target?

For its latest launch in the highly competitive jeans marketplace, Denim Enterprises had little room for error, as the launch would require significant resources. So it opted for a more comprehensive, consumer-centric approach to developing its strategies. It followed these steps:

1. Develop strategic consumer target

This is the most important step, which will guide other new product introduction strategies, including distribution, pricing, advertising and merchandising decisions. To determine its target, Denim Enterprises analyzed several sources of information: attitudinal data, syndicated buying style profiles and consumer profiles of competitive brands.

This analysis revealed untapped potential among middle-market to upscale consumers ages 35 to 54. This consumer group was reached by Denim Enterprises' competitors and represented 25 percent of U.S households. Based on this and other research, Denim Enterprises decided to target these consumers with a new brand

2. Identify test stores for new product rollout

Before rolling out the new product to the national market, Denim Enterprises identified test stores to help provide key market feedback on retail and consumer acceptance. With only one chance to succeed with customers, Denim Enterprises knew it had to quickly understand different consumer dynamics to better execute the national rollout.

First, the company determined in which retail channel it would select test stores. Using a trade area methodology, Denim Enterprises compared the strategic consumer target across the department store and mass merchant channels to determine the best consumer fit. It analyzed the percentage of store sales attributable to the target consumer for each channel. From this analysis, the company decided the mass market offered the best outlet for success. Denim Enterprises then prioritized specific stores for new product testing, based on the stores' alignment with the targeted consumer group.

3. Measuring results

Next, Denim Enterprises will analyze its sales from the test to understand which consumers are buying the new brand. If the consumers purchasing the brand are similar to the strategic target, the test implementation will be considered a success. Once proven successful, Denim Enterprises will move forward with plans to increase distribution to other stores within this retail chain and other retailers.

The investment of time and financial resources to introduce and distribute a new apparel item is very high. Taking a consumer-centric approach, Denim Enterprises used consumer and store information to pursue strategic consumers who represented the largest sales opportunity

SPECTRA, a VNU business, serves the fast-moving consumer goods industry with consumer-centric marketing solutions. It helps to create marketing ROI by measuring the consumer behavior impact of demand-side spending. Spectra provides clients with segmentation and targeting services designed to help them identify high-value consumers, uncover new opportunities and execute marketing and sales efforts at the store level.