Canada Goose Inc.s Marketing Plan

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Canada Goose marketing strategy is closely related to its advertising. This essay analyzes the luxury brands marketing plan and suggests some strategies regarding Canada Goose target market.

Table of Contents

Executive Summary
Company Background
Market Analysis
Existing Marketing Strategies
Canada Goose Target Market: Recommended Strategy
Conclusions
References

Executive Summary

Canada Goose is a large producer of premium-class winter, autumn, and springtime clothes in Canada. Its production facilities include eight manufacturing plants, six retail shops, and over 1000 employees. Its yearly revenues exceed 300 million dollars annually (Bloomberg, 2019). The company has a stable position in the Canadian and the US markets but is experiencing trouble expanding to the European market due to high competition and to the Asia-Pacific markets due to the threat of counterfeit products.

It also has issues with the ecological community due to allegations of animal abuse and mistreatment. The companys marketing and advertising strategies include traditional marketing, word-of-mouth advertising, and relationship establishment. The company should refocus its attention from Baby Boomers and Gen X customers towards Millennials, who now comprise most of the workforce.

Company Background

Canada Goose Holdings is a Canadian company specializing in all kinds of winter clothes, from jackets and parkas to vests, hats, gloves, and other warm apparel suited for cold weather. The company was created in 1957 by Sam Tick and specialized in selling vests, raincoats, and uniforms for snowmobile driving and other outdoor apparel (Bloomberg, 2019). The companys initial name was Metro, but it was changed to Snow Goose as the company expanded its sales across Canada in 1985. The rebranding into Canada Goose happened in the 1990s when the company decided to go global, and the copyright claim for the Snow Goose name belonged to a different European company (Bloomberg, 2019).

As it stands, the company operates six retail stores and eight production facilities throughout Canada (Bloomberg, 2019). Canada Goose Holdings caters to all customers in the premium outdoor apparel sector, including men, women, teens, children, and infants. The two primary methods of selling merchandise include wholesale and direct supply. Canada Goose provides its products to retail stores and distributors in 38 countries and reaches out directly to customers across the globe via e-commerce (Bloomberg, 2019). Recently, Canada Goose began the exploration of the Japanese market by establishing a partner-operated retail location in Tokyo.

The company specializes in high-end outerwear, with major product lines including parkas, traveling jackets, shells, vests, knitted products, and accessories. Different products are suited for winter, spring, and autumn seasons. Canada Goose does not have a dedicated summer-wear operation. The premium class of the products is ensured by using expensive materials, such as duck-down insulation and coyote fur. In contrast, economy-class products utilize feather mulch, dog fur, and cat fur, which have lower status and weaker heat preservation properties.

The company has plenty of competition in the premium outwear clothing segment, the most frequently-mentioned rivals being the Parajumpers, Woolrich, and Moncler. Of these three, the Italian Moncler is the largest and strongest competitor, with over 1,4 billion dollars in revenue. Canada Goose, Parajumpers, and Woolrich stand at approximately equal footing, with circa 300 million yearly revenues each (Bloomberg, 2019). Nevertheless, Canada Goose has a firm footing in its home country since Parajumpers and Woolrich are US-based companies, and Moncler is a European company. To summarize, Canada Goose is a well-established brand that achieved partial globalization and has steady and positive revenues. However, it struggles to expand its reach beyond the established markets due to high competition and high risks of counterfeiting.

Market Analysis

Segmentation and Expected Growth

Overall sales in the clothing and fashion industry are down in all major markets worldwide. The US clothes market, one of the largest and wealthiest in customer buying parity, reports a 4% decrease in overall sales (Chen, 2018). At the same time, outdoor apparel is the only segment in the industry that claims steady growth, defying the overall trends with a 2% increase in sales. Sports outwear, and weather-resistant clothes segments show even higher growth, with a 3.2% increase in sales in 2018 (Chen, 2018). It bodes well for Canada Goose, as their respective segment of luxurious outdoor apparel is also growing.

The total market in the US alone for active apparel has been up to 48 billion dollars (Chen, 2018). Out of this number, around 12 billion dollars are held by luxury outdoor apparel, with an estimated growth to nearly 20 billion by 2026 (Transparency Market Research, 2018). Canada Goose and its direct competitors, such as Parajumpers, Woolrich, Moncler, and others, make up the top 10 clothes producers in the West.

Trends

There are five market trends currently influencing the luxury outdoor apparel sector, which are as follows:

Millennials as the primary market consumers. The markets emphasis has shifted from Baby Boomers and Generation X to Millennials and Gen Z, which comprise over 75% of the current workforce (Bethune, n.d.). At the same time, they are the primary consumers of outdoor clothing for all marketing segments, including the premium segment. They are characterized by an increased appreciation of brands, higher levels of independence, and a conscious attitude toward businesses, politics, and the environment. They are also avid Internet users, making significant shifts in the traditional advertising and branding strategies that most companies have used for the past 19 years.
Cause-driven companies are at an advantage. This trend has a connection with millennials being the new driving consumer force in the market. Issues like equality, exploitation, ecology, and corporate social responsibility are important factors that attract customers to brands (Grodzki et al., 2018). This factor impacts premium outdoor brands like Canada Goose, as their production involves consuming natural resources and animal materials (feathers, fur, etc.). Therefore, companies need to learn to balance authenticity with eco-friendliness. The issues of equality and exploitation are driving production values home as customers become increasingly aware of unlawful and unethical practices of employing labor in 3rd-world countries to produce luxury items for the West.
A new definition of outdoors. For decades, outdoor goods were primarily associated with winterwear and protection from the snow. However, the advances of the 21st century made it easier for individuals to travel and explore, significantly increasing the potential for outdoor activities (Bethune, n.d.). The new definition of quality outdoor wear includes durability, versatility, and a healthy amount of customization options to enable the wearers to express themselves. Thus, the requirements for outdoor products now include weathering different environments while retaining their good looks and uniqueness of design.
Urban = Outdoors. Many producers associate the great outdoors with hiking and nature. At the same time, the majority of customers describe themselves as soft outdoors type, meaning that while they enjoy an occasional hiking trip outside of the city, the majority of times, they will wear outdoor products while going about their daily lives in an urban environment (Bethune, n.d.). It places additional requirements for materials, appearance, and functionality of the design.
Bloggers and Internet celebrities are the new idols. The influence of athletes and regular media celebrities in advertising is fading (Bethune, n.d.). Although each famous media persona can lend a more significant amount of exposure than a hundred regular bloggers, the sheer number and influence of internet personas on the market are much stronger. Millennials enjoy the practical application of goods, honesty, and connection they get from watching streams, subscribing to Instagram posts, and reading blogs more than they do from paid celebrities doing advertisements.

SWOT Analysis

SWOT analysis is a universal technique implemented in small-scale and large-scale strategic planning, which could help identify Canada Gooses key strengths, weaknesses, opportunities, and threats instead of a potential expansion to other markets (Phadermrod et al., 2019). It helps to specify the objectives in connection with various internal and external factors that could prove beneficial and detrimental to accomplishing corporate development and marketing goals (Kotler et al., 2013). SWOT analysis of Canada Goose is as follows:

As it is possible to see, Canada Goose has a solid home customer and production base (Brydges & Hracs, 2018). Its positioning in the domestic market is dominant, with the company being one of the largest Canadian brands. Besides, most materials required for premium-class outerwear production can be found at home. The company has a history of healthy working relationships with several indigenous suppliers, ensuring the highest material quality standards. Combining these strengths enables Canada Goose to create a solid competitive product.

The companys weaknesses revolve around various legal regulations on the fur and skin trade and the limiting business model of selling premium-class goods. Not everyone is capable of affording a 1000$ winter coat, meaning that a large number of customers in the low and middle class are effectively barred from buying from Canada Goose by the steep price ceiling, which is the price to pay for being a premium brand (Brydges & Hracs, 2018). Lastly, the company primarily serves North American and European markets, meaning that any venture outside the comfort zone will take much work.

Canada Goose has several opportunities for increasing its revenues, brand exposure, and market share. The first potential solution is to expand into the summer clothes category and create premium products for high-humidity and temperature environments. These garments would not only attract additional market share but enable the company to expand into previously inaccessible due to climatic conditions markets, like Africa and the Middle East. Countries of the Gulf Cooperation Council (GCC) are among some of the most high-paying markets for premium and luxury items.

Additional opportunities lie in providing goods to large markets in Eastern Europe and Asia, such as China and Russia, which are known for harsh weather, especially in the Northern provinces of either country. Lastly, the globalization of commerce allows Canada Goose to expand into distant markets without having to set up brick-and-mortar shops, deliver goods to customers directly, and use e-shops to reach customers.

Canada Goose should be wary of threats that may diminish its presence in the market. The greatest threat is coming from counterfeit goods made in China. Since the companys brand name relies on premium prices and quality to maintain its image, the apparition of fake, cheap lookalikes will reduce sales and detract customers from the company (Brydges & Hracs, 2018). The ecological side of production is also an issue for Canada Goose, as it has a long-standing enmity with PETA due to the allegations of animal cruelty. Lastly, the company should guard against brand dilution by selling its goods in multi-brand retail stores where the products will not stand out.

PESTLE Analysis

A PESTEL analysis is a valuable external market analysis tool that allows companies to outline and monitor macroeconomic factors that would impact the organizations market performance (Aithal, 2017). While the tool does not offer direct insights into the internal state of the organization, it allows one to evaluate the chances of a successful product launch when entering a foreign market (Aithal, 2017). Canada Goose would benefit from conducting a PESTEL analysis before committing to brand globalization. Below is a PESTEL analysis for the company:

Political. The company faces internal political opposition from parties against animal cruelty. Disclosure of the details behind animal slaughter for producing high-quality winter garments can force the local government to pressure the company (Hu et al., 2018). External political factors include the threats of state-protected competition in emerging markets, such as China.
Economic. The economic situation for Canada Goose is beneficial. The market for premium outdoor goods has been steadily growing even despite the overall decline in the clothing and fashion industry. The company maintains stable growth and has beneficial economic prospects ahead of it.
Social. The company experiences social tension due to its aggressive acquisition of native animal farms, pushing out smaller businesses in rural communities (Hu et al., 2018). Besides, several scandals have revolved around improper ways of collecting animal material for clothes.
Technological. The technology surrounding the creation of outdoor wear is moving slowly. Although small innovations are being made, especially in the choice of materials, clothes are similar to how they were ten or twenty years ago. Nevertheless, Canada Goose can benefit from developing and utilizing materials with better insulation, thermal resistance, and tensile strength.
Ecological. Canada Goose has major issues with its ecological imprint. The company utilizes coyote fur for its trimmings, while certain species of coyotes are endangered in Canada and the US. Its confrontation with PETA also resulted in several lawsuits, tarnishing the companys reputation and labeling it ecologically unfriendly (Hu et al., 2018). Canada Goose should invest in minimizing its impact on the local ecosystem.
Legal. The use of fur and skin in outwear products is associated with numerous legal obstacles towards the treatment and harvesting of animals. Also, the companys standing in China is weak, as the government unofficially endorses counterfeit products.

As can be observed, the economic situation is the only significant factor working for Canada Goose. While various negative developments are present, the company is used to working with them in the domestic market. Counterfeiting is the largest threat to the corporate brand name to date.

Existing Marketing Strategies

Marketing Objectives and Product Positioning

Current market objectives of Canada Goose include expanding to other regions, retaining its dominant position in the Canadian and US markets, and ensuring its brands authenticity in the face of tarnishing and counterfeiting. The company positions its products as premium-class high-quality, high-versatility outdoor products, appealing to medium-upper class customers while featuring a highly-recognizable brand (large Arctic Initiative logo on the sleeve). Besides, the company seeks to provide the Canadian and US military with winter clothes, thus pursuing government-sponsored contracts.

Marketing Mix (4Ps)

The marketing mix for Canada Goose is as follows:

Place. The companys main markets are Canada and the US, where the brand name is famous, and the climatic conditions require robust outdoor garments (Wu & Li, 2018). It tries to make ventures into Europe and Asia, but the progress is slow due to steep competition.
Product. Canada Goose provides parkas, traveling jackets, shells, vests, knitted products, and accessories. Seasonal offers include winter, autumn, and spring-suited clothes and items.
Promotion. The company has a low-key promotion strategy, mainly relying on traditional outlets (TV, radio, banners, and paper advertisements) and word-of-mouth to sell its items in the market.
Price. Canada Goose is a premium brand that uses expensive materials (duck fluff, coyote fur) as materials for its items and coats. These make the goods the company provides expensive, with the price for a single winter coat reaching over 1000 USD (Wu & Li, 2018).

Canada Goose Marketing Strategy

Canada Goose marketing strategies involve paid advertising, word of mouth, and relationship marketing. The company adheres to the traditional ways of operating a brand. It seeks to enhance its relationships with the existing customer base by improving the view of the brand as premium, exclusive, and authentic (Wu & Li, 2018). By appealing to the expensive TV and radio advertisements, the company wants to show potential customers that it is rich enough to purchase these, thus creating an association between itself and wealth.

Word-of-mouth tactics, though slow, are expected to have greater efficiency, as recommendations from a friend are worth a lot more than an internet-based or a TV promotion, making it more likely for the person in question to buy Canada Goose products (Wu & Li, 2018). Although the company engages in company-to-customer deliveries and Internet marketing, it does not run any large-scale social media campaigns beyond what is generally expected from a large company in the age of smartphones.

Canada Goose Target Market: Recommended Strategy

The recommended marketing strategy for Canada Goose should revolve around reaching a wider audience and re-establishing itself as a premium brand for millennial customers (Kotler et al., 2013). So far, the analysis of the corporate practices shows that the company is still catering to the older generations, using outdated marketing approaches and appeals. Millennial customers are no longer the future; they are the present. Most of these individuals do not own a TV set or watch it too much, as the Internet is effectively replacing cable television. Therefore, Internet advertising should be primarily emphasized (Kotler et al., 2013). Canada Goose should utilize its site and extensive online media outlets to attract additional customers.

Promoting paid advertisements on Youtube and hiring famous bloggers to present the merchandise is a good approach. The costs would roughly equal those of TV advertisements but project the brand name to a broader audience. It is advised to focus on quality rather than quantity for the brand to maintain its premium reputation (Kotler et al., 2013). It is why paid stars are preferable to a multitude of cheaper and less famous bloggers, despite the greater potential outreach. The exclusivity of the brand is supported by the price, meaning that the wider outreach program would not be effective either way.

Besides, Canada Goose needs to work on its reputation as an ecologically-friendly company. To do so, it should donate to charities and other organizations, work on humanizing the treatment of animals used to produce the materials for its outwear products, and invest in items that do not use any fluff, fur, or animal skin (Naderi & Van Steenburg, 2018). The company could rebrand itself as a technologically-advanced producer that uses biodegradable and naturally replenishable materials to attract ecologically-minded customers while maintaining the same prices and quality that make Canada Goose a premium brand (Biçakc1olu et al., 2017).

The company should utilize market penetration strategies to expand to other regions, such as China and Russia. While Canada and the US are profitable markets, Canada Goose already has an entrenched position there, which is not going to change due to market saturation with other domestic brands. Europe is an unlikely target for expansion because it is the home turf of Moncler, the largest premium outwear company and a direct competitor of Canada Goose. Japan is also a likely target due to the number of its citizens packed on a relatively small territory.

Lastly, Canada Goose should invest in developing a summer collection. It would enable the company to reach out to new customers within the existing markets and open additional venues in other countries, such as Egypt, South Africa, Saudi Arabia, the UAE, Qatar, and Kuwait (Kotler et al., 2013). These countries are known for their hot climate, making them excellent customers of summer clothes. Combined, all these measures would help transform Canada Goose and give the company the big push it so desperately needs.

Conclusions

Canada Goose is one of North Americas largest producers of premium-class outwear. It has been enjoying steady growth and development during the past years due to the excellent conditions of its market segment, which showed substantial percentages even while the rest of the clothes and fashion industry declined. The greatest challenge the company has to face is its lack of expansion towards promising foreign markets, poor ecologic reputation, and outdated concepts of marketing, which prevent the company from growing faster. Counterfeited products and steep competition are significant factors, especially in Asia-Pacific.

The companys strong points include a strong brand name and a stable position in the North American markets. It has a long-standing relationship with suppliers and full supervision and control over the production process, which allows the creation of premium-class outwear of high quality. The analysis presented in this paper showed a dire need for the company to reinvent itself as a Millennial brand by engaging in corporate social responsibility, exploring the venues of social media advertising, and diversifying its product range to include eco-friendly and summertime clothes. Particular attention should be paid to ethical manufacturing to avoid tarnishing the brands name through scandals involving PETA and other ecological organizations.

References

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Bethune, A. (n.d.). 5 consumer trends impacting outdoor marketing. Web.

Bloomberg. (2019). Company overview of Canada Goose Holdings, Inc. Web.

Brydges, T., & Hracs, B. J. (2018). Consuming Canada: How fashion firms leverage the landscape to create and communicate brand identities, distinction and values. Geoforum, 90, 108-118.

Chen, C. (2018). Retail may be sinking, but outdoor apparel is killing it. The Street. Web.

Grodzki, E., Powers, S., & Burnstine, A. (2018). Attracting millennial consumers in the digital age. Scripta Neophilologica Posnaniensia, (18), 29-34.

Hu, M., Qiu, P., Wan, F., & Stillman, T. (2018). Love or hate, depends on whos saying it: How legitimacy of brand rejection alters brand preferences. Journal of Business Research, 90, 164-170.

Kotler, P., Keller, K. M., Sivaramakrishnan, S., & Cunningham, P. H. (2013). Marketing Management (14th ed.). Don Mills, Ontario: Pearson Canada.

Naderi, I., & Van Steenburg, E. (2018). Me first, then the environment: Young Millennials as green consumers. Young Consumers, 19(3), 280-295.

Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, 194-203.

Transparency Market Research. (2018). Global outdoor clothing market Snapshot. Web.

Wu, Y. L., & Li, E. Y. (2018). Marketing mix, customer value, and customer loyalty in social commerce: A stimulus-organism-response perspective. Internet Research, 28(1), 74-104.

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