Marketing Plan: Patagonia, Inc.

By: Rhys Davis, Gabby Jackson, Miranda Koch, Jade Pint, Emily Ritchie, Matthew
Thein, and Akihisa Yamaguchi

Executive Summary
 Patagonia is a manufacturing and retailing firm of clothes and items of outdoor such as hiking,

mountain-climbing, surfing. Originally hey started up a small business selling items for mountain-

climbers, but nowadays they have been expanding the variety of items and their activities. Their sales

went up to more than 30 million dollars in 2015 at the area of athletic clothes. Their products are quite

famous as environmentally friendly ones and for its great durability and quality. The number of their

retailing shop is relatively small around 60 in the world and they do manage their business focusing on

operational management without having their own manufacturing factories. They do their business with a

motto that they focus on contributions to the environment rather than sales. As a result, they have cut

costs for sales-oriented ones. They have been kept donating a part of their sales to pre-environmental

groups. Theyve already have built up relationships with more than one thousand NPO groups to do so.

Because of their historical backgrounds, Patagonia always have been seeking to improve the CSR

conditions at every level in their business. Target market is focused on people who enjoy outdoors

activities and seriously think environmental aspects important at the same time. Those customers are

quietly narrowly focused, mainly users can be people from middle class adults to those in high class.

Their products are expensive as much as those of other big outdoors brands. However, their market share

in the outdoor clothes is smallest and competing with big firms like Nike, The North Face, and Columbia.

As for their SWOT analysis, they have strength such as high quality products and customer`s loyalty,

have weakness such as less fashionable and expensive, have opportunities such as reliability of reputation

and increase of outdoor activity in the world, and have threats such as big competitors and aging societies.

Entirely, their position in the market can be said on the edge as a business entity that competes with

others, however, it also reflects their business style.

Through analysis of present situation of the companys internal strengths and weaknesses and

external opportunities and threats served as the foundation for this strategic analysis and its management,

the plan focuses on the companys growth strategy, suggesting ways it can build on existing customer

relationships, and on the development of new products and/or services targeted to specific customer

niches with new direction towards future.

Patagonia first started out as a rock climbing gear business, with Yvon Chouinard and Tom Frost.

As the business gained popularity, they redesigned and improved almost every climbing tool, to make

them stronger, lighter, simpler, and more functional. Chouinard Equipment was extremely popular, but the

pitons were damaging the rock because the same trails and cracks were being used. Chouinard and Frost

found a new way to combat this by using aluminum chocks that could be wedged into the rock by hand.

This was their first step towards environmental change.

In the 1960s, Chouinard invested into clothing, because he had a regulation rugby shirt, and his

friends were interested in getting one to wear when climbing. Chouinard started to see clothing as a way

to help support the hardware business, and by 1972 they sold: polyurethane rain cagoules and bivouac

sacks from Scotland, boiled-wool gloves and mittens from Austria, and hand-knit reversible hats from

Boulder. Once the clothing line was started they decided to change the name. At the time Patagonia was a

name used for a far off place, and they wanted something memorable.

Their stance on environmental issues started in the 70s, and has continued through today.

Patagonia decided to donate to smaller groups working to save or restore habitat. They give 1% of sales to

these organizations every year. They also took an early position against globalization of trade. They have

argued for dam removal where fish life is compromised. They have supported wildlands projects that seek

to preserve ecosystems and places where wildlife can roam. They have switched to 100% organic cotton,

and continue to search for more environmentally friendly fabrics. Although Yvon Chouinard and Tom

Frosts company started out as a climbing business, it has grown into a solid, innovative, and

environmentally friendly company that is constantly searching for new ways to help.

The Marketing Environment

Competitive forces:

When looking at the competitive forces that can affect Patagonias company, three stood out; The

North Face, Columbia, and REI (Recreational Equipment Incorporated). The North Face and Columbia
focus on winter clothing, but these are also big name companies have outstanding customer loyalty. REI

is an outdoor retail co-op company that focuses on ensuring long-lasting gear and a love for the outdoors

and stewardship. All of these companies have their own factories that make the clothes. As for sales of

athletic wear in recent years. In 2015, athletic wear accounted for $33.7 billion in sales, and is on track to

keep rising every year.

Economic forces:

The economic forces of any company can vary extremely. Due to Patagonia manufacturing their

products overseas the cost of products could rise to offset the cost of importing and exporting. It can be

difficult to regulate the prices of items and costs. In addition, to this the inflation rate could fluctuate and

can be another economic factor.

Political forces:

The first political force is the international exchange rate. It differs between each country.

Patagonia currently uses US Dollars as their exchange rate. If people from other countries want to order

from them, their credit card company will calculate the exchange rate at the time of shipment. This could

hurt Patagonia because some countries might not want to spend the extra money to ship to their home

town. In addition, to the international exchange rate, the transportation costs that go along with shipping

the products can become a factor.

Technological forces:

A major technological force is the fact that more and more interactions are being done online.

Patagonia does a good job with keeping with the trend, but just something to be aware of, and the aspect

of social media. In order to market towards the millennial generation, social media is a vital tool. They

just need to make sure that they are keeping up-to-date with all the recent trends.

Legal and Regulatory forces:

Due to Patagonia making all of their products overseas the question of labor laws and the fair

treatment of workers comes into play. Patagonia is very transparent with how their workers are treated.

This is something that companies who manufacture overseas will encounter.

The culture of young people has gradually changed over the years. Doing outdoor activities has

declined in recent years and many people prefer to stay indoors. Although there are groups of people who

do like going outside, the number has gone down. Another factor is that people have less time for leisure

activity and put more time into working. This can affect Patagonia because they like to promote the

outdoors and getting outside, and their market is targeted towards mainly the active individual.

Target Markets

We gear towards environmentally conscious or green consumers, since our products are made of

recycled or organic materials. Consumers that want to promote environmental responsibility are who we

target for our products. Our consumers are likely educated about the environmental effects of

manufacturing. We persuade that dyes in shirts create pollution, so we are very careful in being

environmentally responsible. Simultaneously, we also would be targeting humanitarian consumers who

wish to help people abroad. We publicize how our factories are helping the communities of our workers.

We stand out from our competitors in that our main focus is about having good working conditions for

our workers, and that we are doing our best to recover the environment and leaving a minimal footprint.

Our business targets more middle/upper-middle class consumers that help with costs of our

products. We distribute our products through retailers like Nordstrom or Scheels, because they effectively

sell our products alongside with our competitors.

Customer loyalty is a major factor in our sales. We put a lot of attention to detail into our products

in how or by who they are created. Our consumers expect the benefit of durable, long lasting clothing,

which has been made by workers that are in good working conditions. We do not believe consumers are

likely sensitive to price changes, due to the quality of the product consumers are expecting and who is

responsible in manufacturing their clothing.

Our products work best for individuals that live in colder, more rugged regions. They are also

more suitable for active people that require more durable clothing, but we also offers more leisurely
clothing and other various products for more casual consumers.

We intend our products to be used outdoors, whether it may be from warmer activities such as:

surfing, swimming, or fly fishing, to colder activities like: skiing, snowboarding, climbing, or trail

running.

Currently, We pursue reliable, long-lasting, and environmentally friendly clothing that supports

both active and leisure individuals. We use recycled polyester in many of the clothes and only organic

cotton. A love of outdoors demands participation in the fight to maintain them, and to help reverse the

steep decline in the overall environmental health of the planet. We donate our time, services and at least

1% of sales to hundreds of grassroots environmental groups. We have already awarded over $74 million

in cash and in-kind donations to domestic and international grassroots environmental groups.

SWOT Analysis

The strengths of Patagonia as a company vary. Patagonia controls their gear designs,

testing, marketing and selling processes. Which means that the company controls what materials

will go into their products, what those products are going to look like, how durable or flimsy the

materials may be, who their target markets are, and how they are going to make and complete

those sales. This is a strength because Patagonia controls that their products are made from

recycled materials only; and since they are an activewear company, they ensure that their

products are both high quality and durable for any weather conditions. Another strength coming

from Patagonia controlling their company sales is that they decide what their money goes to once

it is made. Which doesnt disappoint considering they donate 1% of all of their sales to

environmental groups around the world. That can be seen as a strength because it not only shows

that this company cares about the world around them, but also that when you buy this product,

your money is giving back to communities. Contract manufacturing is how Patagonia receives

their final products and although thats not always seen positively, this company runs a little
differently to make this one of their company strengths. They pick and choose which factories

overseas will make their products, and they require that those chosen factories have safe working

conditions where the workers arent treated or paid poorly.

To every upside, there is a downside. A lot of the weaknesses of Patagonia as a company

stem from their strengths. Since Patagonia is a contract manufacturing company, they physically

dont make their own products and they dont own the factories that make them either, which

makes things a bit expensive and somewhat controversial. Exporting and importing products is

both harmful to the environment they are trying to save and costly to their company. As well as

keeping up with their factories overseas; constant communication takes time and money.

Although recycled materials seem like a good idea, they cost twice as much to use than raw

materials. And since they are an activewear company that focuses mainly on durable, high

quality products the fashion sense seems, well, non-existent. And lastly, Patagonia is still an up-

and-coming company thats yet not as recognized as some of its competitors- like The North

Face. So customer loyalty is still a work in progress.

Patagonia faces both a lot of opportunities and threats as a company. They have the

opportunity to help the environment, as they use recycled materials and donate sales. They also

have the opportunity, as a contract manufacturing company, to enrich third-world countries with

job opportunities. On the other hand of this method, Patagonia is threatened with controversy

that they're taking away jobs from the states and may face scrutiny from some that their products

arent USA made. And as an activewear company, Patagonia is threatened majorly by huge

companies who are known globally, and have had loyal customers for quite some time already.

Overlooking this all and matching some things together, it's clear to see that Patagonia is

already acting on their opportunities as well as their threats. For example, by donating at least
1% of their sales to environmental groups, Patagonia is already making an impact on the world

around them. Patagonia has given over $74 million to more than 1,000 environmental

organizations which shows that the company is dedicated and willing to help the environment

which will eventually open doors for even more environmental groups to benefit from. Aside

from making an impact on the environment, Patagonia makes an impact on their overseas factory

workers by providing a safe working environment as well as helping them when theyre in need.

For example, one of Patagonias factories were undergoing a monsoon so the company gave all

of the factory workers raincoats. And lastly, because Patagonia controls their gear designs and

testing, they are able to control the materials being used, which are recycled materials, and the

quality of their gear deriving from those materials. This means that the company can guarantee

durable yet environmentally friendly products.

Marketing Objectives

We have four main objectives for our marketing plan. Each of them have an ideal

deadline of July 1st, 2017. Our first objective is to develop a promotional video that will increase

sales by 15%. The video will advertise families doing several different outdoor activities while

wearing Patagonia products. By using families, we will be able to reach a larger audience

between the different age groups. Showing the different activities will allow us to represent the

types of activities that Patagonia gear is suitable for. Our second objective is to reach 5 million

followers on Instagram. They already have a great website but instagram is a rising, popular

social media outlet that will reach a larger audience, especially millennials. They have creative

instagram posts now but we also want to focus on the products and post links directly to the

product on their website. We also want to use it for coupons, special sales, and gift giveaways.

Two other ways we can gain more users are to follow people who follow accounts of our
competitors and to pay people to promote our products on their instagram accounts. The next

objective is to increase sales by 15% by partnering with outdoor tourist resorts and airports.

These are great locations to reach are target audience. Our last object is to increase sales of the

more unknown, non active wear products by 10%. We want to expand the knowledge of the less

popular products like jeans, swimwear, and even their own brand of beer. All of these objectives

will be beneficial in improving the overall business of Patagonia.

Marketing Strategies

The products that will be marketed during this marketing plan will be Patagonias traditional

products like coats, gear and swimwear but also the non-athletic items like fleeces, sweaters and t-shirts.

The price of these items will be slightly expensive because of their durability. Customers will be able to

use these products for long periods of time therefore saving them money in the long run. To distribute

these items, Patagonia will need to sell their items in sports retail stores like Scheels and Dicks Sporting

Goods, but also in major airports where people are traveling to vacation spots where theyre more likely

to desire Patagonia products. They can also sell items online. To promote their products, Patagonia should

rely heavily on social media by posting on Instagram, Twitter and Facebook. They can also advertise in

travel magazines and offer coupons to customers which will entice them to buy more.

Marketing Implementation

The way we understand our target market, we believe that taking a digital approach to this

marketing campaign will be the most effective strategy. Patagonias marketing efforts will be organized

around the following marketing teams: Social media production and analysis team; Digital media

production team; Multimedia advertising team; Product sales team.

Each team will be headed by a marketing manager who will report to the marketing director

(these positions must be created). Each team will be have their own responsibilities, but it is imperative

that every team stays on schedule to ensure a timely, successful campaign. The social media team will

also provide valuable analytic information about online consumers that the other teams can strategically
use as the campaign develops.

This digital marketing campaign allows Patagonias marketing tactics to be more agile and

adaptive, engaging with markets otherwise untouched by previous campaigns. Finally, this marketing

organization will give Patagonia a better opportunity to connect with a more casual, younger,

environmentally conscious demographic to further diversify client base.

Activities, Responsibilities,and Timetables for Completion

All implementation activities are to begin at the start of the next fiscal year on January 1. Unless

specified, all activities are the responsibility of Patagonias president, Rose Marcario.

On January 1, create four marketing manager positions and the position of media marketing

director. The media marketing director will serve as project leader of a new multimedia production team,

to be composed of 12 employees from a variety of positions within the company.

By January 15, assign three members of the analysis team to each of the following projects: (1) A

social media production and analysis team, keeping pages communicative and up-to-date, (2) A digital

production team responsible for acquiring and utilizing the appropriate resources to create a professional,

high quality promotional video. (3) An advertising team to push the promotional video and other material

through effective channels of communication; (4) A sales team that is responsible for selling both

business-to-consumer as well as business-to-business; developing relationships with resorts and airports

globally to sell products and increase market share in specific regions.

January 31, the promotional video should be scripted and ready to shoot. All the necessary

resources for the production including directors, producers, engineers, talent, etc. should be assembled

and ready to shoot with a deadline of February 28th.

February 1, social media team starts an online campaign aimed at each of our target markets.

Partnering with the digital production team may be useful to generate meaningful content.

February 2, advertising team begins strategizing which digital channels to be utilized for the push

of the video campaign. Setting and preparing for the launch of the promotional video dated for April 1st.
 February 14th, sales team begins reaching out to resorts and airports across the globe to grow the

brands reach. The measureable goal is to acquire ten major accounts by July 1.

February 28th, the shooting of the promotional video should be completed and ready to edit and

produce. Deadline for post-production, March 24th.

March 1, social media team analyses traffic generated by the first month of the social media

campaign and reporting the results to the media marketing director. Using the information, apply any

necessary changes and proceed as directed.

March 24th, the promotional video is now complete and ready to be released. Social media team

can pre-promote, offer exclusive content and build a buzz for the campaign.

April 1, promotional video is released and streaming via a multitude of digital channels. Using

the demographic data collected by the social media team, the sales team can begin targeting likely

consumers, attempting to drive sales at the start of Q2.

April 2, social media team makes a full month push of promotional video, keeping constant

communication with consumers and gathering as much information as possible within the first month of

the campaigns launch.

April 30, social media analysis team reports the first month market data to marketing director to

make any necessary adjustments to the campaign.

May 1, sales team can expand their markets from their current targets (resorts, airports) to

consumers in surrounding regions.

May 15, consider the risks and rewards of shooting and producing a second promotional video,

piggybacking off of the first one. If the marketing director sees fit, begin casting and development of the

second promo video. Tentatively, shooting should be done by mid June. Release of the second promo

video by July 1.