Patagonia is a firm unlike any other; its focus is not just about making a profit. Its founder, Yvon Chouinard has created an outdoor and equipment company that looks to make an impact on how we approach consumption and sustainability....
morePatagonia is a firm unlike any other; its focus is not just about making a profit. Its founder, Yvon Chouinard has created an outdoor and equipment company that looks to make an impact on how we approach consumption and sustainability. Chouinard’s leadership has allowed Patagonia to become an iconic brand that stands for living a better life by taking care of the earth and acting as a moral compass that both companies and consumers can follow. Patagonia, founded in 1972, has utilized its direct-mail catalogs to sell outdoor clothing and equipment, but more importantly to promote the organizations support toward causes like genetically modified food, overfishing, and putting the earth first. What’s makes Patagonia’s message unique is that it voiced these issues when it was not popular to do so; Chouinard let it be known that the earth cannot survive based on today’s consumption practices and there was and is a need to put the earth first and develop a sustainable business model that recycles and reuses materials. (Casey, 2007).
In terms of product, “Patagonia has scaled the peak of the outdoor apparel and accessories business. The company designs and markets rugged clothing and accessories to mountain climbers, skiers, surfers, and other extreme sports enthusiasts and environmentalists who are willing to pay for the Patagonia brand and its environmental ethic. Besides its signature Patagonia line (for outdoor gear and apparel), the company also sells items from sister companies Lotus Designs (paddling gear), Water Girl (women's sportswear), and Great Pacific Iron Works (retails outdoor gear and apparel). Patagonia, owned by Lost Arrow Corporation, sells these items, as well as luggage, through specialty retailers, a catalog, website, and its own stores” (Hoover’s, 2014).
Patagonia’s uses an environmental differentiation strategy built on a vision of environmental conservation and restoration, and a foundation of values that include quality, integrity, environmentalism, not bound by convention, and Zen philosophy. Patagonia’s mission statement is “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis” (Patagonia, 2014).
The business model supporting the strategy relies on innovation with its processes, product and services, and business model. Innovation allows the company to create value through operational excellence, customer intimacy, product leadership, and environmental stewardship. Customer perceive value from excellent quality and service, and the good feeling that results from doing business with Patagonia. Patagonia is able to capture value via profits, growth and market share. Patagonia’s new CEO (Chief Executive Officer), Rose Marcario describes this model as follows: “Patagonia is built on the principle of living an examined life and I think that permeates into the company culture. Anything we’re doing, any product that we’re building, we examine the supply chain and look at the impacts of that chain on the environment. We look for ways to innovate so that it has less impact on the environment and that requires a lot of self-reflection. And, I think, the company culture is really built on that principle and the result of that is a better product that people feel better about buying” (Kasperkevic, 2014).
Patagonia is launching an organic product line intended to support sustainability within the apparel industry and attract the LOHAS Community consumer; they are the “future of your business and also the future of progressive social, environmental and economic change in this country” (LOHAS, 2014). This particular product line will focus on two of the identified segments with the LOHAS Community; they represent a $52 billion of the $290 billion LOHAS market: Eco Tourism and Natural Lifestyles. The campaign is designed to accomplish two high-level goals. First to grow the organic apparel line within Patagonia’s product and service portfolio, and two, to develop a relationship with the LOHAS Community that can be leveraged to promote sustainability and increase social change philanthropy.
By 2014, Patagonia’s organic apparel intends to capture $52 million of the LOHAS Community Eco Tourism and Natural Lifestyle consumer spend in 2014 in the US. Moreover, the Patagonia’s organic apparel will sell $104 million of organic cotton apparel in 2015, $156 in 2016 and $208 in 2017. The website traffic sources will measure promotional activities to ensure efforts are directed toward websites with the highest response rates. For instance, we will obtain Patagonia organic cotton apparel and LOHAS Community as a Google level one category hits for 90% of all users that search for designated tags. Such strategy will ensure Patagonia’s exposure to a large audience base in the US LOHAS Community. The fourth metric will monitor web traffic by state and the goal will be to obtain a 10% conversion in each state versus total clicks.
Our strategy and tactics include monitoring sales trends and effectiveness of the marketing campaign on a weekly basis. Furthermore, by incorporating Patagonia organic cotton apparel success stories into online marketing programs, Patagonia will achieve consistent development monthly. Additionally, Patagonia will work closely with Google to attain advertising space, gain level one category hits for Patagonia organic cotton apparel or LOHAS Community, and offer various types of incentives to attract customers. And finally, Patagonia will work with Social Media channels by contributing inducements. Patagonia organic cotton apparel is expected to capture a significant portion of the LOHAS Eco Tourism and Natural Lifestyle market. Its break-even chart indicates 249,091 units sold would be required to breakeven and the product’s 2014 sales forecast surpasses this with a target of 472,727 providing a profit of $16.6 million. Patagonia’s ability to significantly improve customer satisfaction by providing organic cotton products that protect and sustain the environment, while enhancing the consumers outdoor lifestyle separates it from everything else currently available in the market! However, in addition to that, Patagonia’s ability to provide a platform for social philanthropy is really what will blow the competition out of the water! Depending on its wearer, Patagonia’s organic cotton apparel will enrich eco travel, augment natural lifestyles and enrich the feeling provided by taking concrete steps to sustain the environment, protect the earth, and most importantly facilitate a living a healthier lifestyle.
