marketing plan

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Table of Contents

Executive Summary 4

Situation Analysis Company Analysis 5

External Market Environment 5Competitor Analysis 7 Customer Analysis 8SWOT 9Marketing Plan Objectives 10Strategic Options 11

Marketing Strategy Recommendation 12Segmentation Scheme 12

Target Market and Positioning 13Marketing Mix 14

Product 14Place 15Promotion 15Price 16

Marketing Information Requirements 17

Implementation and Control Plan 18

Appendices 20

References 27

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Executive Summary

Since its founding in 1973, Patagonia has held a historically trusted name for providing reliable outdoor gear without causing any unnecessary harm to the environment. Patagonia is a designer of outdoor gear and apparel for silent sports with a keen focus to help save and protect the planet through the sale of their products. They continue to perform well in their approach to target customers who are more influenced by emotional triggers than by typical marketing triggers but still have much potential to grow.  Patagonia provided a footwear product-line that encountered an abrupt end in 2014 when their supplier Wolverine Worldwide ended their eight-year licensing agreement. However, we see a major opportunity for Patagonia to return to the footwear industry to incorporate their innovative outdoors and environmental thinking towards the footwear market.

Our team has designed a lifestyle shoe that will lead the way for Patagonia to establish itself as a provider of outdoor sports gear from head to toe. The Patagonia Summit and Spire will serve our male and female customers respectively. We created a shoe assembled from 3D printed rubber and recycled ocean plastic to continue Patagonia’s mission to provide high quality products while remaining environmentally conservative.  The use of 3D printing and recycled ocean waste in shoe manufacturing has already been proven feasible by companies such as Under Armor and Adidas but we believe Patagonia’s ability to be a fast follower will provide them the opportunity to capture new market share and develop a nationally recognized footwear product line.

While the Spire and Summit would cater towards the existing loyal customers who are currently forced to purchase their footwear elsewhere, there is also a new segment to play a large role in the near future.  Millennials are now coming of age to make purchases on their own and research shows that this is a generation that believes personal values are more important than personal benefits, such as price or convenience.  This is a group that is willing to pay more for products that come from companies who are committed to a positive environmental and social impact. Patagonia’s longtime mission to be recognized as a brand that aligns its business model with a sustainable and impact-driven operating model is something Millennials greatly value.  While other companies are catching on and beginning to implement positive social causes into their business plan; Patagonia was built from the ground up on these values and we are confident that consumers will be able to identify the difference.  That being said, Patagonia’s well-established and reputable brand among today’s youngest consumers has put itself in a position to offer a new environmentally friendly footwear line. For these reasons we imagine that the introduction of the Spire and Summit will lead to increased profits, growing market share and most importantly build loyalty with the power-spending Millennials of the near future.

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Situation AnalysisCompany Analysis Patagonia, a retailer who sells clothing and outdoor gear, markets to customers across the world who are looking to minimize their effect on the environment. Patagonia was founded by an outdoorsman and passionate climber named Yvon Chouinard. He created the company on the basis of his and other climbers’ need for better tools, equipment, and clothing for their rigorous activities. Today, Patagonia now has presence in the climbing, ski/snowboarding, surfing, fly fishing, and trail running markets. Patagonia sells gear and clothing for many of these sports ranging from jackets to wetsuits to climbing tools to bathing suits. Patagonia’s diverse products allow them to reach many different people in many locations- from sandy beach all the way to the highest mountain tops. The versatility in their products and in the locations where they sell their products is a characteristic of their business in which Patagonia shows a lot of pride.

Patagonia’s mission statement states that they strive to: “build the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis” (“Patagonia’s Mission Statement,” n.d.). Patagonia’s business mission really makes a point to prove how Patagonia is not only a company working to provide high quality active and outdoor wear for consumers, but is also a company who strives to maximize awareness while minimizing its carbon footprint. Patagonia has a unique outlook on their business strategy in that they encourage minimal spending on “unnecessary items.” Patagonia labels this unparalleled business strategy it’s “anti-marketing” strategy which says if you must spend money on “frivolous” items, that you should buy a product from their company. This was initially used in a campaign in 2011 when Patagonia came up with an advertisement that was spearheaded by the saying “Don’t Wear this Jacket.” With the advertisement, Patagonia saw their revenues jump by 30% in 2012 followed by another 6% in 2013 (Thangavelu, 2015).

In addition to the marketing campaign mentioned in the previous paragraph, Patagonia contributes a significant portion, 1% of revenue or 10% of profit depending on which is the higher donation, to environmental causes while also using recycled material when making its products. Their commitment to saving the environment has proven to be a substantial strength for Patagonia among competitors. While Patagonia has shown their success in the clothing, climbing gear, outerwear, and other industries, Patagonia has let the opportunity to expand into the footwear market slowly slide away. Patagonia made an attempt to enter the footwear market in the mid-2000s but was unsuccessful because the company that they partnered with, Wolverine, pulled Patagonia shoes off of the shelves because they were not generating enough revenue. Patagonia should see this as an opportunity to reinvent the footwear market by creating a shoe that meets the demands of their environmentally conscious and active customers.

External AnalysisPatagonia’s external market environment mainly focuses on its Corporate Social Responsibilities in forming a healthier environment.

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Economic Trend: The world’s middle class population would reach 3 billion by 2020 according to research from EY (Appendix I). As the world’s middle class population increases, the global footwear market will also experience massive demand increase. The global footwear market is projected to reach $378.1 billion in sales by 2020 (Footwear market trends). Furthermore, the casual footwear segment and the athletic footwear segment have the fastest growth projection rates in the world market (Appendix II). Although raising raw material prices will constrain the market’s ability to grow, most middle class consumers have changed their lifestyle choices and increased awareness toward environmental issues. Therefore, there are a variety of opportunities for Patagonia to target those consumers who are willing to pay a higher price for more sustainable and eco-friendly products in the footwear market.

Culture/Social Trends: As more people become aware of environmental problems and begin to value sustainable consumptions, companies will need to react to these trends and capture consumer demands in the market. Many consumers value environmental friendly materials like organic cotton and recycled polyester in an effort to participate in the reduce, reuse, recycle processes. Furthermore, the social trends show Patagonia’s belief in the value of a transparent supply chain. Consumers and shareholders want to understand how and where their products are manufactured. These important social trends can offer guidelines for companies to adopt or improve ethical and environmental processes in order to appeal to consumers.

Technological Trend: Advanced Technologies have allowed companies to manufacture products with less materials while capturing aspects of environmental friendly social trends. Relatively new technologies like 3D printing technology will limit material waste in the production process and therefore better match the target market’s demands (Barnatt 2015). The majority of footwear companies use traditional manufacturing which is very costly when it comes to material waste, molding, and transportation. However, with innovative technology like 3D printing, the production process can be shortened by directly transitioning from a computer design to the creation of physical elements of the final product. 3D printing’s prototyping, molds and tooling segments were already saturated with very little growth opportunities within the ten-year period. However, there are still a lot of opportunities in the digital manufacturing market segment for 3D printing ((Appendix III). Therefore, 3D printing technology can help to save manufacturing time, reduce resource usage and lower transportation costs.

Legal Trends: Many footwear companies outsource their production overseas to developing countries in an effort to minimize their labor costs. However, they are often criticized for low wages and harsh working conditions for employees. Adidas is one of the largest competitors in the footwear market and has encountered many legal issues such as forced overtime work and payments below minimum wage (Marks, 2012). With rise of environmentally conscientious consumers, these issues could damage the company’s brand image and eventually lead to local strikes and a decrease in sales. However, Patagonia dealt with these legal trends quickly according to its Corporate Social Responsibility initiatives. Despite their quick call to action, Patagonia was criticized for its human trafficking problem in its Tier 2 suppliers in Taiwan (Hansel, 2015), it took

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a very different approach from other giant footwear competitors. Considering the external social trends, Patagonia stopped job brokers from charging a fee when hiring after June 1st, 2015 (“Annual Benefit Corporation Report,” 2015). Many companies also experienced the legal difficulties to track down their suppliers that claimed to be ethical, but Patagonia managed to resolve this particular issue without any hesitation. Furthermore, Private companies took more responsibilities in their CSR programs because their sustainable environmental actions directly reflect the company’s intention rather than the shareholders’ interests.

Competitor Analysis

Columbia Sportswear: Patagonia’s greatest competitor in the outdoor footwear industry is Columbia Sportswear. As one of the largest outerwear and sportswear companies in the world, Columbia had net sales of $2,326.2 million while $505 million of the net sales were from their footwear category (“Columbia Annual Report,” n.d.). Their footwear category is only 21.7% of their sales, but it is important to note that Columbia directly target consumers similar to Patagonia. With large revenues, Columbia is able to invest a large portion of profits into research and development allowing them to continually innovate. This is evident in their Conspiracy™ Titanium Outdry™ trail shoe which is at the forefront of durable and waterproof technology. Columbia strategically outsources its manufacturing to lower labor costs and increase profit. The key to Columbia’s threat towards Patagonia resonates in that they are both in the footwear industry and the outdoor industry. However, Columbia focuses on footwear related to hiking and sports while staying away from lifestyle and running shoes. One of Columbia’s weaknesses is that they do not separate themselves in the goal to become eco-friendly which is an important factor in the outdoor gear industry.

Nike: Nike is one of the most recognizable companies in the world. With 46% of the market share, Nike holds the majority in the footwear industry (“Nike Inc.,” n.d.). They focus primarily on running, basketball, and lifestyle shoes. Their strong brand recognition with the help of influential athletes and strong financial performance, Nike is able to invest substantial in research and development furthering their excellence in the footwear industry. However, with the lack of focus in the outdoor gear space Nike does not pose a significant threat. Nike also has had issues in their supply chain since the 1970’s. In 2008, Nike admitted its Chinese supply chain is suffering from a lack of transparency, problems with wages and the use of underage workers (“Nike Inc.,” n.d.). While Nike has now stated that they have fixed their supply chain, there is still an underlying perception that Nike uses child labor.

Adidas: Adidas is an international company that owns multiple recognizable brands in the sports industry. While not the leader in the footwear industry, they are leading certain categories in innovation. This is possible by their mass of wealth ($16,915 million of net sales in 2015) and the research and development that goes along with it distinguishing themselves in the footwear industry (“2015-Adidas Group,” n.d.). Adidas is currently producing 7,000 units of a shoe made from ocean waste by originally designing it with a 3D printer. This is a key threat to Patagonia because of the eco-friendly initiative it has started with plastic waste in the ocean. While Adidas is

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helping the environment, that is not part of their mission statement which could cause distrust among consumers about their dedication to saving the environment.

Customer AnalysisWhile Patagonia can be generically labeled as a privately held retailer of outdoor apparel and equipment, a simple glance at their mission statement exemplifies they stand for much more. Patagonia's core beliefs and business model to create social and economic value through the sale of their high quality outdoor clothing products greatly differentiates them from competitors. Likewise, Patagonia’s target market also differentiates from many of their competitors. Similar to other outdoor apparel companies, Patagonia’s typical customer consist of upper-middle class males & females ages 20 to 45 who are active and participate in outdoor sports.  However, Patagonia distinguished itself from competitors by creating a brand that matches its operating model to pursue its business model’s objectives of creating a positive impact towards the planet. This unique business structure has attracted a niche group of loyal customers whom believe personal values are more important than personal benefits.  We foresee that the coming of age of Millennials will provide Patagonia with a larger customer base and serve as a primary driver for growth. This is a generation of people that are willing to pay more for products if they come from brands who are committed to having a positive environmental and social impact.

Patagonia looked at the market for outdoor sports and segmented it into two groups; silent sports and others.  According to Patagonia’s Reason for Being, silent sports are described as sports that “Don’t require a motor; nor deliver the cheers of a crowd. In each sport, reward comes in the form of hard-won grace and moments of connection between us and nature.” Patagonia realized that the typical participant of these silent sports is already environmentally conscious and simply created a brand catered to fulfill their customer’s product needs and their environmental desires. Patagonia does more than just bring awareness to environmental issues, they back up their talk with actions such as donating 10% of profits to environmental groups or releasing intellectual property to competitors because it will overall be better off for the planet.  Patagonia is more than just a clothing store; they have a long-term mission of making the world a cleaner place, which has allowed them to capture truly loyal like-minded customers.

Patagonia is targeting customers who are more influenced by emotional triggers than by typical marketing triggers like promotion, price and distribution. As former Patagonia CEO explained, “Customers become advocates of brands because they develop an emotional connection with their core purpose. Brands that elicit advocacy provide a value beyond just product quality and experience. This connection is something that deserves analysis, as it is the foundation of true loyalty.” (Crooke) Every company’s marketing team is aware of the importance of customer equity but Patagonia took a nontraditional route in their attempt to create truly loyal customers.  Instead of creating artificial loyalty, Patagonia took a stance of doing business from a place of trust and inspiration to show their customers that they stand for something bigger than just making a profit. That being said, we see the coming of age of Millennials to be a pivotal time for Patagonia and real opportunity for growth. Now is the time to develop an additional product line and capture the loyalty of the large power-spending millennial generation of the near future.

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SWOT Analysis

Strengths Anti-marketing strategy Established well-branded company with loyal

and environmentally active customer base Not new to environmentally conscious market Versatility in products and diversity in

segments

Weaknesses Non-traditional business model Much smaller compared to

competitors Highly priced products limit

customer base Does not reach as diverse of a

customer base as competitors

Opportunities Sustainability is the new sexy Footwear market projected to skyrocket Manufacturing technology continuously

advancing

Threats Unusual supply chain can impact

effectiveness of market penetration Longevity of sustainability trend If sustainability is not highly

valued, easily beat out by price

Patagonia is a unique company overall, with various strengths and weaknesses alike. One of Patagonia’s strong suits is their Anti-marketing strategy, which has been historically proven as an effective form of advertising for their business model. In addition to already having experience with environmentally conscious products, Patagonia has successfully established itself as a well-branded company with a loyal and environmentally active customer base. As mentioned in the company analysis, Patagonia also has created various product lines tailored to a wide array of sports, and thus, different segments. There is also consistent quality and versatility within all of Patagonia’s products, adding to its brand reputation as a reliable and high quality product provider.

Weaknesses of Patagonia may be just as obvious as its strengths. One potential weakness for Patagonia is that the company is known as a smaller company, with a fewer selection of products and less revenue. This is a weakness as it allows competitors to dominate numerous markets that Patagonia is not a part of, thus reducing the overall cross-market presence of Patagonia. In addition, the narrower field of markets Patagonia reaches also limits the diversity of its consumer base; its consumer base consists mostly of the upper-middle class. Because of this, Patagonia tends to price its products at a fairly high rate. This can obviously turn away many consumers who are looking for products that Patagonia offers, but unfortunately cannot afford the higher price point.

From briefly understanding the background, strengths, and weaknesses of Patagonia, several opportunities for improvement and threats to success can be identified. To start off, one of Patagonia’s opportunities is that as the trend of sustainability continues to grow as climate change remains a popular subject of conversation. Being in the market for sustainability allows Patagonia to reach out to a wider consumer base, as well as gain publicity. Should Patagonia continue to delve into the sustainability oriented products market, there is no doubt that there would be a positive reaction. This potential for reached new product markets presents an opportunity for

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Patagonia to re-enter the footwear market. As mentioned, Patagonia previously explored entering the footwear market and the project was not as successful as planned. However, should Patagonia try this again, they would have a much higher chance of success due to their further developed marketing strategy and sustainability emphasis. With the footwear market growing at the rate it is, there is no doubt a Patagonia shoe would be received well. Another opportunity Patagonia can explore is advancing their manufacturing procedures. With technology being developed at the rate that it is, Patagonia could definitely improve their supply chain with some newer technology.

When looking at potential threats for the company, Patagonia is susceptible to quite a few. For one, depending on what product Patagonia decides to pursue, the company may need to deal with an unusual supply chain. Procurement of new equipment and raw materials will complicate the supply chain for the company. Another threat for Patagonia is how long the trend of sustainability will last. The trend is currently driven entirely by millennials. How long the interest will last can be a serious threat to Patagonia’s performance. And finally, as Patagonia continues to incorporate sustainability into its products, the price will undoubtedly rise. Because Patagonia values sustainability more than producing a lower priced product, Patagonia has the potential to be beat by competitors who produce cheaper products. However, so long as interest in sustainability continues to grow, Patagonia will remain a strong competitor in the athletic apparel industry.

Marketing Plan ObjectivesPatagonia has been a company known to provide quality products and provide excellent services. Its anti-marketing strategy and heavy focus on corporate responsibility distinguishes Patagonia from its competitors. We believe that Patagonia’s performance against larger competitors is more than enough evidence to prove that Patagonia is a well-structured company. Though these qualities make Patagonia unique, there is still room for improvement.

Although Patagonia is a well-established company, they are hindered by the mere size of the competition. Increasing brand recognition and aiming to develop insistence among customers is an important objective for Patagonia. This would not only improve brand image, but also increase sales and further Patagonia’s reputation in the clothing and apparel industry. The second objective would be for Patagonia to develop a trademark product that would be recognized across all platforms. The product would be a representation of Patagonia’s values and could become a product that Patagonia is known for. For example, Under Armor has their climate gear and Nike has their footwear. This would make Patagonia more competitive as an iconic product is recognizable over different segments. The third objective would be to dive into a new market that would allow Patagonia to take away some business from competitors. Patagonia’s consumer base is sizeable, but there are several segments that Patagonia has yet to reach into. In this aspect, Patagonia is at a disadvantage to competitors like Adidas, Columbia, and REI as those companies all reach into more markets.

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Strategic OptionsTo achieve these objectives, we looked into three possible improvements. The first would be to expand the sports industries to which Patagonia tailors its products. Camping, paddling, and cycling are currently sports that are not part of Patagonia’s target market. Delving into these new markets would make Patagonia more competitive against other companies as they would be tailoring to athletes that currently have little reason to do business with the firm. This could also increase brand recognition, as reaching out to more consumers would mean making the company more known across different customer segments. Though this is a viable technique, there is no guarantee that this will give Patagonia a trademark. Creating apparel for cycling or camping would not necessarily set Patagonia apart from other competitors.

The second improvement would be to focus more on digital marketing. Essentially, this would mean sponsoring more non-silent sports and shifting towards traditional advertising techniques to increase company recognition and reputation. The advantage to doing this is that historically, investing in advertising has always made a company more competitive and profitable. However, this will likely not be the solution we pursue. The reason being is that Patagonia is a company very set on its values, and shifting towards traditional marketing strategies would not only go against the ideology Patagonia is based on, but also turn away the current loyal customer base.

The third possible improvement would be to invest in product development and dive into the footwear market. So far, this is a product line that nearly all of Patagonia’s competitors have. Unfortunately, Patagonia lags in the footwear market. In the past, the company once tried to introduce footwear through a third party. However, the shoe was discontinued shortly after its introduction as expected profits were significantly underestimated. Since then, Patagonia had made several adjustments to its marketing strategies, and profits for those products have consistently increased. In addition to being produced by a third party, which likely affected the customer perception of the product, the shoe was fairly unattractive, poorly advertised, and was priced higher than other shoes in the market. The reason why re-entering the footwear market now would work is that this time, Patagonia would design and manufacture its own shoe, with an iconic Patagonia spin on it.

We’ve decided to pursue the footwear industry as it targets all three objectives. Introducing a Patagonia shoe could penetrate the market and become a known trademark for Patagonia. In addition, the creation of the shoe could incorporate some of Patagonia’s sustainability values to attract a large amount of attention and continue to develop Patagonia’s reputation. Ultimately, we believe that re-entering the footwear market would make Patagonia a more recognized and profitable company over time.

Marketing Strategy Recommendation We believe that Patagonia re-entering the footwear market is a positive step for the company in that it will provide a product to environmentally conscious customers who are in search of a shoe

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that fits their everyday lifestyle. The other suggested options for new Patagonia opportunities don’t differentiate Patagonia enough from other competitors. Expanding into other silent sports does not provide a guarantee that Patagonia could create a unique trademark or product that fits the demands of consumers. While silent sports are trending, they still do not compare in consumer base to the participants of the more traditional sports.  Similarly, if Patagonia were to expand into the digital advertising world, the company would face some obstacles and would not be able to find success. If Patagonia were to pursue an expansion into digital advertising, it would oppose their current “anti-marketing” strategies which they pride themselves on. Changing their advertising tactics would affect their current customer base, while underperforming financially. Underperforming in a digital advertising campaign would decrease efficiency and waste resources while losing support among their customer base which could be disastrous for Patagonia.

Patagonia is known for being a sustainable and eco-friendly company while providing quality outdoor products in clothing, gear and accessory markets. Patagonia needs to follow the economic, technological, legal, and social trends while maintaining a sustainable brand image and loyal consumer base to re-enter the footwear industry and capture the market share (see appendix II). By analyzing different trends and comparing competitor’s marketing segments, we think Patagonia will need to develop the Patagonia Summit and Spire for the growing footwear demands in a sustainable environment. During our first year of production, we have employees and volunteers who will be collecting plastic bottles and other plastic materials. We plan to use this collected plastic as our main manufacturing material in the production of our shoes. We also intend to partner with The Ocean Cleanup in the future to acquire plastic waste that they have collected using their ocean cleanup array technology to use in our footwear products. We also suggest to use 3D printing technology for the rubber bases of the shoe to limit material waste and cause no necessary harm to the environment. Investing early in 3D printers will also position Patagonia at the forefront of the industry and will give the company the opportunity to increase production as 3D printers evolve towards mass production. By taking advantage of 3D printers, Patagonia can further decrease the liability throughout their supply chain. We believe that by applying this digital manufacturing process, Patagonia will better target the market demands and further strengthen the current sustainable business model already set in place. The production of the shoe itself is contributing to the reduction of the environmental crisis while upholding the standard of quality Patagonia has set for themselves over the last 43 years.

Segmentation SchemeThe segmentation process consists of three general steps. The first step is discovering what the generic need is for consumers. Because our product is a shoe, the generic need would, quite obviously, be that everyone needs shoes for everyday comfort and activity. The second step in the segmentation process is narrowing down our product to a broad product-market. For our product, we have determined that consumers who are passionate about sustainability and environmental awareness are in search of a shoe that meets these eco-friendly expectations. For our new footwear products with Patagonia, our broad product-market would consist of all consumers who are looking to purchase footwear that fits this conservational criterion. With Patagonia, we are looking to reach the consumers who are looking for a “lifestyle” shoe that allows for versatile

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activity and is not designated for one specific sport, but rather functions as a shoe that can be worn at any time for any purpose. The final step in the segmentation process required us to determine how to segment our footwear line specifically into possible target markets. Since Patagonia consists of two general segments, the “silent sports” and “other” outdoor sports, we decided that we would gear our new footwear line towards the silent sports segment. We are also further dividing the silent sports segment into male and female segments by designing two different shoes, the Spire and Summit, based off of different customer needs and wants.

Target Market and PositioningAfter segmenting our products into these two specialized segments, we determined that our specific target markets are going to align very closely with our designated segments. Specifically, our target markets are male silent sport participants looking for an all-purpose, environmentally friendly shoe and female silent sport participants who are also searching for a multi-purpose, eco-friendly shoe. When looking at each of these target markets separately, we have to come up with two slightly different ways to approach our marketing strategies. This combining or straddling targeting technique means we are working to appeal to the similarities between the male and female target markets while also slightly differentiating between the two segments. Patagonia customers set themselves apart from other consumers by being true outdoorsmen who put the needs of the environment before the needs of their own, whether male or female. In support of this idea, Patagonia, as previously mentioned, has been most successful selling their products to this type of customer in smaller retail stores and online. Patagonia sells their products at surf shops, mountain gear stores, and other boutique style shopping locations. So, when looking at our target markets and Patagonia’s success targeting these same segments in past years, we determined that the most effective way to market our new footwear line would be by introducing the new advertisements to these smaller retail stores prior to attempting to mass market (or in Patagonia’s case “anti-market”) the footwear line. By focusing our new products in these smaller production areas, we can attract our broad target market which consists of both men and women who are strong supporters of the environment and are in search of shoe that minimizes its effect on the Earth. However, like all other products, we also had to find a way to appeal to male and female segments in different ways. In order to do so, we have two different shoe designs; one that is designed to attract a man’s attention while another is designed to fit the desires of a woman. The male shoe is called the Patagonia Summit and the female shoe is called the Patagonia Spire. While both of these shoes are very similar, we have designed the shoes so that the color options provide for more customizable products depending on a customer’s specific taste while the shape of the feminine shoe is slightly more narrow allowing for a better fit for a female foot. The creation of these two products allows us to separately appeal to both of our target markets in a small way while still maintaining the overarching marketing strategy centered on environmental conservation.

By focusing on these two target segments, Patagonia will have a distinct competitive advantage over other footwear producers because of their already well-established “anti-marketing” strategy which already attracts the target markets we have determined to be the different segments for our footwear line. By segmenting the footwear line to customers who have already proven to be a

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member of these target markets, Patagonia will not have to worry about whether or not there is a group of consumers who “fit the bill.” The anti-marketing strategy that Patagonia has successfully used to back up their environmental support, proves how Patagonia wants to first, save the Earth, and second, be a successful company. This gives Patagonia a distinctive role in the active footwear industry because no other footwear company has adopted this marketing strategy or exemplifies their dedication to save the environment quite like Patagonia.

Product and Target Market

Segment Description

FemalesPatagonia Spire

Young adult to middle aged Environmental activist Enjoy the outdoors Want style and comfort Active lifestyle that requires constant movement and

switching between activities Silent sport participant Willing to pay a higher price for a more Earth-conscious

shoe

MalesPatagonia Summit

Young adult to middle aged Eco-friendly products are of high value Enjoy the outdoors Looking for comfort and versatility High-activity lifestyle Participating in a variety of high involvement silent sports Price doesn’t matter as long as the shoe satisfies

environmental requirements

Marketing MixProduct: Patagonia’s reintroduction into the footwear industry will be headlined by the Summit and Spire lifestyle shoe. This is based off the active and adventurous life of the quintessential Patagonia customer. Patagonia’s Summit and Spire focus on providing the fan of silent sports and adventure of outdoors a versatile shoe that they can use from the most intense situations in nature, to running a race, or relaxing around town. Patagonia is known for their quality and reliable gear that our customers trust their lives with. The Summit and Spire will be a versatile shoe that will allow the consumer to operate at the highest level. While providing our customers with a product that will allow them to operate at the highest level, Patagonia is dedicated to producing a product that benefits the environment.

The “upper” of the Patagonia Summit and Spire will be produced from recycled ocean plastic. The material will be lightweight and breathable allowing air to circulate through the shoe when active (see Appendix IV). With 5.3 trillion pieces of plastic floating in the ocean there is an abundance of resources to take advantage of (Main, 2014). This plastic poses a threat to wildlife as well as

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damaging our oceans. The area with the highest concentration of plastic waste are the Asian Pacific countries. Patagonia has the opportunity to produce goods at a cheaper cost while effectively decreasing the amount of plastic in the ocean. To ensure a lifetime value Patagonia will spray each pair of Summit and Spire with a hydrophobic solution that will render the shoes waterproof.

The bottoms of the Summit and Spire will be produced via 3D printing using recycled tires. Currently tires are being recycled into new products unlike the stock piles of used tires they once accumulated thirty years ago. This does not mean that there still are not millions of tires being thrown away each year. In 2009, the most recent year available, we generated 296 million scrap tires, with passenger cars accounting for 189 million of them (Motavalli, 2014). By producing the soles of our shoes with recycled tires Patagonia can continue the success of decreasing tire waste. The benefit that the Summit and Spire’s soles will bring are their grip. The enhanced grip offers better traction which leads to more efficient running, or more stability while climbing (“Rubber for Runners,” 2013).

The unique aspect about the Summit and Spire is that they will include a pair of nylon cord shoelaces capable of providing significant help when stuck in nature. There are a number of survival uses for shoelaces that make them a very important resource in the wild (“Survival Uses for Shoelaces,” 2015). While the Summit and Spire’s shoelaces are not the main attraction, they allow the consumer to utilize every part of the shoe.

The Summit will feature a color selection of black, blue, and green. The Spire will feature a color selection of pale blue, grey, and pink (see Appendix V and Appendix VI).

Place: The Patagonia Summit and Spire are a shopping product, which means that consumers’ buying approach will reflect a hedonic perception. With a strong brand name already established among customers, the Summit and Spire will not be widely distributed. Instead, Patagonia will exercise selective exposure to achieve optimal market presence by selling to selected intermediaries. By selecting small boutique shops (surf shop, ski resort, rock climbing facility, etc.) across the country will keep Patagonia’s brand intact. The Summit and Spire will follow past and present Patagonia products by not appearing in an outlet mall.

Our product will also be available for sale online. This will give our customers the ability to buy the Summit or Spire if they do not have access to one of Patagonia’s selected stores.

Promotion: We will promote the Summit and Spire equally to the public by creatively using our resources to reach our target market and build a new customer base.

We will do this through short yet clever commercials to bring interest to the product. To penetrate the market, we need to deliver a product that will stand out from the crowd and make consumers switch to Patagonia. This will be done in a two-way approach. We will promote the product through media advertising, website content, and catalogs to get the initial interest for the Summit

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and Spire. Our second approach will be more personal. This will be done through company experts attending trade shows to get the pulse of our customer base. Our customers do not want to follow the crowd, which is why we need personal interactions between the customer and our company. This will effectively communicate the benefits of our product and our company.

Patagonia has never been about being flashy and force feeding consumers a product. We will be distributing our efforts to promote the Summit and Spire on a selective basis moving away from mass exposure. The Patagonia brand is best represented from the voices of our customers and our image would diminish with an excessive advertising campaign. The best way for us to validate our product are through these non-company sources such as the leaders in the industry. Consumers will recognize Patagonia as a leader in the outdoor industry as well as their dedication to saving the environment. The Summit and Spire deliver exactly that as a Patagonia lifestyle shoe and with the recycled products used in manufacturing. Patagonia’s Summit and Spire advertising objectives will be focused on persuading the customer they are the highest value and most eco-friendly product in the market.

Patagonia aims to establish a strong pull between the company and consumers. Due to the novelty of Patagonia’s products it is assumed that brand preference has already developed, but there is a need to build insistence.

Price: The Patagonia Summit and Spire demand respect with the high end resources used in production and the versatility it brings to the consumer. The Summit and Spire will be priced to effectively penetrate the footwear industry in order to increase market shares and initial sales. This is to establish a foothold in the industry and prove to the market that Patagonia is providing a competitive product. Among high quality footwear producers, such as Nike, Columbia, Adidas, and Timberland, competitive products range from $135 to $230. Because of the functional benefits and environmental friendly resources used in manufacturing the Summit and Spire, we intend to price towards the upper tier of the pricing range. We want the Summit and Spire to last our customers a lifetime. As individual consumers, the single best thing we can do for the planet is to keep our own products in use longer (“Patagonia’s Mission Statement,” n.d.). This product will have a large enough cost to maintain the image of a reliable and quality product, as opposed to having the image of merely cheap and low quality. With this in mind, after fixed costs and variable cost calculations, we have determined the following breakeven and manufacturer suggested retail prices (see appendix VII):

Although Patagonia is priced fairly high, we expect because of the quality and uniqueness of our brand, we will have a high fair value compared to our leading competitors (see Appendix VIII).

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Marketing Information Requirements In order to further defend and implement our marketing plan, additional primary research must be conducted throughout the new products development process. We plan to concentrate on focus groups, participant observations, consumer surveys and telephone interviewing to achieve our objectives.

When Patagonia summit and Patagonia spire are finally ready for market tests, the style and feel of the shoe will need more primary data from focus groups to support it. These are qualitative data researches require for detailed responses that reflects the participants’ thoughts (Perreault. Et.al). We should ask open ended questions about how the participants feel about Patagonia’s new footwear products compare to competitor’s similar products during the interviews. We also need to make sure such focus groups were not biased and best match our objectives in order to limit risk and ensure validity in the research. Another form of qualitative data research Patagonia should use is participant observations in local locations. Many consumers can find the new Patagonia summit and Patagonia in their local beach store or surf shops. A closely observed response of these participant’s decision choice would generate more sales depending on location preferences and future online shopping opportunities. The cost for conducting these researches should be relatively low due to these small sized groups and observations. The qualitative results should yield one or two problems or suggestions and only be a step-stone for more in-depth primary data research strategies.

Once the qualitative researches generated the ideas needed, we can go in-depth into quantitative data researches that will produce numerical data comparisons that we can further analyze. One way we can conduct more primary quantitative data is through online surveys. However, massive surveys require lots of investment and could be misleading if the response rate is low (Perreault. Et.al). Therefore, in order to minimize any data risks, we can design simple, clear and understandable surveys that are fast to fill out and easy to use to increase the survey participants’ response rate. We will then heavily conduct these online surveys through social media networks like Facebook and Twitter to rise the survey response rate and offer supports if the participants had any questions toward the survey. Furthermore, in order to collect primary quantitative data quickly and efficiently, we suggest using telephone surveys. These surveys will be carefully selected depending on the participants’ demographics to diverse sample risk. Although telephone surveys are not as big as online surveys in scale, but they do yield promising results within a limited time frame. Patagonia, as a fast follower in their segment markets, will have to considering using telephone surveys under the time pressure to get valuable data faster. Therefore, through these primary data research steps, Patagonia will better implement the marketing plan through minimizing risk and filling researching objectives.

Implementation and Control PlanNovember 2016 - January 2017After the project is approved, Patagonia will begin networking with various environmental groups to establish a set supplier of raw materials that will be used for the shoe, mainly recycled tire

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rubber and ocean plastic. Preliminary designs will be finalized by the end of this period, and market surveys will be sent out to estimate the consumer reaction to a product like this.

February 2017 - April 2017At this point in time, overall survey reactions should be positive. Patagonia will have 2-3 designs of the shoe and will proceed with procurement several 3D printers. Various designs created will be tested on athletes to determine durability, stability, and quality of design. Product design improvement will occur during this time.

May 2017 - August 2017Patagonia will begin to perform cost-benefit analyses on the different designs, holding up production time to material usage and design quality to determine a set blueprint for the shoe. Depending on how much variation to the design of the shoe, the supply chain and process of procurement may need to adjust accordingly. The shoe will be evaluated by internal and external parties to estimate consumer reaction, ROI, and sales. After this step, Patagonia will release a commercial featuring the shoe. By August, intermediaries and distributors will have been contacted, and agreements for the new product will be in the works.

September 2017 - December 2017Patagonia will continue to promote the shoe. The company will also begin by creating 5,000 units of the men’s shoe Summit, and 5,000 units of the women’s shoe Spire. Contracts with intermediaries and distributors will have been settled early in September. Manufacturing of the product will be complete by October, and hit the market in November, just in time for the holidays. Marketing research and adjustments to expected sales and ROI will continue to be calculated throughout these months. With Patagonia’s loyal customer base combined with the hit commercial, ending inventory will hopefully be less than 100.

January 2018- February 2018After the pilot study, Patagonia will start the reflection of the Patagonia Summit and Spire. Analyzing effectiveness of marketing strategy, shoe design, distribution channel, supply chain, and manufacturing process will occur. The company will make adjustments as necessary and maintain a positive relationship with raw recycled material suppliers. Forecasting footwear market, and keeping an eye on the competitor’s behavior will be necessary actions. The finance team will predict future revenues, and Patagonia will purchase more product manufacturing equipment. Patagonia will additionally renegotiate contracts with distributors and suppliers.

March 2018 - December 2019Patagonia will mass produce the Patagonia shoe and begin to sell the Summit and Spire more as a product rather than a promotional item. At the end of each quarter, minor adjustments to the supply and distribution channels will be made. Financial forecasts will constantly be changed, and Patagonia will continue to invest in market research and evaluate consumer behavior. Expansion of manufacturing space will likely occur and additional equipment will need to be purchased. In December 2018, Patagonia will re-evaluate the shoe once again and make adjustments to the

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design as necessary. Patagonia will also consider discontinuing the product should consumers react negatively or financial forecasts are drastically off. Should the product perform well in the market, Patagonia will begin to design two additional models of shoes and release those in late 2019. An alternative would also be to incorporate recycled rubber and ocean plastic into some of the other products offered by Patagonia. Finally, during this period Patagonia will also report on its environmental impacts and establish their reputation as an environmentally-friendly company.

Foreseeable issues are: High price of product make it difficult to market and sell Procurement of recycled materials may be unstable as more shoes are produced Sustainability integrated products may not be as popular in the future, and thus negatively

affect the performance of the new productMaximizing likelihood of success:

Heavily investing in relationships with recycled material suppliers Continuously adjusting the price and product design according to consumer reports and

market research Continue to treat loyal customers well so that the product reflects well with them, which it

turn will attract non-Patagonia customers Find many uses of the 3D printer so that the investment is used to the fullest

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Appendices

Appendix I

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Appendix II

http://www.prnewswire.com/news-releases/footwear-market---global-industry-analysis-size-share-growth-trends-and-forecast-2014---2020-300211852.html

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Appendix III

Appendix IVPositioning Graph

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Appendix VIPatagonia Spire

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Appendix VPatagonia Summit

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Appendix VII

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Appendix VIII

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