Case:LEGGS PRODUCTS INC(A)

Leggs-The Company
Subsidiary of Hanes Corporation
First nationally branded and advertised hoisery

First to introduce hosiery industry to utilize package goods marketing program

Introduced first in 1970(roll out marketing strategy followed)

It accounted for 25% of hosiery volume done by food and drugs outlets
5-6% market share- largest selling single brand in the hosiery industry

Objective
Generate profitably the largest number of incremental sales in the next 6 months Increase trial rate in low BDI markets and repeat purchases in high BDI areas.

Marketing Strategy
Share- 12% supermarket, 6% drug store Integrated food and drug hoisery program-name package,design,display,configuration, ad and promotion complement each other Packaging-actual plastic egg, in coloured cylinder to distinguish it from competition

Distribution System

From front door to retail display by Leggs trucks Consigned products-no investment from retailer Sales force route acted as a detail force to implement promotions Computerized online marketing and sales information network

Test marketing results

40 % of potential women had tried awareness increased by 80%,25% of all women listed Leggs as their regular brand. New products - Sheer from tummy to tots pantyhose, queen-size etc- cannibalized existing product to some extent.

COMPETITION
Major competitors- Kayser-Roth Corporation No Nonsense Pantyhose and Burlington Industries Activ Pantyhose. No Nonsense- backdoor delivery Activ- Cigar an news stands. Activ- $1.00 Leggs- $1.9 No Nonsense $0.99

Alternatives
40c off twin pack offer. 25c twin pack offer A coupon mailed to homes worth 25c off one pair of Leggs. A 20c off single pack offer.

Problem
Specific alternatives to employ for Leggs Pantyhoses first national promotion during the coming fall season.

Sales estimation
20c off single pack- 480000(80%) dozens per week at reduced prices ; 10% immediate increase in sales; 10%long term increase. 40c off double pack- 360000(60%) dozens at reduced prices, 10% immediate increase in sales- no long term effect. 25c similar as 40c pack.

Coupon redemption- 8%

Suggestions
Advertise Nationally at 10% off. Low BDI Areas Push single packs of 10% off.

High BDI Areas Push double packs of 10% off but also keep single packs available.

What was actually done

To test these four promotion alternatives, Jerry Clawson, director of marketing research, decided that each would be implemented in a carefully chosen test market, and the results would be compared with another market where no unusual promotion was carried out.

Released : 40-cent reduction (for two pairs) in Syracuse New York; a 25-cent reduction (for two pairs) Columbus, Ohio

20-cent reduction (for one pair) in Denver, Colorado

25-cent coupon in Cincinnati, Ohio.

The results in these markets were compared with those in Boise, Idaho, where no special promotion occurred. RESULTS According to the firms sales research group, the results were as follows: The two for 40-off promotion (Syracuse) was the most effective with a net short-term cumulative increase in sales of 53 percent felt over six weeks. The 20 price-off promotion (Denver) was the second most effective, with a net cumulative short-term increase of 20 percent felt over eight weeks. The 25 coupon promotion (Cincinnati) was the least effective with a 3 percent shortterm increase in sales felt over eight weeks.

THANK YOU