Peerceptiv Final Assignment

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University of Nevada, Reno *

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210

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Marketing

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Feb 20, 2024

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docx

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Uploaded by CoachEelMaster1055

The North Face Puffer Jacket Overview The North Face is a company that provides a wide variety of outerwear for all of your outdoor and athletic needs. They supply outerwear, footwear, backpacks, tents/camping gear, and accessories like hats and gloves. Their products are extremely high quality and tend to cater towards people who are outdoorsy and athletic. People who like to hike, camp, climb, ski, and explore tend to gravitate towards a lot of North Face products. A lot of their super expensive jackets and clothing are targeted and produced in order to help people combat extreme weather conditions. They use technology like Gore-Tex and synthetic insulation to provide warmth, protection from the rain and snow, all while being lightweight and breathable. They’ve also recently expanded into the world of athleisure and leisure wear in order to expand their brand into the casual clothing market. Their new lines of leisure wear combine the high-quality and durability that the brand has become known for. This new line of clothing includes leggings, hoodies, t-shirts, and jackets that are meant to be worn for more everyday occasions. By expanding into this new realm of the market, The North Face has begun to open themselves to the everyday person by showing you don’t need to be a freak athlete or adventurer in order to wear their brand. Even with these expansions into new parts of the fashion industry, The North Face still continues to preach their idea of a green future. They pride themselves on having sustainable suppliers for their products, and they even provide a source map showing customers where they get their materials from. Their core values have stayed consistent throughout the years which is something that isn’t seen as often in today’s market.

Target Market The market that The North Face primarily targeted in the past was the super adventurous and outdoorsy type. This was done because their products were made based on necessity, as in super thick parkas for extreme cold weather. But now that The North Face has gained more production overhead and increased access to more materials as time has gone on, they’ve been able to expand their target market to more casual people. Now that they’re able to target more people, their company and brand are expanding more than ever. Even though a lot of the advertisement campaigns that they run typically show off an elegant view of nature, they’ve still managed to capture the attention of non-adventure seeking people. Their view has shifted from focusing mostly on the extreme adventurers and athletes to the everyday Joe since there is much more room for expansion into that sort of market. The company’s main focus still persists on making durable, high-quality gear for any type of adventure, but they’ve allowed for their brand to expand. Their goal still remains to inspire people to do better and go outside of their comfort zone, and telling people they can do that by wearing North Face clothing. Pricing Variations Since The North Face has so many options now when it comes to what type of clothing you need, there are a lot of options and variations when it comes to the pricing of their products. For example, the Men’s TNF Tech Crew retails for $75 and is meant to be a warm first layer for the colder months of the year. On the other hand, the short sleeve tri-blend shirt is meant for year round use and is maximized for comfort. Both of these products are listed under the “Men’s T-Shirts” section of their website despite having completely different uses. This tends to be seen throughout the entire website depending on what the customer needs. There are a wide variety

of options for jackets and pants depending on what the individual needs the clothing for. Despite all of this, allowing for customers to have a wide variety of options means that consumers can trust The North Face to provide clothing for whatever they might need. Men’s TNF Tech Crew ($75) Men’s Short Sleeve Tri-Blend ($30) Gross Margin Estimate The North Face is a subsidiary of the VF Corporation, who owns companies like Vans, Timberland, and Dickies.They split their sectors of growth into three main regions: America (North and South), Europe, and Asian-Pacific (APAC). Their biggest sector of growth has been in the European countries, since they’ve begun to expand their market to countries outside of the United States more and more throughout the last few years (1). While these numbers are slightly skewed due to recovery from the pandemic, they still show us that The North Face is expanding its reach across the globe. According to SGB Media, “Gross margin increased 180 basis points to 54.5 percent, primarily driven by a higher proportion of full-price sales more than offsetting incremental freight costs. On an adjusted basis, gross margin increased 150 basis points, including a 20 basis point positive impact from acquisitions, to 54.8 percent.” (2). Despite factors like shipping and freight costs being increased during 2022, The North Face has proved that it is a profitable company. The North Face company alone helped to boost VF Corp’s fourth quarter (2022) revenue to be seen more favorably in the eyes of investors.

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Channel Distribution The North Face uses a variety of distribution channels to get their products to customers. Their primary channel consists of their own retail stores, which are located in various cities around the world. These stores offer a full range of The North Face products and provide customers with options for any adventure that they might be interested in. While the traditional brick and mortar stores tend to be seen as a dying breed, The North Face has been keen to ensure a great experience when it comes to shopping in their in-person stores. Alongside their own stores they tend to distribute their products to various third-party retailers all around the globe. By doing this, they’re able to expand the reach of their product without having to expand their company on an international level. North Face’s secondary distribution channel consists of various e-commerce platforms. Even though they still have their proprietary first-party website, they still provide supply to third- party outlets. This can vary from places like Bass Pro and Scheels to Zappos. They don’t tend to discriminate when it comes to third-party retailers wanting to supply their products. Since the online shopping world is so huge this makes perfect sense, so they can attempt to get their name seen on as many corners of the internet as possible. And since they’re continuing to work on their goal of becoming an internationally recognized name, allowing for their products to show up on almost any clothing website gives them a huge advantage compared to other brands. Buyer’s Decision Process

The buyer’s decision process when it comes to purchasing from The North Face is very similar to any other clothing brand. The first step comes with the buyer figuring out what article of clothing they need for their intended task. In the case of North Face products, this usually means something for an extreme type of weather. Once the buyer has figured out what they need the clothing for, it's time for them to do some research. This research consists of comparing competitors to each other, and in this case they would compare and contrast the pros and cons of North Face products and Patagonia. During this research process the buyer might come across more alternatives that they might take into consideration before deciding what to buy. Once the customer has bought their desired product from The North Face they’ll tend to ponder and assess their feelings toward their newly purchased product. Most of the time (in the case of North Face products) this feeling will be positive considering the high quality of the product and the product’s durability. Marketing Communications The North Face uses all of the different market communications to advertise and get the word out about their product. The North Face uses various advertising channels to promote its puffer jacket, including physical advertising such as posters and signs and social media such as commercials and ads you would see on instagram or twitter. They use high quality visuals that showcase the jacket's features, such as its insulation and durability, and they highlight its performance benefits for outdoor activities and withstanding the cold. The North Face also tends to run promotions for their jacket by discounting it during the winter season so it incentitizes more people to buy their jacket when it is cold. The North Face has its own retail stores as well as online websites to directly sell its products. They use in-store displays and online visuals to showcase their puffer jackets, including videos and photos that demonstrate the product's features and benefits to catch the shoppers eye. The puffers they sell in the retail stores also tend to be towards the front of the store, so it is one of the first things shoppers see when they walk in. The North face has public relations with hundreds of athletes and outdoors people to showcase their product in action and to build brand awareness and credibility. The North Face also uses direct marketing to reach customers directly through email and social media. They send personalized messages to customers based on their past purchases and interests, highlighting the benefits of their puffer jacket and any promotions or discounts that may be available.

Company Advertisement In this advertisement, The North Face is advertising their puffer jacket in a red colorway, stating the material used in the jacket is 100% recycled and provides extreme warmth and compressibility. The style of this advertisement is very simple, it is not a complex ad with a lot going on. The message is not conveyed using a ton of words, it's a simple picture with a few words that achieves their primary goal to inform the shopper of the good quality of the jacket. The ad is trying to make the buyer more aware of what the product gives to you and what the benefits of wearing it are. Communications Budget According to The Daily Outdoor Retailer, The North Face reported an estimated $1.32 Billion dollars in revenue in Q3. Using that data, we can assume that the company spends roughly 10% of their revenue on their communications budget. So we can assume that The North Face spends around $132,000,000 on advertising. While this does seem like a lot of money, it still leaves $1.188 billion in gross margin. I believe the primary method used by The

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North Face in setting their communications budget is percent of sales. The percent of sales method allows the company to maximize how much they need to use on communications while only using a set percentage of the revenue they bring in. Hypothetically if they continue to use the percent of sales method for their communications budget, they are going to be able to spend a lot of advertising throughout the years. North Face Kids Athletic Program Marketing Plan One big market that North Face as well as many other companies are missing out on is kids. In order for the company to keep prospering, it is essential that the newer generations adopt their products and view them as a popular option. Without the approval of the generation that follows, the company will inevitably go under. Some famous examples of businesses failing due to the newer generation include Vine, Blockbuster, and Toys R Us. I propose that North Face should launch an athletic program where kids complete challenges in order to “level up” and earn new North Face merchandise via mail. An incentive system is very important amongst younger kids, because it grants them a sense of accomplishment. One good example of this is the “Mileage Club”, where kids across the country got rewarded one “point” per mile they would run. Filling out their scoresheet granted them rewards such as trucker hats, water bottles, bracelets, and other cool things that a kid would love. With this in mind, we can influence young adolescents around the world to not only buy and represent our company, but have fun while doing it and earn cool rewards such as shirts, hats, and many other accessories that come at no loss to us. The main objective of this project is to get our name out there early within the youth and make an impact on them so that they remember our company and who we are. Word of mouth amongst kids is the most powerful form of advertising that doesn’t get discussed much. Although North Face already has an incentive program already, it is not close to the one that we are suggesting. The Explorer program (XPLR Pass) is a members reward club that rewards customers for buying their gear. One dollar equals one point earned, where certain point thresholds such as 50 and 100 have their own unique rewards.

The XPLR pass is focused around spending money. Our incentive program opens the floor to kids across the country who spend no money at their own accord. However, the program may incentivize them to further be interested in the future of our company, and ultimately become a regular consumer. By exposing them young to our products, we can guarantee to plant an early seed in their brains, portraying our business is legitimate, fun, and one that you don’t want to miss out on. This is how our company plans to execute this. A successful marketing plan for an athletic incentive program for kids should be focused on engaging parents, emphasizing the benefits of participation, and leveraging partnerships and incentives to drive sign-ups. By using a combination of marketing channels and tracking our results, we can create a plan that resonates with our target audience and drives meaningful results. Our target audience for this program are children ranging from ages 5-16 who are currently enrolled in public schools. The message we will put out there will be positive, with the bottom line being to encourage health, teamwork, personal growth, and community involvement. Marketing Strategy For our marketing channels, we have chosen to advertise digitally. This includes social media marketing, direct widespread email marketing, local community events where we can set up a booth, and by making YouTube content that others can follow. We believe that by choosing these channels, it will be the most effective way to reach out to the newer generations. We will also be trying to get in contact with school representatives to further implement our idea. Another crucial component to advertise will be to make a highlight video, showcasing what the program is about, interviews with kids who have gone through the program, and infographics convincing parents why they should allow their children to participate as well as the benefits they might receive. We will need to receive a lot of funding for this project if we want any hopes of going countrywide with it, as we would like to make this free of charge for the kids. Of course,

the school and other outside organizations will be the one paying for it, but our primary focus is making this available for anyone that wants to participate, regardless of their income. Partnerships and sponsors will assist our company in solidifying a good reputation with the community. This will also help us fundraise for special events. Because of all the materials that will be needed for this project to become successful, I believe it would be beneficial to look at our common competitor, which is the Mileage Club. They have successfully implemented our idea, so why not look to them for reference? According to their website, it costs around $356 to buy all of the supplies needed to register around 1000 students. Based on this data, this program will be a sign-up after school one and not a P.E curriculum, considering the immense cost. Despite this, this will remain a free program for anyone interested. One benefit apart from finances is that many kids don’t like to be active. Many kids hate physical education, and by enforcing it on them it’ll just make their lives worse, all the while costing us more money. Measures of Success You might be asking yourself, how is this profitable in any way? I mean, giving out free gear and campaigning for this most cost a fortune. And yes, it does. However, things usually go down before they come up. There is no light without dark. After we successfully implement our new North Face program into schools and clubs worldwide, they will need to purchase the necessary tools from our website in order to smoothly run the process. This includes (but not limited to) timers, applications, an instructional booklet, and a scanner to verify the exercise was completed. We approximate that we will spend around $100,000 for all advertising across platforms combined. After seeing what the results of this are and how effective it is, we will adjust accordingly. Overall, branching out to different consumer types will inevitably bring more traffic to the company. Media sites may start to report on our new program, giving us more recognizability and credibility amongst the general public. One good example of this is when former First Lady Michelle Obama had

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her public health campaign of “Let’s Move!” back during her term. By promoting health and wellness, The North Face could improve its brand reputation, increase sales, engage with local communities, improve employee well-being, and make a positive impact on society. Works Cited 1) Source, Broadsport. “Q1 2022 Regional Performance (North Face).” Boardsport SOURCE , 30 July 2021, https://www.boardsportsource.com/2021/07/30/vf-reports-first- quarter-fiscal-2022-results-raises-full-year-fiscal-2022-outlook/q1-2022-regional- performance-north-face/ . 2) SGB Media. “VF Corp.'s Fourth Quarter Boosted by the North Face: SGB Media Online.” SGB Media Online | Active Lifestyle Market B2B Information , 19 May 2022, https://sgbonline.com/vf-corp-s-fourth-quarter-boosted-by-the-north-face/#:~:text=brands %20and%20regions.-,Fiscal%202021%20also%20included%20an%20extra%20week %20compared%20to%20the,than%20offsetting%20incremental%20freight%20costs . 3) Montgomery, T. (2023, April 13). The North Face is the star for VF Corp. in Q3 - Outdoor Retailer's the daily . Outdoor Retailer's The Daily -. Retrieved May 3, 2023, from https://thedaily.outdoorretailer.com/news/brands-and-retailers/the-north-face-is-the-star- for-vf-corp-in-q3/#:~:text=

Peerceptiv Final Assignment

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