This paper offers a marketing case study of the hosiery industry. The analysis is based on an article about the Hanes Corporation, and specifically relates to the marketing of its L'eggs pantyhose products.
The Hanes corporation is renowned for its underwear and hosiery products, as well as for its bras and sweaters. Prior to the introduction of L'eggs, the company, along with the rest of the hosiery industry, had been hit by a flattening out of sales and a glut of pantyhose production. Most hosiery was sold, then, through department and specialty stores that wanted private labels. Because the market was at its saturation level, these stores were able to put a price squeeze on the manufacturers, thereby eroding the profit levels of these manufacturers.
Hanes, along with its competitors, was mostly a marketing company, preferring to sell what it already had, as opposed to being a market-driven company, trying to sell what the customer wants. The company did little advertising, and considered itself a manufacturing company, not a sales-oriented organization. The result was that Hanes paid little attention to the fact that hosiery, on an increasing scale, was being sold in supermarkets and drugstores, market outlets that Hanes mainly ignored because the pantyhose and stockings sold there were not particularly well-made and customer complaints were frequent.
In the product lifecycle concept, hosiery products had reached stage 4 and stage 5 levels, i.e. competition had brought sales to a level of maturity, and decline was in the offing.
In was in this period that Mr. Elberson, then president of the Hanes hosiery division, had the notion that the company's products could be sold in supermarkets and drug stores, in lieu of being sold in traditional outlets such as department and specialty stores.
Mr. Elberson's subsequent marketing strategy was based on research that he commissioned the Nielsen Corporation and the Marke...