Reference no: EM131669994

Question: AGGRAVATION LEADS TO INSPIRATION FOR SARAH CALHOUN OF RED ANTS PANTS

Like many other entrepreneurs, frustration was the source of inspiration for Sarah Calhoun. When she couldn't find rugged work pants designed for women, she decided to meet this unmet market need herself. A chance encounter in a coffee shop with an experienced apparel industry insider (who noticed she was reading Starting a Business for Dummies) convinced her that a real opportunity was there and waiting for someone to pursue it. Calhoun based all three key elements of her marketing strategy-segmentation, target markets, and positioning-on her mission of pursuing this opportunity. She founded Red Ants Pants with the singular focus on providing hardwearing pants for hardworking women, meeting the needs of customers whose work makes clothing a matter of practical utility and even on-the-job safety. Red Ants Pants are made from tough, heavy cloth and in both "straight" and "curvy" styles to provide a better fit for more women. In addition, they come in two or three times as many waist/inseam combinations as typical pants, greatly increasing the chance that every woman will find exactly the size she needs. In keeping with the capacity of a small business and the nature of her product offerings, simplicity is the key word in the product mix. Pants are available in exactly one color: chocolate brown.

(It was only after buying $45,000 worth of the practical fabric that Calhoun learned "chocolate brown is the new black" in the fashion world.) A few years after introducing the pants, she expanded the product portfolio with a handful of complementary products, including shirts, hats, and belts. Calhoun is adamant about keeping production in the United States, too, a rarity in the clothing business, which outsources most of its production to low-cost labor centers in other countries. Instead, she chose a mother/daughter-owned factory two states over, in Seattle, and she views supporting quality jobs in this country as "part of my responsibility as a business owner." Referring to her production partners, she says, "They have 23 employees who are treated well, paid well and enjoy good working conditions." At $129 a pair, the pants are not bargain-bin items, to be sure. However, like many purveyors of high-quality products, Calhoun emphasizes value, noting that customers would wear out several pairs of cheaper pants in the time they might wear out a single pair of Red Ants. Plus, the price reflects the structure she has chosen for her business: not offshoring in pursuit of the lowest possible production costs. At the rate her sales are growing, customers apparently agree that it's a fair price to pay for pants that keep them safe and comfortable on the job. Distribution strategy was one of Calhoun's most important marketing and business decisions. Clothes in general and pants in particular are products for which individual fit and function can't be absolutely confirmed until the customer tries them on. Having her products available in hundreds of retail outlets would let more customers try them on-and give her tremendous visibility in the market. However, it would also put her at the mercy of retailers' demands regarding price and inventory. She opted to function as her own distribution channel, selling from her website, over the phone, and from her storefront operation in White Sulphur Springs, Montana. Having so many sizing options helps ensure that pants fit when customers receive them, but as with most online clothing retailers, she invites customers to exchange pants that don't fit. Like millions of other small companies in recent years, Red Ants Pants has taken advantage of technology to overcome distribution hurdles.

Calhoun explains, "The old quote of retail being location, location, location doesn't hold up as much. I have Internet and I have UPS and mail service, and that's all I need." Customer communication is another aspect of the marketing mix in which Calhoun demonstrates both the greater flexibility that small companies often have compared to their larger, "more corporate" competitors-and the need to exercise creative brain power over brute-force budget power. Her communication style is more fun and more daring that the typical corporation would attempt, for example, and it seems to resonate with buyers. How many clothing companies would use photographs (discreetly staged, to be sure) to suggest that hardworking women would rather wear no pants than wear pants that don't fit? Without a significant marketing budget, Calhoun looks for low-cost, high-visibility ways to reach customers. Her most unusual has been the Anthill, an ant-decorated Airstream travel trailer that she and her sales manager take on the road on trips they call the "Tour de Pants." They invite women to stage in-home gatherings, much like old-school Tupperware parties. Visiting customers in their homes and hearing stories about women working in what are often male-dominated professions, Calhoun also gets invaluable marketing research insights. And the Anthill is rolling advertising at its best. Some people even follow her down the highway to learn more about the company and its wares. Calhoun's most ambitious communication effort so far has been sponsoring the Red Ants Pants Music Festival in 2011, which attracted such major Americana artists as Lyle Lovett and Guy Clark. All profits went to the Red Ants Pants Foundation, which she started to "support family farms and ranches, women in business, and rural initiatives." The combination of meeting customer needs with quality products and a creative marketing effort is paying off. Red Ants Pants now has customers all across the country and around the world, from Europe to Australia, and even women working the research stations in Antarctica. Are customers satisfied with the product? "Putting on these pants was a religious experience," is how one phrased it.

1. How might Calhoun's decision to keep production in the United States help solidify her market position in the minds of her target customers?

2. If Red Ants Pants had investors looking for a quick return, how might that influence Calhoun's decision to continuing functioning as her own retail channel, rather than going through established retailers?

3. How could meeting small groups of women in their homes to talk about pants possibly be an efficient communication strategy?