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The North Face: Finding True North

Presented by: Amanda Rogers, Carla Lopez-Raygoza, Jessica Miller, Jess Simpson, Mark Klausing, Matt Melton, and Steve Oak!
by

Steve Oak

on 13 May 2014

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Transcript of The North Face: Finding True North

-Trends:
TNF uses sustainable materials to reduce environmental damage
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Growth in "Brand Hitchers" - people who wear active apparel w/out participating in outdoors activity
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Collaborations with fashion designers to create fashionable and functional attire
b. Competitors (top 3)
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Patagonia
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Columbia
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REI, Inc.
a. Size, revenues, trends, sub-categories
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Market Share in 2012 Fiscal year
II. Market Analysis
c. Political
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US apparel industry included in fair trade agreement w/ Latin America
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Rise of minimum wage in US/California already in effect
d. Technological
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Manufacturing process requires both machinery and intensive human labor
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3D body scanning technology being developed for proper fitment
I. Industry Analysis
(cont'd)
I. Industry Analysis
a. Economic:
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Outdoor apparel is fastest growing segment of global sports apparel market
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Current global outdoor apparel market at $3.69 Billion!
b. Social
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Outdoor participation currently stagnant, but at high rate
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49.4% of Americans participate in outdoors activities

A. External Environmental Analysis
The North Face® brand has grown from a single storefront to a respected global brand that generates over a billion dollars in annual sales in just over 40 years. Yet the fundamental mission remains unchanged: building the best gear for the outdoors, supporting the preservation of wild places, and inspiring a global movement of outdoor exploration.
Overview
The North Face: Finding True North
Presented by: Amanda Rogers, Carla Lopez-Raygoza, Jessica Miller, Jess Simpson, Mark Klausing, Matthew Melton, and Steve Oak
-Revenues:
The North Face (TNF) expects $3 Billion in revenues for 2015
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Global revenues for TNF increased by 20%
II. Market Analysis
(cont'd.)
b. Competitors
(cont'd)
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TNF products are usually more expensive than competitors. Consumers are aware of superior quality.
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New apparel always introduced to keep up with technological advances and maintain position as innovators in industry. Consumers trust high quality of products and remain loyal to the brand.
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Described as “premier supplier of authentic, innovative, and technologically-advanced exploration apparel, footwear, equipment, and accessories”
III. Product Analysis
a. Strengths
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Strong brand awareness/image among outdoor community
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Large focus on product technology and R&D
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Backed by VF Corp, world's largest footwear and apparel manufacturer of powerful brands
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Committment to sustainability and community
b. Weaknesses
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Low employee morale (retail and corporate)
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Unsatisfactory opinion of management
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Products seen as "too expensive"
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Difficulty communicating technological innovations
III. Product Analysis
c. Opportunities
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Improve internal culture
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Improve employee morale by giving more feedback, welcoming new ideas
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More training for senior management and improve accountability
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Expand product offerings (ex. cycling, kayak fishing, etc.) and sponsor top athletes
d. Threats
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Competitors, like Patagonia, have stronger company culture and better benefits that attract talented employees
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Other competition viewed as better value and affordable product
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Knockoffs commonly distributed in Asia
B. Evaluation of Marketing Strategies
I. Promotional Strategies
a. Advertising/Branding
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TNF aims to be "Nike of outdoors"
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Activity-based marketing model targets 4 categories: Outdoor, Performance, Action Sports, and Youth
-TNF wants products to be seen as premium, stylish, and high-performance
b. Publicity
-Sponsorship of 70+ elite athletes and world's most prestigious outdoor
events and expeditions
b. Publicity (cont'd)
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Owned media: Youtube Channel, Instagram, Google+, Facebook(3 Million), Twitter(112,000)
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Press Releases during major sporting events (ex. Sochi Olympics 2014)

Winning Factors and Insights
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“People find comfort in taking journeys and reaching destinations (physical or emotional) and will embrace any product that helps give them the direction to do that.”
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Ogilvy Shanghai developed insight with a firm understanding of the culture they were marketing to
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Insight was applied to Chinese culture, but has universal appeal
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Campaign inspired people to be active, build relationships, and reach a goal, which gave them permission to believe that a brand could help solve their problems


Winning Factors and Insights
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Execution used common sense & language every Chinese person could understand (i.e. the phrase “True North”)
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Result: A campaign that struck a good balance between commercialism & art, The North Face brand was made visible to a HUGE consumer base.
1. Clearly define the central problem or opportunity
-Given TNF's sizeable resources/ previous success in promoting outdoor sports,central opportunity was to become “Nike of the outdoors.”
2. Identifying critical factors in order of importance
1. Marketing budget: crucial for brand visibility, recognition, and associations that consumers make with product. VF Corp’s sizeable resources can allocate a substantial mktg. budget for TNF
2. Free capital
3. Manufacturing infrastructure: having the equipment/ personnel available to continue producing high-quality products so brand can market itself as “premium.”
4. Customer Service: vital aspect of any retail-based product, poor customer service will hurt the expansion process
- If 1-4 are successfully addressed, The North Face can become “the Nike of the outdoors.”

3. Strategic alternative courses of action
Focus on being profitable (safer, more conservative strategy, won’t rival Nike though).
Focus on perfecting the brand one aspect at a time, rather than all at once (slower process, safer, but no guarantee brand will stay relevant over time).
Put “all chips on table,” become “Nike of the outdoors”-- NOW.
4. Strategic alternatives most appropriate for dealing with problem
-Given TNF's success & potential, 3rd alternative is most worthy
-Goal is realistic and lucrative
5. Future problems and how to address them Beneficial research used to solve problems
-Potential problems could include improved technology and affordable products with similar quality from competitors.
-Focus groups could be beneficial in deciding whether consumers are willing to pay top-dollar for the best quality or sacrifice brand name and some quality for affordability.
6. Discuss your summary rationale and defend your choice
Why is becoming “Nike of Outdoors” best choice?
-Popularity of “wilderness chic” i.e. Duck Dynasty, Survivorman, Alaska-frontier shows add equity to TNF
-TNF parent company, VF Corporation =$11B co. Their resources can turn TNF into “Nike of the Outdoors.”
-Necessary manufacturing/ distribution channels already in place
- NorthFace products already available at retail powerhouses such as Macy’s and Nordstrom

Conclusion:
Considering the above factors it’s best to attempt to become “Nike of Outdoors”--now.
THANK YOU!
c. Selling and Sales Promotions
- The North Face distributes their products to thousands of wholesalers worldwide that then turn around and sell the products directly to consumers.
- The North Face operates their own 36 retail stores worldwide- The North Face distributes their products to thousands of wholesalers worldwide that then turn around and sell the products directly to consumers.
- The North Face operates their own 36 retail stores worldwide
Full transcript