The task here is to write 1 section of the report : Next steps/Actions along with a Gantt chart (Timeline of actions)
The organization in consideration is Patagonia
I have already completed the alternative solutions which are attached. Please refer to these alternatives to chalk out the next steps/action plan section (which is required)
There are two alternatives which will be written in terms of action plan/next steps. The two alternatives are:
1. Increase online presence
2. Diversify the product line
More details can be found in the attachments.
The following attachments/action items can be found:
1. The written report until the required section. This will allow you to understand the context and prior tone of the analysis
2. Notes on the action plan/Next steps - Please refer to these notes and expand on them
3. Kindly include a Gantt chart and timeline of actions as mentioned in the notes
4. The prior section i.e. The first alternative - Increased Integrated marketing with enhancing online presence. Please use this written section to enhance on the the first action plan
5. The prior section i.e. The second alternative - Diversify the product line. Please use this written section to enhance on the the second action plan
6. Kindly use product line options present in the Notes on action plan/Next steps document/attachment
The main idea behind the Integrated marketing strategy is to present a multi – dimensional view or image that is consistent across all the promotions. The integrated marketing strategy for Patagonia will be centered around the company’s mission of creating products that are sustainable and eco-friendly, thus contributing towards its social responsibility. We will market the company’s vision through various platforms targeted towards the audience that believe in the same goals as the organization. For Patagonia, integrated marketing solution will include a. Social Media Campaign – Company will utilize its social media pages and website to promote and highlight company’s initiatives on Environmental issues. The campaign would consist of series of videos mainly focussing on the initiatives and campaigns organized by the company, also, it would include interviews from company executives on company’s vision along with customer interviews about their perception of Patagonia. b. Instore Promotions – Company’s instore promotion campaign would be aimed at highlighting the eco-friendly materials used by company. Instore promotions would include specially designed isles and merchandise. Additionally, Customers will be informed by the cashiers and staff about the contribution from each bought item with receipts showing how much contribution from the sale would be donated to the environmental causes. c. Patagonia Environmental Monthly - Company would also create a monthly newsletter available to customers who opt-in for the subscription free of charge. The newsletter will show the new trends and updates from around the world on environmental issues, featuring Patagonia and other organizations working on the cause and creating a positive impact on the society. d. Sponsoring Sports Events – Patagonia will also sponsor sporting events on national and regional level. With a huge portion of the population that is interested in sports this will provide a chance to the organization to reach a wider audience both demographically and geographically. e. Celebrity Endorsements – More number of celebrities are now speaking openly on the environmental issues, with many working in coordination with the organizations such as United Nations, Patagonia would aim and reach out to these celebrities for endorsements and speak about Patagonia influence and work towards the environmental causes. f. Green World Funding – Patagonia would also provide funding and invest in emerging companies whose mission aligns with that of Patagonia, this will not only help Patagonia’s mission but also would provide an additional revenue source for the company. g. Commercials – In 2017, Patagonia air its first commercial in last 40 years, spending $700,000. Patagonia will create a series of similar commercials with people talking about the environment that will not only be featured on television but also accross all media platforms. The marketing budget for the integrated marketing would be approximately $60 Million that is around 6 to 8 % of the company sales ($841 Million). With a current compounded annual growth rate of 2.5 % company can break even on the spend in almost 3 years, expecting the growth rate increase to around 4% we expect that Patagonia will break even in less than two year. Considering that in 2017, Patagonia spend $700,000 on a single advertisement, first in last 40 years, budget seems reasonable. Pros Cons Wider reach to the unknow audience. Does not have direct impact on market share. Positive influence on people. Does not target new customer segments (specially on prices). Improvement in brand image. Marketing budget is smaller as compared to some other big organizations. Future increase in sales expected. Does not address the competition https://www.forbes.com/sites/trevornace/2017/08/24/44-years-patagonia-released-first-commercial-clothing/?sh=2f8ed5b93c80 Patagonia’s Marketing Objectives and Strategy Marketplace – Products Patagonia is an outdoor clothing and gear company, producing clothes mainly for skiing, surfing, climbing, trail running or snowboarding disciplines. It is ranked #2239 in the United States for outdoor clothing, and #7958 worldwide (Statista, 2019). Patagonia’s main marketplace is United States (69.84% of all purchases), followed by United Kingdom (6.47%) and Germany (4.05%) (SimilarWeb, 2020). Patagonia offers high-quality, designed to last outdoor clothing which is known for its environmental sustainability. The marketing strategy used by the company is promoting used clothing and urging customers to think twice before buying a new product (Hiebert, 2017). This is a unique marketing strategy which sets Patagonia apart from its competitors. The company applies the reverse psychology marketing technique, which although seems like an anti-marketing, it increases the company’s revenues. As their products are designed to last, the advertising strategy reaffirms the fact that consumers can purchase used clothing without sacrificing on quality. Marketing Strategies In addition, Patagonia started to provide credits for consumers for submitting used clothing. As a result, Patagonia saw an increase in its ecommerce revenues by 55.6% since 2015, making it $396.9, and in 2017 the company reached $1 billion in sales (Statista, 2019). In the last six months, Patagonia.com was visited 5.19 million times, with an increase in August and September (SimilarWeb, 2020). This is likely due to the promotions that normally take place in the summer. The company is known to be active on the political and environmental fronts which fits well with the company’s client base, who typically are environmentally conscious and active in the environmental issues, which improves the company’s image as more environmentally conscious (Hiebert, 2017). Patagonia’s products are recycled and ‘Fair Trade’ certified, organic, and the company uses solar energy at its headquarters base in California (Craft.co). The company’s ultimate promise to its client base is the reduction of its environmental footprint. Patagonia recently introduced an initiative where it sends out an environmentally friendly truck across the United States (Patagonia’s main client base) and offers to repair the customers’ outdoor gear (Craft.co). Competitors Patagonia’s main competitors are Arc’teryx, North Face, Columbia Sportswear, Canada Goose, and Burton (Statista, 2019). These are identified as the main competitors due to the location of the main customer base (United States), similarity of values (environment and sustainability) and similarity of products offered. Although Patagonia was founded in 1973, which is relatively recent compared to 1950 for Amer Sports and 1938 for Columbia Sportswear, it is still performing similarly in terms of revenue. For instance, Patagonia’s yearly revenue is estimated at $1billion at 2240 employees, Farfetch’s yearly revenue is also estimated at $1billion at 4532 employees (SimilarWeb, 2020). Moreover, Patagonia’s main marketplace is United States, whereas Amer Sports is based in countries such as the United States, Canada and Australia. Similarly, Farfetch’s main client base are in the Unites States, United Kingdom, Brazil, Hong Kong and Tokyo (SimilarWeb, 2020). Despite this, Patagonia is performing similarly in terms of yearly revenue. However, although Patagonia experienced $500 million increase in revenue from 2014 to 2018, its competitor Columbia Sportswear experienced $600 million increase in revenue from 2017 to 2020, and Farfetch experienced an increase by $750million between 2017 and 2020 (Statista, 2019). Arguably, Patagonia wasn’t increasing its revenue as rapidly as its competitors, but this can be because Patagonia’s main marketplace is United States, which prevents it from increasing its revenues as rapidly. Buyers and Users Patagonia’s client base are active, outdoorsy, environmentally conscious individuals. These are conscious buyers who resonate with Patagonia’s goal to be more environmentally friendly, who enjoy quality products that last for many years, enjoy very active lifestyles which include outdoor sports, and are usually aged between 18-35, both male and female (Hiebert, 2017). As Patagonia’s product pricing lands on the mid- to high range, the company’s consumers are likely to have a reasonable disposable income. It is estimated that over 22% of their consumers earn between $20,000 to $39,000, 29% earn between $40,000 to $69,000, 25% earns $70,000 or more (Hiebert, 2017). Patagonia’s client base is very loyal, and clients tend to buy different items on a regular basis. Patagonia attracts mainly conscientious customers. According to the market analysis, 69% of the company’s clients like to know where their products come from and whether it was produced organically. In addition, 67% of Patagonia’s clients prefer to decrease driving to help save the environment, and 54% of their clients always shop for fair trade clothes (Craft.co). Data shows that Patagonia’s clients are based mainly in suburbs or in the city, making it the main demographic for the company (Craft.co). Analysis shows that Patagonia’s clients don’t mind spending. Recent survey found that only 43% of Patagonia’s clients restrict themselves with a budget, which is true for 58% of the US population (Hiebert, 2017). Segmentation Patagonia’s core values are sustainability and giving back to society, Patagonia targets outdoor enthusiast and environmentally conscious people. They have positioned themselves to appeal to people who reject fast fashion and “wear and dispose” mindset of consumerism. Key distinguishers which their consumers value are products extensible, considering functionality, financial, durability and environmental aspects of the product before evaluating purchase alternatives. The role personality plays in selecting a brand is of importance, for Patagonia image of pro-environmental consciousness, ruggedness, cognition, and sincerity plays the key role. Based upon the outlook the current behavior patterns the group of end users can be clubbed as below: Segmentation: Lifestyles of Health and Sustainability (LOHAS) (Ethos, 2017) focused group, this is the people who follow natural lifestyles, eco-tourism and follow environmental consciousness to the core while making purchasing choices. This group of people care deeply about the claims firm make about all natural or processing techniques. “Patagonia used this insight to develop their “Footprint Chronicles” – an online resource that provides details about the eco-footprint and legacy of Patagonia products” (Ethos, 2017) The LOHAS market segment is large market, “representing one in four adult Americans and an estimated $290 billion in U.S. spending power for goods and services.” (Ethos, 2017) “By referring to Claritas Prizm segmentation, the target based upon customer purchasing power, the behaviors can be identified as Urban (U) Social Groups have population density centiles mostly between 85 and 99. They include both the downtown areas of major cities and surrounding neighborhoods. Households in this classification live within the classic high-density neighborhoods found in the heart of the cities: Urban Uptowns with below Prizm sub-categorization 04 Young Digerati 07 Money & Brains 19 American Dreams 21 The Cosmopolitans” (Claritas, 2020) Position in the Market Patagonia’s position against its competitors is quite strong. They are in a strong position due to its loyal consumers, purpose-driven strategies, strong philosophy, eco-friendliness, excellent marketing and excellent reputation as a company that is sustainable and ecological. For instance, Patagonia donated $10 million in 2018 from its profits towards community-based environmental projects and activities (Roper, 2020). However, Patagonia suffers from weak-ecommerce and struggles to increase its sales to the same levels that its competitors achieved. Particularly during the pandemic, it would be expected to see an increase in sales of Patagonia as consumers are choosing online shopping as their main method of purchasing