Illustrated Strategic Report
Introduction 154 Words
The fashion industry is one of the fastest growing industries in the world economy . This is mainly brought about by the fact that the world population is overshooting, hence the continuous demand for apparels, clothing, and other fashion products. Another notable reason is the growing trend for globalization. With companies in the fashion industry only serving domestic markets before, more and more ones are starting to expand overseas.
The North Face is one of the most valued brands and companies in the worldwide fashion industry. The company specializes in marketing its outerwear, coats, fleeces, foot wears, shirts, and outdoor activity tools and equipment such as tents, sleeping bags, and a wide range of back packs. The company started out as small climbing equipment retail store in San Francisco, California, United States in 1968 and has since then grown to become one of the most internationally recognized brands in the market segments that it serves.
Brand Values and Identity and Business Model
The brand’s value and identity, based on the company’s actions and research and development strategies, are centered on these two variables: quality and authenticity. The company has been so concerned with the quality of the products that it is making and releasing into the market that it decided to take full control of the production of its goods as early as two years after its inception. In 1968, while it was still in the process of starting out small, the company decided to integrate a small production facility into the back of one of its earliest branches, specifically the one located in Telegraph Avenue in Berkeley . It was right there and then that the company started to blossom as a full-pledged clothing and apparel company that develops its own products. Now, it is important to note that The North Face started out as retailer; this means that the quality of the products that it sells is dependent on its supplier. If, for whatever reason, its supplier becomes unable to deliver the goods that The North Face would have to sell for a premium, or if the quality of the goods delivered by its suppliers proves to be poor, it would be The North Face’s brand which would be jeopardized. Apparently, the company was able to sniff out the primary disadvantages and growth threats that being a retailer brings. The good thing is that the company, because it highly focuses on quality and authenticity, managed to address those threats and disadvantages at a time when they were not yet causing any harm to the company’s brand value and identity.
Though a good deal of the company’s products is produced internally, the company is currently operating its own complex network of suppliers (i.e. supply chain). It is teamed with a host of online partners and authorized dealers to make sure that its products are well marketed and distributed to its target markets. Currently, the lists of companies that are in the company’s supply chain include the following :
Corporate Social Responsibility
The North Face is a company that is known for supporting and even hosting CSR events and programs, especially those that concerns its target markets which are the mountaineers and outdoor activity goers. The company has made it a point to consistently keep in touch with its products’ supporters because that, after all, is one efficient marketing strategy. The company also has a CSR initiative called Chemical Responsibility, which basically is its way of ensuring that its products are free of harmful chemicals that are found in other undisclosed fashion industry firms .
Core Organizational Values
Continuous innovation appears to be one of the company’s main focuses as far as values are concerned . This can be evidenced by the fact that the company, especially since the start of the 21st century, has ramped up its R&D efforts to outmatch its competitors . One of its leading technological edges is its use of a material that they call Thermo-ball, allegedly a breakthrough in the fashion and apparel industry because of its ability to provide unprecedented levels of insulation (i.e. warmth) in all conditions. This brings the company back to their core target markets which are the sports and outdoor activity-goers. A perfect example of a target market or population that would benefit the most from the company’s most recent innovation would be the mountain climbers; mountain climbers get frequently exposed to harsh and extreme weathers. They get to places which could either be too hot or too cold for normal and unequipped (with proper gears and clothing) to stay in. With the company’s latest discovery as a result of its massive R&D funding, it can improve its leverage in that particular market segment and maybe even manage to outperform its competitors in terms of securing a larger share of the market; or in the case of The North Face, increase the gap between its dominant position and that of its smaller competitors, something which may eventually push them out of the market. All of these possible outcomes present a net positive scenario for the North Face.
Start of Section II 885 Words
Delivery of the Brand’s Identity to Target Customers
Ever since its inception, the company has made it clear that the main market for its products would be the outdoor activity goers, although it is widely evident that the company is also serving other fashion industry market segments. Mountain climbers, trekkers, and backpackers used to be the company’s main target markets during its early years. Thanks to the growth opportunities brought about by the continuous expansion (both in terms of size and number) of its retail stores and the ever increasing level of brand awareness and patronization (by its customers, current and prospective alike), The North Face was able to expand to other market segments, although the market segments that it expanded into were ones that are directly related to its original target market segment. Examples of market segments that the company expanded into include, but may not be limited to, ski and other North American sports wears, camping equipment, and even shoes.
The North Face’s target customer in terms of age and gender would be the 16 to 22 year old women. It is important to note, however, that the company also produces, markets, and sells products that are intended for other demographic groups (i.e. based on gender, age, and even purchasing power); however, for the purpose of uniformity, this paper will focus on this particular set of demographic criteria. In a study and commentary that was authored by Rebecca Willis, she asked the question as to what women of different ages want from fashion (including products and accessories). In the said document, the answer that she came up with was not surprising it all. It showed that “women re stick of low quality, overpriced, poorly-made, ill-fitting clothes that do not last; they are fed up with too much choice, and its twin: too little they want to choose” . The same is in fact what other academic and socially-inspired sources that have been reviewed in accordance with the goal of knowing more about this particular market segment or demographic group . What most companies do not get is that for a marketing strategy to become effective, the members of the strategic marketing team should first have a solid and clear background and perspective of their target market (females aged between 16 and 22 in this case). Now, if the members of the marketing team are really good with generating unique and authentic ideas, then there should really be no problem when it comes to attracting people who are members of this demographic group. In marketing, just like in any other areas of business, it all starts with the process of obtaining the right type of information. This is because it is after the completion of this process that the strategists in a particular company (i.e. The North Face) can determine the things that they are supposed to do and those that are not, considering the goals and objectives of their marketing program. .
Women love clothes and there is no question about that. However, for mid to late teens and early twenties females, tastes and preferences for fashion products may be a little bit different . Because these demographic group are practically in their school age, it would be logical to assume that members of this group are more sensitive to product prices than their older counterparts—mainly because of the notion that as an individual (regardless whether male or female) ages, the assumption that suggests that the possibility of that person being employed (and therefore having a higher level of purchasing power only increases). This, unfortunately, does not bode well for The North Face and its products because in terms of pricing, they are marked with a higher level of premium especially when compared to low cost producers from other countries (i.e. their competitors).
There is a theory in economics that is called the rational choice theory (otherwise known as rational action theory in other literatures) that may be applied to the marketing strategy formulation for stocks. The underlying premise that supports this theory is that the aggregate social behavior of a particular group is a result of the collation of the choices and actions of individual actors, each of whom is making their own decisions—and that the individuals who make such decisions are rational and can therefore be predicted . Applying this theory to this case, the resulting forecast would suggest that the target market of The North Face would most likely defect because the rational thing to do for them (based on the valid assumption that they are more price sensitive than other demographic groups) would be to purchase products that are less expensive than the ones that The North Face is selling.
Conclusions 172 Words
Appendix I - The Mood Board
The picture below summarizes the products that the company can present or sell to its target markets based on its brand value and identity
Appendix II – Competitive Shop Report
Appendix III – Price Positioning Map
The North Face – A
Patagonia – B
Jack Wolfskin – C
Merrell – D
Columbia – E
Berghaus - F
Above is a matrix that summarizes the North Face’s position in terms of pricing (on one of its products) relative to its competitors based on the products reviewed earlier.
Appendix IV – Marketing Audit
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