Marketing and Distribution Channel Patagonia

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Two interrelated stratégies :
* how to expand their product portfolio

US outdoor apparel industry
Competitors :
* The North Face
* Marmot Mountain
* Mountain Hardware
* Columbia Sportswear

Patagonia’s history

Target market :
* Core users, Patagonia tried to remain true to them. They had ambassadors. * Will to expand to customers outside the core

Product Line
Eight smaller lines
Gross margin from 40% to 55%, variability on geography and distribution channel

Patagonia’s activities
Design and Development : 3 criteria : quality, impact on environment and aesthetics Feedback on products by professionals
Environment : use of recycled polyster new supply chain more expensive

Procurement and Production
Most garments raw materials
200 different suppliers around the world
Outsourcing of manufacturing
Produt lines wider than competitors
Prefers long term Relationship
Try : - outsource some of its activities
* reduce lenght to supply chain

Marketing & Sales
Print advrtising, electronic media, grassroots efforts, public affairs, trade shows, product graphics. 2002 : « Commited to the core »
Able to sell its products for signifiantly more than other outdoor manufacturers. 4 distribution channels : in US : 50% wholsale, 30% retail, 20% direct (internet, mail order). Price equity between channels.

Gross margin : wholesale = 40%, retail = 50%, direct = 60%. International = try to have one single global product line.
Europe : prices 5% higher than in other markets but magins less important.

Outbound Logistics and Customer Services
One central distribution center in Nevada.
Contracted with third-party logistics providers for international opérations. Customer service center = return rates = 15% for mail and 20% for internet, lower than the industry. Quality of the product very important possibility to return a product.

Human Ressources
1000 employees.
Worklife very cool....
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