Ramiro& Sons buys T-shirts in bulk, applies its own trendsetting silk-screen des

Question

Ramiro& Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers.

Ramiro wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive RamiroT-shirt.

Ramiro presents the following data for its first two years of operations,2012 and 2013.

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RamiroRamiro's

2.

RamiroRamiro

2012 2013 1 Number of T-shirts purchased 225,500 257,000 2 Number of T-shirts discarded 20,500 24,000 3 Number of T-shirts sold (row 1 - row 2) 205,000 233,000 4 Average selling price $32.00 $33.00 5 Average cost per T-shirt $17.00 $15.00 6 Administrative capacity (number of customers) 4,700 4,450 7 Administrative costs $1,739,000 $1,691,000 8 Administrative cost per customer (row 7 / row 6) $370 $380

Explanation / Answer

1) Ramiro & Sons is opting a product differentiation strategy. The designs of Ramiro are “trendsetting,” its T-shirts are distinctive, and it targets to do production of its T-shirts a “must have” for all the teenagers. It demonstrates the product differentiation strategy, and to succeed, Ramiro need to continue the hard work to innovate and be able to charge a premium price for the product

2) The key measures Ramiro need to include in its balanced scorecard are as follows:

Customer Perspective:

-- Distinctive market share, name-brand Ramiro's T-shirt

--customer satisfaction, and increasing the new customers,

--increasing the count of mentions of Ramiro’s T-shirts in the leading fashion magazines

Financial Perspective:

-- Will be able to increase the operating income from charging higher margins

-- Charge premium price on products

Internal Business Process Perspective:

--Quality of silk-screening (use of glitter, wide use of colors, durability of the design),

-- New designs frequency,

-- Time between concept and delivery of design

Learning and Growth Perspective

-- Better ways to attract and retain talented designers

-- Enhancement in silk-screening processes,

-- Continuous learning in the marketing skill levels

-- Employee satisfaction

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