Monday, October 7, 2019

Patagonia Case Analysis Study Example | Topics and Well Written Essays - 1000 words

Patagonia Analysis - Case Study Example Customers in their desired target market, however, seem to be willing to pay this price for the quality, durability, and environmentally-focused attributes of the company’s brand name. The problem at Patagonia, however, is not related to the product, pricing or the above-industry-norm commitment to environmentalism as it is related to customer lifestyle. Patagonia only spends 1% of its entire budget on promotion and advertising, thus relying on social media and sales representatives to maintain the promotional function. The firm requires more visibility to extend its product line beyond the higher resource buyer segment to balance its profit goals. PROPOSAL ALTERNATIVES Experts in public relations identify the many competitive advantages that come from utilization of professional, externalized public relations firms. These include a positive corporate identity, improved national standing among competition, and improved consumer purchase intention (David, Kline & Dai, 390). Des pite Patagonia’s current sales success in gaining a higher volume of customers, the marginal increases in sales are much lower than industry norms for a business of this variety. Granted, some of this profit reduction comes in the form of environmentalism and charitable donations, however achieving higher profitability without losing the current positioning related to eco-friendly production is attainable by devoting a large portion of the operating budget to advertisment. In order to achieve a successful brand with high visibility, the focus should be on empowerment: â€Å"putting them in charge to take action† (Bayley, 15). Patagonia is a highly action-oriented business active lifestyles related to surfing, climbing, rafting and other outdoor recreation. Under the VALS2 Marketing Diagram for segmentation, action-oriented individuals spend a majority of their disposable income on social activities, buy on impulse, and follow fashion and fads significantly (Boone & Kur tz, 302). Even though Patagonia’s products are priced higher than industry norms, they are not priced significantly higher than other sportswear and outdoor wear companies overall, thus making them affordable for lower-income customers still in an above-average category. Action-oriented individuals in society include other recreational activities related to camping, skiiing, and general boating and lake/oceanfront activities. Patagonia requires extension of its brand presence into these markets in order to find profit success without sacrificing its core values that leadership is so dedicated to sustaining as top priority. The action plan for Patagonia is to develop relatively low-cost advertising and utilize assistance from external public relations consultants to create a system of well-coordinated press releases that give more visibility to the general consumer public. Reliance on the distribution network to conduct advertising function takes control of advertising from ow nership and places it in a third party, thus adding an element of risk to the business model in relation to sales. Consumers of all demographics respond positively to advertising with vivid

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