Analyzing Patagonia’s Marketing Strategy

by Tiana | Case Studies | 0 comments

Patagonia is a manufacturer of outdoor clothing and equipment for the silent sports of climbing, surfing, skiing and snowboarding, fly fishing, and trail running. The first store opened in Ventura, California in 1973, selling custom mountain climbing gear before expanding its product line to include apparel designed for other outdoor sports such as surfing. Patagonia now sells outdoor products such as camping food, sleeping bags, and backpacks in addition to sportswear. 

The majority of Patagonia’s success can be attributed to its marketing strategy. 

In this case study, we’ll look at Patagonia Marketing Strategy, which includes its marketing mix, digital presence, advertising campaigns, and SWOT analysis. So, without further ado, let’s begin by learning about Patagonia as a company.

About Patagonia

Patagonia is an American clothing company that markets and sells outdoor clothing. It was founded in 1973 by Yvon Chouinard. Yvon Chouinard, an accomplished rock climber, founded Chouinard Equipment in 1957 to sell hand-forged mountain climbing gear. 

Then, around 1972, they began selling rugby jerseys, which provided excellent support and were ideal for climbers and the mountaineering community. The clothing department was viewed as a supplement to the hardware business. However, they continued to look for the best type of material for mountain climbers, surfers, and others in order to improve their quality and overcome any problems that arose.

When the market was saturated with specific colours around 1980, they introduced some very different colours such as teal, cobalt, and french red. Now, the company provides a wide range of products to its loyal customers. But, more importantly, this is a company that advises their customers to reconsider whether or not they need to purchase the products.

Even if Patagonia started as a company selling outdoor gear, it has expanded itself into something this huge with the help of the marketing strategy. So, let’s dive into the Patagonia Marketing Strategy and learn about the secrets to its success. 

Patagonia Marketing Strategy

Patagonia thrives in non-traditional marketing because the company likes to push the boundaries with its unconventional marketing strategy. 

Patagonia’s “Worn Wear” campaign began as a series of pop-up events and has since grown to include a short film, a mobile tour, and an online website. A surfer, a long-distance hiker, a cyclist, a young family, an organic farmer, a wildlife photographer, a backcountry skier, and a climber are among the eight loyal customers featured in the 30-minute film. 

Each person interviewed recalled some of their favourite memories while wearing Patagonia gear, some of which they had owned for up to 33 years. Rather than encouraging customers to buy new clothes, this video emphasizes the importance of investing in high-quality clothing that will last a lifetime.

Another distinguishing feature of Patagonia’s marketing strategy is the differentiation of stores based on location. While the majority of their stores offer the same general products in a similar layout, the company gives each store a slightly different personality and tries to appeal to the area’s target market. 

Its Encinitas store, for example, features a large rack of surfboards as well as tables full of board shorts and bathing suits to match the beachy feel of this surf town in Southern California. Customers entering one of their Colorado stores, on the other hand, would see much more snow gear as well as images of the mountains and extreme snow sports.

So now that we’ve learned about its marketing strategy, let’s dive into its marketing mix in the section below.

Patagonia Marketing Mix

The four Ps of marketing is referred to as the marketing mix: product, price, place, and promotion. These are the key components of marketing a product or service, and they interact heavily. So, let’s take a look at the 4 Ps of Patagonia’s marketing mix down below.

1. Patagonia Product Strategy:

• Product quality is maintained by adding value at various stages of the value chain
• All products come with an easy-to-understand user manual that includes step-by-step instructions for product use
• Patagonia benefits from a broader product portfolio as well
• Patagonia’s distinguishing feature is its provision of emotional benefits to the consumer
• Patagonia has used various SKUs to increase market penetration

2. Patagonia Price Strategy:

• Patagonia encourages favourable brand and product perceptions in target consumer groups by using premium pricing for some of its product lines
• Patagonia successfully adds more value to its products from the perspective of customers by employing psychological pricing
• It can also maintain consistent revenue growth by adjusting pricing in different markets based on local currency value
• The company also control costs and prices by lowering marketing and distribution expenses with bundle pricing

3. Patagonia Place Strategy:

• Patagonia has greater control over operations, as well as store layout and design, in company-operated stores
• Licensed stores also allow customers to enjoy the company’s various product offerings
• It has created a fully functional website for online order placement and tracking
• Their products are also available in supermarkets and hypermarkets across the country
• Patagonia also uses partner agents for product placement in offshore locations

4. Patagonia Promotion Strategy:

• The company uses its social media presence to engage with customers directly
• Patagonia offers its customers a loyalty card program
• As part of its on-the-ground promotional efforts, it employs community influencers
• They also create television commercials

Now that we have seen the brand’s marketing mix, let us look at their advertising campaigns.

Patagonia Advertising Campaigns

Through advertising strategies, customers can learn and experience more about a company or a product. These are some of the company’s efforts to persuade customers.

– ‘Don’t buy this jacket’ Campaign

In the run-up to Christmas, the brand ran a poster and public relations campaign telling customers, “Don’t buy this jacket.” The message was intended to encourage people to think about the environmental impact of consumerism and to buy only what they need.

Although this approach may appear risky, European marketing director Jonathan Petty claims that it has contributed to the establishment of a strong community of people who value the brand’s values and products. “Our customers expect very high quality, which is why they return to us,” he says.

“We’re on the other end of the spectrum from big brand disposable fashion,” Petty explains. “Because we believe in creating high-quality, long-lasting products, we offer a lifetime warranty on all of our products.”

– “Buy Less, Demand More” Campaign

Source: https://youtu.be/UAZ8Ts9CC6I

The idea is simple, and it is based on two principles stated in the campaign’s name: encouraging customers to buy fewer new products and increasing demand for products made sustainably—using recycled materials, regenerative organic cotton, and fair-trade production practices.

The initiative’s most notable feature is a button that Patagonia has permanently installed on its website that allows shoppers to easily compare new products with used alternatives.

The second part of the campaign emphasizes education and encourages consumers to demand more of three things in the apparel industry: regenerative organic cotton, fair trade production practices, and recycled fibres.

Let us now take a look at Patagonia’s digital presence in the next section.

Patagonia Digital Presence

If you have a digital presence, customers can easily browse through your portfolio. It enables you to interact with them while also keeping you ahead of your competitors. Patagonia makes extensive use of social media platforms. Let’s take a look at some of them:

Website

Facebook

• 1.5 Million+ Followers

Instagram

• 4.6 Million Followers

Twitter

• 510K Followers

So, now that we’ve gotten a sneak peek at Patagonia’s digital presence and activities, let’s look at the brand’s SWOT analysis to better understand its strengths, weaknesses, opportunities, and threats.

SWOT Analysis of Patagonia

A SWOT analysis is a method of identifying a company’s strengths, weaknesses, opportunities, and threats. The primary goal of a SWOT analysis is to help organizations develop a comprehensive understanding of all the factors involved in making a business decision.

Let’s take a look at Patagonia’s SWOT analysis below:

1. Patagonia Strengths:

• Excellent Philosophy: 

Patagonia’s business is based on the “buy less, buy quality” philosophy, which encourages customers to invest in used versions of its brands rather than buying new ones. This philosophy allowed the company to increase its revenue by approximately 30%.

• Great H.R. Strategies: 

Employee-first strategies boost employee morale, efficiency, and productivity. Even though Patagonia stores have been closed indefinitely due to the virus, the company has continued to pay employees their regular salaries.

• Eco-Friendly Operations: 

With an increasing number of environmentally conscious consumers, eco-friendly businesses are well-positioned to capitalize on this market. Patagonia is the most environmentally friendly retailer, donating 1% of its revenue to environmental organizations through One Percent for the Planet.

• Effective Marketing: 

Marketing content should convey the desires of the target audience to capture the audience’s attention. Through campaigns such as Global Climate Strike, the company capitalizes on consumers’ growing eco-consciousness.

2. Patagonia Weaknesses:

• Weak e-Commerce:

While other retailers have prioritized e-Commerce adoption, Patagonia has struggled to increase online sales. This is a major flaw, especially in today’s pandemic-stricken society, where consumers prefer to shop online.

• Reliance on Suppliers: 

Patagonia, like any other clothing company, relies on Asian suppliers. Even though the company ensures that each supplier follows its rules and philosophy, it is still vulnerable to the supply chain issues that come with over-reliance.

• Low Market Presence:

Patagonia has 37 stores in the United States, two in Canada, and a few in other countries around the world. Because of the retailer’s low market presence, many customers are forced to shop at competitors simply because they cannot find a Patagonia store near them.

3. Patagonia Opportunities:

• Strengthen Market Presence: 

Patagonia has 37 stores in the United States, spread across roughly 20 states. Building more stores will increase the company’s market presence and allow it to capture and serve more customers.

• Expand Globally: 

Although the outdoor retailer only operates in the United States and Canada, there is a high demand for outdoor apparel all over the world. Patagonia will benefit from having multiple revenue streams by expanding globally.

• Exploit e-Commerce Channels: 

Consumers of outdoor apparel prefer to shop online, which presents an opportunity for growth for the company. It can make better use of e-commerce channels to increase online sales.

• Extend Product Line: 

Patagonia sells outdoor clothing and other outdoor-related items. The retailer’s product line can be expanded to include everyday clothing, sportswear, and secondhand clothing.   

4. Patagonia Threats:

• Climate Change: 

Patagonia’s products are made from natural materials such as features and wool, making it extremely vulnerable to climate change. Due to prolonged droughts and flooding, the availability of these raw materials will become increasingly difficult.

• Declining Retail Sector: 

The retail sector has been declining for the past five years, which has been accelerated by the pandemic. Patagonia’s profitability and long-term viability are jeopardized as a result of the decline.

• Stiff Competition: 

Outdoor apparel retail has several competitors, such as North Face, L.L. Bean, Osprey, and others, who compete for market share with Patagonia.

The brand has been able to remain at the top of its game due to an excellent marketing strategy, advertising campaigns, digital presence, and SWOT analysis, and with this, we have concluded the Patagonia case study. Let us now wrap it up 

Conclusion

Patagonia’s marketing strategy is distinct and one-of-a-kind. However, it can serve as a foundation for a variety of other businesses. The most important lesson a company can learn from Patagonia is their honesty, transparency in their values, and attitude. Patagonia provides a wide range of long-lasting products, but they never fail to keep their word in times of environmental crisis. 

When a company expands and grows, it usually loses sight of its original purpose. 

Patagonia, on the other hand, is unique. They prioritize the environment, which is why they dare to advise their customers not to purchase a particular product. 

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