As someone who's potentially a customer of your $350 half-canvassed suit, I don't think it will be good business for you, because:
1. Your target customers will be those college students/grads getting their first suit for a job interview. They are more likely to go to the mall/department store and get something they can recognize, rather than spend their nervous money on something with little mass market recognition. To them, brand is quality, and you can't compete with J Crew, Banana Republic, etc. on that.
2. As for the minority of college students/grads like myself who sneak around SF and appreciate true quality, they will actually go for the full-canvassed suit. Because there's no reason to get a half-canvassed at $350 when you can get a full-canvassed at $500. Some of them may still buy the half-canvassed as a backup or second suit, but I doubt if volume will justify your effort.
That's not to say you can't make it happen. You will have to go another way instead of just making the suit and putting it out there. It will take some genius marketing because talking about quality to those frat bros and starving liberal arts college grads already sounds like a lost cause.
There's another market for your suit, the SF member type who will buy a decent, half-canvassed suit at $350 but is not actually in need of one, because they already have something else better. To attract these people you should make your suits 'unique' in some aspects, such as fabric, styling, construction, and make them in short-run collections to stir interest. You can run parallel collections within the Sartorial line in order to capitalize on the interest and avoid the half-canvassed line eating too much into the full-canvassed line. (I suppose there will be economies of scale with regards to material and labor too.)
Thanks for weighing in - you definitely provide food for thought and I am admittedly still on the fence regarding this. Target customers are not only college students/grads, however. My guess is the average man across the US looks to spend $300-$400 for a suit. Sad, but true, as this range usually offers next to nothing in terms of quality. But you're right - the average man is not here on Styleforum or shopping online. They just go to a Macy's or JAB and buy a suit one size too big and are done with it. So rather than the average male, I guess what I'm going after are those guys that shop J.Crew, BB or Suit Supply, and trying to beat them by offering a superior product at a lower price point. Granted this would be on a MUCH smaller scale and to a much smaller market - these would be the guys here on the forum and/or shopping online. I have also found that simple word of mouth is the best advertising (as always), and the Benjamin Sartorial line has really picked up and business has continued to increase because of this in the last year. I get several emails saying their friend and/or colleague recommended us for our suits.
Also, some guys will have a hard time stretching their budget to $525 for a suit as you're talking a 50% increase from $350. While some may be willing to stretch I'm guessing many will have a hard time justifying or simply cannot. I guess at the end of the day, I'm not necessarily looking to do a huge business. I'm simply looking to fill a niche and demand. With the Wizard of Aahs vendor no longer around with his Baroni and Marco Valentino suits, it seems he has left a gap in this price range, and although I have no intimate knowledge of his business it seems that he had quite a large following and did well. With the economy being lousy and jobs market being tough with no near-term turnaround in sight, I'm thinking that this price range may prove to be very important.
I still haven't totally thought it through completely, but for sure there will be obvious differences between the two lines. A fully canvassed suit does make a significant difference already, but I realize few outside of the forum can decipher this (or are even aware of this at all).
Thanks again for your thoughts - I appreciate the discussion.